This article explores the concept of capitalism, its evolution, and the challenges it faces today. It aims to provide a deeper understanding of the current economic climate and the factors influencing individual success. This is the first episode of this topic.
Personal Investment Philosophy
The speaker outlines their personal approach to investing, highlighting key considerations:
- Federal Reserve Policies and Macro Data: These are considered crucial indicators when making investment decisions.
- Company Valuation: Absolute valuations, like price-to-earnings ratios, are important but are adjusted based on monetary and fiscal policies.
- Work Experience: Valued more than immediate financial gains, as it builds inner strength and adaptability. The speaker believes inner strength leads to financial success.
- Money as a Tool: Viewed as a measure of adaptation to the political and social environment, not an end goal.
- Humility: Bragging about wealth is seen as a sign of insecurity and a lack of inner strength.
Having more money can provide a more comfortable life, but building inner strength is more important for adapting to changes.
The Current System and its Drivers
The speaker argues that success in the current system is heavily influenced by the Federal Reserve and government policies.
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Monetary success is closely tied to positioning oneself strategically in accordance with these policies.
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A regular job may not provide meaningful value; individuals may need to find jobs that fit the current social system or leverage income through investments.
Investing is necessary but requires patience gained through work experience. Sticking to a job for more than 3 years equips you mentally.
Why Does Our Society Feel Like It's Failing?
The speaker believes society is headed in a strange direction: hard labor doesn't necessarily lead to a more comfortable life, and investing against Federal Reserve and government policies can lead to failure.
The Core Problems of Capitalism
Capitalism, despite its potential, has struggled with two fundamental problems:
- Unemployment: The system inherently leaves some individuals without employment, either voluntarily or involuntarily.
- Distribution: Wealth and resources are not always distributed equally, leading to some individuals being left behind.
When capitalism first emerged, the system was working so well that there was no need for people to worry about unemployment and distribution.
Growth Drivers Throughout History
The speaker identifies key drivers of capitalist growth in different eras:
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Until 1920s: Modernization of cities through steam power, railroads, and steel production. Everyone who wanted a job had a job and everyone who worked hard were rewarded.
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1920s - 1970s: Mass production in factories, including cars and household appliances. Middle class were generally okay.
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1980s - 2000: The internet and the dot-com boom created numerous jobs and opportunities.
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2000s - 2008: A search for new growth led to increased speculation in financial markets and the proliferation of derivative products, creating wealth only on paper.
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2008 - Late 2010s: The Federal Reserve intervened with quantitative easing (QE) combined with the smartphone.
The Current State of Capitalism
Today, even the smartphone is losing steam, and COVID-19 occurred.
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In the 2020s, massive QE programs were implemented due to a lack of new innovations.
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This worked for a few years, but inflation emerged, proving unlimited QE is not a viable solution.
The world is now lacking innovation, new products, and viable QE.
The Impact of AI
The speaker notes that artificial intelligence (AI), the most recent breakthrough, is currently exacerbating unemployment and inequality. The only breakthrough and innovation that came out in the world very recently is AI, which means that it only expedites more unemployment and even more unequal distribution.
Conclusion
The speaker concludes by summarizing the evolution of the market and explaining why the system feels like it is going in the wrong direction. Future videos will explore solutions for sustaining capitalism, the roots of inequality, and predictions for the future.
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