As the summer season closes this year, it brings with it both joy and sorrow. The joy was experienced by watching my, now seven month old, son start to crawl, and experience his first visit to the ocean. The sorrow came on July 5th, when my wife’s grandfather passed away after battling cancer for over ten years. One of the most impactful memories came from what was said at his funeral. His son was speaking about his father planting several small trees in the yard one day. His dad stood up after planting the last one and said to his son, “I will not likely be here to enjoy the shade of these trees.” As a new father, I’ll never forget how that made me feel. There are decisions and actions that we make every day, where we will likely not be here to see the effect.
This story, and life in general, brings us to the narrative of time. I’d like to break this down to the three stages of time, past, present, and future. Which stage do you think is most important? Most folks typically say the present, as that is the only part of ‘time’ we are guaranteed. Some say the future, as that is where ‘hope’ lives. Others say the past, as it is full of memories and life lessons. I would have likely given different answers over my life, but now, I would say they are 100% equally important, none ranked higher than the other. Why is that? Each stage impacts the others. The past influences the present, which the present influences the future. You truly can’t have one stage without the other, this is why I view them as equals.
What would happen if there was a greater importance placed on the present? What if the present was the only focus? Would there be consequences for any actions? Lessons learned from history? Would decisions be carefully weighed and evaluated for future impact? Unlikely! Decisions would be driven by pure emotion or carnal cravings, completely uninfluenced by past lessons or evaluated for future impact. This sounds like a terrible way to live, much less build and govern society!
Yet, this focus on the present is exactly what is happening across society and financial markets. With over $16 trillion of negative yielding securities, Twitter comments counting as government policy, and central banks committing to do everything possible to keep the current ‘party’ going, we have sucked the future dry and have ignored the past completely. There are multiple avenues that will be explored in this, ‘Time,’ series. Debt and interest rates, economic stimulus, modern monetary theory, share buy-backs, and more, have all been forced into the present, at great cost to the future. It will not be a fast process, but it is an important one.
“History has stopped.Nothing exists except an endless present in which the Party is always right.”George Orwell, “1984” (1949)