American “What Else”? A Potpourri

Good Morning Ladies and Gentlemen

” In a gold rush, do not invest in gold mines but in shovels.”

André Kostolany

Today’s “Stefan’s Weekly” is a bit of a potpourri, for which I ask your pardon. But many things happened during the last seven days, and I would like to cover them at least briefly.

The Most Famous Person Ever

Jesus Christ is universally acknowledged as one of the most renowned figures in history. He was born in Bethlehem, Palestine, to Mary, who the Bible states “was found with child of the Holy Ghost” (Matthew 1:18). He represents humanity and divinity. In contemporary times, the Pope, regarded as God’s representative on Earth, is arguably the most recognised person worldwide. Yesterday’s election of a new Pope, an American, has surprised many and presents an intriguing choice. I must admit I am positively surprised. Therefore, the most famous living person in the world is an American, yet it is not the American President.

The Wisdom Of Experience

The benefits of increased globalisation, which contributed to economic growth and sustained disinflation, are now at risk due to a reversal of that trend. As Dieter Borchmeyer, Professor Emeritus of Modern German Literature and Dramatic Theory, articulated in a recent article for the Neue Zürcher Zeitung: “Conservative reforms preserve the existing order, while revolutionary actions seek to dismantle it. Abstract political ideas often lead to ideology, which can, in turn, incite violence. In contrast, reform policies draw upon the wisdom of experience.” We should never forget what Peter Atwater teaches us: that widely shared extreme vulnerability resolves in spontaneous social movements. This is why I firmly believe that an economic environment is only good if broad sections of the population can share in the prosperity.

The Fed

Ladies and Gentlemen, according to the latest Fed statement, “the risks of higher unemployment and higher inflation have risen” since the last meeting. However, suppose that cheaper crude oil will trickle through to lower prices for American motorists at the end of the long refining process. That would present enough reason for hope that consumer confidence can be bolstered and inflation can stay under control. So maybe that justifies the expectations of rate cuts. I keep my fingers crossed, yet I am long crude oil, as I do not trust that scenario enirely.

One Last Thought

Why do politicians tend to spend ever more money? Politicians aim to win elections, and one of the most effective strategies to achieve this is by making promises or offering incentives to voters. However, these incentives often come at a cost, and that funding must originate from somewhere. In political circles, money is typically acquired in small, inconspicuous amounts (small direct or indirect taxes), so its impact on citizens goes unnoticed. Politicians may also opt to incur debts that future leaders and our children will inevitably have to address or repay long after the current officials have left office due to age. Beware!

Ladies and Gentlemen

Feel free to send your messages to smk@incrementum.li.

Many thanks, indeed!

I wish you an excellent start to the day and weekend!

Yours truly,

Stefan M. Kremeth
CEO & Head of Wealth Management
Incrementum AG – we love managing assets

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li