We are living in an ocean of monetary inflation (pictured below). This affects all aspects of our lives whether you want it to or not.
Whether it be your labor energy or investment energy, it is sinking unless you are taking proactive steps:
In the monetary ocean in which we live, our income from our labor and assets such as bonds, CDs, and money markets are being severely diluted (we’re getting less for every unit of energy) as the water-line rises.
The visual: with ever more storm-water (monetary inflation to deal with the fallout from COVID-19) entering into our monetary ocean (where we live and swim), we are having to swim harder and farther just to get up to the surface for air.
For savers and those that have assets, it is smart to seek lifeboats that can float above the newly punctuated water line in 2020 and beyond. The punctuated water spike in 2020 will keep rising to well over $8 trillion over the next 14 months:
This rising monetary tide does not lift all boats.
Because income from labor and fixed-income assets are being severely diluted by monetary inflation along with a zero-percent interest rate policy, they are simply the chosen losers in our system. Savings and safe income are essentially getting destroyed.
To keep pace or get ahead of the monetary inflation rate (the rapidly rising water-line), investors are wise to look toward areas that can float above the destruction of savings accounts and fixed-income assets.
According to our research at FMT, COVID-19 and the monetary inflation have catalyzed the next decade of technology-driven disruption and digital transformations (as we highlighted in our April “Profit From the COVID-19 Pandemic Playbook”).
Rethink X, an original think-tank for disruptive technology and declining cost curves, believes there are key technologies that will radically change the 5 foundational sectors – information, energy, transport, food, and materials – that will make the 2020s the most disruptive decade in history.
Our research draws similar conclusions to Rethink X.
One of the core problems FMT has a hard time making an argument against is that a lot of these key technologies transforming society are deflationary in nature.
Rethink X’s research concludes that the technologies that are radically changing energy, transportation, and food alone will provide abundance and will drive household costs lower by an order of 10x this decade.
According to our research, the biggest problem this manifests is that these deflationary forces (costs declining and technology eating jobs) are working against a monetary system that is built for constantly increasing debt and the need for inflation.
Jeff Booth, author of “The Price of Tomorrow,” waxes eloquently in his 2020 book on these important issues.
Ironically, while COVID-19 catalyzed monetary inflation and technology, the rapid changes happening in our country (and elsewhere) due to technology disruption are likely going to necessitate more government debt and monetary inflation by the Federal Reserve due to tech’s deflationary forces.
Fortunately, our research at FMT has identified what we believe to be some dominant emerging investments from these mega-disruptive trends, that are upending traditional constructs.
FMT Advisory believes the companies and software networks manifesting the largest sector disruptions and/or that provide the largest solutions to the problems ahead are the most investable for serious money.
It is a variety of network effects that should essentially help us sail above the ongoing rise of monetary inflation in the years ahead.