Is adapting too easily to Change bad?
G’day all
I was mentioning last week about change and how it is here to say, and those of us that can adapt will be more likely to thrive in these conditions.
This week I want to delve a little further, particularly into two areas of change and I fear maybe setting an ‘interesting’ precedence…
Firstly, I am concerned with some of the policies being created ‘on the fly’ to deal with issues arising from this crisis… Is it just me or am I missing an agenda here somewhere?? May have to search for that memo again…
Once we set a precedence of allowing the government to think its “OK” to change the rules on the fly for us, what’s to stop them down the track making wholesale changes as they wish, because they see some other emergency response is needed?
No please, don’t get me wrong, I am absolutely all about leadership and happy for leaders to lead…but this is all starting to sound very reactive to me…
You need to take the blue pill to protect you against ‘Rona, but then need this red pill to fix the side effects of the blue pill… oh and for the side effects of the red pill, here’s this green pill, totally harmless…trust us…
Hmmm…
Leading me into my second point… we all know governments (just saw Japan’s however-many-trillion-yen package) particularly US and AU are throwing everything INCLUDING the kitchen sink at the economies right now, due to these ‘unprecedented times’ (their words, not mine…)
This week the RBA has also basically said there is no point in going to zero or negative interest rates, they are essentially treating the current rate as 0 (might as well be…) so all that is left is QE (quantative easing – i.e. money printing)
Now, the US, Japan, and even EU used this after the GFC (albeit hesitantly then, hoping it would not cause crazy inflation) but with the bar already set, governments are now turning to it again, with far less hesitation and must more gusto…
At the time, most economists were shocked that it didn’t cause massive inflation, but it certain did cause inflation, just not in consumer prices, but in asset classes. After the stimulus packages of the GFC, the US stock Market tripled, and both US and AU housing booms commenced…
The issue I see here is now massive economic deficits, perpetual supply of money printing, and active government intervention in what was traditionally, the territory of the central banks – all this has become the ‘norm’…
They are throwing around the term ‘emergency response’ but what we will see is that in the future now, they will be very quick to again resort to these responses in far less emergencies…
Back after GFC the financial big boys (who generally also happen to own a lot of assets), seeing the impact of the stimulus, thinking “OK, that’s not too bad” are again, sitting back grinning waiting for the impact on asset prices.
I am concerned what this is going to mean long term, Governments and central banks seem happy enough to pull the trigger again, and again, without really knowing (or more likely happy with) the outcomes?
Now as a property investor, I am not saying this is bad…just… different. Hard to make head nor tail of what will be the longer term impacts on our economies here…
Or…
It could simply be that I have been cooped up in this home office for too long and starting to jump at shadows now… Never mind me… I have a memo to find…
Anyway, you got this!
Happy Investing all and have a great weekend all!!
