Month: June 2021

interest rates, retirement, risk management

2021 Inflation and Parallels to the Seventies

James Cox

My most vivid memory of the Seventies is sitting in the car with my siblings and parents in a mall parking lot the week before Christmas and my mother crying because they couldn’t afford presents and had to file bankruptcy. For a 12 year old it made the challenges of real life… real.

The seventies were a traumatic time for many Americans… the end of the Vietnam war, the political chaos of Watergate and Nixon, the oil embargo, gas rationing throughout the decade, the suffocation of unions, the loss of jobs and industries as Japan and South Korea became exporters. Economic instability was an ever-present cloud.

Moving in waves through the decade, the economy suffered from bouts of inflation and deflation. It made policy decision-making challenging at best… boost the economy to keep it from slowing down, or is the economy running too hot?

When you drill down one sees many similarities between conditions that led to the “stagflation of the 1970s” and the situation we find ourselves in post COVID.

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Climate change, environment, retirement, risk management

Global future growth… and Climate Change

James Cox

A recent Bloomberg article titled “The Global Growth Hotspots of the Future Are Here” discussed an HSBC report which advises that investors need to focus on the growth of cities in the Emerging Markets. (1)

“While wealthier countries are more urbanized today, the proportion of urban to rural dwellers in emerging markets is expected to climb to 63 percent in 2050 from 50 percent now, according to the study, which draws on research by McKinsey and the United Nations.

Developing nations’ emissions are rising fast and the report predicted that their share of cumulative emissions would reach 51 percent by 2020. (2)

By 2050 some 5 billion people – more than half the world’s population – will live in emerging market cities, and account for more than half of global gross domestic product growth.

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Climate change, entrepreneurship, environment, ESG, life insurance, new economy, protection, retirement, risk management, Socially Responsible Investing, SRI

Embracing the Future: An Interview with Charlotte Markward

James Cox

I met Charlotte and her Husband Randy years ago at a Green Drinks in Philadelphia. It was before the days of Tesla, widespread solar power and organic food sections at the grocery store. People got together to share a beer and dream about a future that would be more sustainable. Things have changed a great deal in the past few years.

Charlotte is a graphic designer based in Philadelphia. She has agreed to share some of her experiences and insights so that we all might have an easier path to financial security.

Charlotte has been interested in supporting socially responsible investing for many years. I asked her what it means to her. Charlotte said, “For one thing it’s smart. We have a finite amount of resources and we are running out of them. To continue doing things in the old ways is to set yourself up for failure. Green investment is where the growth will be.”

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interest rates, retirement, risk management

“Rising Prices in the Economy”: Inflation Post COVID

James Cox

In September 2020 Jay Powell announced that the Federal Reserve would adjust how it reacts to inflation, one of its chief mandates, and allow inflation to run hotter for longer. The expectation is that it will be several years before the Fed raises interest rates. Traditionally, elevated rates of inflation indicate the economy is operating at full capacity and may be in danger overheating. Following the COVID recession of 2020 the Fed is trying to create a positive environment for the recovery.

In the Spring of 2021 signs of inflation are abundant. Since the fall of 2020 commodity prices had risen dramatically. Lumber prices had soared as supply constraints limited what was available, especially as housing prices went up and building accelerated. Copper surged to new record highs. Wheat, corn and other food commodities went up as the economy reopened and supply couldn’t keep up with demand.

Among tech businesses a shortage of computer chips affected the building of everything from cars to exercise equipment. “Just in time” supply chains showed increasing strain.

To top things off, a gasoline pipeline was held hostage by a ransomware attack in early May 2021. The result was gasoline shortages and higher prices throughout the east coast US.

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