My work and the trip were on my mind as I flew to Singapore. My schedule didn't allow much election watching, so it was shortly after 12 noon our time that I received an SMS from Veronica saying "Congratulations, your man won". The fate of America approached a defining hour, and passed through while I taxi'd from one appointment to another.
Still, the moment itself, as played back on our evening news, did not disappoint. In my lifetime I have not witnessed such a spontaneous outburst of joy in the entire world (except Russia) on an election result. When I ask myself how this has come about I would answer that a simple contrast led to Obama's white house victory. The encumbent party led by McCain seemed mired in the negative message of fear, nebulous accusations, and for Palin, highly repetitive sound bites. I think Obama's campaign stayed on a message of hope, with rhetoric that gave us a brief respite from the realities of our time. I think this message is what won the day.
The big question before us is how we are going to use this new found hope (assuming you share a sense of hope with me). There is a lot to overcome. I note in the news the return of tribal warfare in the Congo. Russia used the U.S. election to announce the deployment of missles on the Polish border. The stock market plunged 500 points the day after the election as it turned its collective attention back to the real issues of falling business activity and dramatically falling unemployment. Reports Friday tell us there are ten million Americans out of work tonight, the most in twenty-five years. There are likely many more coming into that demographic if the Fed doesn't bail the auto industry. They say they need $50B to survive, but no guarantees they won't need more. Retailers felt the floor fall away in October, harbingers of one of the worse commercial Christmases in our memory. Then there are the state governments themselves, coming under enormous pressure as their tax bases decline rapidly. Investment advise columns tell us we should worry about munis' defaulting. They are going to need some of that fed money also according to talking heads. We shouldn't forget that the Fed has already injected more dollars into the financial system than the annual GDP of Australia. We will have to wait to see the long term impact of such a huge injection of funds, but we can expect that number to grow rather then diminish s the needs line up. Don't forget that Obama is going to raise taxes for some, and is going to need to spend. Hopefully his spending will be wiser then that of the last eight years.
It's a good thing to have a ray of hope now. It is apparent that we face a period of much sacrifice and probably more decline. We need more then ever to nurture that precious commodity, even more then gold, more then oil, maybe even more then wheat. I hope our hope lasts but I think hope is as infectuous as the loss of it. Be sure to share whatever hope you have. You don't actually lose it when you do that. You actually multiply it.
There will many any need of it. It is one thing to stand in a crowd and cheer on election night. It is quite another to watch your bills collect on the side table while you change the dial between daytime TV shows. Be charitable this Christmas, perhaps foregoing personal gifts and giving to others if you can. Be charitable at home too. Plan a warm quiet Christmas and count the blessings you have. You have your family. You live in what is still by far the most free country in the world. There are others reasons to be hopeful beyond Obama's inspiring oratory. For example we have never had such sophisticated, nor readily available technology in our history. Gains in productivity are being realized on every front. Our security is better now then ever, some would say too much better but I do not agree. We could also point to the flip side of one our economic problems; the country is leaning out both corporate and consumer debt. Corporates are selling assets and paying down debt as fast as they can. Cash is king again they say. I would say there sure is plenty of it being poured into the tank but it isn't getting burnt yet. The domestic oil and alternative energy field is going to get a huge stimulus if Obama keeps his campaign pledge. He won't give up on that one. He sees it as a cornerstone of what will be his legacy. We will cause more distress to OPEC over the next 15 years then they have ever felt. We will need som articulate and adept diplomacy at hand. We could expect our trade balance to improve if the dollar holds a bit longer and as most of our overseas partners become enmeshed in similar problems. Don't count on the dollar holding up for long, not at the rate we are making news ones. Dollars are notes, a fiat currency. They devalue or grow just like stocks. This is an excellent time to consider silver and gold in my opinion. Natural gas looks very good now. It would be the time to consider gas, before the harder part of winter sets in. Commodities in general have become more affordable as the world deflates. Whether the largesse of the government is simply putting gasoline on the fire as some would contend, or the sheer weight of the inflationary steps they have taken truly does balance the deflationary forces, we have yet to see. I believe it stands a chance. However, we will need all the hope we can muster and we will need to spread it around.