ECB / Entitlement Society

Good Morning Ladies and Gentlemen

”Anyone can make it, but not everyone.”

Gerd Ziegler

ECB

Before we dig into today’s somewhat philosophical topic, let us quickly look at what happened on the interest rate front. Yesterday’s European Central Bank (ECB) meeting resulted in the widely anticipated 25 basis point interest rate cut. Another 25 basis point cut is also expected for the December meeting. Based on Futures prices, four additional interest rate cuts of 25 basis points each are awaited in 2025. The ECB’s target range by autumn 2025 is 2%. However, that remains to be seen. I am not sure if, at the end of next year, we will see rates below 2%. Anyway, some weeks ago, I wrote that interest rate cuts are positive for stock markets under normal circumstances. This is still the case! And now, Ladies and Gentlemen, enjoy today’s topic.

Today’s Topic: my very personal view!

I perceive a shift from a meritocracy to an entitlement society. Nowadays, it seems, people believe in being entitled to a successful career, a good life, good health, an attractive, intelligent partner, and everything else others may have or may not have. This was different in the past. In the feudal system, only the nobility had the privilege of a good life. Everyone else knew they couldn’t demand much in this life, but if they were decent and submissive, they believed in a good afterlife or heaven. Regardless of desire or merit, having noble blood was the only chance to succeed.

Capitalism

Capitalism has brought significant changes to society. In theory, there are no glass ceilings anymore, and everyone now has the opportunity to succeed, at least in Western and some other more or less capitalistic societies. However, as a result, people now feel entitled to success, whether they deserve it or not. Capitalism has led to widespread prosperity for large global populations. Yet, it is not evenly distributed and not even present everywhere. Despite this, many more people have a better life today than 20, 50, or 100 years ago. Nevertheless, because not everyone succeeds despite the opportunity, frustration builds, leading to envy, anger, fear, and the desire to find someone to blame for one’s failures and maybe even to seek retribution against them.

Frustration

When ruthless politicians, ruthless gurus, ruthless people in general and criminals manipulate the frustration, envy, and fear of those who have not succeeded by, for example, blaming immigrants, warning of inflation, predicting bank failures, and forecasting a collapse of the financial and political system, managing such fears, they can offer themselves as saviours to those who cannot see beyond the claims. To me, this is nothing more than a fear-based agenda for power, leading to a loss of prosperity for those who need it most. I see repeatedly that even quite sensible people hold views and beliefs that are neither scientifically proven nor would have been morally/ethically justifiable until a few years ago. I think they are prone to disappointment, and I wonder what life has done to those people and where their inner compass has gone.

“I said dreamer, you’re nothing but a dreamer.”

Supertramp

Quote and conclusion

Looking for the culprits does not make sense, but I hope humanity will realise the potential for positive action. Naïve? Yes, probably. Do I care? Nope, not at all!
”Anyone can make it, but not everyone.” This, Ladies and Gentlemen, is probably and, unfortunately, true, and I cannot think of a way to change it. To me, the best, however not flawless, system is an open and liberal democracy where the people can elect politicians and vote on substantive issues. In my opinion, the promise that everyone can make it in an open, reasonably democratic society of capitalist characterisation still stands, but everyone has to do it for themselves; the government cannot do it for its citizens, no matter what frivolous politicians will promise in exchange for some votes. Those who believe the state can do it for them are nothing but dreamers, and by the way, never forget that the flow of people follows the flow of capital because everybody seeks a share of that capital.

Ladies and Gentlemen

As always, please share your opinion with me, but please do not forget (instead of hitting the reply button) to send your messages to smk@incrementum.li

Many thanks, indeed!

I wish you an excellent start to the day and the 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