Humility - Lessons from the Past

One of the financial blogs I visit regularly is Juggling Dynamite by Danielle Park. Danielle is the advisor I spoke about in my post The Ethical Financial Advisor. I encourage you to visit her blog also if you want to keep abreast of what is happening and where we are at in today’s turbulent financial arena. I say arena in the sense of gladiatorial arena where you can lose a financial arm and a leg if you’re not careful. I was struck by her recent post ‘Bouncing away’ which you can read in full here. In it Danielle talks about the recent rally since the March 9 low. But what I would like to share with you here is Danielle’s observations on her recent visit to Malta.

This will be a baby steps recovery. It will take time and real work. But it will be a healthy wake up call. The tiny Island of Malta is one of many examples of this phenomenon. Malta was one of the most bombed countries of the Second World War. It was pummelled to rubble. A German blockade brought the people to the verge of starvation just days before the British navy came to their rescue.
When I was visiting Malta recently, I asked the local people about how the world credit crunch and downturn is affecting them and their economy. They noted that tourism was somewhat slower. But they said Maltese people had generally not been caught up in over-consumption and credit abuse the past few years, so they were not suffering the consequences of deleveraging now. When I asked why, they explained that the older generation in Malta had lived through the utter decimation of their Island in the war. They had lived through the life-altering experience of losing one’s wealth, property and loved ones. They had worked for the past 60 years rebuilding their country brick by brick. They had taught their children the importance of not wasting and not taking more than they need. They own houses, but not mansions and no one has a three-car garage. They have no fresh water on the island. They developed the expensive process of desalination and now properly value clean water as the source of their life. They tend to walk and ride bikes, they drive smaller cars. Adversity brought a humility and wisdom to the Maltese people that has served them now for 2 generations.

With adversity comes humility and ‘with humility comes wisdom’. The adversity the Maltese people went through, though painful, had the seeds of something good in it. Likewise, the adversity America and the world is going through today is perhaps a necessary purging, a necessary winter to kill off the swamp plants that were growing to excess. And hopefully it too will have the seeds of something good in it, as Danielle says:

Some of the solutions to coming problems have yet to be designed. But there is now great effort focused on getting the world back to growth and in the end, we will succeed. That said, those looking for a resumption of reckless consumer spending and bubble-like prices will no doubt be frustrated and disappointed, at least for some time. Dark as many now feel, there is strength in this experience and we will bounce.