Hi Do, Here are Todd’s latest fun picks to take your financial skills to the next level... It's an easy mistake to make...
You assume the future will be similar to the past.
The sun will rise in the morning. Grocery store shelves will be be stocked, and the internet will connect
You have no reason to expect any different.
But every few generations sudden economic change occurs. The stability of previous generations is suddenly unwound in a relatively short period of time (a few years).
Unfortunately, this sudden change blindsides almost everyone because there's nothing in your life experience to prepare you for it. Only a deep study of long-term economic history provides a framework for what's occurring... right now.
Your intuition tells you something different is going on. You can see the deep social unrest, extreme political polarity, extremist groups rising in power, stock market skyrocketing in the face of economic decline.
In my Expectancy Wealth Planning course community, I call it "epochal change" because the more common term "end game" is too pessimistic.
This is not about doom-and-gloom. I'm very optimistic about our future. I believe strongly that my kids will inherit a much better world than I did.
But economic history tells us that the process of arriving at this positive outcome will be anything but smooth.
The existing system that has governed how everything operated in your adult lifetime has now reached an unsustainable extreme. The excesses of the past must get cleared to make way for the future. Every act of creation is at first an act of destruction.
I'm not talking about your garden variety societal problems or stock market decline. This is the end of an economic era and the beginning of something fundamentally different.
Yeah, serious stuff.
I'm almost 60 years old. My adult life has never experienced rampant inflation, only knows a world where the United States was stable and dominant, the dollar was the world reserve currency, and deflation ruled the economic roost so that an activist Federal Reserve could battle every market decline with ever-more-permissive monetary (and now fiscal) policy.
That's all changing right before your eyes - epochal change.
I first warned my private Expectancy Wealth Planning community in April 2020. The symptoms are progressive, and the U.S Federal Reserve has followed the policy playbook with eerie precision.
The government completed the first stage by reducing interest rates to zero. The second stage finished when aggressive QE (quantitative easing) resolved itself to "QE Infinity" last March. This exhausted the monetary policy playbook, or at least, marginalized the effectiveness of applying more of the same.
But the pandemic left policy makers desperate for even more stimulus, so they employed the most dangerous and destabilizing weapon in their arsenal - direct fiscal stimulus to businesses and consumers without creating value-producing infrastructure like roads and bridges. Otherwise known as "helicopter money," it's here, and there's no going back now.
National debt increased more in 2020 than in the first two hundred years of this Republic - combined! Estimates vary, but my family of four increased our share of government debt by roughly $100,000 last year. I sure didn't get anywhere near $100,000 worth of benefit. Did you?
Recent fiscal stimulus is not a sign of strength. It's a symptom of government desperation. Their backs are against the wall, and they are using the last (and most dangerous) tool at their disposal to keep the existing game alive.
Most shocking was how no policy makers objected. In fact, the public is frustrated because the checks aren't bigger. Everyone is scrambling for their share of the handout.
But of course, that's how the end game plays out.
It's deceptive because all of that fiscal stimulus produces immediate prosperity... in the short-term. Everything seems pretty good right now.
You can see it in the record run-up in stock prices since the March lows despite a weak economy. You can also see it in strong consumption statistics in the face of record job losses.
But that false prosperity built on funny-munny policies is masking the underlying long-term decay. Every symptom is aligned with the final stage of the end game.
The government was already broke before all of this began. The short-term stimulus handouts are actually long-term debt in disguise.
Entitlement programs are already forecast to raise government debt at an unsustainable geometric growth rate over the next two decades. But now, the covid stimulus packages radically accelerated that time table to just a few years.
The final outcome is baked into the cake, and there is no way to turn back now. The fiscal stimulus from 2020 (with more expected in 2021) crossed the Rubicon.
A financial journey that began with World War 2 followed by Bretton-Woods, then meandered through 40+ years of declining interest rates and progressively permissive monetary policy, is now coming to a conclusion.
And you get the dubious honor of managing your family finances through this end game. It presents both great opportunity, and great risk.
What makes the end game difficult is how the rules are different from everything the past taught you.
It took decades of economic and policy development to reach this point of no return. And while the unwinding phase is much quicker and more violent than the decades it took to get here, your time-table for this change should be measured in a few years, not months.
My Expectancy Wealth Planning course community is networking to crowdsource the best educational resources on this topic so that we're prepared. I'll share samples in this newsletter from time to time (see below).
The main idea for you to take away from today's lesson is how we have already entered a window of rapid, unusual change that occurs once every few generations. It's perfectly normal in the context of long-term history, but it will feel anything but normal to live through.
This isn't doomsday. The sky isn't falling, and we're not fear mongering. There will be plenty of opportunity if you know where to look. And investment gains will be enjoyed if you know how to manage risk.
I hope the resources I share periodically in this newsletter (and below) will help you navigate the choppy waters ahead...
Grant Williams hosts several podcasts, and the quality is so high that he's putting them behind a paywall starting February 1st. But right now, you can still access his 14 episode "End-Game" series where he interviews a variety of hedge fund managers and some of the brightest minds in the investment world about the end game. Every interview features a top subject matter expert. They may disagree about how the game will end, but they all agree the end game is upon us. Listen and learn before Grant puts his podcast behind a paywall starting February 1st. An academic social scientist used a three-factor, mathematical model built over 10,000 years of data to forecast 10 years ago that in 2020 we would begin an "age of discord" that would persist for several years. What makes this article particularly interesting is how he uses seemingly unrelated and subjective social indicators - bloated elite class, job loss problems, and increasing income disparity - to make the "end-game" forecast. However, also note that his trigger point for the epochal change, as determined by 10,000 years of data across many countries and economic systems, and supported by today's situation, is government finances. As he states, "The final trigger of impending collapse tends to be state insolvency." Gee! Sounds familiar, eh? It's fascinating to find supporting conclusions from entirely different academic disciplines built on totally different data sets. This blew my mind, and brought a smile to my face. It's a 3 minute YouTube video of the Boston Dynamics robot dance team guaranteed to impress. The future is so bright you gotta wear shades.
Onward and upward!
Todd Tresidder
Discover how risk management grows your portfolio with greater consistency and reliability. My Expectancy Wealth Planning course teaches you "deep diversification" principles, unusual strategies, and connects you to specialized software and support services. This isn't the same old worn out "risk dilution" strategy (bonds and cash) that reduces expected return as much as risk. Instead, Expectancy Wealth Planning shows you how to increase expected return while reducing risk at the same time. Get started now. You get a full 30 days... without risk.
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