Thread by @hansthered

Welcome to the Fourth Turning. At this time, we have entered the "crisis stage" as defined by the generational shift currently in progress. Boomers are retiring, handing the reins to Gen-X, and Millennials are entering their wage-earning years. Let's look at some data.

First, let's talk about home prices and wages. Between 1974 and 2018, real personal income has increased by 37%. However, median home prices have increased by 768%.

Source: Fred
fred.stlouisfed.org/series/MEPAINU…
fred.stlouisfed.org/series/MSPUS

Between the years 1974 and 2018, debt to GDP increased from 30% to 105%.

Source: Fred
fred.stlouisfed.org/series/GFDEGDQ…

The Shiller P/E Ratio is dangerously high. Only in the dotcom bubble was this more elevated. But what's causing this?

Source: Shiller P/E
multpl.com/shiller-pe

I'm going to suggest that money creation has been the driver of all of these trends. M1 (a measurement of money stock) has increased from $273B in 1975, to $4T today.

Source: Fred
fred.stlouisfed.org/series/M1

In fact, the "dominant source of market demand" are actually the companies themselves.

Source: Marketwatch - Goldman
marketwatch.com/story/buybacks…

Q: If companies are buying their own stock back, where are they getting the money from?
A: Borrowing

It turns out that this is an unintended spillover effect of rate cuts. Since 1981, the Fed's target rate has dropped from 19% to 1%.

Source: Fred
fred.stlouisfed.org/series/FEDFUNDS

It's kind of strange because when you turn on the TV you see the president saying we have the best economy ever, the best everything ever. Politicians are clamoring over each other to take credit. Let me ask you something. Are you buying any of their BS?

We know from history that sound money is necessary for long-term REAL growth. In the past, many nations have gone back to the gold standard as a way to stabilize their money. That may happen again. But you may have also noticed that people carry around these computers these days.

We are transitioning to the digital age. Warfare will take place in cyberspace. Business is already being completely reshaped, global supply chains etc. The top companies by market cap are all tech companies now.

Source: dogsofthedow.com/largest-compan…

If only we had some kind of scarce resource that could be used around the world and was also digitally native. Ideally, it would be divisible into very tiny pieces and extremely secure. If we had such a thing, it could become very valuable. #Bitcoin

bitcoin.org/bitcoin.pdf

If such a thing did exist, we would need some way to project its value into the future. WAIT A MINUTE, WE DO!

Source: digitalik.net/btc/
Hat Tip: @saifedean @100trillionUSD

Unpopular opinion: When the US Dollar loses its reserve currency status, what replaces is will be a multinational standard based on hard asset reserves. Those reserves will include gold, natural resources (possibly energy), and #Bitcoin

Now the stage is set. How long will we have to wait for the catalyst? The next Bitcoin Halving is coming up in 79 days.

Source: bitcoinblockhalf.com

A global pandemic is already disrupting supply chains. Did you know that China is the largest manufacturing country globally? It turns out that 20% of all manufacturing comes from China.

Source: brookings.edu/research/globa…

According to Maersk, China is only running at 50-60% of their regular output right now.

Source: cnn.com/2020/02/20/bus…

Let's talk about coronavirus for a minute, because this thing is not only happening in China. In the USA we may feel somewhat safe, isolated from the impact. But there's a problem. A bunch of test kids sent out by the CDC are not working as expected.

This means that we have no idea how much it's actually spreading in the USA. Taken as a whole, the doubling rate outside China (the cases we know about) is now under seven days.

Source: gisanddata.maps.arcgis.com/apps/opsdashbo…

China has driven global economic growth over the last decade. But since 2007 that growth has slowed from 14% down to 6%. Then we had the trade war, Chinese new year, HK Protests, now millions are in lock down. This won't end well.

Source: Fred
fred.stlouisfed.org/series/NAEXKP0…

The world is not coming to an end. We're just at a pivotal moment when drastic change is possible. The crisis we are facing will give us the spirit we need to act. Be bold, and HODL on my friends. #Bitcoin

Fourth turning: amazon.com/dp/B001RKFU4I/…