This article is going to contain some conclusions drawn from years of watching the technological progress we made and how it relates to economics. I will not take the time to explain every conclusion since that is outside what this post is about. A lot of this is based upon my own research along with following the works of others.
The percentage of the economy operating under the Laws of Informational Technology is a vital component to the economy. At present, in the West, it is above 4% and growing at an accelerating rate. Why is this so important? Because informational technology is deflationary in nature.
At present, I peg this number at roughly 3/4 of a percent a year and growing.
This is an important variable because the Fed is under mandate to hit a 2% inflation rate. It is something that it struggled to reach for most of the past decade in spite of putting trillions of dollars out in an effort to stimulate the economy. It is this one fact, in my opinion, that most overlooked.
We are being told by the mainstream media that the economy is doing wonderful. Things are really starting to heat up is the message they are delivering. Sadly, when the plight of the average person is studied, we see the fallacy in this statement. Things are not going well for most people.
The reason for this is a number that few people look at. It is never mentioned by the mainstream financial media yet it is crucial to the analysis of the economy. Basically, the Nominal GDP rate has been slowing for some time. In fact, it is about half the rate it was a decade ago. This is having all kinds of impact including affecting the velocity of money.
Some of this is offset by the fact that the U.S. Government is still spending like there is no tomorrow. The deficit the last two years was $585B and $665B with a projected deficit of $900B in 2018 (according to the CBO). The scary thing is we are seeing these numbers when we are told the economy is going well. What happens when the next recession hits? This will rapidly sink to $2B+.
https://www.marketwatch.com/story/us-ends-fiscal-2017-with-666-billion-budget-deficit-2017-10-20
This money is helpful in counteracting the effects that I am referring. The drawback is this is debt which is never a good thing to rely upon.
Globally, we are still seeing easing to the tune of a couple hundred billion a month.
neamgroup.com
Central Banks are hesitant to dump their balance sheets and for good reason. Many want the governments of the world to reign in spending but they cannot not. The global economy cannot handle either situation. We are going to see the situation get worse over the next 5 years since the pace of technology advancement is picking up. This means that the bankers and governments are only falling further behind.
Of course, it seems they have no idea why.
Enter cryptocurrency.
I maintain this is not only going to be a valid technology, but a needed one. This is the one force that is going to offset all that I am referring to. Cryptocurrency will stimulate economic activity simply because people are getting purchasing power placed right in their hands. There are no government mandates that require Congressional approval. This is not a political fight that ends up being waged in the media.
Instead, we have true innovation that is changing the economic paradigm. Cryptocurrency is money, not debt. It is placed directly in the hands of the people who need it and will use it. Hence, it is an immediate economic influencer.
It is no secret that the monetary/financial game is nothing more than a mirage. This house of cards is going to topple over (like it did in the past). At some point, probably in the next 3 years, we will see the global economy slow significantly, if not crash. Sadly, for the human population, this is going to be the one that truly is a "jobless recovery" once we come out the other side.
Cryptocurrency is going to take a central role in this. The political stomach for what needs to be done isn't there. Over the last decade, we saw the U.S. add more then $10T to the economy through all its programs and yet the needle barely moved for a long time. As technology advances, we are going to see this multiplied.
I know I did not go into a lot of detail explaining this. The point that I want to convey is, that amidst all the FUD, everyone here can relish the fact they are in the right place. Crtypocurrency is going to be at the core of economic activity going forward. It is the only thing that I can see will make up for the shortfall that is in operation. As economic activity backs the establishment into a corner, their options become even more limited.
This is one of the major reasons I am a HODLer of my cryptocurrency. Not only are there technological reasons why I think this is going to take over, there are also economic. We are going to see a ton of economic activity arising outside the traditional avenues, most of it digital in nature.
I will not delve into it but trust me when I tell you, the amount of money required to offset the pact of that digitization is absolutely mind-blowing. There is no way the Governments and Central Banks of the world will be able to keep up.
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