Earlier this year, I wrote in an article that,
that I feel uncertain about predicting how things will turn out in 2010
would shape economic development. Scenarios from the
“Decline accompanied by demonstrations” on the one hand, and “
: The crisis is over, the great upswing is coming” on the other, stood in stark contrast to one another.
: The crisis is over, the great upswing is coming” on the other, stood in stark contrast to one another.
I called it a balancing act.
Well, you may have heard that the
The flutter of a butterfly's wings can influence the weather in Europe
can. How, then, is it even possible to make predictions?
In complex systems, there are often many unknown factors, and
so many possible interactions that clear predictions
are always impossible.
That's why there's little reason to believe long-term predictions.
It is now believed that the weather can be predicted with relative certainty about 14 days in advance
to be able to do that, but nothing more than that. So it's almost amusing that
Business plans for "the next 5 years" at startup companies
are demanded; politicians want laws because they “know exactly
"what the world will be like in 20 years," etc.
Complex systems do not behave in a linear manner and are therefore not as
predictable. Butnearly all future scenarios are based on linear
Projection. So the only thing we know for sure is that it won't happen exactly like that.
"First, things turn out differently; second, not the way you think," as the saying goes.
It's fascinating how we can still get so fixated on one possible future.
But what's even worse is that we can act in a completely paradoxical way.
Right now, many people fear that times of high inflationare ahead of us
and find the rising national debt
alarming. But what do they do about it?
and find the rising national debt
alarming. But what do they do about it?
They are buying government bonds—in other words, the very debt
that they fear.
that they fear.
They are afraid of fire and believe that this will protect them,
that they're adding fuel to the fire. What a paradox! The next big bubble is forming,
Because if interest rates really do rise, bond prices will plummet.
Today, stocks that offer greater security are those whose profitability
have remained, and some of which pay higher dividends than the interest on the bonds.
The situation is different in the banking world. If a bankcan borrowmoney at 0.5%
, then a 2% bond yield means a 300% profit!
, then a 2% bond yield means a 300% profit!
This is how the rich get richer and the poor set the stage for further poverty.
So does that mean we have to rail against the rich and make millionaires foot the bill?
Unfortunately, that isn't the solution right now; if anything, it creates even bigger problems.
What is the real reason for the growing divide between the classes?
Part of the problem lies in the system and in what is known as structural change.
The much greater one, however, lies in education and in prevailing paradigms,
Beliefs.There are a lot of calls for more education these days.
But what kind of education?
Does that also mean financial education? Unfortunately, no!
Financial ignorance is precisely what leads to these paradoxes,
that the poor, because of their ignorance, find themselves in the
invested in the wrong assets.
Let's take the example of "Millionaires at the Cash Register." It works well as
"Party slogan." But what does it actually mean?
If we are currently in a period of low interest rates, then that means
2% interest on one million euros invested equals exactly 20,000 euros
Annual income. After deducting taxes and insurance premiums
If you have to, how much will you have left……? Let's just say 1,500 euros a month.
Have the people calling for “Millionaires Pay Up” actually done the math?
It’s wrong to generalize.
It’s wrong to generalize.
I'm not trying to defend the rich today; there are certainly injustices there that need to be addressed.
The simplistic demands and ill-considered fears about the future lead to
always the paradoxes that, when all is said and done, make things worse.
Should we demonize investors who make money on the stock market?
After all, the government itself is a shareholder—and so is every citizen. Should the
Wouldn't it be better if the government became an even better investor? Then maybe everyone would benefit more.
Would better financial education perhaps lead to fewer
vague fears and help people choose the right stocks instead?
So, instead of indiscriminately disparaging successful investors,
perhaps part of the solution for the future lies in “poor” people
buying good, sound stocks every now and then?
vague fears and help people choose the right stocks instead?
So, instead of indiscriminately disparaging successful investors,
perhaps part of the solution for the future lies in “poor” people
buying good, sound stocks every now and then?
The uninformed and the fearful are currently leaving the stock market.
The "savvy" and "wealthy" are now buying up bargains at
stock prices. As a result, the poor become even poorer, and the rich
even richer. Unless education changes, no laws will make a difference.
If there were a law that required all healthy people to share some of their health
If they had to pay for it, would all recipients take better care of their health?
If everyone who has cultivated their fields well were required to turn over some of their crops—
—wouldn'tthe recipients all start to tend their gardens and fields more carefully?
—wouldn'tthe recipients all start to tend their gardens and fields more carefully?
We must not focus solely on those who have, but above all
also onthose who do not have. In other words, what level of education and what
level of achievement should be required?
also onthose who do not have. In other words, what level of education and what
level of achievement should be required?
If the gap between the poor and the
richis to beclosed
solely by having one side move toward the other
, then soon we’ll all be on just one side—in this case, the side of poverty.
richis to beclosed
solely by having one side move toward the other
, then soon we’ll all be on just one side—in this case, the side of poverty.
You can only reach the middle if both sides move.
So another paradox is wanting to reach the middle by
just want to remove one edge. Only when both edges have been removed
...and the center is formed. However, it's a smaller one—after all, the plate has to be smaller.
will be when we trim the edges.
So it's not the solution after all?!
“The mind that created the problem cannot solve it,”
said Albert Einstein.
The solution lies at the next higher level. Let's stop,
not just thinking about how to divide a cake, but
Let's start focusing more consistently on creating new cakes
to take care of. But that requires a different kind of education.
And even more excitement for the future!
Didn't Martin Luther put it in similar terms:
"I'd still plant a cake today………"
Sincerely
Wolfgang Georg Sonnenburg
Wining for Life