You Can’t Fight the Tsunami of Structural Change

Structural change is upon us.  Our leaders can’t fight it.  As they embarass themselves with bailout after bailout, they fail to stop and look at what’s happening around them.

Structural change is an inherent decrease in demand for stuff we don’t want.  In fact, we don’t even think we need it any more, mainly because the tools of demand generation (mainstream publishers and marketing agencies) are failing to connect with the average user or ‘consumer’.

This article points to some clues that retail sales are going to continue to plunge.  In December through to Christmas Eve, retail sales fell 8% from the previous month.

The obvious reason why we’re seeing unprecedented decreases in demand is because the US (and parts of Canada and the rest of the world) is experiencing a substantial loss in regular work.  In the past, we’ve relied so heavily on massive single employers and as they teeters, they topple the lives of hundreds of thousands of people.

Politicians (and subsequently, governments), of course, love large employers because it reduces the amount of sucking up they have to do.  If they can have a closed-door meeting with 20 or 30 ‘captains of industry’ (like Stephen Harper does without the input of Canadians), we get monopolies telling our elected officials about the kind of policy that will benefit them the most, but which certainly don’t work to the benefit of the broader collection of Canadians (or Americans).

We have to learn that the solutions are the problem.  More cars, more suburban housing developments, cheaper oil prices and lots of Boxing Day specials are not the solution to what ails us.  That’s like giving a coke addict more coke.  Deregulation and lack of accountability invites wolves into the sheeps den.

The financial crisis was caused by over-extended consumers who got in over their head with mortgages and who simply decided that walking away would be the best solution.  Of course, being confronted with outrageous medical bills and other costs of living don’t help the situation.

Buying gas-guzzling SUVs and other unreliable vehicles isn’t the answer as well.  Keeping the producers of these vehicles alive won’t save us.  It’ll kill us.

The cure is cold turkey.  Stop spending your money on crap and vote with your dollars because it’s the only poll that politicians and our ‘captains of industry’ pay attention to.

Of course, if you’re lucky to still have a job and you’re saving your money because you’ve stopped buying junk, where do you put your money?  It’s easy to say, but criminals and crooks are still running (or ruining) the financial markets, putting self and greed before the interests of savers.

If you’re in debt, pay off your debt.  I don’t think I need to offer too many other suggestions, given that most North Americans have substantial obligations on their books.  If you’ve still got cash left over, put it in your RRSP (or IRA Roth) and sit in cash for a little while.  If you don’t like that option, look for local and small businesses that are looking for seed capital and invest in them.  There are lots of co-ops and not-for-profits that need cash.  For information about Canadian co-ops click here .

What are your suggestions?  Do you have a recommendation for all those people out there that don’t want to buy junky cars, toys, trinkets and trash and would just like to save their money until the problems are actually solved?

Please remember that any advice offered through this blog does not represent financial advice and any action you take should be with the guidance of a registered financial planner or investment advisor.