In his TED Interview Yuval Harari states that we no longer have a narrative for what’s happening in the world. The 20th century had three big stories: the fascist, the communist, and the ‘liberal’ story. The end of World War II knocked out fascism, the end of the Cold War knocked out communism, and now the liberal story is collapsing. The evolution of today’s macro-economic and political landscape seems to point in that direction.

Since 2008 the economic landscape has shifted from an investor-led ‘game’ to one run by central banks. Since the Great Recession in 2008, quantitative easing without quantitative tightening has become the norm. In 2020, the US government announced a $700b+ program to address the COVID-19 economic downturn. The world is facing a central bank bubble.

The ‘free’ economy, as we know it, no longer exists. Companies that are supposed to go bankrupt are kept alive by the money printing machines. There is no longer a story of ‘liberty.’ Creative destruction is getting stifled by those in power where saved incumbents leave no room for better, more innovative companies. For example, bailing out United Airlines and potentially Boeing means stifling innovation for cleaner, faster, and more efficient air transport.

Furthermore, from the French Revolution Livre to the Confederate States Dollar, history is full of examples of what happens when money is printed in preposterous quantities. The short story: it fails. While the Federal Reserve is doing what it can to address the 2020 liquidity crunch, the lack of quantitative tightening track-record is setting the world up for an inflation era. This becomes a problem when the elite, who lobby to save their failing companies and funds, are running the country. Everyone but those at the top of the pyramid will pay. We’ll lose out on cheaper, better, products from never-to-be born ventures and instead pay inflated prices to further enrich the incumbents in power. The inequality gap will only continue to grow. Welcome to crony capitalism.

The world may be entering a dangerous cycle where the rich are not only get richer but also more powerful. Breaking out of these power structures will become increasingly difficult. How it’ll play out is unknown. It’s too early to tell. Mis-managed inflation, like in the Weimar Republic in the early 1920’s, could lead to social unrest and political instability. Or we may need to wait for a new disillusioned generation to start challenging those in power.

There is, however, one catalyst that could accelerate social-economic instability, and that’s COVID-19. Governments are making trade-offs between saving lives and saving the economy. However, as people are touched emotionally by the crisis, whether it’s through loved ones passing away or through lack of income, their patience will dwindle and, if inflation starts to affect the Consumer Price Index, those in power will have little room to maneuver. Like the Bubonic Plague, COVID-19, if it lasts, may shift the power from ‘feudal lords’ to the people.

This uncertain ‘rigged’ environment leaves few investment options. For those lucky enough to have extra cash on hand however, it represents a unique opportunity to hedge or, depending on how things turn out, make once in a lifetime returns. In the short term, the liquidity crunch will keep demand for the US dollar strong, which may further increase by a looming emerging markets debt crisis. There’ll also be value stocks to pick from the 2020 market downturn. But ultimately, we are left with only a couple of inflation-resistant safe havens: gold and, for those who buy into the “digital gold” narrative, bitcoin.

It is time for a new story. One that embraces resiliency and sustainability, connects not divides us, and that creates economic prosperity opportunities for all.