The Fed’s Money Printer Is Chipping Your Life Away
Remember the time where you used to stand in line for more than 2 hours just for some free McDees? I know I did. It came to a point where the trade off didn’t seem to make sense — and that was when I smiled and knew that I was finally worth more than $2 an hour.
It’s funny because I didn’t use to think of time as an asset class.
But when you trade what’s limited (your lifespan) for something that’s potentially unlimited and decreasing in value (at an exponential rate), it doesn’t take a genius to figure out that it’s only a matter of time before inflation and currency debasement is going to eat you into oblivion.
Fiat money being supplied by the Fed (seekingalpha.com)
So apparently, 25% of all USD that ever existed was created in 2020 and 2021
That is mind blowing.
Considering how the US went off the gold standard in 1970s, these days the dollar is effectively backed by nothing other than Jerome’s finger on the trigger.
So here’s what we currently know about the US Dollar:
If that sounds like a highly centralized shitcoin with unchecked tokenomics, you are probably half right. In fact, the rate of money supply has gone up so much that for the first time since 1980, they have actually stopped tracking it.
Working harder just to stay exactly the same
So if my earning power doesn’t go up nearly as fast as M2 money supply, what is really happening?
“Working harder” is becoming the norm in order to enjoy the same standard of living. And that kinda sucks if I’m reliant on a single source of income. Because I basically become hostage to a few stakeholders for that wage increment/discretionary bonus, and we’ve all heard about how well that worked out.
I remember it was all about wanting to squeeze more out of myself.
What started with availing yourself on holidays and “multi-tasking” at dinner conversations, soon became answering emails at unearthly hours and sacrificing memorable events with loved ones.
Unfortunately time doesn’t work that way and something has to give. Alas, everyone has the same number of hours in a day — yes even the almighty Jeff Bezos Elon Musk.
Money printer goes brrrrrrrrr
What really irks me is the incessant and deliberate money printing that is the Fed. What used to be the bedrock of financial infrastructure is now increasingly resembling monopoly money.
Any other country indulging in such rampant monetary debasement would have had hyperinflation and gone under several times over. The only reason why the USD is still standing is because there is no other real alternative to the reserve currency at this point (surprisingly the RMB makes up only ~2% of global reserves held)
Time as an asset class
When I was playing Starcraft as a total noob, I didn’t realize that creep was actually a resource.
Well, technically it isn’t a resource that you have to mine, like minerals or gas, but it allows the Zerg to run faster and see further so that it becomes easier to win.
And in the game of life, I reckon we all want to win.
I pictured myself on my deathbed with God asking me: How much would you pay for another 6 months to live healthy?
That answer that I came up with is an infinite amount of what I would be worth at that point in time.
When I managed to wrap my mind around this notion, everything flipped.
The $30 cab fare that would saved me an hour’s worth of commute no longer seemed expensive as that meant that I could enjoy a nice leisurely breakfast with my loved ones.
$5 food delivery service? Sure why not, if that translated to an additional half an hour for working on my hustle.
Optimizing for happiness, here are some general life objectives I came up with for myself:
- Being able to spend time with your loved ones
- Being able to stop and take a breather whenever you want
- Being able to do work you believe in, with people you love
- Being able to enjoy life in good health
All these things require time, and because you can’t earn back lost time in the same way you earn back money. an increased net worth basically means that you’re able to “buy” more of your future life back.
And that cost per hour increases as your net worth goes up. The old adage — time is money, should actually be the other way around, because with money, you can now buy time.
We are living in an unprecedented age of low rates and unlimited money supply and we literally need to guard our lives against inflation.
Because if someone were to rob what could be the potentially best 5 years of your life, wouldn’t you be pissed?
I know I would.
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Originally published at https://pocketchange.co on July 15, 2021.
