The Double Whammy Of Technology And The Economy

There are a lot of interesting things going on around the world. Unfortunately, much of this could cause a great deal of grief for average individuals. In my opinion, we are nearing a breaking point with some of what is taking place.

It is no secret that many are starting to question the economy. Things appear to be slowing around the world. The last decade saw a massive increase in the debt loads globally. While the proponents of modern financial engineering feel this will never be a problem, we all know, eventually, the debt becomes too burdensome.

Ultimately, the servicing of the debt needs to be maintained. That will get more difficult as time goes by.

Hence, we are going to see a recession (if not worse). Will it be next year? The year after? Two years from now? There is no way to know the answer to this. However, what is known is that the longer things get pushed out, the worse it tends to be.

This is compounded by the fact that central banks are trying to push people into spending. Much of Europe went negative with their interest rates. This does not help savers. Never was there a better time to accumulate debt. Sadly, this does not speak well for the economy long term.

In the West, more of our individual budget is spent with the corporatocracy. When people consider how much of their money goes to mega-corporations, it truly baffles them. It also shows the world we live in since these companies only care about maximizing profits. All else is mostly lip service.

Hence, the idea of employing people is not on their agenda. Automation is providing corporate leaders with options they never had before.

This is where technology enters the picture.

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I did a bit of an experiment while driving down the street earlier. I was looking at all the businesses on this road asking myself how many will still be around in a decade.

Technology is turning many industries on their ears. The disruption that is already taking place is mind blowing. This situation is compounded when we consider this process is only just getting started. Thousands of businesses are going to disappear over the next decade simply because technology altered how we live as a society.

One of the main businesses I drove by were banks. It is incredible how many of there are out there. That said, being involved in cryptocurrency led me to believe they are cooked. There is no way that all that physical space is used for banking down the road. We are already seeing the impact that something like blockchain is having on that industry.

Will banks mirror the video cassette rental industry? There was a time when most towns had a number of places like Blockbuster and Movie Gallery. Today, they are all gone. I believe we will see the same thing happen with banks.

One thing that a downturn in the economy will do is speed up the process of automation. Companies will already be taking the hit, financially, for the layoffs. Hence, there is added incentive to automate, thus relieving them of re-employment when things turn positive.

Each time I engage in an exercise such as this, I am reminded of the impact that cryptocurrency is going to have on society. People are going to be hurting (many are already). With the path we are on, things are going to come to an abrupt halt at some point. When mainstream economist start touting how wonderful negative interest rates are, watch out.

Presently, tens of millions who saved are suffering. Traditional methods of investing are producing little to no return, forcing people into riskier asset classes. This is alright as long as things are propped up. The challenge comes in when the situation turns south.

In my view, the impact of technology was already felt by people over the past two decades. While it might not had significant impact across the board in terms of job loss (manufacturing being the exception), it did produce a cap on wages. I believe the threat of automation went a long way to keeping average wages flat over that period of time.

Hence, we see a situation where growth came from debt. While the mainstream business tells us this can continue forever, it cannot. At some point, the entire house of cards comes toppling down.

Technology keeps progressing regardless of the economic circumstances. In looking at the cycles, we see that technology moves in 15-20 year waves. The situation I am mentioned here is magnified when you consider was are exiting a down period technologically. The last two decades were a technological down period. After the massive breakthroughs in the 1980s and 1990s, things leveled off for a while.

Now, we are on the edge of a technological explosion. There are at least half a dozen technologies that can have similar impact as the top breakthrough of the past two decades: the smartphone. Consider that for a moment.

There are half a dozen technologies with the potential impact upon society as we saw with the smartphone.

The pace that things are going means people are going to get blindsided by all of this. Few are mentioning it especially in the media. It is something that politicians are not aware of since they are, for the most part, technologically clueless. Hence, we hear the same tired rhetoric as always.

It is time people woke up. Unfortunately, that is not going to happen until it is too late for most. They will proceed like nothing is happening only to realize, one day, they are out of a job and cannot find another one.

The present system is being turned upside down. Technology plus a financially rigged economy means that things will get very bad for millions of people across the world.

Fortunately, we are starting to create options for people. Each day, more people are finding their way into cryptocurrency. This could be a blessing as fiat currencies suffer the consequences of poor policies by central banks and governments.

That is why the time to get started is now.

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