Buckle up, America’s in for a bumpy few years:

Buckle up, America’s in for a bumpy few years. Wooo baby, the next few years are going to be fascinating. Unlike anything we’ve ever seen before in history. Yet, history rhymes a lot right now. It just looks different.

AMC/Gamestop is just a catalyst. Last crisis was mortgage backed securities and banks selling CDOs. This time will be about hedge funds and naked shorting. This has been happening for so long but no one has ever realized it. How much the banks and finance professionals push the boundaries of the rules, and yet seem to get away with it, is astonishing.

America has barely put away a criminal for a financial crime. What is it, 1 banker in the whole 2008 crisis went to jail? Yet, black people have historically gone to jail based on selling less than a gram of weed. Oh man, America is so screwed up. Crimes are not prosecuted the same way. Saw a thing this week about a black guy wanting to be tried as a white guy because he told the judge history tells him that white people get lighter sentences and held to different standards.

It’s true. This is how it works. The system in America is not fair. Is it fair in the rest of the world? I don’t know. Black people all over the world have not been given the same opportunities generations ago where they could build themselves into being at the peak of their industries. It takes time to build generational wealth.

Black people never had that opportunity. All ability to make money 50-60 years ago was taken away from them. In America, they couldn’t get bank loans. They were sectioned. Their schools were underfunded. Their kids couldn’t get access to quality education. There were no after school programs. There were no local jobs. So people couldn’t afford to survive. Then what? They turn to drugs and crime.

Times are changing. People are realizing this issue is more serious than it should be. But it’s hard to change that old school perspective when it’s existed for years. The institutions are bigger than the people in them, yet because they are run by people from older generations, their thinking and view of the world is based on a completely different set of circumstances. They look at the world from their old view.

Young people see the world in a completely different way. Women are becoming leaders. Immigrants are building exceptional companies that are contributing not only to the American economy but also the world. What is it, 45% of the S&P 500 companies are run by immigrants? That’s amazing. Diversity of thought = progress.

The world is changing. What’s cool is I’ve learned about both generations that it feels like I have insight into both worlds. I’m learning and watching the social media generation grow up through my sister. I’m understanding and learning about what my friends are worried about. Yet I’m reading history to learn about the older generation. Plus I speak to my dad every day to understand his perspective on the world, which I like to think of as a boomer educated way of seeing the world. It’s different man. The world is changing.

If the market crashes, everything changes. Most people don’t realize we had the longest bull-run in recorded history of the US stock market. This has never lasted this long. Part of the reason is because of the quantitative easing the US Fed did in backstopping the stock market. Trump and Powell were ‘like f it, we’re not letting any public business go out of business. We can’t let people not have jobs so we’ll keep zombie companies alive.’

They’ve done it this entire year.

The house of cards is going to fall.

Then what?

It’s all just propped onto each other. Money. We’ve only been in an environment where America holds the global reserve currency. We don’t know what it’s like to just endlessly print money in our country and have it mean nothing, because it’s pegged to another currency.

Imagine living in Argentina or Venezuela over the last several decades. Your currency is worthless. Governments are printing more and more where eventually the same dollar you have is worth less. If you have 100 bananas total, one banana is worth a lot. If you print 1 million bananas out of thin air and then give it to people, the value of one 1 banana goes down. That’s what the US government did in printing 4 trillion dollars out of thin air.

The US dollar has only become a global reserve currency since the 1970s. Before that, the US didn’t set the standard. As soon as the US dollar is not the standard currency again, they’re in for a bad time if they keep printing money.

You have to let companies die. You have to let evolution take place. But you can do everything you can to make a more seamless transition. Ray Dalio has talked about it by redistributing wealth and taxing the rich. Is America’s rich class ready? I’m not sure.

As Ray Dalio said today in his post, ‘Don’t Take Democracy For Granted.’ People don’t understand how countries and societies can just disappear over decades because of conditions in a country. America is in peak downturn according to Dalio’s assessment of history. I think he’s right.

What does that mean for the rest of the world? Do we all just look to China?

I don’t think so.

The West will still survive, but the rest of the world may be forced to look to China. China may control all their transportation, their technology, their healthcare and their infrastructure. China went all in on ‘Silk Road’ and built new transport routes. They’re 10x ahead of anyone else on 5G according to Eric Schmidt, the former CEO of google, which they’re probably giving away for free. Yet their government has control over all the information, prosperity, press and their markets. People can only get so big. Look at Jack Ma. Dude ‘disappeared’ for a few months, and then came back. Wut? That wouldn’t happen in a democracy or America. It’s because he questioned the government. You can’t do that in China.

Matt Ridley and Shane Parrish talked about it in a podcast I heard today about how the great civilizations of the world were in places that were free to market, trade and prosper on their own. Ancient Rome, Ancient Greece, the British, Renaissance Italy, etic. Is that city or place going to be in China over the next decade plus? I don’t think so.

It’s going to be Singapore.

Singapore is going to be the place to be. The government has great power over its population, but it rewards its citizens. It’s the bridge between China and the rest of Asia, as well as a portal to Europe, Africa and Australia. It could be a mega hub.

But if I look at America, it’s not going to be a desirable place in the next 10-20 years at the current rate. The healthcare system is a disaster. Most kids can’t get a great public education. Most of America is obese or hooked on drugs or working in jobs not paying enough so, especially for the new generation, they can’t afford to live in the new economy.

Then bring on inflation. It’s going to be here this next decade. People don’t read enough or know what happened in the 1970s when the oil crisis happened. Interest rates were up to 20%. You had to pay 20% of the amount of money you took out of the bank. The stock market wasn’t positive for 16 years. Think about that. Could that happen again? Possibly. Don’t think the downturns will last as long because of the innovation economy and how progressive those companies are.

Cathie Wood is a genius. She’s a goat of goats. Yet I think her strategy is 5-10 years too early. If she survives this correction, then she’s who you should be investing in. She understands where the world is going better than any investment manager I’ve seen. But right now, she’s losing credibility with her Tesla bet. She has to know markets can’t keep going up and given the environment in the last decade, she has to be smarter than that.

Money doesn’t exist forever. Money right now is free. 0% interest rate environments. People don’t have to pay extra money on the cash they take out of the bank on a loan. It’s free. But free money doesn’t last forever. What if interest rates go up to 20%?

That’s a completely different environment that people aren’t prepared for. Everything is going to get more expensive. Hope you have assets that make a higher return than inflation because otherwise your money is losing its buying power. This hurts the poor because they’re not invested in assets. In today’s environment where billionaires made 3.8 trillion dollars in the market, we’re not in a great environment. Money has to get redistributed.

Who knows though? History doesn’t repeat itself but it rhymes, as Mark Twain has said. Although it rhymes a lot right now, we’re in a completely different context with China that never existed before.

Man, the world politics that is going to happen in the next 10 years is going to be super interesting. Who’s going to control the UN? Who’s going to control the WHO? Who’s contributing vaccines to the rest of the world? Who is leading the world in the next decade?

I don’t know.

My bet is not on America right now.

We’ll see.

I hope I’m wrong.

No matter what, if the market corrects with all of the above, these next few years are going to be fascinating.