So well written and I think you’re really nailing a very complex problem - our current situation = I’m richer and wiser from this article - and many of your other wonderful articles.
Hi Lau. I have missed this development too. Have you left Crisis Investing? Would you be able to post a link to what you offer in your subscription plus costs etc? I have really appreciated your wise insights. All the very best for your new venture.
Hi Karen. Yes, I have left Crisis Investing. I don't offer anything paid just yet… just the free stuff… but, yes, I'll be launching over the coming weeks. It's been a hectic past month, so I haven't really had a chance to think through the finer details you're asking about. But once I know, I'll make sure you hear from me. :) In the meantime, appreciate you being a reader, Karen. Your kind words mean a lot. Cheers!
Excellent, comprehensive, articulate, and I think more than stiulating, very likely a clear vision into a probable near future concluding with helpful suggestions regarding how to not be more of a victim than is absolutely already baked into the cards. Hoping for the best and thankful for the opportunities that are still within one’s reach. I recommend Lau in general and especially this longer piece and all the data shown in the WTFHappened in 1971 graphic cascade.
Thanks for the perspective, Kimberly. As I've said elsewhere, I don't have collective solutions for this, just individual ones.
I mean, on the collective side: first of all, who cares; the powers that be certainly don't. Second, trying to stop AI is like trying to stop a runaway train. And I'm equally unimpressed by the likes of Bernie's 50% government ownership pitch. I could probably write a book about this, but let's just say: fusing state power with the dominant corporations in something as revolutionary as AI, and aligning their interests, is one of the worst structural ideas ever.
On the individual side, I could talk about internationalization, getting a second passport, building parallel communities, and plenty in between. But none of that matters if you're not financially strong enough to at least break even in the new paradigm.
Thank you for the reply, Lau. Since I have grandchildren, I don’t take the subject of the economic future lightly. It is a main focus of mine to find ways to help them be well fed, housed and clothed in this difficult future that is unfolding in front of my eyes. I do agree with all that you wrote about the current state of affairs. I am searching diligently for as many answers as possible to: “so now what?” For most of the people in my life, “becoming good investors” will not be a possible path.
It will probably be more along the lines of the parallel communities.
But I hope that the good investors will find a way to help with the parallel communities.
These are our families and friends. What’s coming is serious. We should all be preparing in every way we can. Getting ours and leaving them in deep poverty doesn’t sit right with me. But I’m not sure how to play this out for the best for everyone either. Trying to figure that out.
Lau, a most excellent article!…….the middle class is already dead. It happened when liberals were allowed in Washington to destroy healthcare, money, and the home front. We do not need a Fed, political parties that tell us what to do, nor all the rules and regs imposed.
I would love to subscribe to many things online; but am taking a year off to evaluate MY money and my retirement. It seems that I am part of that middle class that has been decimated, and I need to pull in the gut to survive. Your columns are worthy, and thank you for the free thoughts!
How would government taxes factor in here? I have read that the younger generations are leaning more toward socialist ideals. Wouldn’t they come after these AI winners to “pay up” their share? Doesn’t change the displaced work force as you discussed, but maybe who pays for it?
I think there's really something to be said here. Because the younger generation is really going to bear the brunt of this… graduating with debt their parents never had, into a job market with flat hiring, into professions being eaten by AI in real time. If this really gets out of hand, I think there's a real chance we see Class Warfare 2.0 over the next decade… not unlike what played out in Russia a century ago. My two cents.
Definitely worth my time. Took me longer than ten minutes though because I read it deliberately and paused to contemplate what I just read. I look forward to your posts.
It's worth mentioning the 5th option: a chain-reaction worldwide uprising and revolution that burns the entire rotten system to the ground and imprisons and/or executes every member of the global crime syndicate which has exploited the common man's labor and stolen his wealth for thousands of years now. It would be ugly and many would suffer and/or perish but the alternative is a dystopian 1984 existence with a permanent slave class.
There’s so many problems of many types that people haven’t yet thought of solving. One of my advice to my kids is It is okay to be financially poor but not culturally poor. I teach them to not to steal, not to lie (to themselves too), and try to remain positive. My personal employment record has undulated in 30 years; new career job about every 5 years.
Quite visionary. I don’t see any flaw in your reasoning.
Couple thoughts on asset appreciation:
The nominal rise of the S&P 500 since ‘71, 75X, may be a bit misleading, because a lot of the company stocks listed in the index in ‘71 don’t exist today - they went out of business.
The 16X nominal rise of housing, however, is even more complicated, and could well be understated. Most homes are bought with borrowed money. That leverages the gain. If you bought a $100,000 house with 20% down, and its price went up 16X, your personal investment went up 80X.
To go a little deeper…if you sell your home and move to another, you don’t realize that 80X gain because the one you buy went up, too. The 80X gain didn’t do you much good. A house isn’t really an investment.
However, if you had meantime invested in one or more additional houses or apartments as rental income property, the comparison with stocks really counts, and real estate comes out looking good - except the lack of liquidity could end up being a huge downer - another reason for diversifying.
So well written and I think you’re really nailing a very complex problem - our current situation = I’m richer and wiser from this article - and many of your other wonderful articles.
The rise of the Ai-stockracy !
This might actually be the better term. Ha.
I didn't realize you'd gone solo, Lau. Congrats and best of luck. You're always a great read.
It's a fresh development. But, yes, on my own now. Good to see you here, Laramie.
Hi Lau. I have missed this development too. Have you left Crisis Investing? Would you be able to post a link to what you offer in your subscription plus costs etc? I have really appreciated your wise insights. All the very best for your new venture.
Hi Karen. Yes, I have left Crisis Investing. I don't offer anything paid just yet… just the free stuff… but, yes, I'll be launching over the coming weeks. It's been a hectic past month, so I haven't really had a chance to think through the finer details you're asking about. But once I know, I'll make sure you hear from me. :) In the meantime, appreciate you being a reader, Karen. Your kind words mean a lot. Cheers!
Excellent, comprehensive, articulate, and I think more than stiulating, very likely a clear vision into a probable near future concluding with helpful suggestions regarding how to not be more of a victim than is absolutely already baked into the cards. Hoping for the best and thankful for the opportunities that are still within one’s reach. I recommend Lau in general and especially this longer piece and all the data shown in the WTFHappened in 1971 graphic cascade.
Thanks, Jay. Appreciate you reading and sharing.
well researched and delivered.
“The moral of the story? You’d better start learning about investing (and speculating). And practicing what you learn, too.”
That’s it? That’s your entire advice? The only option? After laying out how completely devastating this is going to be for millions of people? Dang.
Thanks for the perspective, Kimberly. As I've said elsewhere, I don't have collective solutions for this, just individual ones.
I mean, on the collective side: first of all, who cares; the powers that be certainly don't. Second, trying to stop AI is like trying to stop a runaway train. And I'm equally unimpressed by the likes of Bernie's 50% government ownership pitch. I could probably write a book about this, but let's just say: fusing state power with the dominant corporations in something as revolutionary as AI, and aligning their interests, is one of the worst structural ideas ever.
On the individual side, I could talk about internationalization, getting a second passport, building parallel communities, and plenty in between. But none of that matters if you're not financially strong enough to at least break even in the new paradigm.
Thank you for the reply, Lau. Since I have grandchildren, I don’t take the subject of the economic future lightly. It is a main focus of mine to find ways to help them be well fed, housed and clothed in this difficult future that is unfolding in front of my eyes. I do agree with all that you wrote about the current state of affairs. I am searching diligently for as many answers as possible to: “so now what?” For most of the people in my life, “becoming good investors” will not be a possible path.
It will probably be more along the lines of the parallel communities.
But I hope that the good investors will find a way to help with the parallel communities.
These are our families and friends. What’s coming is serious. We should all be preparing in every way we can. Getting ours and leaving them in deep poverty doesn’t sit right with me. But I’m not sure how to play this out for the best for everyone either. Trying to figure that out.
Keep up the good writing.
Lau, a most excellent article!…….the middle class is already dead. It happened when liberals were allowed in Washington to destroy healthcare, money, and the home front. We do not need a Fed, political parties that tell us what to do, nor all the rules and regs imposed.
I would love to subscribe to many things online; but am taking a year off to evaluate MY money and my retirement. It seems that I am part of that middle class that has been decimated, and I need to pull in the gut to survive. Your columns are worthy, and thank you for the free thoughts!
How would government taxes factor in here? I have read that the younger generations are leaning more toward socialist ideals. Wouldn’t they come after these AI winners to “pay up” their share? Doesn’t change the displaced work force as you discussed, but maybe who pays for it?
I think there's really something to be said here. Because the younger generation is really going to bear the brunt of this… graduating with debt their parents never had, into a job market with flat hiring, into professions being eaten by AI in real time. If this really gets out of hand, I think there's a real chance we see Class Warfare 2.0 over the next decade… not unlike what played out in Russia a century ago. My two cents.
A good history lesson. Yes the world is changing fast and people should consider closely where they put their money.
Jim Marshall
100%. Appreciate your reading, Jim.
Thanks Lau your ability to look at these things from different perspectives is commendable.
Appreciate it, Pete.
Definitely worth my time. Took me longer than ten minutes though because I read it deliberately and paused to contemplate what I just read. I look forward to your posts.
Thanks Gordon. That's the highest compliment a writer can get. Appreciate it.
Great piece! Thank you
Thanks NN! Appreciate you reading.
Another day excellent article! -Eva Morris
Thanks Eva, appreciate you reading.
It's worth mentioning the 5th option: a chain-reaction worldwide uprising and revolution that burns the entire rotten system to the ground and imprisons and/or executes every member of the global crime syndicate which has exploited the common man's labor and stolen his wealth for thousands of years now. It would be ugly and many would suffer and/or perish but the alternative is a dystopian 1984 existence with a permanent slave class.
There’s so many problems of many types that people haven’t yet thought of solving. One of my advice to my kids is It is okay to be financially poor but not culturally poor. I teach them to not to steal, not to lie (to themselves too), and try to remain positive. My personal employment record has undulated in 30 years; new career job about every 5 years.
Quite visionary. I don’t see any flaw in your reasoning.
Couple thoughts on asset appreciation:
The nominal rise of the S&P 500 since ‘71, 75X, may be a bit misleading, because a lot of the company stocks listed in the index in ‘71 don’t exist today - they went out of business.
The 16X nominal rise of housing, however, is even more complicated, and could well be understated. Most homes are bought with borrowed money. That leverages the gain. If you bought a $100,000 house with 20% down, and its price went up 16X, your personal investment went up 80X.
To go a little deeper…if you sell your home and move to another, you don’t realize that 80X gain because the one you buy went up, too. The 80X gain didn’t do you much good. A house isn’t really an investment.
However, if you had meantime invested in one or more additional houses or apartments as rental income property, the comparison with stocks really counts, and real estate comes out looking good - except the lack of liquidity could end up being a huge downer - another reason for diversifying.