This is it, freaks. The Everything Bubble has popped. The chickens have come home to roost.
We are standing at a point in history that will be talked about for centuries to come. A surreal experience that probably doesn't feel real at the moment. Sports leagues around the world are packing it in and cancelling seasons. College students are being sent home en masse. Pictures of our President standing next to men who have contracted the plague du jour that were taken just days ago are floating around. Chaos reigns supreme today. It's hard to even gather enough attention to actually write this issue.
The combination of the slow transition to industrial globalism, decades of low volatility manufactured by central planners, and the erosion of capital accumulation by individuals has put us in a very precarious situation. The Titanic has hit an iceberg called COVID19 and the damage is catastrophic.
The world is currently being ravaged by an invisible pathogen, both physically and economically. As I've stated in this rag throughout the last few week's, I am not an expert in pandemics and cannot add much color to the situation other than recommending that you wash your damn hands and live a healthy life. However, when it comes to the economic consequences of the spread of the virus I feel more confident in sharing some thoughts.
It is very telling that the US government response to the pandemic has been to "save the economy" at all costs.
Unfortunately, due to the factors listed in the third paragraph of this issue, there is no protecting the US economy from this virus. We are currently being caught with our pants down. More vulnerable than ever because of the compounding of terrible decisions over the course of the last 50 years.
Right now, most of the medicine we'll need to combat this virus if it gets out of hand (if it isn't already) is manufactured in China. Who isn't really happy with us at the moment.
The easy monetary policy and financialization of our economy since we officially (temporarily) ditched the Gold Standard in 1971 has destroyed the common man on many fronts. It slowly destroyed his purchasing power, debilitated his ability to accumulate capital slowly over time, and has torn apart his family as he was forced to work more shifts while his wife jumped into the workforce with him so the family could try to get by. Leading to increased stress and divorce rates as money became tighter.
Now, when stress is at an all time high, the powder keg has been sufficiently topped off with gun powder in the form of a decade's worth of artificially suppressed volatility, and the common man has been sufficiently polarized against himself by the Red and Blue teams; an invisible boogeyman sweeps through the planet to officially kick the legs out from under him.
The institutions the common man has depended on for years, mainly the Federal Government and the Federal Reserve, have been left utterly neutered and unable to do anything material to help the situation other than turn on the printing presses.
I can hear them warming up as I type. Get ready for an expansion of the monetary base that will make the reaction to 2008 look like child's play. And make no mistake, this attempt to put Humpty Dumpty back together again will be just as ineffective as the last. It will suppress more volatility and lead to another crash at some point in the future. And it probably won't take as long to hit a head as it did this time around. I fear the reactions to these crises will be less effective from here on out.
This is why, despite a 25% fall in price this morning (what a sight to see), I will continue to find safety in sats. Bitcoin provides a deep safety that the traditional system simply cannot provide at this point. As they rev up the printing presses, I believe more individuals will begin to seek safety and sanity in sats as well. People will begin to realize that the division caused by the Red and Blue teams and the mental cage they've been put in by said teams are distractions from the true core of the systemic problems that exist today; we fucked up the money.
Fix the money and you fix the world.
In the meantime, stay safe out there. Say hi to your neighbors and turn towards community.
The salt air is refreshing.