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Standing On The Fault Line

October 13, 2021 | Posted in: Insights, Wealth Strategies

I recently had occasion to review the thirty blog posts and white papers that I have written over the past couple of years. This exercise afforded me an unusual moment of clarity in which I was able to connect a number of dots. Surveying the wide variety of topics covered, I had a powerful realization that we are in a time of considerable change, even upheaval, and this is occurring in virtually every aspect of lives. I make this statement with some caution because I am very skeptical of blaring headlines regarding uncertainty, volatility, and turmoil. However, the next section catalogues a large number of “hot spots” across politics, social policy, economics, business, and many other sectors. Hopefully, the depth and breadth of this list convinces you as it did me that we are in truly extraordinary times. Some of the following are directly attributable to the pandemic, but in other cases, I suspect the crisis was the catalyst that allowed long-simmering issues to come to the fore.

Both Risk and Opportunity

A detailed discussion of each hot spot would require a tome, so I provide only a summary statement. Some items are self-explanatory and many are covered in my writings that can be found on the Diversified Trust website. In order to make them easier to digest, I have divided the list into major categories.

Climate change
• Forest fires
• Floods

The Nature of Work
• Work from home versus traditional work site
• Disappearance of job categories due to robotics and Artificial Intelligence
• High “quit rates” and dissatisfaction with wages, working conditions, lack of meaning and respect, and so on
• Worker shortages in many categories
• Disproportionate impact of the pandemic on women-childcare as a major issue

• Component shortages
• Supply chain bottlenecks
• Shipping disruption and soaring freight costs
• Emergence of new businesses such as pre-prepared meals, virtual gyms, and streaming

Consumer Behavior
• Conspicuous consumption and soaring demand for luxury goods
• Population migration
• Soaring housing prices and historic rent increases

Corporate Behavior
• Implementation of ESG principles
• Intense focus on diversity and inclusion

• Incredible dysfunction and division
• Culture wars
• New voting laws in several states

Socio-economic issues
• Worsening income and wealth inequality
• Declining birth rate
• Decrease in life expectancy
• Impact of remote learning on those lacking computers and Wifi-unequal opportunity, a lost generation?
• Abortion controversy

Civil Rights
• Intense focus on law enforcement
• Controversy regarding the role of civil rights in educational curricula

• Return of the retail investor
• Unprecedented government involvement in markets
• Low/ negative interest rates
• Crypto currencies
• Specter of renewed inflation

• Soaring natural gas and oil prices
• Possible gas shortages, particularly in Europe

Undoubtedly, I have omitted some important issues but this list is certainly of sufficient length to confirm my statement that we live in interesting times. Some of the items discussed are very positive and will result in long overdue change whereas others pose considerable risk.

The Fault Line
I chose this metaphor because a fault line is a crack between tectonic plates in which there is pressure and motion. This movement is generally small and incremental but occasionally erupts in the form of an earthquake. I am not sure which will be the case given the large number and complexity of the issues cited herein. However, I am quite sure that life will be very different!