I'm down to "Hope the problems don't really precipitate in my lifetime, and don't have kids". I don't feel like that's a solution.
In practical terms, you should recognize that this feeling is fear and it is in fact a feeling, and you can choose to own it rather than let it own you. Stay away from the particular enterprises that everyone says are about to collapse, and double-down on whatever assets nobody is paying attention to. Life goes on, and people have to do something, so own the things that people will be interested in over the next few years. It's all a bubble, just do your best to ride it.
There were a few asset classes that were clearly looming bubbles in 2008: housing, CDOs, most hedge funds, Web 2.0 startups. If you were invested in them at the beginning of the year you probably lost your shirt. Meanwhile, if you invested in Bitcoin or mobile or sharing economy startups in 2009, you're likely a millionaire several times over. Housing itself started to become an attractive investment once the crash was over in 2010, with many landlords making 10%+ returns annually since then.
This is false. It is the hallmark of the current economic order that our systems are very efficient, very interconnected, and very fragile.
I shouldn't care whether or not provincial Chinese governors are faking their economic reports or making bad loans - but of course, I do, since that could have a ripple effect that makes my business suffer. I shouldn't be fragile to that but I am.
Making the system less fragile would require removing some of the interconnections and the efficiencies. Growth and returns would be lower, but failures would be localized and less "interesting".
> This is false. It is the hallmark of the current economic order that our systems are very efficient, very interconnected, and very fragile.
What evidence do you have to support this? Even in 07 an index-weighted fund only took 3 years to recover. If you were 50% in bonds, 1 year to recover.
OP was encouraging you to separate your fear from the evidence-backed likelihood that while you may lose a bit in deliveraging, there are also gains to be had in the 10-year term.
If you're feeling that things are fragile right now, adjust your allocation to something more conservative, take a two week vacation, listen to some mindfulness podcasts to calm down, and then think through where it might make sense to put 10% of your bets on 10yr+ plays.
Sometimes people discuss things at a systemic level, rather than a personal level. The person you are lecturing to deleverage may be debt free, with $5M in Gold in a vault, but still be wistful of a less fragile world economic system.
The financial system is quick to ask for less regulation/less red tape but when comes the time to own their mistakes, they are really happy to get some of that taxpayer money from the government!
We are living today in the biggest bubble of all times. It is the everything bubble. The stock market is hyperinflated with valuations that are completely disconnected from the real economies of the world.
Most of the major economies are so indebted that to even think they would ever repay their debts is just a pipe dream.
Most emerging economies have been having huge political and economic issues in the last few years as well.
Housing bubbles are popping up all over the globe. Major resources are dwindling and our ecosystem is starting to crumble while we are day by day emitting more and more carbon emissions in the atmosphere.
Finally using bitcoin as an example of a great investment is more than dubious. Bitcoin was a gamble in 2009 and is still a gamble today.
To protect the bankers?
Here's a fun data point for you. From 1997 to 2017, the global extreme poverty rate (people living on less than $2/day) dropped from 29% to 9%. Two thirds of the people at the bottom got out of that bottom, in the past twenty years alone. That's amazing.
So, while all is amazing, all can be very non amazing on the receiving end of the liquidity removal.
Of course the Bolivar tanked. You can use a dollar to buy anything in the world. You can't use the bolivar to buy diddly squat.
We have a long, colorful history of punishing latin american nations for embracing redistributive social policies and decolonisation.
Never forget: https://www.democracynow.org/2013/9/10/40_years_after_chiles...
Venezuela is refusing international aid. There are sanctions on their government bonds, but the lack of private sector trade is basically caused by
- the lack of private sector industry,
- a lack of hard cash now, and
- trade barriers implemented by the Venezuelan government
not punitive American trade barriers or them somehow being turned into a "pairah".
All aid from the IMF comes with punitive strings attached. Enforced austerity from abroad. A painful, unwarranted contraction of the economy primarily felt by the people most at risk.
>There are sanctions on their government bonds
You sanction a government bond and guess what happens? Debt becomes expensive, development becomes impossible. You are unable to cushion economic shocks like the threat of sanctions by a major economic superpower. The threats become liable to throw the entire economy into chaos, sending investors, domestic and international, fleeing for less risk.
We're keeping their oil cheap for a reason.
Like many former colonies, they suffer from a resource curse. Nationalizing their primary, non-renewable, extractive industry is the only way to ensure that their economy didn't centralize and stagnate, to ensure they didn't remain a vassal state[1]. Norway did it and they're a thriving, economically diversified, socialist state with an enormous sovereign wealth fund[2]. Libya did it to pursue the same societal goals and we exterminated their ruler and destroyed their state to such an extent that slavery reemerged[3].
I wonder what the difference was.
1. https://www.investopedia.com/terms/r/resource-curse.asp
2. https://www.ft.com/content/99680a04-92a0-11de-b63b-00144feab...
If the U.S were to systematically purge their most productive industries (think Finance, Tech etc.), the US economy wouldn't last very long either.
How you think we're all better off just because we're enjoying eating our seed corn I do not understand. Next year we will simply starve.
Food productivity globally has skyrocketed, to the point where we are supporting the largest population in history, with the cheapest food prices and lowest rates of malnutrition and famine in history. Climate change is a serious problem, but it's unlikely to end civilization, and even more unlikely to end the human race. At this point, I'm pretty sure the world would recover well even from a full-scale nuclear war between the US and Russia (which hasn't happened in 70 years anyway). That's because it wouldn't affect everyone directly, and massive, vital infrastructures are in place - the paved roads, power lines, working vehicles, communications systems, and most importantly, the documentation and literacy to read it. We could rebuild. We would rebuild.
Population growth has stabilized at the beginning of the process, where it matters. Right now, there are two billion children in the world. In a hundred years, there will also be two billion children in the world. The growth in global population right now is coming from the drastically increased lifespan of previous generations - adults that were once children who, contrary to human history, weren't struck down by disease or famine or war.
The biggest "seed corn" is fossil fuel, but we're moving toward a clean alternative energy future at a fine pace. By the end of the 21st century, clean wind and solar power will dominate, and fossil fuel will be a thing of the past. With a tremendous supply of clean energy, free information, and health... a lot changes.
The more pragmatic advice however is to hedge in real transactional things, food production, logistics, real estate, and manufacturing, Etc. That part of the economy that operates on barter if it has to because people need these things to live.
Land in good climates. Don’t even worry about the houses.
Good education and shelter is pretty close, but not at all commodified or fungible. Real estate is complicated I guess.
Replacing the current system with something better.
I for one think that the systemic and intentional divisiveness separating peoples and pushing them to war with one another than their opressors will also spur any attempt at improvement in the aftermath of coming disasters. We won't unite for the better, we will tear ourselves apart with blame and ire.