A Cultural Examination of Wealth through Literary Art

Good Morning Ladies and Gentlemen


”If a tree falls in the woods and there’s no one around to hear it,
does it still make a sound?”

Jesse Felder

 

In a series of four articles unfolding over the summer, my friend Anton, who lives in Oxford (UK) and works in the financial services sector, and I will examine the familiar term “wealth” and aim to gain a deeper understanding of its meaning.

Below is the third article in this series. In the previous two, we have attempted to define wealth using philosophical insights and to understand its essence by linking it to the nature of the human person.

Thank you all for reading them, submitting your questions, and sharing your points of view.

Today’s article will explore wealth from a cultural perspective through the lens of art and literature, specifically. As with the first two parts, Anton provided the text while I handled the editing.

If we are to take a purely metaphysical position, culture may be defined as what people do in time. However, if we try to be more precise, we will see that it is difficult to determine precisely what culture is. In part, this is because a culture contains tangible elements, such as buildings erected in a particular architectural style, paintings, books and songs, and intangible aspects like philosophical perspectives, political views, and moral considerations. Moreover, some of these aspects change as time passes, while others do not.

Therefore, rather than seeking a definition, it may be helpful to look for a mode of thinking about culture that helps to reveal part of what it is. The sculptor Alexander Stoddart articulated such a perspective well in a Ralston College interview. Stoddart sees culture as communion with the dead.

This is a beautiful way of thinking about culture because it enables us to understand an important truth- namely, that we are all one humanity; history has not ended for those who died long ago, while it keeps going for us today. Instead, history is going on for all – those alive and those resting. As such, culture can be understood to be a bridge between aeons through which generations of men and women lived, leaving – as we are leaving today too – their traces of how they lived and what they believed for posterity to contemplate and, hopefully, to understand. An essential part of this heritage that cultures leave behind is art.

Indeed, a powerful way to understand cultural landscapes is through artworks. Art serves an important function in the lives of individuals and of civilisations. On one hand, artwork enables people to express beliefs, values, aspirations, fears, socio-political relationships, and even economic and military events. In this sense, art’s function is some self-understanding, as the German philosopher Hegel argued in “Lectures on Aesthetics”. However, this is only part of the role that art has.

If they are truly works of art, they must lead us beyond ourselves. We can see this primarily in the sense of awe that they inspire in us: they invite us to meditate upon aspects of life other than ourselves. These different aspects can be a loved one, nature, our family and neighbours, or wealth and how it relates to others.

Of course, the world of art is very diverse. It includes poetry, paintings, music, literature, architecture, cinematography, and perhaps even clothing items. Wealth has been explored and represented in various ways across these art forms from ancient times to the present day. Let us go back to the edge of antiquity and take as an example Homer’s epic poems, “The Iliad” and “The Odyssey.” Both present wealth in multiple forms.

In “The Iliad”, two kingdoms go to war. The entire military and material might of these two realms is on full display, all their material wealth is on the line – and for what? For something of far more value than the Greek or the Trojan kingdom: for human relationships, ultimately for love. In this manner, Homer’s mythological poem tells us much about our understanding of wealth. We value material possessions but are ready to sacrifice them for the real wealth another person can give us through their love.

Moreover, throughout “The Iliad”, other forms of wealth appear. These include particular virtues, like honour, which the warriors significantly value, and that most constant and correct aspiration of all mankind: immortality. These notions do not reach their full philosophical potential because Homer did not have the theological insights or the metaphysical concepts we possess today. However, “The Iliad” contains them, reminding us that, since time immemorial, wealth has meant more than material possessions.

Similarly, in “The Odyssey”, the house of Odysseus is rich in possessions, but his wife and son are mourning because he was thought to be dead after he fought in the Trojan war. Once more, we see that wealth should include something more than material items, prestige, and political power, for Odysseus’ family was reputable and influential. Moreover, Odysseus struggles to return home to his family for a long time because that is what he values most; that is where his heart is and, therefore, where his treasure is.

Suppose we accept Stoddart’s view that culture is communion with the dead. In that case, we can bring forward the observations we have extracted from Homer’s work about wealth and apply them to our present day without losing their colour. Looking at the world around us, do we see anything fundamentally different? I would argue that we do not, yet much – so much – has changed since Homer wrote the poems.

One of the genuinely great insights from reading Proust’s “In Search of Lost Time”, aside from the interesting perspectives on memory and time and aside from the in-depth views of French society of the late 19th century – early 20th century, is the stark realisation that material wealth, even when surrounded by immense aesthetic beauty, is insufficient for the human heart.

In Proust’s work, all the luxury in the world becomes the mere floor of a large ballroom in which generations join in their own social and political dances, all, however, playing after the same tune – that of the pursuit of unchanging happiness, that is, of love. Fundamentally, nothing new was said by Proust other than what Homer said, and yet, how much has the world changed since the ancient Greek poet lived?

Of course, there is no shortage of books that deal with the theme of wealth. Throughout the ages, this subject has fascinated the minds of authors worldwide. Some of the titles that are worth mentioning include “Great Expectations”, “The Great Gatsby”, “War and Peace”, and “Middlemarch”. Nevertheless, the same dynamics will be found everywhere: wealth is never seen as complete or, in fact, beneficial when it is confined to material possessions; there ought to be (and there often is) something more valuable, namely, personal relationships.

Our culture today has nuances and, therefore, is somewhat different from what people have left behind. However, at its core, because what men and women seek does not change, our art will tell the same human story. If it is authentic art that we shall leave to posterity, it will place wealth within the same dynamics we have from Homer to Proust.

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

The U.S. Federal Reserve System

Good Morning Ladies and Gentlemen


”Nvidia and Microsoft account for 15% of the S&P 500’s market capitalisation.”

Common Knowledge

 

When a government prioritises avoiding austerity measures over managing fiscal deficits, state expansion and the resultant increase in state deficits may become one-way streets. Nonetheless, Ladies and Gentlemen, it is essential to recognise that time is an expert at changing things, i.e. temporal dynamics can significantly alter any such trajectories.

To Make A Point

Perhaps it’s due to our work on the “In Gold We Trust” report, or perhaps it’s our general skepticism towards the ever-increasing government debt (to put it mildly), or simply our commitment to safeguarding our investors‘ purchasing power through various but coherent investment strategies, but I sometimes receive a range of intriguing messages about the “real facts” concerning the U.S. Federal Reserve System (and many other topics). Ladies and Gentlemen, we are neither flat-earthers nor pizza-gaters; we are a group of serious asset managers and economists dedicated to comprehending the global economic landscape and financial markets. For this reason, I feel compelled to share some clarifying information about the Federal Reserve System today, as there appear to be some misconceptions among some readers. What better time than now, during the ongoing Jackson Hole Economic Policy Symposium 2025 (taking place from August 21 to 23), which focuses on „Labour Markets in Transition: Demographics, Productivity, and Macroeconomic Policy“?

The Federal Reserve System

The Federal Reserve System serves as the central bank of the United States and is tasked with formulating and implementing monetary policy, consisting of the dual mandate of price stability and maximum employment. It is important to note that the Federal Reserve is not „owned“ by any individual or entity. Established in 1913 through the Federal Reserve Act, it was designed to function as the nation’s central banking authority. Its Board of Governors, located in Washington, D.C., operates as an agency of the federal government, reporting directly to and being accountable to Congress.

The Main Aspects of the Federal Reserve System

The Federal Reserve plays a crucial role in stabilising the U.S. economy by influencing money supply, interest rates, and inflation. The U.S. central banking structure has three key features.

Feature Number One

The first feature is its central governing board, the Federal Reserve Board of Governors, which establishes monetary policy, and the Federal Open Market Committee (FOMC), which manages open market operations and sets interest rates.

Feature Number Two

The second aspect is its decentralised network of 12 Federal Reserve Banks. I believe this is where some observers find confusion, as they mistakenly perceive the Federal Reserve as a private organisation. Each of the 12 reserve banks operates within its geographical area, or district, implements policies and provides financial services, and is incorporated as a separate entity with its own board of directors. Commercial banks that are members of the Federal Reserve System own shares solely in the reserve bank of their district and are subject to its regulations. It is important to note that holding shares in a reserve bank differs significantly from owning shares in a private company. Reserve banks do not operate for profit, and possessing a certain number of shares is, by law, a requirement for membership in the system. Furthermore, the reserve banks are obligated by law to transfer their net profits to the U.S. Treasury.

Feature Number Three

The third feature combines public and private elements because the Board of Governors, appointed by the American President and confirmed by the Senate, provides overarching guidance for the Federal Reserve System and supervises the 12 Reserve Banks. While the Board is accountable to Congress and testifies before it regularly, it is uniquely funded outside of congressional appropriations. Additionally, the Board submits a comprehensive report, i.e. the Monetary Policy Report, twice a year, detailing recent economic developments and outlining its plans for monetary policy.

Conclusion

I hope this simple explanation provides some clarity and facilitates a deeper understanding of the American central banking system. Oh yes, and I almost forgot today’s quote. How does it make you feel when you see that two companies account for 15% of the 500 companies‘ market cap that make up the S&P 500?

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

Stop Moralising / Interpreting Latest Data / Inflation And Growth Perspective

Good Morning Ladies and Gentlemen


”Don’t gamble; take all your savings and buy some good stock, hold it until it goes up, then sell it. If it doesn’t go up, don’t buy it.”

Will Rogers

 

Europe’s difficult situation is home-made, and I think humanity is currently engaged in a significant experiment. Because in the Western world, particularly within “reasonably” liberal democracies, we lack a scientific control group. This absence stems from our collective deference to the directives of the American government, given its economic and military power, which is a somewhat understandable situation. Nevertheless, it leaves us without a means to discern our circumstances if we do not submit to these influences. However, at some point, I believe, Europe must cultivate a culture of debate that allows individuals to express opinions that may not align with the prevailing and often left-wing mainstream. The ongoing moralising and emotionalising of discussions is detrimental to the political discourse and seriously represents one of many fundamental challenges.

The U.S. Labour Market

Overall, tension in the U.S. labour market is rising, although it has not yet indicated a recession. Concurrently, the U.S. economy is experiencing a slowdown, as evidenced by the labour market data for July and the ISM services index. Initial jobless claims in the US increased from 218’000 to 226’000, while continued claims surged to 1.97 million, a new record high.

The Fed – Was I Wrong?

Some two weeks ago, I wrote: “So, if you seek my two cents on the matter, I believe it is reasonable to expect that the Federal Reserve will make no policy changes for the remainder of the year. As a result, I would not be surprised if interest rates remain unchanged during this period.” Given the context of the U.S. labour market and the Fed’s dual mandate addressing inflation and employment, I must admit that the likelihood of interest rate cuts is rising. The current US key interest rate range lies between  4.25% to 4.5%. Until yesterday morning, there was a strong possibility that the Fed would decrease its key interest rate by 25 basis points in September and even at the following meetings in October and December. Futures traders anticipated more key interest rate cuts by the end of 2026, namely in September, October and December 2025, and two more in April and July 2026. The latest numbers clearly show that the tariff war’s impact on the consumer side of inflation remains limited in July, with US inflation remaining at 2.7%. However, core CPI inflation rises to 3.1%. It is essential to acknowledge, Ladies and Gentlemen, that we are not exempt from the possibility of forecasting inaccuracies, i.e. (and it is not that I like to admit it) we are also prone to prediction errors.

Prediction Error: A Quick Definition

Prediction error is the difference between expected outcomes and real events. This process acts as a mechanism by which the brain maintains a cognitive record, constantly comparing its predictions with incoming sensory information. Consequently, it enables the ongoing improvement of internal models, supporting adaptive responses to the environment.

Not So Fast, Look At The PPI

However, yesterday’s unexpectedly substantial price increases among U.S. producers may indicate the tariff war’s initial effects on inflation. In July, producer prices in the United States surged by 3.3% year-on-year, following a 2.3% increase in June; economists had only anticipated a 2.5% rise for July. This development immediately tempered expectations for a swift interest rate cut in the world’s largest economy, which had previously been supported by the above-mentioned subdued consumer price inflation data released earlier in the week. Now, the latest and higher producer prices may lead to higher consumer price inflation, and higher consumer price inflation limits the possibility of interest rate reductions that the stock market had been speculating about recently. In short, it will stay interesting and higher market volatility may be expected.

Reduced Growth Prospects Using Germany as an Example

The outlook seems quite bleak when assessing European growth prospects through the lens of Germany. The ZEW Index highlights a troubling economic situation for Germany in August, with a significant drop from -59.5 to -68.6 points. This decline has effectively interrupted the tentative recovery that had been underway. Additionally, economic expectations have sharply fallen, plummeting from 57.7 to 34.7 points. After several months of improvement, it is clear that the 15% import tariff imposed by the U.S. on EU countries is beginning to affect the economy. Excluding the recovery following the coronavirus crisis in 2021, the German economic landscape has been negative since 2019, reaching a record low that surpasses 2002 to 2006, when Germany was often referred to as the ‘sick man of Europe.’ Overall, the prospects emerging from the world’s third-largest economy are not particularly encouraging.

Conclusion

We are now entering a critical phase regarding the initial effects of the tariffs imposed by the Trump administration on global trade. This situation extends beyond merely the absolute level of tariffs; it also encompasses the non-binding nature of agreements and arrangements, along with a noticeable departure from established global trade norms. Without passing any judgments, we will be able to assess the implications for the United States and other nations within the next few quarters, or at most, in a few years. It is important to note that during uncertain times like these, businesses and individuals tend to trim investments, which will likely negatively affect global growth and employment rates.

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

Navigating Markets in the Age of Sensitivities

Good Morning Ladies and Gentlemen


””Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.”

John D. Rockefeller

 

Becoming socially acceptable historically involved adapting one’s behaviour to fit various settings, particularly when sharing those spaces with others. For instance, if you enjoyed putting your feet up on the sofa at home, you understood that such behaviour would be inappropriate on a train. Listening to music in a waiting room was typically done with headphones to respect those around you. However, with the rise of remote work, the use of noise-cancelling headphones, and a reduction in social interactions, leading to less time spent with others, including strangers, many seem to have developed heightened sensitivity to noise. A crying toddler can become distressing, and the sound of someone smacking their food can feel intrusive. This heightened sensitivity now has a formal designation: Misophonia. Some individuals are so acutely attuned to the presence of others that it becomes nearly unbearable for them.

In contrast, others may seem oblivious to the needs and existence of those around them. This dynamic presents a stark contrast in sensitivities, a phenomenon that can be frequently observed, read about, and experienced across all platforms, particularly social media. Now, why would I mention this? I believe these perceived sensitivities influence our thinking and behaviour in many aspects, including investing.

Fed’s Not Moving

Federal Reserve Chair Jerome Powell emphasised that inflation remains far from the target. He noted that a rate cut in September could be considered only if there are signs of an economic slowdown, which would include a weakening labour market emerging before that time. Interestingly, and perhaps not widely recognised by the general public, two members of the Fed’s board (Fed governors Christopher Waller and Michelle Bowman) voted against keeping rates at their current levels. This marks the first instance of such divergence with two dissenting votes in 32 years.

U.S. Car Makers as a Proxy

Following General Motors, Ford stands as another iconic U.S. automaker that was significantly affected by discussions around the introduction of tariffs, which have significantly impacted the manufacturing costs of their vehicles. Thus far, they have only experienced a portion of this effect. In the coming quarters, we will better understand the actual impact on costs, likely leading to price increases and subsequent inflation. I think price hikes will be inevitable, as the net margins on cars are not high enough to absorb such additional cost. The principles applicable to the automotive sector will likely extend to a broad spectrum of industrial goods. Although the imposition of applied tariffs may generate revenue for the U.S. government, it is essential to consider that these tariffs are also likely to result in price increases, exacerbating the financial burden on consumers.

Conclusion

Ladies and Gentlemen, as it was mentioned on Bloomberg, “while the economic growth has moderated, as the Fed statement said, the stock market is pricing in growth acceleration. Lately, the surge of cyclical/defensive stocks may reflect the stimulative part of the Big Beautiful Bill. That’s the risk for a Fed looking to resume the policy easing.” So, if you seek my two cents on the matter, I believe it is reasonable to expect that the Federal Reserve will make no policy changes for the remainder of the year, and therefore, interest rates will remain unchanged during this period. In a time characterised by sensitivities, staying focused on long-term investing is increasingly crucial rather than seeking short-term gains through speculation and being swayed by the constant noise around us.

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