Choosing sides in the great reopening debate

Everyone is banking on vaccines marking the end of this abominable pandemic.

Let’s hope that’s true.

There is a subtle debate in play here, one which we would do well to be on top of.

Have lockdowns made us more appreciative of things like cooking, home movies, reading a book on the sofa, and the quiet life?

Or, has distance made the heart grow fonder for things like live music, theatre, cinemas, live sport, pubs and bars, restaurant food and five-a-side football?

Well I recently road tested a live-streamed concert.

I didn’t go as far as Sam Volkering, who attended a live concert in VR (virtual reality) a few months back. He loved it by the way.

I paid ten pounds so that my flatmates and I could settle in one evening at 8pm on a Thursday, hook up the TV to the big speakers, and watch for Ben Howard’s live run-through of his latest album, Collections From the Whiteout. It was filmed and recorded at the Goonhilly Satellite Earth Station in Devon, near where Howard is from.

My colleague Boaz laughed at this mad idea, paying for a live stream.

But it was completely magical. We loved it. He is just amazing, especially “live”.

And the formality of an event was a welcome reminder of how things used to be.

Couple of beers beforehand, settle in for the music, and grab a pizza afterwards. Yes, all those things happened in the same room, but I didn’t have to get on the Tube, it was a tenner between four for the music instead of £35 each, and we were still in bed before midnight on a work night.

Seriously good value all round.

And we all agreed wholeheartedly that it had really made us desperate to see him live as soon as we could.

As much as we loved the comforts of home and the value, money doesn’t translate into experiences very well, and very little will stop us now from trying to see the real thing.

Why do people go to art galleries when all the images are replicated in excellent quality online?

Why do fans pay £60 to watch Granit Xhaka and David Luiz at the Emirates stadium? I mean, who can possibly say why Arsenal fans would bother paying so much to see those two, but the reality is that for football fans, Sky Sports can just never compare.

If you love something, there is a high intangible value to being there in person.

So while I recommend the live streamed concert idea, I can’t promise you that it quite matches the real thing.

This leads to two conclusions.

Firstly, that the death of the city is an overbought idea.

Everyone’s going on about it, but I don’t buy it.

There’s a reason why humans have been congregating in larger and larger numbers over the last few thousand years.

The value of interactions grows exponentially over time. Each new person you meet, new place you visit, thing you see or hear, all adds to your development, both personal and professional.

In cities, as there are more people crowded into a small space, there are more interactions and connections and so the compounding happens quickly.

At the most simplistic level, a friend of a friend might invite you to an event where you happen to bump into…. your future wife, or future employer, or future investment manager.

This is called the “urban wage growth premium”.

Or more simply, I’d rather watch Ben Howard for £35 at the Brixton 02 than on my TV at home.

Buyers of fast cars will understand this sentiment. Value deteriorates as a factor as quality passes a certain point. No one buys a Ferrari and asks how many miles it does to the gallon.

In my view, the importance of space and gardens and home working and fresh air and all that are certainly important, and they were massively under-appreciated by many people before the pandemic, holed up in high-rise blocks of flats.

But cities have grown over decades because of very powerful, fundamental forces which cannot be derailed so easily, I think.

An opportunity might even exist for companies or cities who can capitalise on this human interaction premium.

So don’t give up on London quite yet, and if you happen to have a few million lying about, I hear there are some bargains in prime real estate in Zones 1 and 2.

But more relevant to the rest of us is how much “revenge spending” the UK will unleash on the retail and hospitality sectors now that we’re allowed out.

“That’s obvious Kit. I’m reading this from the pub right now!”

Well, if that’s true, then good on you.

But we can’t go to the pub every night, or eat out for lunch every day.

Our wage or time constraints will catch up with us eventually.

As incredibly unadventurous as this sounds, I actually think that we will slowly settle into our old habits, if the vaccines truly do allow for a permanent reopening of the economy.

Perhaps there will be slight individual adjustments.

Some might have resolved to try out more new restaurants, or to join a Yoga class. Others might have bought Ottolenghi’s new cookbook Flavour, or a pasta roller, and realised just how good and easy home cooked food can be.

But at the population level, my guess is that the levels of spending we reached won’t be dramatically different, once things settle down. The novelty value of the reopening will wane, that Classic American at Pizza Express will lose its lustre, and we’ll start to wonder why we thought we missed friend X or colleague Y so much.

Some people think that the reopening will drive inflation higher. That makes sense.

The “base effects”, as they’re called, will drive demand higher and prices will respond. This, as Federal Reserve chair Jerome Powell has pointed out ad infinitum, will be a transitory effect. And it’s only repairing a hole compared to what came before. That’s the argument central banks are giving as to why they don’t fear inflation.

But as we’ve spoken about before, perhaps there is more to the monetary drivers of inflation than the central banks of the world believe…

If you’re worried about the great debasement of your currency, whether pound, dollar, euro or another, then I wouldn’t blame you for being interested in quirky ways to protect your money.

Perhaps, two years ago, you couldn’t have imagined storing some of your wealth in cryptocurrency – and heck, you wouldn’t be alone!

But there is a risk that world currencies are in something of a race to the bottom. As financial observers you are in a privileged position to see this coming before the crowd.

So now, perhaps, is the time to take a new step and look into digital assets as stores of wealth through the storm of money printing that’s now well underway, and that shows no signs of slowing down.

If that sounds like you, then click here

It’ll take you through to talk by a man who understands these things much better than I, and how digital assets can help you.

All the best,

Kit Winder
Editor, UK Uncensored

You may like

In the news
Load More