What have you got in your pocket?
Probably my tape measure.
I must have bought about 15 tape measures over the last year, only to have many of them "walk away" into the abyss of tradies coming and going. I assume there is a blackmarket for stolen tape measures and there is a stall set up on the darkweb, probably next to the portal for stolen pens.
What I should have really done is instead of buying decent ones that I want, I should have bought a pile of cheap and crappy ones and scattered them all around the place, manipulating supply and diluting the value, making them less likely to stay in the pockets of tape measure hodlers.
Easy come, easy go.
I was going to put a picture of a tape measure here (I bought two new ones this morning), but I really like this images of blossoms on our pear tree, with a heavy edit over the top. It reminds me of barbed wire, except with flowers instead of spikes and with a little work, might make for a decent wall print on fabric.
So, what do I have in my pocket?
Not much in terms of assets, but I am hoping that over the coming years, I will be able to change that by using some of my crypto positions to diversify, because I don't want to end up in any position that looks like this:
As expected and I have written about for a while now, there are warning signs that between the record low interest rates, the incentives given to get into new homes and the bank of mum and dad financing larger debt withdrawals to get into overpriced homes, many people have become over extended and are living on the edge. Any upward movement in interest rates will push many of the households over that edge and the 230 thousand quoted above, represents 3% of all households in Australia, which doesn't sound like a large amount, but is enormous.
What is also interesting is that a "lead economist" said:
“Interest rates have been coming down since 2011 fairly steadily and while people have been taking out bigger mortgages as rates have come down, it’s hard to see how there can have been much of a significant increase in mortgage stress other than as a result of people’s incomes falling,”
He cited that interest rates hadn't increased since November.
But, based on a survey of a wide selection of economists in March:
They expect wage growth, at a record low 1.4 per cent, will drop to 1.2 per cent this year, and lift to 1.6 per cent in 2022.
But inflation is expected to average 2.7 to the June quarter this year and then 1.7 per cent over the next 12 months.
This means that wages will very likely fall in real terms, in relation to the inflation rate in the country. And, while interest rates haven't increased since November, that is only six months ago, but the average house loan in Australia is nearing 30 years and will definitely be affected by rising interest rates at some point along that line. This is not an issue if there is significant employment rates and the real wages are able to increase not only to cover the interest rate hikes, but also the inflation rates, but what are the chances of that happening.
It is an insane situation and you would think they would have learned from the housing crisis in 2008, but perhaps they have. Of course, what they have learned is that through a process of incentive, they will be able to create the conditions for a massive amount of wealth transfer from poor to rich.
The economy is expected to grow by 6.5 per cent in 2021 and 2.9 per cent in 2022.
Economic growth is not a very good indication of economic well-being of citizens in my opinion, as even though more wealth can be generated, it can't be assumed that the wealth is going to benefit the average person. I think that with the divide growing between the class groups to the point that the difference between the top and bottom of the one percent is greater than the bottom of the one percent and the bottom, the safe assumption is that economic growth is going into the pockets of fewer and fewer people.
A lot of the tools of economic evaluation are losing their ability to evaluate, as they were built for different conditions. For example, Gross Domestic Product (GDP) is the measure of value for all goods and services, but if the value of that is winding up in very few hands, its ability to translate into the economic health of society is very limited. While in the past, a lot of the value generated required labor, these days, the most profitable companies don't require many people at all, so the salaries are lower. The finance industry itself is a very good example, as it generates trillions of dollars for itself, on the back of very few employees. Tech industry is another, where trillions are made with far fewer people than for example, in the manufacturing industry.
If this value doesn't find its way into enough hands, the entire economy falls down, as there will not be enough consumers to keep the game running to maintain the insane profit models. But, the distribution is poor, because there is very little incentive to improve it and rather, there is a lot of incentive to restrict it further by using the wealth generated to create more wealth through passive incomes by investing into businesses that feed back into the same narrow set of economic participants.
There are other factors that compound the problem also, as these same high profit industries like finance and tech, are largely borderless and by design, are able to reduce their tax footprint with creative accounting practices. This takes the money they earn away from the locations they earned it and while they profit more, the places they operate are bled dry, with less and less resources available to fund local initiatives or power the community.
If the wealth is generated in a country, but the profit doesn't stay in that country, how accurate is the measure of GDP?
Now, I am not an economist, but the economic story that is being floated is full of holes and will eventually sink, making what is going on now nothing more than a money grab by rats as they escape. And while those same rats will end up living large on economic islands sectioned off from the 99%, I don't see a scenario in this traditional economy where real lives of real people are improved and instead, they will go down with the ship.
What I do see as the "savior" for the economy of society, is the development of decentralized finance and economies that are not reliant on the governments or financial institutions, which is developing now on blockchains using tokenization. But this is not enough alone, as it requires the vast majority of participants to understand that in order to be one's own bank in a healthy economy, one has to have resources available and the willingness to be part of the generation and distribution of wealth, not just the accumulation of wealth.
Assets, values, businesses, relationships, communities, activities, responsibilities. The thing that everyone should be looking to have in their pocket is, ownership of experience.
A lot of people think that the economy can't change because those in power will not allow it, without realizing that the power they have is granted by us. We think that the power they have is their wealth, but wealth is an illusion and only based on what we value. When we stop believing that what they hold is valuable, it becomes valueless and therefore, powerless as a way to control us.
Be the change. But also;
Fund the change you want to see in the world.
What do we have in our pockets?
Change.
Taraz
[ Gen1: Hive ]
