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I hate to state the obvious but some times it needs to be said.

Real wage/earnings growth is what actually increases one's income level. I one gets a 2.6% pay raise or a 2.6 return on their investment but their cost of living increases by more than 2.6% they are worse off than they were previously. Make more, spend less or preferably both that way you can splurge for the extra square. :p
 

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Now they are talking about inflation, and ignoring that a whole generation of people are heading into retirement with no pensions and no savings.

The foundation of our economy is consumer spending.

We are heading for a deflationary period in the future, when millions of new retirees have left the pool of spending consumers and are forced by the reality of scant retirement savings or income to cut back their spending sharply as consumers.
@sags Which generation of people are heading into retirement with no pension or savings? I ask out of genuine interest as I know Boomers, Gen Xers, and Millennials that have little to no savings, have their retirement savings allocated improperly by owning primarily one asset class. I am also aware of people from all demographics that have amassed sufficient assets to enjoy their retirement either now or when the time comes. I hate to beat the same drum time and again but there are many roads to wealth and life and circumstance are not the same for each of us. Fortunes are made (and lost) sometimes very quickly, while for others it may take a lifetime or longer.

I am fascinated by your statement that the foundation of our economy is consumer spending. Is it currently? Has it always been that way? Does it have to be the foundation going forward?
 

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A wise old boomer who is willing to adapt his world view to new information over time

Thanks for sharing this link. I would agree with a lot of points made in this segment especially about the transformation of how the world views money, Ray Dalio is always able to capture my attention and I will likely watch the entire 92 mins when I get a chance. This is not the first time in my life that I will miss out on an opportunity to make sizable returns on an investment thesis. I knew crypto would become a game changer when I saw a crypto atm at a local restaurant 5 or 6 years ago. Unfortunately for me, I don't know how to evaluate crypto to determine what is a proper valuation and I don't believe most in the market do either. That doesn't mean I should criticize the investment, or even try to caution others repeatedly. It is unlikely that I will buy crypto for investment purposes but that doesn't mean that I can't learn more about the future. I am open to the possibility of it becoming a global currency To draw a parallel comparison that has already been discussed here and elsewhere: the dot.com bubble was real. Some people made a ton of money. Some people lost a ton of money. After the dust settled the internet and the web became a huge part of our daily lives. What's to say crypto will be any different? I think it's likely but not to the point where I will wager on which currency(ies) will be the winner(s).

Sadly, I did not receive a reply from Sags to my questions in post 839 as I believe there was an opportunity to add value by explaining your thoughts on inflation/deflation and the future retirement of people.
 

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Canada: Household consumption as percent of GDP, 1961 - 2020: For that indicator, we provide data for Canada from 1961 to 2020. The average value for Canada during that period was 56.35 percent with a minimum of 52.91 percent in 1981 and a maximum of 63.42 percent in 1961. The latest value from 2020 is 57.42 percent.


@sags thank for the link. I don't believe anyone would dispute that North Americans migrated to a consumer driven economy in the latter 20th C. I believe this is typical of developed nations when the cost of production exceeds the cost of outsourcing. It happened in Europe in the 19thC prior and perhaps was delayed as a result of colonialism. Even China is seeing labour cost pressure from neighbouring countries. As the middle class emerges in China there will be greater demand for goods and services. This has already started and who knows at what rate it will accelerate.

Will the US hold on (and if so for how long) or will it follow the path of previous empires. Isolationistic policy has seen a lot of political acceptance in the US but what are the effects of such economic policy? A move away from the US$ to another currency(crypto?) would be a huge blow to that nation's strength and a major disruption to the global economy that we have not seen in our lifetimes.
 

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Would you prefer crypto or yuan? How much more USD can we print to fight countries who dare trade oil in something other than USD?


source
This provides an excellent visual of the past 40 years and does a lot to explain interdependence of a global economy.

"Since 1980, countries like Japan, which at one point almost exclusively traded with the United States, now rely on China for a majority of their trading activity."

Top 5 U.S. Top Trade Partners in 2018 (Total Merchandise Trade, $M)
1. Canada: $617,382
2. Mexico: $611,528
3. Japan: $217,563
4. Germany: $183,558
5. Republic of Korea: $130,635

Top 5 China Top Trade Partners in 2018 (Total Merchandise Trade, $M)
1. Japan: $328,043
2. Republic of Korea: $312,520
3. Hong Kong: $312,258
4. Taiwan: $225,780
5. Germany: $184,368

Japan is #3 US and #1 China respectively. I know Japan put a lot of effort in the 80s to buy US Treasuries to control its currency and buy up US assets. China as well in later decades. I am not sure how many accountants it would take to determine who owns what.
 

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I am crypto now.

I downloaded the Daedulus wallet and waiting for it to sync with the blockchain. After an hour it is 6.28% finished. This could take a while.

Next I go to Coinbase and sign up and then buy some Ada. Then I stake it and the free cash starts rolling in.
Someone hacked @sags CMF account. :p
Can you provide some insight as to the sudden shift?
 

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Thanks for sharing those charts @m3s. Adoption and use is not necessarily aligned with investment and return. It is interesting to see that adoption took off following the dot.com bubble being popped. I think tech adoption gets faster as tech evolves. If we look to the tech of19th C I imagine the adoption time lines to reach adoption would be stretched further than the time needed in the 20thC. In the first half of the 20thC adoption seemed to stall in the 60%s. In the latter half the stall came in the 80%s.
 

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Many of today's youth understand digital payment and economics better than they do paper currency. They can easily calculate a digital transaction but cannot make change for a small purchase of less than $20. The pandemic helped accelerate the move away from paper money. Gaming is full of digital currency and may kid's first experience with currency is from gaming.

The uber wealthy have many more ways to move "money" around these days. They aren't just in offshore accounts in USD. Even years ago there were many storages of wealth that were utilized. They understand diversification. They have the best advisors and intel out there. They also have the ability to lobby changes to the system to stay at the top of the heap. They are not going to sit on the sidelines for blockchain and crypto. Sure some will not adapt but when they tipping point comes many will be part of the move. They are entrenched in a system that allows them to preserve and prosper.

Those in charge are often initially opposers or deniers say it's a fad (how many scribes thought the printing press wouldn't last :p), has no purpose beyond entertainment etc. There will be a flip flop and the shift will appear to be monumental and sudden but in many ways it has been in the works for quite sometime. Demand for a global currency from China and others goes back to 2009. A crypto currency may be that disruptor. Paper is going away and the USD will not always be the global currency nor has it always been.

The super rich have the money and power to get off sinking ships before the rest of us even know we're taking on water. How and when it happens is largely unknown but change is inevitable.

Why the US Dollar Is the World Currency (thebalance.com)
 

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There was an old boomer saying….Eatons doesn’t tell Sears their business .
🤣 I had to give this a laugh and understand the lesson you are trying to teach. However, neither of these companies have the great reputation they once did. In fact, most gen z probably barely recognize the names.
 

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After the success of LVTS, I suspect that Lynx will eventually embrace blockchain. It might be a part of an international solution.
Here is an excellent and example of how blockchain can improve the current system. It is a simple enough example for almost anyone to follow. This acts as a reminder that inventions and utilizations can serve a greater purpose other than speculative investment. There is always speculation in the start up early adoption phase. With more attention comes more speculation until scammers see opportunity. Then massive destruction for those entities that have no value. The survivors then become the industry leaders. Has happened repeatedly with innovation throughout history.
 

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The crypto collapse has destroyed $2 trillion in wealth, and there is fear that a "black swan" event is about to happen when Mt. Gox releases all their bitcoins to customers who will dump them onto the market. The last time there was a big dump like this.......bitcoin fell to $3,000.

It is projected by many bitcoin experts that the price will fall to $10,000 or below. The slow decline already underway has bitcoin currently at $19,000.

It is a particularly bad time to try to sell bitcoins, because volumes are extremely low and investors are fleeing from the money hungry defi apps.

All the crypto news is very negative. We could be approaching the final days as everyone tries to cash out at the same time.


So those that bought at $3k have made over 6x their initial investment? I am not saying it is likely for many to have bought in initially at 3k but I think a 6 fold gain is pretty good. Even if it goes down to $10k that is still better than a triple bagger. I am not a crypto investor but just thought I should point out that not everyone has lost their shirt with crypto.

I doubt this is the end of crypto. Definitely the end of some currencies, but likely crypto is too established to not exist in some capacity.
 
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