The Current Inflection Point in Social Mood is the Most Important Trend Change of Your Career

Inflation and Deflation are in a death match

Social mood is now changing at a very large degree of trend

Of the two statements above, the second of these matters much more than the first and chances are you've never read about the ever present dynamic of social mood and how it affects you in the markets you serve and the rest of your life. The following post is something I wrote to two people close to me; both of whom are in the path of two very industry specific, multi-generational trend changes ( I do not mention here) but especially in the general sense as offered through the perspective of 'the developing social mood'.

In the spirit of a blog, I can only post bites here and bites there, but this conversation is relevant to everyone, no matter who you are...follow along...

Choose a brief link above (links deleted because of relevance) ....Quietly after the morning papers were printed and delivered the Fed announced unusual measures to add dollars where they are most needed to credit markets (abroad, not at home) Since there are no mechanisms for the Fed to lend to foreign governments and banks they had to make it up. Mr. Bernake did promise to be resourceful.

 

The point is, very simply, that liquidity is drying up because people, business, and banks are ravenous for dollars. The cost of cash money is going up because, very simply, demand for money is going up. Money is different than credit. I'll leave that for you to look into for yourselves but what is notable is that despite raging inflation in consumables (my groceries cost at least 10% more this year than last but they do not count that even though every other central bank on earth does) How can this all be justified?

Deflation and Inflation are in a death match, not with each other but each seeks control of our aggregate psychology in the economy. (Inflation and deflation do not really have will of their own as they are phenomenas that occur within groups so they can be shown to be part of the crowd and the especially developing social mood that emanates from the crowd.) They are both afflictions of our outlook to the future. You both have read enough of my trending perspective to know that our outlook to the uncertain future is called social mood. Social mood is measured in positive or negative degrees based on aggregated readings of an entire nation (if that is the group you are looking at and I am) Inflation and deflation both affect how we see the future as well in a distorting kind of way that does not affect social mood; in reality, the social mood conveys inflation and deflation and when it conveys both we will eventually see it clearly as, 'we were all messed up back then' as a natural part of (our) group process ?(click on jpeg thumbnail embedded in article) . All trending can be seen to be a group process but social mood is the ultimate trend and what I call 'the root trend'.

Deflation is developing in areas initially related to the things we want and the inflation in the things we need is no match for it which is why the Fed actually had the temerity to lower rates in the face of historic price inflation. They know how to handle inflation from history. Deflation is a much tougher psychological challenge to deal with. Japan's rigid system never really figured it out, even after a decade. They lost control and a generation of aging seniors were lost in the process. That's the way the media tells it but social mood at a very large degree of trend turned down in the late 1980's in Japan.  I recall this because meaningful parallels may eventually play out.  In the end, aggregate social mood is yelling "last call" in the US. I offer this insight in the spirit that if our collective group psyche does continue to falter now, you'll understand it is natural, necessary, and right on time no matter how it is described. It is not about telling the future nearly as much as it is in understanding the incremental present steps and how particular smaller trends relate more to the secular social forces, and not just the near term gyrations we dance around every month in our markets.

Socially speaking (on a personal level), the people who shine during social corrections, (larger ones are called recessions) are those who know and care about what they are doing and do it for the satisfaction it offers. If you happen to be directly in the path of the deflationary spiral in business enterprises, then prepare to unwind the structures that exist and simplify, simplify, simplify. The worst thing you can do is to hang onto conventions of the past. When the social mindset begins to change you will see how we collectively value ideas and things which are smaller, streamlined, accountable, efficient, automatic, nimble, neat, organized, detailed, direct, and most of all, things that deliver results.

That is what the social (emotional )weather has in store no matter what happens with our money and markets. Both money and social issues from the stand point of mood parallel each other but we often do not have time to notice and when we do we look for correlation in the wrong ways so it does not make sense. Meanwhile, the issues above will seem to matter most in your professional spaces.  We are clearly experiencing a developing negative social mood at a large degree of trend and this advice will bear out in a reasonably brief amount of time now that the turn seems to be behind us. This matters to my fiends and this matters a great deal to marketers and strategists of all stripes.
Social mood sets the pace and tempo. The Root Trend is simply a journal of the comings and goings we should take time to notice as marketers.

Now is a great time to read these links: (both short reads - click on thumbnails)

What is social mood?

Why we are here