The Only Thing That Can Save Us From Late Capitalism Is Tokenization
Our economy is getting fatter, older and sicker by the moment.
About half of chronic kidney diseases are due to diabetes.
Even when you tightly control it, the disease worsens due to “hyperglycemic (too much glucose) memory.”
Apparently, prolonged high levels of sugar change the genetic makeup of the kidneys, rendering them resistant to standard treatment.
https://www.nature.com/articles/s41467-022-32477-9
Of course, this made me think about… the US economy 😂
After years of money printing, cheap lending and excessive spending, the US economy developed diabetes, sorry, inflation, that required our doctors, sorry, the Fed, to control it.
But it seems that even with quantitative tightening, bringing interest rates to 4.75% (from 0%), Americans are still continuing to consume.
And the tests (read: market signals) are off, notably:
- The Philips curve, the inverse relationship between inflation and unemployment (the higher the inflation, the lower the unemployment), has actually FLIPPED.
- The inverted yield curve, when long-term bond interest rates (read: long-term borrowing cost) are lower than short-term interest rates, has NOT, as it previously had, predicted a recession.
- The job market composition has UPTURNED, where lower-paying jobs (leisure and hospitality) are increasing, while high-paying jobs (tech and finance) are lost.
A multitude of reasons can explain this market’s response (or lack thereof) to the Fed’s rate hikes.
However, I want to offer one here:
Perhaps, just like with the diabetic kidney, there are irreversible changes to the economy that resist standard treatment (i.e. repeated Fed rate hikes).
Perhaps our profound inequality (the GINI coefficient increased from 35.3 in 1974 to 49.4!) is causing many of us to live in CONSTANT recession while others might NEVER feel it.
So in a monopolistic economy, where winners are richer and losers are out of business, it is hard to see how repeat rate hikes can be curative.
And what would a different monetary policy, where mass enjoyment from capital markets would not go to so few, look like?
Well, unless we are talking about wealth redistribution (boo), it is, you guessed, programmable money, aka tokenization.
Tokens, simply stated, enable new forms of financing, user engagement, investor rewards and better financial governance.
