We teach children how the world works, helping them distinguish the line between what’s possible and impossible. A child’s mind is unchained by the laws of physics, societal norms, common sense, or wisdom of the crowds. And in a world turned upside down, perhaps the history of 2020 is being authored by children instead of men. We face impossible new facts that not too long ago we would laugh at as fiction. We assume the worst of what’s possible has obvious limitations that cannot be crossed, but now those limits are being trespassed one after another.
Explanation gymnastics is required to make sense of the numbers we’re presented during these strange times. The world has flipped on its head: negative interest rates, negative oil futures, and America’s unfunded liabilities exceeding its total national assets. Yields on 1-month and 3-month Treasury bills dipped below zero, 1-month going -0.053% while the 3-month was at -0.033%. “So we pay the government when they borrow our money?” Oil futures dropped to -$38.52 a barrel. “Will gas stations pay us to fill up our cars shortly?” America’s unfunded liabilities are now -$144,679,751,492,823 while our total national assets stand at +$144,548,406,155,157. “Does our nation have a solvency issue, right now?” These are all understandable first-takes in a world that has breached all sense of normalcy.
Initially, our minds are dumbfounded by the mere idea. We collectively responded with perplexity: “I didn’t even know that was possible.” It sounds impossible, like non-sense. We hear the mainstream media explain it to the best of their abilities, but deep down it doesn’t sit well. The media is so adept at knee jerk publishing in a 24/7/365 news cycle, but even they take days to formulate a cogent response without sounding ignorant — you know they are playing explanation gymnastics as well. Try hard enough, long enough, and eventually you can convince yourself too. A society that forced to mansplain non-sensical negative numbers week after week is exercising its ability to normalize the unimaginable.
Even our positive numbers are pessimistic. America is #1 in COVID-19 cases — 1,000,000 cases and 55,000 deaths. Our unemployment numbers rose to 26 million out of 156 million total working-age Americans; add in the estimated 6 million workers that gave up on the search and that puts unemployment >20%. During the Great Depression, unemployment didn’t exceed 20% until the 4th year; we’ve reached that milestone in 9 weeks. Despite a nationwide lockdown, our stock market is still irrationally optimistic; the Dow Jones only 19% off its all-time high and the NASDAQ 11% off its all-time high. And although it’s easier to play mental gymnastics through these positive numbers; unfortunately, all roads lead to ugly conclusions.
Most deceitfully, our fabricated number. Out of thin air, the Federal Reserve printed $2 trillion. A stimulus appetizer to counteract the economic shutdown in response to COVID-19. Americans are coming to the realization our money supply is completely arbitrary. Some questioning why they need to pay taxes if money can be fabricated on a whim. But our government is a clever magician, the “free” stimulus money is a 1–2 punch of distraction followed by a litmus test. Give the people a taste of “free” money, and instantly all the anger and hard questions stopped. Attention was diverted away from the exposed critical system malfunction and refocused on chasing the free cash giveaway. By falling for this sleight of hand, we validated the litmus test: Americans can be bought at our own expense. And therein lies the magic trick. A government masterclass, killing two birds with one stone. America was founded by rugged freedom fighters. Like wolves once bred to hunt with a killer instinct, we have been domesticated into mere house pets. America has successfully trained Americans to beg for table scraps like dogs, when we should fight like wolves, for freedom.
Look at the numbers above. Both positive and negative numbers are pushing us in the wrong direction. Here’s what makes sense, starting with our negative numbers. We will never repay our debt. And the quality of our money will continue to erode. This is a given. There is only one path forward: put the pedal to the metal on this debt machine until the wheels fall off. And that’s exactly what America is doing: chasing free helicopter money versus fighting to fix America. America’s monetary system is broken and we may be face to face with our final debt jubilee before it all goes tits up. And that is ok because we had more fun than we deserved.
Regarding our positive numbers, the damage caused by COVID-19 has led to massive unemployment while the stock market seems unafflicted by COVID-19. Capitalism is accelerating the gap between the rich and the poor, and the closest leap we can make with the least effort is a transition towards socialism. Stagflation is the word you will begin hearing in 6 months because we already have depression level unemployment numbers and stagnant economic growth; we will offset this with waves of emergency stimulus money resulting in inflation. Stagflation will be the pressure that bursts our economies’ pipes. And this is where our fabricated number comes into play. The government will be forced to fabricate helicopter money and the people will demand it now that we all know it fully within our means. I believe UBI, universal basic income, is coming within a 5-year window. The outcomes from all the numbers are connected, feeding into one another in a giant, ugly flywheel. The wheels will come off our monetary system, a ticking time bomb.
I’m sure we can design a better system. Can’t we? Most people cannot name a better solution, we’d rather someone much smarter than ourselves design it so we can continue living our lives unburdened by problems of such magnitude. So seriously, what’s to be done? Nothing at all. Our capitalist engine will fail, so instead of stressing over fixing it, just sit back and let it happen. Where our focus should be is on what comes next. We have a massive opportunity to part take in the building of a new system to right the ship. To save America.
I believe we are lucky to already have a nascent system, born from our previous recession, designed to solve the major flaws in American capitalism — Bitcoin. Before you scoff, ask yourself two questions. First, do you believe capitalism still works in your favor? Second, if capitalism ended tomorrow, would you have a better solution? If you answered no to both questions, recognize that you have no options and no answers. If you answered no to both questions, perhaps it’s worth giving Bitcoin a fair shake.
There’s a reason it went from $0.003 in 2008 to $18,000 a decade later. That is not a mistake. Yesterday Bitcoin rose ~18% from $7800 towards $9300. There’s a sea change happening. If you invest the time to be curious and open-minded as to what Bitcoin does and why it has value, you may arrive at some uplifting conclusions. It will be worth more than gold. It is a blueprint for a world structured in positive, constructive, and honest numbers.
