NOVEMBER 27, 2021 – Yesterday, I sneaked a peek at the latest news headlines—equities markets down hard, along with bond yields, and commodities. The culprit: fears arising from the “omicron” Covid variant now on the loose in South Africa.
Just a week ago, we were spooked by the specter of inflation. How fast the apparent hockey game of finance bounces off the boards at one end of the ice and winds up in a skirmish at the opposite end.
Financial markets—debt, equities, and commodities—are reflections of human activity. Because we need to consume stuff to survive and thrive, we make, sell, trade, store, and distribute it. This process is called, “the economy.” In recent times, much of the “stuff” our economy produces is “service,” not stuff “stuff.” The more we consume and the more of us who do so, the more stuff gets made, sold, traded, stored, and distributed.
Economic growth—and thus, economic prosperity—is driven by two over-arching factors: population growth and productivity gains. The latter is best viewed as technological innovation.
I’m optimistic that because of the compounding factor within technological advances, we’re now running an economic marathon, not bouncing randomly off the boards of a hockey game. And the general direction is up, despite dips and curves along the way.
Technology is one reason I decided to consume less-to-little mainstream news. Our well-being isn’t or shouldn’t necessarily be measured by how much “stuff” our society consumes—and certainly not by how much our wealthiest 1% consume. Nevertheless, our material consumption of goods and services does reflect national “happiness.” On-going revolution in technology is the great game-changer of civilization. If, however, you’ve fallen unwittingly into the business model of mainstream media—sensationalized “news” selected and presented to get your blood boiling (to draw an audience for building revenue)—you’ll miss the forest through the trees.
I won’t argue that non-economic and non-technological news isn’t worth knowing. All in our collective existence is integrated, and just as a volcanic eruption can wreck an island in paradise, so will the troubles of a marginalized element of the population eventually singe the eyebrows—potentially much more—of non-marginalized citizens. But the stage on which all of us operate is the economy, and the strength and dimensions of that stage are determined far more by the rate and quality of technological change than by the publicized buffoonery of demagogues playing to the business model of mainstream media.
Is there cause for concern over the omicron variant busting out of South Africa? Of course there is—just as there’s reason to worry about the economic consequences of renewed Covid-related lockdowns; just as we should be troubled by internal assaults on our democracy, not to mention humankind’s lack of urgency in addressing climate change. But in the grand scheme of things, I’m confident that the compounding effect of technological innovation can change a trajectory of defeat into one of victory.
The bottom line: buy to hold, then hold onto your seat. Help is underway.
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© 2021 by Eric Nilsson
