Whose Economy is Threatened?

That depends on who is fearful of negative effects.

The wealthy wonder about their long-term asset values. They consider hedging actions to escape the worst of inflation, or deflation. They opt for strategies that soften the effects of recessions while building toward opportunities for boom times. This group has wealth buckets that see them through hard times. To the rest of us, the term means something else.

The poor know what hard times are. They have lived through them over and over again. For them the fight is always over adequate food, decent housing, medical care and clothing. Planning for the future is not in their cards. That hand was dealt much differently than for the wealthy.

Middle class folks, however, are another story. Their homes are worth more but so are replacement properties. If downsizing or moving to a lower cost of living area, you will do OK. If you are relocating to a higher cost of living area, good luck. Hope your new job assignment comes with a healthy salary increase.

Middle class people also have career choices that many others do not. It is a matter of past experience and educational credentials. Willingness to continue your own education will also enhance flexibility and upward mobility in career matters. For the most part, however, the middle class is dropping out of sight. They are now counted among the higher level of lower income groupings. Some are advancing into the bottom rung of upper class, but just barely.

No, the class system in America was never formal, but real just the same. The wealth or poverty brackets have been hugely redefined in the last 10 years. The middle class just keeps getting smaller and smaller. Poverty groupings enlarge in leaps and bounds. The upper class has expanded as well but still remains between 5 and 10% of the population.

Hope those folks enjoy themselves while they can. Reversals in financial status can be breathtakingly fast. Best your wealth is invested in assets that produce income. Not status. The status items are truly meaningless in the long term.

That has never been truer than during the COVID pandemic. $400 shoes have no place to go these days. Entertainment venues often are breeding grounds for viral shifts in COVID, the flu and Monkeypox. Travel, too, is fraught with threats of pandemic.

Interesting time we live in, but don’t forget that poverty, wealth and economic struggles are all relative. And timing. Both change each other exponentially. Always.

August 16, 2022

 

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