Money printing is happening all over the place. This is something that started in the United States and continued for the better part of 4 decades.
Since that time, the velocity of money slowed to a crawl. It is now at a low dropping a remarkable amount since the Reagan years.
One of the biggest impacts on all this is technology. In fact, today, there is no way to get around the disruption of technology. There is no business, industry, economy or financial arena that can overlook the impact of what is taking place.
Ultimately, it is important to remember that when the Internet comes to an industry, a couple things happen. The first is that whatever is there gets obliterated. In addition, the price of things get pushed to the floor. Zero or near-zero suddenly becomes the norm.
Over the last few decades, we saw this happen with information, communications, music, and video. All of them have seen major disruption which obliterated industries and sending companies into bankruptcy.
As we move forward, we see the impact of Artificial Intelligence growing. This is vital since it truly affects the economic impact upon policy. The Fed has been trying to figure out why their policies are not creating the results they desire.
Traditionally, software saw a deflationary rate of around 17% annually. This was true for the better part of 20 years. This is all changing.
Artificial Intelligence is now taking that rate and mooning it. At this point, we are still without metrics to see what pace things are going at. This is changing as Open AI is starting to establish new parameters to gauge things such as NLP, voice recognition, as well as image recognition.
In fact, the first one was completed. It was the later and the results were truly scary. We are seeing a rate of near 65%.
For those who think that monetary policy is not going to be crushed by this, think again. There is no way for central banks to stand up to such an onslaught.
This is a bear that wants to be fed and will require a lot of food. With each new technological layer, we add more to the pile. This is going to require an even greater amount of powering to keep things moving forward. Ultimately, technology is exploding at such a rate that the old policy makers cannot keep up. They are completely out of their realm here.
Trillions of dollars will be used in development of some of the amazing breakthroughs we are going to see. This is a far cry from what took place 40 or 50 years ago.
The downward pressure in computation that we witnessed the last 40 years is now taking place in materials, chemistry, medicine, and housing. The world is entering the "as a service" realm which takes things to another level.
Economics and technology are now both exponential and accelerating. This is going to wreak a massive amount of havoc on all the old economic models. It is something we cannot avoid.
For this reason, pay attention, long-term, to the NASDAQ. This is an area where a lot of the money ends up.