Lowering Your Standards - a History

Level 1 - NGMI

Welcome Avatar! If you haven’t noticed, the Fed is on a decisive path to lowering stock prices, lowering RE prices and making debt extremely expensive. That is only a small point in time relative to the past 100 years. The concept of slowly making the masses accept a lower quality product has been in the works forever. Notice the phrasing there. Lower quality of products not “lower quality of life”. Objectively speaking, since the USA exports inflation and is the current reserve currency, we are able to constantly increase our standard of living over the past 100 years.

If you’re alive today and are willing to avoid the trap of following rules all day, you still have a great chance of becoming wealthy in the USA. The problem is that you’re taught to do the exact opposite, follow rules/take orders to make sure however hired you gets richer. In short, would you hire someone for $100,000 a year if they made you $90,000 a year? Of course not. You’d never operate a business to lose money.

Part 1 - Slowly Lowering Food Quality

In the past no one looked at labels to figure out if they had unhealthy amounts of sugar, unhealthy amounts of chemicals, gluten free, organic, free range so on and so forth. This is a product of technology that eventually went a bit too far.

Starting with Spices and a Fridge: At this point, food quality didn’t change much and simply elongated. With spices and a standard fridge, we reached a point where food wouldn’t spoil in a few days. This was a net win as you could maintain the nutrient content of fruits, vegetables and meat/seafood. Eventually, freezers became common place and things started to get a bit weird. Since this allowed for much longer transportation and longer storage, the ability to send food across sea became possible.

Slow Degradation: After this tipping point, we started to develop food and *animals* that were heavily induced with chemicals. Food would not be picked on time, and instead were picked earlier and these items would “ripen” on their journey to the destination. Since this isn’t natural at all, the nutrient content would decline. Similarly, if you look at a massive Chicken farm, you can see them stacked on-top of each other being force fed to become heavier and produce more meat/weight for the eventual sale.

Pro-tip: at this point you are actually better off buying frozen vegetables and fruits in many cases since the product is picked *after* it is ripe and immediately frozen (higher nutrients). Alternative would be purchasing products from your local Farmers market.

Addition of Chemicals: As population rose rapidly, new ways to produce food emerged. We now have food sprayed with tons of pesticide, seedless fruits/vegetables and of course fructose corn syrup and other strange sugary flavors such as Sucralose in a myraid of drinks from sodas to “zero calorie water”.

Now the Sticking Point: Here it gets real interesting. Now that the cost of goods has gone up so much and we’re having an energy crisis, we’re looking for even more alternatives! If the cost of beef rises rapidly and the cost of chicken rises rapidly, the substitution (of beef for chicken) is less impactful. This means we have to go “down the supply chain” more which apparently means bugs.

Eating Insects Can Positively Impact Climate Change

Yes. The above the actual headline from the World Economic Forum. You can see for yourself by following the link here. We’ll ignore the the fact that the image appears to be similar to the movie “Honey I Shrunk the Kids”

How Do They Get Away With This? You’d think that this is an impossible agenda. Who would sign up to eat bugs. Well the same could be said about chemical grown animals. The key is in “normalization”. You start with something like Grasshoppers since they are normalized in parts of Asia and South America/Mexico “Chapulines”. This then starts the slippery slope towards normalization of drinking things like cockroach milk. (Yes the articles says SuperFood to start… lol!)

Sit Back and Wait: As food prices have increased, substitution to more chicken/eggs and other cheaper forms of protein has gone up. With the goal of slowly accepting lower quality we can watch and see how this progresses as it relates to “green initiatives”.

Part 2 - Slowly Lowering Your Ability to Acquire Assets Through Work

While it is true that things were certainly rougher in the 1950s. You had a lot of dangerous jobs that would cause quick and sudden death. This caused the average age of death to be a lot lower versus today. That’s the good news.

The bad news is that it now takes two working income streams to afford a solid standard of living in the USA. This is present with two parents working at all times (Pew Research Source Here).

The pitch was simple, big push for equality (who wouldn’t agree with that!) then hit them with the old “wage growth below *asset* inflation”.

The easiest example here is real estate and stocks. While we know that “inflation” has been low single digits until this latest disaster where it is likely closer to 20%, if asset inflation is 5-10% (Real estate/stock returns), it means that your wages are *NOT* keeping up with assets. This is why the chart shows “flat” real wages but you can’t afford a median home on a median wage any time soon (assets go up more than inflation due to money printing and loose interest rate policies)

Source

Read that Carefully! While real wages *adjusted for inflation* were roughly flat “0% growth”. The S&P 500 adjusted for inflation is up 2,650% over the same time frame. Now ask yourself. Who does this benefit? The people in charge already or the people trying to move up the socio economic ladder.

Standard =/= Work to Assets: Before moving on. The standard of living for someone who makes $100,000 a year now, would make kings jealous back in the past. That said, this is due to competitive company progress. The concept we’re talking about is the ability to *acquire assets through work*. If you work 2,000 hours a year, you can acquire *LESS* assets after a year than you could in 1964 since the real wage growth is flat while the real asset growth is up 2,650%. No one talks about wealth taxes or real asset growth vs. inflation because this would cause the masses to realize that they can’t get ahead by trading their time for money.

Part 3 - Choosing Winners and Losers - Debt and Leverage

At this point we reach the current state of affairs - 2022. The goal appears to be as follows: 1) make it difficult/impossible to purchase a home and 2) create a strong dependence on the government

Home Purchase: At 6% interest rates, homes are now unaffordable for the masses. Not going to sugar coat it. If you were going to buy a $400,000 home with $80,000 down and have a high credit score your payment just went from $1,678 (at 3%) to $2,247 (at 6%). This is a 33.9% increase. While you can argue that this will send prices down (correct in our view), it also means that the demand for renters will rise which causes a lot of near term pain as land-lords can charge more for now.

In the end, significant interest rate volatility only benefitted people who were making a lot of money during Covid. You could take out a 2.5-3.5% 30-year loan and simply wait out the storm. The chances of cap rates dropping all the way down to 2.5-3.5% are low. This effectively locked in the “new elite” with cheap debt.

Student Loans: While we did attend a “top university” the reality is that debt forgiveness is a scam because you shouldn’t have Plumbers, Electricians, Nurses etc. pay the tuition of someone else. This is simply not fair. People with a HighSchool education should not have their tax dollars going to someone they’ve never met for a Humanities Degree. They decided not to go to college and shouldn’t be forced to pay for someone else’s tuition.

What would be fair? Require the University to be on the hook for the loan. If this were the case, the number of fake degrees would drop and the $10,000 forgiveness would make the University think twice about charging $100,000 over 4-years for a degree that leads to no income growth.

BowTiedBull - Read Pinned Tweet or NGMI @BowTiedBull

To be clear student loan forgiveness would make sense if the *university* paid the bill. Without pain for the university they have no incentive to change the worthless degrees they charge for. Charging $100K equally for engineering degree vs humanities is insane.

Duration of Leverage: As a final kick in the teeth, the government is aware that these policies will cause a lower standard of living through economic pain. Fed member Neel Kashkari stated that the decline in stocks is good since the market is realizing that the inflation issue is serious. (Source)

This means the people who took long-duration leverage are the winners. If you refinanced at under 3% (since you were lucky enough and rich enough to do so), you’re now sitting pretty as everyone is forced to pay 30-40%+ more in mortgage payments. Your cash flow situation is sold. By “your” we largely mean rich individuals and institutions.

While we‘ve got nothing against doing this back in 2020/2021 (the game is the game). Recognizing the impact is important so you can see who really benefits from all of these policies.

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Conclusion

As you can see the policies benefit people who *already* own assets. If your goal is to get rich by working for someone else, it will be quite difficult since your wage growth will not mirror the company growth perfectly and your equity in the firm is likely minimal. Fortunately? You’re reading this from a Computer. That computer is capable of reaching billions of people for a measly cost of around $4 a month. If you have any skill in the world where people go out of their way to tell you “hey you’re good at this” we can all but guarantee you can earn money online from it.

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Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are *opinions* written by an anonymous group of Ex-Wall Street Tech Bankers and software engineers who moved into affiliate marketing and e-commerce. We’re an advisor for Synapse Protocol and on the JPEG team