Crossing the Chasm | Post COVID Reconstruction
The world is getting prepared for a post-COVID-19 Bretton Woods style reorganization with massive state investment to transform the global economy.
The Greens in Ireland are going to be in government, and their 17 point agenda is a plan to invest in Ireland and drive change in energy use and society. PDF
It’s beginning to feel like 1945 post WW2 and the destruction then was immense, but the reconstruction was even bigger. The 1950s and 1960s were an era of massive economic development, modernization, and prosperity. That will be our post-pandemic economy. The changes will not suit everybody, but that’s the “hunger games” of business.
Marc Andreessen is calling for a massive change in human ambition and a surge of “building”. We progress as a race by building, not withdrawing. | It’s Time to Build | A16Z
And Mark Cuban is talking about America 2.0. The reboot.| Article.
The central bank’s responses to this economic freeze have been big and they look set to get massive. 6 months of global GDP is $50 trillion dollars, and this might be the size of the bailout. Money creation of this scale is the effective nationalization of the old financial system and the complete devaluation of cash. We have never had a freeze of the world economy like this, and it's causing carnage with the flow of money to small businesses everywhere.
It’s ugly but we are crossing the chasm into a new economy and there are huge opportunities on the other side.
“Cash is Trash” - Ray Dalio | Article
The desire to dash for cash is very powerful. Resist it. Fear swamps the mind of most investors and it’s hard to see through the fog of the crisis. The fear of now is so powerful. The governments of the world are going to spend whatever money is required to overcome the economic cost of COVID-19 and that cannot be ignored. The Great Depression was an unnecessary blunder and it will never be repeated.
Your cash cannot withstand this wall of government money and we need to be ahead of this tidal wave. The reconstruction of the post-pandemic world will involve the physical reconstruction of the economic system. Our value system is undergoing fundamental change, and this will echo around the whole economy. As money is devalued, humanity is being revalued upwards. Energy must accelerate its change to electrons, crushing carbon. Our cities will be rebuilt to reflect our new economy. Confident, modern, green, and connected delivering a quality of life for its residents which is different from today.
This will all be financed with new cash that will be devalued through asset inflation. As our products get cheaper (due to digitization, automation, and mass production), our assets will become more and more valuable. These assets will be digital and physical. Yields on quality income look set to go lower in a flight to quality.
The spread between negative-yielding government paper and everything else is the source of our future wealth.