This is how things will play out in simple terms:
- Against all economic theory, against all negative expectations, against President Trump, his tariff strategy, which is to force nations into negotiating tariffs toward zero everywhere, this strategy or something proximate yet caused by it, will deliver a huge increase in global productive power. Most importantly in America herself.
- What happens to economies when they are given a spectacular labour saving device or an improvement in government efficiency or reduction in taxation as the tariff will deliver in this case, in spite of it being so unlikely and no one expecting it to work? Land values rise everywhere, especially where the gains of this new productivity emerge. What is more, the speculation in these land value earnings - rent, will drive demand for even higher 'capital' gains in the selling price of it. Into a mania where we all start to believe the price will keep rising forever. Everyone will buy in, especially the billions who can no way afford it, in expectation of future higher selling price.
- Against all common sense, economic theory and fairness, crypto will be the unconsciously collective thing which triggers the Great Recession. That it has nothing either technically or financially connected with triggering the recession is neither here nor there. For every great recession the trigger never happens in the material world. What people feel at a deeper level is what matters. And crypto will be the tipping point which finally causes the whole world to wake up and remember. That the foundations of every economy in every nations, is rent seeking. But The People, all being systemic rent seekers, cannot tolerate this eternal fact. We must have a scape goat. And it will be crypto, even though it is totally unrelated. Look to the past 3 recessions and see it happening.
- One morning, probably just into the new year of 2027, we will wake up and remember. Crypto will crash toward zero as it always would have done. This will be a small shock to the world. But given it's been given psychic power by The People, it will trigger the collapse of global finance, but in reality MORTGAGES. Followed by the rental value of all land (for which mortgages are merely a derivative)
- Government, as always too late to act, and when acting anyway always screwing it up, will blame crypto and scape goat a human figure too - the 2027 Bernie Madoff. Maybe a few big banks will be allowed to go under. Whatever it takes to make sure the right thing does not get blamed so that once recovered form this one, we can proceed to do the same thing again for the next 20 years. House prices globally will fall by about 30%, maybe more this time given recent government interventions further intensifying the prior mania.
- In about 4 years things will have fully recovered and we can walk into the next cycle with all the same inevitable consequences laid out carefully for our next generation.
Though this is a dark picture I don't paint it because I want it. I do not. But it was priced in 2012. By all nations as the foundations of economic policy in all nations, even China. And there are some small shining lights to come out of it anyway:
- The remote possibility The People will throw away our systemic selfishness and ignorance, and demand the abolition of all taxation, except for that on the value of land. I don't believe this will happen but I remain in the hope it will. Location Value Covenants being my preference over Land Value 'Taxation'.
- The original Bitcoin protocol emerges as the cash of nations. And with the possibility of systemic rent seeking gone, it can become the cheapest form of money possible AND the most most exchanged thing, making it implicitly 'The Money'.
Go well.
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