Everyone seems to intuitively know that the system we have is not sustainable, especially for people of my generation (Millennials, b. 1982 - 2004). Many of us went to college and graduated in the early 2000s. Just as we were getting our feet set in new careers, the 2008 economic crisis hit. It's been a long recovery from that, and just as things were picking back up, we had the COVID-19 shutdown.

Now, the economy seems to be doing okay (at least if you’re in the NYT bubble), but there are significant structural issues. Just as people have gotten back on their feet after COVID and received some stimulus checks and new tech jobs, they're going to find that the rug will yet again get pulled out from under them. The biggest issue is that the underlying forces that led to the 2008 crisis have not been properly addressed. The regulations in the banking sector that followed were mostly cosmetic. The system was essentially patched up by pumping more money into it rather than undergoing significant reform, which is the only way to truly fix the system (at least this is what Professor Eisenbach taught in his US Presidential History class).

Now, what else is going on? I'm not a finance expert per se. I understand it as best as I can, but I'm not going to pretend to be an authority on the subject. I can't predict exactly how it will unfold: what asset crash will trigger it or anything like that. The whole system seems bubbly to me, and it seems like we're headed for not just a "Black Swan" event, but a "Black Swan of Black Swans." The catalyst could be something very minor. It could be a Chinese invasion of Taiwan, or the BRICS nations cutting off trade with the U.S., or some sort of embargo. It could just be the market getting spooked and people pulling out because they know the game is up.

Things are getting more protective; trade barriers are going up, and people are getting more defensive. This is exactly what happened in the lead-up to World War II. People are preparing for war, and that makes war all the more likely.

What I find frustrating is that I was listening to an episode of the Pivot podcast from a while back, around July, and there was a listener question from the youngest listener who has ever sent in a question. He was asking Scott Galloway for financial advice. He has an allowance and wants to invest his savings. Scott told him, quite wisely, to invest in the S&P 500 or the NASDAQ because it would be worth a lot in 70 years.

When you're telling a 10-year-old to invest in the stock market at a time like this, you've got to think that you're at a top. Robert F. Kennedy Jr. said this in a Joe Rogan interview: his dad (or grandfather, I forget) would always say that if his shoeshiner was talking stocks, it was a good time to sell.

If you think on a larger historical scale—financial trends not just over a few years but on a century-long basis—you start to realize the game can't go on forever. Maybe when children start investing in stocks, that's the time for a big sell-off.

I can't help but think this surge in retail trading is a scheme to get as many people as possible to buy stocks. It's been promoted under the guise of democratizing investing, but why would financiers sacrifice their own profits unless they want something from you? They want liquidity; they want an exit strategy. They want to offload as many assets as possible from their balance sheets to retail traders. They want the government to provide stimulus checks to people so they can buy these soon-to-be-worthless assets.

It's clever, and I think it's going to work, because people will buy into the notion that stocks are the way to go for your savings. Your savings account doesn't offer substantial returns, so people think they have to invest it somewhere else.

The issue I see coming is frightening, more so for the wealthy than for regular people. If the whole financial game I'm talking about succeeds, we could see stagflation. You'll have a lot of inflation from all the stimulus and money printing, but the returns on stocks won't keep pace. At the same time, you'll see a different kind of inflation at the elite level because wealthy people will have a lot of money from selling off assets. They will try to convert that into hard assets like gold, Bitcoin, or real estate.

Some parts of this might be wrong, and other parts might be right. That's just how these things go. But moving on from the bad phase, what's going to follow the pumping phase is a severe contraction and a huge backlash from the populous. It could become an absolute mess, exacerbating inequality even further. While some might make it out of that recession just fine, most people are going to do very poorly. It might not feel as much like a recession because there won't be massive unemployment, like what's happening right now. Interest rates will go up, but at some point, interest rates won't be able to rein in inflation, and the FED will run out of options.

So, then you're going to have a massive inflation problem. You'll have elderly people with all these benefits, and you'll have overemployed young people who aren't getting paid enough. They'll be working jobs that mainly serve older and wealthier individuals. But that whole system won't work, and the reason is that the economy will have to shift to something completely different. An existential challenge will arise, like a major war or a civil war, or perhaps one after the other. The government, the nation, the states—whatever collective emerges—will need to channel all resources into fighting that conflict. Young people will have to start producing things for that war effort, not servicing the elderly.

How do you do force this shift? You leverage the anger and frustration of the people to justify seizing assets from the elderly. You target tax havens, shell companies, loopholes—essentially, anything that hides wealth—and get a clear picture of who owns what. If someone owns a lot, you heavily tax it, maybe even up to 100% or 99%. This approach can also be used to justify removing social security and trimming down bloated government agencies.

It's a process that involves destroying the existing system and replacing it with something far more efficient. It's like the Reagan version of taking on big government, but rather than just defunding it and letting it wither, this approach completely dismantles it and then builds a new system that is streamlined and effective. This process has similarities to, but also inverts aspects of, the response to the World War II crisis. During WWII, the focus was on creating new agencies, generating demand, providing money even when it wasn't immediately needed to stimulate spending, and spreading financial support to allies.

However, this time, it's about dismantling existing agencies: tearing down an old government, and then constructing a new, better one. This contrasts with starting from scratch. The Great Depression saw a need to scale up, to spend more, to do more—bigger was better. But here, it's about a different kind of big. In the COVID era, it's about being merciless, ruthless in tearing down what's established, and then rebuilding with strategic focus.

You can't enact this radical change by force; that would only lead us down the path to totalitarianism. The strategy must be rooted in politics, convincing the elites and government bureaucrats that participating in this transformation is for the greater good. It's essential to frame it as part of a grand experiment to preserve the American quest for freedom and democracy. Doing so would be a civic duty, one that serves not just self-preservation but the survival of the Republic itself.

Shaming tactics could be effective here, similar to how Roosevelt challenged the wealthy plutocrats of the Gilded Age. The focus should be on altering mindsets, particularly among the tech-savvy and venture capitalist crowds. They need to realize it's not just about growth and money; serving the country and a higher cause should be the ultimate goals. A lifestyle perceived as gluttonous should be critiqued, and a move towards asceticism might be necessary.

As for which political party is most suited to enact these changes, it's unclear. Elements of this new radical thinking are found both in the Republican and Democratic platforms. However, the actual party may be irrelevant. What matters is the will to address underlying issues rather than simply paying lip service to popular ideas.

My generation faces a unique challenge. We've been conditioned to believe in the meritocracy, working diligently to achieve educational and professional milestones. But there's a rising sentiment that the system is broken and will fail to deliver on its promises. Whenever this economic downturn happens, it will serve as a major reality check, necessitating the invention of a new system that actually rewards merit.

What's more interesting is that the administration under which this crisis occurs will shoulder the blame. Presently, there seems to be a narrative forming that could likely pin the fault on the Democrats, even though both parties have contributed to the state we're in. But crises have a way of disrupting established loyalties, and we might see an upheaval in voter demographics as a result.

It's hard to say which side will seize the moment to enact change. It could be a radical wing of the Democratic Party, or perhaps a new faction within the Republicans. Regardless, it won't be the moderate, old-guard politicians who bring about this shift. The need for change is urgent, and whoever fails to recognize this will likely go down in history as another Hoover, presiding over a crumbling system unable to meet the needs of its time.

So, the situation is complex, but one thing is clear: something significant has to happen, and it will necessitate a fundamental rethinking of our current systems and ideologies.

Where we left off before was the idea that we're going to have an inflationary recession, a death by fire some people might call it. I'm sure there will be periods of cold, of deflation, but it seems most likely that we're going to lean towards the inflationary side of things. And I think the last blog post did just a mediocre job of summarizing a lot of stuff I've been consuming on platforms like YouTube, Twitter, and various podcasts. I tried to synthesize that but not very well. But anyway, I'm going to take that sort of base idea of what's going to happen and talk about the implications of that for the Elite Class.

Something I've recognized, through the second-tier elite circles — you might call them “mids” — is a lot of complaining about the price of things, even though these people are quite wealthy. They complain about very specific items, like the cost of a lobster roll in Nantucket, a porterhouse steak at a nice restaurant, the cost to get your roof redone, or other contractor home improvements, cost of landscaping, and of course, the cost of education – private education, college education, and even the cost of luxury vehicles and art.

I don't know if anyone has created a sort of inflation basket for luxury goods, or even just a goods basket for your typical elite in U.S. society. But I would guess that compared to elite wages, like the salaries of lawyers, doctors, high up government officials, investment bankers, etc., the elite cost of living was pretty reasonable up until the financial crash. Maybe for certain industries, the salaries began to stagnate before that, especially for entry-level positions. But it seems like that was the turning point where the economy didn't totally collapse, but something fundamentally changed. Cheap money was getting pumped into the system, and most of that was going straight into the banking sector, government contracts for defense, and later renewable energy companies. And we've seen wealth accumulating at the higher levels.

Starting then, there seems to have been the beginning of a non-linear increase in the cost of the elite basket of goods, especially post-COVID. My intuition suggests that the recent inflation we've been having is affecting the elite basket of goods more than most others. I'm not quite sure how to prove that, and I doubt there's enough data available.

This sort of elite inflation is fine so long as salaries are increasing, but more importantly, elites can finance their lifestyles. I was having a conversation with a friend from a well-off background, and we discussed the salary required to live an elite lifestyle. When you factor in the mortgage on two houses (an apartment in the city and one at the shore), private education for two kids, country club membership, wanting to save at least 10/20% of your income, you and your partner would need a combined income of around 1.5 million, which is tough to achieve. And those higher-paying jobs that would satisfy that are often held by older individuals who are holding onto their positions with a vice grip.

There's a visible anxiety among Gen-Xers, who are now concerned about affording the lifestyle they were accustomed to. Many of them, even the Boomers who didn't save enough, resort to debt. This was more prevalent when interest rates were extremely low, leading many to take loans out on their homes and stock portfolios. If you own a business, you could apply this same leveraging. This works so long as growth is good enough and you can keep borrowing; if either one of or both of those things stop: catastrophe.

When we think of debt, we often consider it purely a governmental problem, but this is happening in the private sector, specifically in the elite circles. This is something people don't talk about either. All you see are the status symbols; the fourth or fifth house, the sweet new car. But what you don't see is what's behind that. They could be acting responsibly, or they could be leveraging up, thinking the bull market and good times will go on forever. And because we've reached this point, a deflationary recession in a democracy like ours or, more aptly, a plutocracy, seems impossible. If that occurred, all these people's debts would balloon and become insurmountably burdensome. People would likely fall into crippling debt for the rest of their lives, or even go bankrupt. So, that's probably not going to happen.

Instead, these people, much like the government, will likely be bailed out in ways similar to the inflation tactics and the FED's money printer. I recently watched a YouTube video where the speaker (I forget his name) mentioned that, in the long run, we'd have to maintain our defense spending, keep the imperialism going, and possibly even expand healthcare. It's going to be clear that we won't manage the interest rate payments on our debt without the FED intervening. We're heading into an inflationary spiral where the FED just prints money, buys treasuries, while all other holders of treasuries are selling to avoid loss of value.

In this scenario, what happens to the wealthy? Their stocks and real estate values will keep rising, which might seem positive. But in a low-growth environment, where productivity gains are likely seen more in the public sector or military rather than in the private sector, stock market performances could underperform relative to inflation. This pattern was observed in Weimar Germany and Argentina. So, the inflation we currently see with elite goods could worsen exponentially.

In such times, the wealthy might feel rich because of the inflated currency, but the cost of luxury items will shoot up significantly. Consider this: the price of a filet mignon at a restaurant could be $120, a lobster roll in Nantucket could go up to $200, and a flight to Paris might be priced at $20,000. Basically, the lifestyles most elites have known for the past few decades will become totally unsustainable (and rightfully so, I’ve had enough of all this gluttony).

Moreover, during these times, private companies will not be hiring as much. And when the FED tries to curb inflation, taking out loans will become costly due to higher interest rates. The elite will likely have to cut down on their lavish lifestyles. Investing in hard assets will be a smart move, and the most logical employment option will be in sectors where wages are tied to hard assets, like in the World War II era.

Financial roles, insurance jobs, and consultancies might suffer, whereas jobs linked to tangible assets will thrive. We've seen this before. Many believe that we're currently in a bubble, and historically, economic bubbles do burst. Not only will professional wages stagnate or reduce, but many might lose their jobs altogether.

For the younger generation, opportunities might arise in newer industries or perhaps in war efforts, offering them wage appreciation. However, for those who once saw a clear path to becoming partners at law firms or ascending corporate ladders, that path might soon become obscured.

We've had many recessions and depressions in history. The Great Depression stands out because it destroyed immense wealth accumulated during the Gilded Age. It impacted the elite, the plutocrats, prompting society into drastic measures. I foresee something similar on the horizon, and many are not mentally prepared for this shift.

In such times, character is tested, and many will face daunting adversities. While I still spend money in a somewhat undisciplined fashioned now (might as well enjoy the good times while they’re here), I'm mentally preparing for potential upheavals. Maybe I'm wrong, but based on historical patterns and current observations, a collective reality check seems imminent. These checks tend to occur every fifty years or so, and it's crucial for us to be prepared.

Typically these reality checks occur in an alternating pattern: where there is one mental reality check (an awakening as the Strauss-Howe Generational Theory would put it), while the other is a very physical manifestation, a crisis. This is a crisis moment, and in these sorts of moments practicalities become paramount: what do we have? what can we create? who can we convince? is he on our team or there’s? will he kill me or not? It becomes very black and white very fast. So, it's kind of time to team up. And here's the thing, it doesn't feel as intense right now. But when shit hits the fan, I'm honestly looking forward to seeing how the people I know, the family and friends I have, the country I’m a pat of band together to navigate through it all. My whole life (and in the collective life of my generation), I (we) have only known a nation of division, hatred, and turbulence. At some point this will have to change.

The last semblance of national unity I experienced was when I was one year old during the 9/11 attacks. It may not seem like a genuine moment of national unity, but rather a manipulated one. A moment that was exploited for the benefit of a few over the many. I'm not sure that, in the long run, that approach can continue. Initially, perhaps, but in moments like these, a government has to function efficiently for the benefit of the collective because it's fighting for its existence. If it doesn't adapt to feedback, that feedback can turn into a revolution or result in outside invasion. When issues are existential, the facades fall away – the lies, manipulation, and conspiracies. If a government doesn't work, or you aren't doing your job, you're replaced and progress accelerates. These are challenging and harrowing times, but they're also invigorating. It's a pivotal, life-altering period when a crisis arises.

It's hard to predict how to prepare for these moments. Perhaps I'm fooling myself, but I believe people can prepare for these harrowing events. Many people are so consumed by societal pressures - to earn degrees, attain a certain lifestyle, meet expectations. But, judging by how hard my generation works and our credentials, there's an immense amount of potential. But it's not being rewarded. At some point, my generation will recognize they're on the wrong track and that the rules of the game are changing, and there will be this unleashing of collective energy and will that will truly reshape the earth.

Considering the long-term consequences, if you come from immense wealth and hide in your glass castle, you'll be despised. If you don't contribute in these critical moments, your reputation will suffer. Those who rise to the occasion will be remembered, and those who don't will be left behind. For decades, society has praised those who put their interests first. But people's lifestyles are going to change.

Now, I might be veering off-topic, but these thoughts are interconnected. I often ponder these things. I feel like I'm ahead of the curve, but not in the conventional entrepreneurial sense. I think about societal and political shifts. Many invest their money in tech and innovation, but even this sector will face challenges. However, where do all these brilliant minds go in times of crisis? When you bring them together, focused on a singular task, it's incredible. The collective will, initially destructive, can also bring about beautiful creations and a brighter future.

I haven’t written in a while but this is a GPT-edited, AI-generated transcript of a couple dictation sessions I did on the economic situation and such. It’s a ramble, but for the future I think this is the most sustainable way for me to get these posts out consistently; the editing I did for the earlier posts was a pain in the ass and who the hell am I editing for anyway. Raw thoughts are enough, a future AI can make this stuff more digestible…

Everyone seems to intuitively know that the system we have is not sustainable, especially for people of my generation (Millennials, b. 1982 - 2004). Many of us went to college and graduated in the early 2000s. Just as we were getting our feet set in new careers, the 2008 economic crisis hit. It's been a long recovery from that, and just as things were picking back up, we had the COVID-19 shutdown.

Now, the economy seems to be doing okay (at least if you’re in the NYT bubble), but there are significant structural issues. Just as people have gotten back on their feet after COVID and received some stimulus checks and new tech jobs, they're going to find that the rug will yet again get pulled out from under them. The biggest issue is that the underlying forces that led to the 2008 crisis have not been properly addressed. The regulations in the banking sector that followed were mostly cosmetic. The system was essentially patched up by pumping more money into it rather than undergoing significant reform, which is the only way to truly fix the system (at least this is what Professor Eisenbach taught in his US Presidential History class).

Now, what else is going on? I'm not a finance expert per se. I understand it as best as I can, but I'm not going to pretend to be an authority on the subject. I can't predict exactly how it will unfold: what asset crash will trigger it or anything like that. The whole system seems bubbly to me, and it seems like we're headed for not just a "Black Swan" event, but a "Black Swan of Black Swans." The catalyst could be something very minor. It could be a Chinese invasion of Taiwan, or the BRICS nations cutting off trade with the U.S., or some sort of embargo. It could just be the market getting spooked and people pulling out because they know the game is up.

Things are getting more protective; trade barriers are going up, and people are getting more defensive. This is exactly what happened in the lead-up to World War II. People are preparing for war, and that makes war all the more likely.

What I find frustrating is that I was listening to an episode of the Pivot podcast from a while back, around July, and there was a listener question from the youngest listener who has ever sent in a question. He was asking Scott Galloway for financial advice. He has an allowance and wants to invest his savings. Scott told him, quite wisely, to invest in the S&P 500 or the NASDAQ because it would be worth a lot in 70 years.

When you're telling a 10-year-old to invest in the stock market at a time like this, you've got to think that you're at a top. Robert F. Kennedy Jr. said this in a Joe Rogan interview: his dad (or grandfather, I forget) would always say that if his shoeshiner was talking stocks, it was a good time to sell.

If you think on a larger historical scale—financial trends not just over a few years but on a century-long basis—you start to realize the game can't go on forever. Maybe when children start investing in stocks, that's the time for a big sell-off.

I can't help but think this surge in retail trading is a scheme to get as many people as possible to buy stocks. It's been promoted under the guise of democratizing investing, but why would financiers sacrifice their own profits unless they want something from you? They want liquidity; they want an exit strategy. They want to offload as many assets as possible from their balance sheets to retail traders. They want the government to provide stimulus checks to people so they can buy these soon-to-be-worthless assets.

It's clever, and I think it's going to work, because people will buy into the notion that stocks are the way to go for your savings. Your savings account doesn't offer substantial returns, so people think they have to invest it somewhere else.

The issue I see coming is frightening, more so for the wealthy than for regular people. If the whole financial game I'm talking about succeeds, we could see stagflation. You'll have a lot of inflation from all the stimulus and money printing, but the returns on stocks won't keep pace. At the same time, you'll see a different kind of inflation at the elite level because wealthy people will have a lot of money from selling off assets. They will try to convert that into hard assets like gold, Bitcoin, or real estate.

Some parts of this might be wrong, and other parts might be right. That's just how these things go. But moving on from the bad phase, what's going to follow the pumping phase is a severe contraction and a huge backlash from the populous. It could become an absolute mess, exacerbating inequality even further. While some might make it out of that recession just fine, most people are going to do very poorly. It might not feel as much like a recession because there won't be massive unemployment, like what's happening right now. Interest rates will go up, but at some point, interest rates won't be able to rein in inflation, and the FED will run out of options.

So, then you're going to have a massive inflation problem. You'll have elderly people with all these benefits, and you'll have overemployed young people who aren't getting paid enough. They'll be working jobs that mainly serve older and wealthier individuals. But that whole system won't work, and the reason is that the economy will have to shift to something completely different. An existential challenge will arise, like a major war or a civil war, or perhaps one after the other. The government, the nation, the states—whatever collective emerges—will need to channel all resources into fighting that conflict. Young people will have to start producing things for that war effort, not servicing the elderly.

How do you do force this shift? You leverage the anger and frustration of the people to justify seizing assets from the elderly. You target tax havens, shell companies, loopholes—essentially, anything that hides wealth—and get a clear picture of who owns what. If someone owns a lot, you heavily tax it, maybe even up to 100% or 99%. This approach can also be used to justify removing social security and trimming down bloated government agencies.

It's a process that involves destroying the existing system and replacing it with something far more efficient. It's like the Reagan version of taking on big government, but rather than just defunding it and letting it wither, this approach completely dismantles it and then builds a new system that is streamlined and effective. This process has similarities to, but also inverts aspects of, the response to the World War II crisis. During WWII, the focus was on creating new agencies, generating demand, providing money even when it wasn't immediately needed to stimulate spending, and spreading financial support to allies.

However, this time, it's about dismantling existing agencies: tearing down an old government, and then constructing a new, better one. This contrasts with starting from scratch. The Great Depression saw a need to scale up, to spend more, to do more—bigger was better. But here, it's about a different kind of big. In the COVID era, it's about being merciless, ruthless in tearing down what's established, and then rebuilding with strategic focus.

You can't enact this radical change by force; that would only lead us down the path to totalitarianism. The strategy must be rooted in politics, convincing the elites and government bureaucrats that participating in this transformation is for the greater good. It's essential to frame it as part of a grand experiment to preserve the American quest for freedom and democracy. Doing so would be a civic duty, one that serves not just self-preservation but the survival of the Republic itself.

Shaming tactics could be effective here, similar to how Roosevelt challenged the wealthy plutocrats of the Gilded Age. The focus should be on altering mindsets, particularly among the tech-savvy and venture capitalist crowds. They need to realize it's not just about growth and money; serving the country and a higher cause should be the ultimate goals. A lifestyle perceived as gluttonous should be critiqued, and a move towards asceticism might be necessary.

As for which political party is most suited to enact these changes, it's unclear. Elements of this new radical thinking are found both in the Republican and Democratic platforms. However, the actual party may be irrelevant. What matters is the will to address underlying issues rather than simply paying lip service to popular ideas.

My generation faces a unique challenge. We've been conditioned to believe in the meritocracy, working diligently to achieve educational and professional milestones. But there's a rising sentiment that the system is broken and will fail to deliver on its promises. Whenever this economic downturn happens, it will serve as a major reality check, necessitating the invention of a new system that actually rewards merit.

What's more interesting is that the administration under which this crisis occurs will shoulder the blame. Presently, there seems to be a narrative forming that could likely pin the fault on the Democrats, even though both parties have contributed to the state we're in. But crises have a way of disrupting established loyalties, and we might see an upheaval in voter demographics as a result.

It's hard to say which side will seize the moment to enact change. It could be a radical wing of the Democratic Party, or perhaps a new faction within the Republicans. Regardless, it won't be the moderate, old-guard politicians who bring about this shift. The need for change is urgent, and whoever fails to recognize this will likely go down in history as another Hoover, presiding over a crumbling system unable to meet the needs of its time.

So, the situation is complex, but one thing is clear: something significant has to happen, and it will necessitate a fundamental rethinking of our current systems and ideologies.

Where we left off before was the idea that we're going to have an inflationary recession, a death by fire some people might call it. I'm sure there will be periods of cold, of deflation, but it seems most likely that we're going to lean towards the inflationary side of things. And I think the last blog post did just a mediocre job of summarizing a lot of stuff I've been consuming on platforms like YouTube, Twitter, and various podcasts. I tried to synthesize that but not very well. But anyway, I'm going to take that sort of base idea of what's going to happen and talk about the implications of that for the Elite Class.

Something I've recognized, through the second-tier elite circles — you might call them “mids” — is a lot of complaining about the price of things, even though these people are quite wealthy. They complain about very specific items, like the cost of a lobster roll in Nantucket, a porterhouse steak at a nice restaurant, the cost to get your roof redone, or other contractor home improvements, cost of landscaping, and of course, the cost of education – private education, college education, and even the cost of luxury vehicles and art.

I don't know if anyone has created a sort of inflation basket for luxury goods, or even just a goods basket for your typical elite in U.S. society. But I would guess that compared to elite wages, like the salaries of lawyers, doctors, high up government officials, investment bankers, etc., the elite cost of living was pretty reasonable up until the financial crash. Maybe for certain industries, the salaries began to stagnate before that, especially for entry-level positions. But it seems like that was the turning point where the economy didn't totally collapse, but something fundamentally changed. Cheap money was getting pumped into the system, and most of that was going straight into the banking sector, government contracts for defense, and later renewable energy companies. And we've seen wealth accumulating at the higher levels.

Starting then, there seems to have been the beginning of a non-linear increase in the cost of the elite basket of goods, especially post-COVID. My intuition suggests that the recent inflation we've been having is affecting the elite basket of goods more than most others. I'm not quite sure how to prove that, and I doubt there's enough data available.

This sort of elite inflation is fine so long as salaries are increasing, but more importantly, elites can finance their lifestyles. I was having a conversation with a friend from a well-off background, and we discussed the salary required to live an elite lifestyle. When you factor in the mortgage on two houses (an apartment in the city and one at the shore), private education for two kids, country club membership, wanting to save at least 10/20% of your income, you and your partner would need a combined income of around 1.5 million, which is tough to achieve. And those higher-paying jobs that would satisfy that are often held by older individuals who are holding onto their positions with a vice grip.

There's a visible anxiety among Gen-Xers, who are now concerned about affording the lifestyle they were accustomed to. Many of them, even the Boomers who didn't save enough, resort to debt. This was more prevalent when interest rates were extremely low, leading many to take loans out on their homes and stock portfolios. If you own a business, you could apply this same leveraging. This works so long as growth is good enough and you can keep borrowing; if either one of or both of those things stop: catastrophe.

When we think of debt, we often consider it purely a governmental problem, but this is happening in the private sector, specifically in the elite circles. This is something people don't talk about either. All you see are the status symbols; the fourth or fifth house, the sweet new car. But what you don't see is what's behind that. They could be acting responsibly, or they could be leveraging up, thinking the bull market and good times will go on forever. And because we've reached this point, a deflationary recession in a democracy like ours or, more aptly, a plutocracy, seems impossible. If that occurred, all these people's debts would balloon and become insurmountably burdensome. People would likely fall into crippling debt for the rest of their lives, or even go bankrupt. So, that's probably not going to happen.

Instead, these people, much like the government, will likely be bailed out in ways similar to the inflation tactics and the FED's money printer. I recently watched a YouTube video where the speaker (I forget his name) mentioned that, in the long run, we'd have to maintain our defense spending, keep the imperialism going, and possibly even expand healthcare. It's going to be clear that we won't manage the interest rate payments on our debt without the FED intervening. We're heading into an inflationary spiral where the FED just prints money, buys treasuries, while all other holders of treasuries are selling to avoid loss of value.

In this scenario, what happens to the wealthy? Their stocks and real estate values will keep rising, which might seem positive. But in a low-growth environment, where productivity gains are likely seen more in the public sector or military rather than in the private sector, stock market performances could underperform relative to inflation. This pattern was observed in Weimar Germany and Argentina. So, the inflation we currently see with elite goods could worsen exponentially.

In such times, the wealthy might feel rich because of the inflated currency, but the cost of luxury items will shoot up significantly. Consider this: the price of a filet mignon at a restaurant could be $120, a lobster roll in Nantucket could go up to $200, and a flight to Paris might be priced at $20,000. Basically, the lifestyles most elites have known for the past few decades will become totally unsustainable (and rightfully so, I’ve had enough of all this gluttony).

Moreover, during these times, private companies will not be hiring as much. And when the FED tries to curb inflation, taking out loans will become costly due to higher interest rates. The elite will likely have to cut down on their lavish lifestyles. Investing in hard assets will be a smart move, and the most logical employment option will be in sectors where wages are tied to hard assets, like in the World War II era.

Financial roles, insurance jobs, and consultancies might suffer, whereas jobs linked to tangible assets will thrive. We've seen this before. Many believe that we're currently in a bubble, and historically, economic bubbles do burst. Not only will professional wages stagnate or reduce, but many might lose their jobs altogether.

For the younger generation, opportunities might arise in newer industries or perhaps in war efforts, offering them wage appreciation. However, for those who once saw a clear path to becoming partners at law firms or ascending corporate ladders, that path might soon become obscured.

We've had many recessions and depressions in history. The Great Depression stands out because it destroyed immense wealth accumulated during the Gilded Age. It impacted the elite, the plutocrats, prompting society into drastic measures. I foresee something similar on the horizon, and many are not mentally prepared for this shift.

In such times, character is tested, and many will face daunting adversities. While I still spend money in a somewhat undisciplined fashioned now (might as well enjoy the good times while they’re here), I'm mentally preparing for potential upheavals. Maybe I'm wrong, but based on historical patterns and current observations, a collective reality check seems imminent. These checks tend to occur every fifty years or so, and it's crucial for us to be prepared.

Typically these reality checks occur in an alternating pattern: where there is one mental reality check (an awakening as the Strauss-Howe Generational Theory would put it), while the other is a very physical manifestation, a crisis. This is a crisis moment, and in these sorts of moments practicalities become paramount: what do we have? what can we create? who can we convince? is he on our team or there’s? will he kill me or not? It becomes very black and white very fast. So, it's kind of time to team up. And here's the thing, it doesn't feel as intense right now. But when shit hits the fan, I'm honestly looking forward to seeing how the people I know, the family and friends I have, the country I’m a pat of band together to navigate through it all. My whole life (and in the collective life of my generation), I (we) have only known a nation of division, hatred, and turbulence. At some point this will have to change.

The last semblance of national unity I experienced was when I was one year old during the 9/11 attacks. It may not seem like a genuine moment of national unity, but rather a manipulated one. A moment that was exploited for the benefit of a few over the many. I'm not sure that, in the long run, that approach can continue. Initially, perhaps, but in moments like these, a government has to function efficiently for the benefit of the collective because it's fighting for its existence. If it doesn't adapt to feedback, that feedback can turn into a revolution or result in outside invasion. When issues are existential, the facades fall away – the lies, manipulation, and conspiracies. If a government doesn't work, or you aren't doing your job, you're replaced and progress accelerates. These are challenging and harrowing times, but they're also invigorating. It's a pivotal, life-altering period when a crisis arises.

It's hard to predict how to prepare for these moments. Perhaps I'm fooling myself, but I believe people can prepare for these harrowing events. Many people are so consumed by societal pressures - to earn degrees, attain a certain lifestyle, meet expectations. But, judging by how hard my generation works and our credentials, there's an immense amount of potential. But it's not being rewarded. At some point, my generation will recognize they're on the wrong track and that the rules of the game are changing, and there will be this unleashing of collective energy and will that will truly reshape the earth.

Considering the long-term consequences, if you come from immense wealth and hide in your glass castle, you'll be despised. If you don't contribute in these critical moments, your reputation will suffer. Those who rise to the occasion will be remembered, and those who don't will be left behind. For decades, society has praised those who put their interests first. But people's lifestyles are going to change.

Now, I might be veering off-topic, but these thoughts are interconnected. I often ponder these things. I feel like I'm ahead of the curve, but not in the conventional entrepreneurial sense. I think about societal and political shifts. Many invest their money in tech and innovation, but even this sector will face challenges. However, where do all these brilliant minds go in times of crisis? When you bring them together, focused on a singular task, it's incredible. The collective will, initially destructive, can also bring about beautiful creations and a brighter future.

I haven’t written in a while but this is a GPT-edited, AI-generated transcript of a couple dictation sessions I did on the economic situation and such. It’s a ramble, but for the future I think this is the most sustainable way for me to get these posts out consistently; the editing I did for the earlier posts was a pain in the ass and who the hell am I editing for anyway. Raw thoughts are enough, a future AI can make this stuff more digestible…