{"id":45617,"date":"2019-04-24T09:55:13","date_gmt":"2019-04-24T14:55:13","guid":{"rendered":"https:\/\/olduvai.ca\/?p=45617"},"modified":"2019-04-24T09:55:18","modified_gmt":"2019-04-24T14:55:18","slug":"if-getting-ahead-depends-on-asset-bubbles-its-not-getting-ahead-its-gambling","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=45617","title":{"rendered":"If &#8220;Getting Ahead&#8221; Depends on Asset Bubbles, It&#8217;s Not &#8220;Getting Ahead,&#8221; It&#8217;s Gambling"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"http:\/\/charleshughsmith.blogspot.com\/2019\/04\/if-getting-ahead-depends-on-asset.html\">If &#8220;Getting Ahead&#8221; Depends on Asset Bubbles, It&#8217;s Not &#8220;Getting Ahead,&#8221; It&#8217;s Gambling<\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Given that the economy is now totally and completely dependent on inflating asset bubbles, it makes no sense to invest for the long-term.<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Beneath the endlessly hyped expansion in gross domestic product (GDP) of the past two decades, the economy has changed dramatically.<\/strong>\u00a0The American Dream boils down to\u00a0<em>social and economic mobility<\/em>, a.k.a.\u00a0<em>getting ahead through hard work, merit and wise investments in oneself and one&#8217;s family<\/em>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The opportunities for this mobility in the post World War 2 era broadened as civil rights and equal rights expanded. The 1970s saw a disruption of working-class mobility as high-paying factory jobs disappeared, leaving services jobs that paid less or required more training, i.e. a college degree.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The U.S. economy took off in the 1980s for a number of reasons, including computer technologies, federal stimulus (deficit spending) and\u00a0<em>financialization<\/em>\u00a0(a topic I&#8217;ve covered many times). With millions more college graduates entering the workforce and the Internet creating entire new industries, the opportunities to &#8220;get ahead&#8221; increased across the social and economic spectrum.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>But something changed in the aftermath of the dot-com bubble bursting.<\/strong><em>The fruits of financialization<\/em>&#8211;highly leveraged debt gambled for short-term gains in markets&#8211;were extended to everyone with a job (or a willingness to lie) via\u00a0<em>liar loans, no-document loans and subprime mortgages.<\/em>Just like bigshot financiers on Wall Street, J.Q. Citizen could leverage a couple thousand dollars in cash (or even better, borrow the closing costs via a 105% of value mortgage and put nothing down) and buy a McMansion worth $250,000 or even $500,000.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The only difference between bigshot financiers and J.Q. Citizen was the scale of the leverage and gamble:<\/strong>\u00a0J.Q. Citizen could leverage a few grand into hundreds of thousands, while the financier could leverage a bit of collateral into mega-millions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&nbsp;\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If &#8220;Getting Ahead&#8221; Depends on Asset Bubbles, It&#8217;s Not &#8220;Getting Ahead,&#8221; It&#8217;s Gambling Given that the economy is now totally and completely dependent on inflating asset bubbles, it makes no sense to invest for the long-term. Beneath the endlessly hyped expansion in gross domestic product (GDP) of the past two decades, the economy has changed [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[127,5809,353],"class_list":["post-45617","post","type-post","status-publish","format-standard","hentry","category-economics","tag-charles-hugh-smith","tag-financialisation","tag-gdp"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45617","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=45617"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45617\/revisions"}],"predecessor-version":[{"id":45618,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45617\/revisions\/45618"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=45617"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=45617"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=45617"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}