Expectations
Those of us born between 1981 and 1996 are considered Millennials. Over the decades, many of us witnessed the evolution from cassette tapes to CDs, from VHS tapes to DVDs, from MS-DOS to Windows, from floppy disks to 3M diskettes, from making calls on memorized landline numbers to sending SMS messages, from playing soccer in the streets to playing FIFA online, and from using Walkmans to listening to digital music on iPods. We've been acutely aware of how technology has sculpted our lives. We were arguably the most promising generation to date, quick to adapt to technological changes, eager to innovate, and ready to improve whatever we set our minds to. With the right tools within our reach, we felt capable of overcoming any challenge, poised to boost our productivity exponentially and introduce a new vision for the future that could redefine the world as we knew it. However, this generation, almost imperceptibly and in just a moment, plummeted into despair.
Reality
Now, the vast majority of us millennials find ourselves in a new phase of life, arguably the most burdensome yet: juggling work, family, schools, extracurricular activities, bills upon bills, mortgages, loans, credit card payments, interests, investments, and retirement plans. The hope of transforming the world as we once envisioned has dimmed; the once bright future now seems grim, devoid of prosperity, leaving us fearful for what lies ahead for our children. What's more, many of us have chosen not to bring more children into this already troubled world, a decision that's as terrifying as it is telling. This raises the question: were we ever truly prepared to face the realities ahead, or did we overestimate our abilities to such an extent that we overlooked the wisdom of previous generations who, unwittingly, have cornered us? In essence, the generation poised to revolutionize the world has been swallowed by unforeseen forces.
How Did We Get Here?
Consider this: How many people do you know who are genuinely happy in their jobs? How many have complained about unbearable bosses, contemplated quitting, or actively sought new employment, yet feel trapped by the necessity of their paycheck to cover mortgages and bills? This situation is emblematic of a larger issue. Life isn't merely black and white; it's filled with nuances. Yet, by examining the reasons behind our generation's precipitous fall, we uncover critical insights:
Financial illiteracy is rampant; the intricate world of finance, with its convoluted jargon, remains a mystery to most. A select few have cracked the code, reaping the rewards, while the majority have been left floundering, chasing dreams of innovation without a clear understanding of the financial game.
The productivity boon promised by our technological proficiency has evaporated. Tasks that once took 8 hours are now completed in 15 minutes, without any corresponding decrease in work hours or a sevenfold increase in pay. Instead of experiencing a reduction in costs, we've been schooled in the belief that "prices always rise," a simplistic and ultimately misleading justification for our economic woes.
Social media has taken control of our collective consciousness, fostering an environment where critical thinking is drowned out by an incessant stream of content. This has led to a pervasive culture of comparison, where desires are shaped by the curated lifestyles of influencers, further distancing us from reality.
The convergence of these factors has fostered a short-term, profit-driven mentality, where the relentless pursuit of money, often through questionable means, overshadows the genuine value of work and community. Trapped in a cycle of consumption and competition, we've lost sight of what truly matters, relegating ourselves to roles that neither fulfill us personally nor contribute meaningfully to society.
The Trap
The plight of many millennials — unable to start families, overburdened by work, priced out of homeownership, and suffocated by inflation — paints a bleak picture of the future. Contrary to the belief that hard work and dedication would guarantee a better life, we've stumbled into a trap. This misconception, inherited from our parents, fails to account for the systemic issues at play. Central banks and governments, through ingenious financial manipulation, have orchestrated a legal form of theft: inflation. Contrary to popular belief, inflation isn't a natural byproduct of scarcity or human activity; it's the result of deliberate currency issuance, enriching a select few at the expense of the many.
As a result, our once-promising generation has fallen victim to a grand deception, trapped in a system that prizes short-term gains over sustainable progress, leaving us striving for an ever-elusive sense of abundance. This paradox, as highlighted by Jeff Booth in "The Price of Tomorrow," suggests we've unknowingly consented to a society built on the principles of theft, disguised as inflation, systematically draining our resources and aspirations without our realization. To truly understand the magnitude of this predicament, we must turn to the some numbers, confronting the harsh realities of our current economic landscape.
The Numbers
Delving into the numbers, it's essential to grasp that people value money for what it can buy, not for itself. This understanding is key when considering productivity's role in our economy. Guy Swann explained this in very simple example on one of his 'Guy's take' videos. Imagine society becomes on average 5% more productive annually. If one family expenses were $100,000 last year, a 5% boost in productivity would mean they only need $95,000 for the same goods and services this year.
Yet, central bank policies, like the Federal Reserve's 2% inflation target, distort this picture. Instead of spending less thanks to increased productivity, the same items now cost $102,000. This not only reflects a mismatch between societal progress and financial policies but also represents a form of "theft." Instead of seeing a drop in prices and a boost in living standards, inflationary policies negate our productivity gains by 7% in this scenario.
This system taxes our productivity's fruits, benefiting those close to the levers of monetary control at the expense of the wider population. This diminishes our purchasing power and disrupts the incentive for innovation, creating a gap between effort and reward. This situation highlights the critical need to reassess our financial systems to ensure a fair distribution of productivity gains, aligning economic policies with fairness and efficiency to genuinely advance societal progress.
The Millennials response
I have no idea what year Satoshi Nakamoto was born, but he - or she or they - gave Millennials the tool we needed exactly for this. And what do Millennials do with it? We adapt. The tool is Bitcoin and it is touted as a solution to the financial system's flaws, contrasting sharply with traditional currencies controlled by central banks. Its finite supply positions it as a deflationary asset, which could realign productivity gains with individual purchasing power, as opposed to the inflationary nature of fiat currencies. Let’s take a look closer to some of its characteristics:
Aligned with Deflationary Forces of Technology
Bitcoin is often celebrated for its deflationary nature, primarily because there is a finite supply of 21 million coins. This scarcity is in direct contrast to fiat currencies, which can be printed in unlimited quantities by central banks, leading to inflation. Bitcoin's design inherently appreciates in value over time, assuming increasing adoption and constant or growing use, mirroring the deflationary impact of technological advancements on production costs. As technology drives efficiency and reduces costs, a currency that mirrors this deflationary trend could ensure that the gains from increased productivity are more directly reflected in individuals' purchasing power.
Eliminates the Necessity of Being a Financial Investor
One of the more compelling aspects of Bitcoin is its potential to simplify personal finance. In an inflationary economy, individuals often feel compelled to become de facto investors, seeking assets that will outpace inflation to protect their purchasing power. We all want to feel like Wall Street geniuses. This necessity can detract from one's primary profession or passions, forcing individuals to allocate significant time and resources to navigating the financial landscape. Bitcoin, by being a deflationary asset, could theoretically mitigate this pressure, allowing individuals to preserve value over time without the need for constant investment and reallocation of resources, thereby enabling them to focus more on their primary work and interests.
Incentivizes Productivity, Collaboration, and Innovation
Bitcoin's decentralized nature fosters a different kind of economic environment—one that rewards productivity, collaboration, and innovation. Without a central authority controlling supply, the value of Bitcoin is determined by the collective belief in its utility - the real free market - and the security of its decentralized network. This setup incentivizes individuals and businesses to adopt and innovate on the Bitcoin platform through different layers, contributing to its utility and, by extension, its value. The transparency and immutability of Bitcoin's blockchain technology also promote trust and collaboration among parties that might not have any direct relationship, paving the way for new forms of economic and social interactions.
Exposes Non-productive Entities
By adhering to a monetary system governed by fixed rules rather than discretionary policy, Bitcoin can shine a light on inefficiencies and parasitic behaviors within the economy. In a Bitcoin-centric economy, the value is more intricately tied to genuine contribution and productivity. Entities that have thrived on inflationary policies to garner economic rent, without contributing actual value, would find their operations increasingly unsustainable. This level of transparency not only could prompt a realignment of economic activities towards more productive and socially beneficial endeavors but also drastically reduce malinvestment. Malinvestment, the investment in projects or endeavors that are not the most beneficial from an economic standpoint, is often exacerbated by distorted price signals under inflationary regimes. Bitcoin, by offering a clear, unmanipulated representation of value, discourages investments in unproductive or harmful projects, steering resources towards truly valuable and sustainable ventures.
Conclusion
In summary, millennials have navigated a world of rapid change and economic challenges like any other generation before. Amid these challenges, Bitcoin emerges as a potential solution, offering an alternative to the traditional financial system's flaws. Its limited supply contrasts with the endless printing of fiat currencies, promising a future where increases in productivity directly benefit individual purchasing power.
While embracing Bitcoin's potential, millennials face obstacles like volatility and regulatory challenges. Yet, the promise of Bitcoin aligns with their readiness to innovate and seek fairer economic systems. For millennials, Bitcoin represents not just an investment but a step towards a future where the economy rewards real value and contribution.
The future shines brighter today than it ever has before!
