“Things are really bad”. This is the refrain we are hearing every day in every corner of society, across all sectors and economic strata, with the exception of the very highest. Moreover, what began as a murmur amongst the most pessimistic and/or alarmist voices has gradually in crescendo until it has become a rallying cry today. Soon to be heart-wrenching.
Some are predicting a serious economic crisis that could lead to a financial collapse. There are those who talk about the future “corralito” Spanish. Those not-so-distant and recurring times when Argentinians would pack their savings into suitcases, briefcases and rucksacks to cross the Río de la Plata (the ‘charco’) in search of safe investments in their nearest paradise: Uruguay. That crisis in the neighbouring giant gave a further boost to the already luxurious coastal town of Punta del Este, a few kilometres from Montevideo – the Marbella of wealthy Argentines and Brazilians. Time will tell, but I sincerely believe we are a long way from that scenario.
Before the economic and financial system suffers structural damage that threatens its very survival, there is a long and painful road ahead: society still has plenty of room to become even poorer. By this we mean that we are still a long way from reaching the levels of “social suffering” seen in those South American countries. Although, unfortunately, the gap is narrowing.
The economic prosperity we enjoyed until very recently is still fresh in our minds: holidays, investment, consumer spending in general and optimism. The term was coined a person earning a thousand as the epitome of the final link in our financial system. Below this lies marginal and minority poverty – though that does not make it any more acceptable. But in recent times – in recent months, I would say – the situation has been deteriorating at a dizzying pace. Pessimism has replaced joy; what little consumption remains is more compulsive than rational. The banks’ encouragement of consumption and the consolidation of loans in times like these strikes me as even more sickening. The people on a thousand-euro monthly salary are starting to be the envy of quite a few people. Just a few months ago, people were still debating whether or not there was a property crisis, or whether it was simply a deceleration in the sector’s growth. Today it is the voice of the people and tomorrow, perhaps, history. Something is changing for most people, and quickly too.
The anchoring effect which applies lucidly Fernan2 The focus on markets and property in his post also misleads us psychologically when it comes to analysing the current situation and, above all, the economic development of our society. Our psychological attachment to the prosperity of recent times distorts our perception of reality. Yet, on the whole, the financial situation of the majority of the population is getting worse day by day.
Those who analyse the situation with a degree of discernment and speak of playpens, they thus attribute the difficulties to the financial system. According to them, the economy could suffer severely from the excesses of the property bubble, the banks could be overwhelmed and the state rendered incapable. No, gentlemen, the first on the list and those most likely to suffer in this scenario are ordinary citizens. In other words, the majority. Perhaps their attachment to the former welfare state is misleading them, but before the financial system begins to falter, the personal finances of ordinary citizens will deteriorate as far as necessary.
Fortunately, there is still a long way to go before our society reaches the level of social unrest seen in South America. Here, the rich can still drive around in Mercedes and BMWs, and even Porsches and Ferraris. In Brazil, no millionaire dares to be seen in anything more ostentatious than a Passat; you often see mid-range cars with a chauffeur and the passenger seat occupied. Express kidnappings are still in their infancy in Spain, and detached houses are still inhabited without having to be part of gated estates, with access barriers and armed security guards in their guardhouses in the darkest style Checkpoint Charlie, as is the case in most of the southern hemisphere.
It is true that we are beginning to hear about these ‘express’ kidnappings in our society, that burglaries – both violent and non-violent – in detached houses are now commonplace, and that crime in general is on the rise. However, these are not public order problems caused by a relaxation of security measures, but rather by the increase in need of certain sections of the population. Immigration does not help in this regard either, and the ‘state of discontent’ from which they fled seems to be growing ever closer to our now-longed-for ‘welfare state’.
But “don’t worry”, the blood of everyone It won’t reach the river. Our financial system is not in mortal danger as long as there is scope for further social deprivation. Unfortunately, that’s just the way it is. But the anchor effect In good times, it helps us look the other way. As he said, Supertramp in 1975: Crisis? What Crisis?
Before the economic and financial system suffers structural damage that threatens its very survival, there is a long and painful road ahead: society still has plenty of room to become even poorer. By this we mean that we are still a long way from reaching the levels of “social suffering” seen in those South American countries. Although, unfortunately, the gap is narrowing.
The economic prosperity we enjoyed until very recently is still fresh in our minds: holidays, investment, consumer spending in general and optimism. The term was coined a person earning a thousand as the epitome of the final link in our financial system. Below this lies marginal and minority poverty – though that does not make it any more acceptable. But in recent times – in recent months, I would say – the situation has been deteriorating at a dizzying pace. Pessimism has replaced joy; what little consumption remains is more compulsive than rational. The banks’ encouragement of consumption and the consolidation of loans in times like these strikes me as even more sickening. The people on a thousand-euro monthly salary are starting to be the envy of quite a few people. Just a few months ago, people were still debating whether or not there was a property crisis, or whether it was simply a deceleration in the sector’s growth. Today it is the voice of the people and tomorrow, perhaps, history. Something is changing for most people, and quickly too.
The anchoring effect which applies lucidly Fernan2 The focus on markets and property in his post also misleads us psychologically when it comes to analysing the current situation and, above all, the economic development of our society. Our psychological attachment to the prosperity of recent times distorts our perception of reality. Yet, on the whole, the financial situation of the majority of the population is getting worse day by day.
Those who analyse the situation with a degree of discernment and speak of playpens, they thus attribute the difficulties to the financial system. According to them, the economy could suffer severely from the excesses of the property bubble, the banks could be overwhelmed and the state rendered incapable. No, gentlemen, the first on the list and those most likely to suffer in this scenario are ordinary citizens. In other words, the majority. Perhaps their attachment to the former welfare state is misleading them, but before the financial system begins to falter, the personal finances of ordinary citizens will deteriorate as far as necessary.
Fortunately, there is still a long way to go before our society reaches the level of social unrest seen in South America. Here, the rich can still drive around in Mercedes and BMWs, and even Porsches and Ferraris. In Brazil, no millionaire dares to be seen in anything more ostentatious than a Passat; you often see mid-range cars with a chauffeur and the passenger seat occupied. Express kidnappings are still in their infancy in Spain, and detached houses are still inhabited without having to be part of gated estates, with access barriers and armed security guards in their guardhouses in the darkest style Checkpoint Charlie, as is the case in most of the southern hemisphere.
It is true that we are beginning to hear about these ‘express’ kidnappings in our society, that burglaries – both violent and non-violent – in detached houses are now commonplace, and that crime in general is on the rise. However, these are not public order problems caused by a relaxation of security measures, but rather by the increase in need of certain sections of the population. Immigration does not help in this regard either, and the ‘state of discontent’ from which they fled seems to be growing ever closer to our now-longed-for ‘welfare state’.
But “don’t worry”, the blood of everyone It won’t reach the river. Our financial system is not in mortal danger as long as there is scope for further social deprivation. Unfortunately, that’s just the way it is. But the anchor effect In good times, it helps us look the other way. As he said, Supertramp in 1975: Crisis? What Crisis?