To start with, here is a chart of annualized U.S. But it'll dive into other branches of the government later in the analysis section. This analysis emphasizes presidential terms, because that's what I get the most questions about. A president that faces an opposing-party-controlled senate, for example, is a very different environment than if that president also has his party in charge of the senate. We tend to think of political history in terms of who was president, because we can put a face and a general political tone to that era, but congressional control plays a big part as well. However, underneath the surface, there are tons of other details. As a consequence, investors tend to assume that if a specific candidate, or more broadly a specific party wins, then various aspects of the economy will change suddenly. Human nature tends to place a lot of emphasis on specific events, rather than multi-year processes. So, let's take a look at it in data-driven terms, rather than partisan or narrative-driven terms. In this extraordinary contrarian book, Jeff Booth, a leading mind and CEO in e-commerce and technology for 20 years, details the technological and economic realities shaping our present and our future, and the choices we face as we go forward-a potentially alarming, but deeply hopeful situation.In recent interviews on various podcasts and media channels, I frequently get asked about how the upcoming presidential election affects my investment outlook. Otherwise, the same technology that has the power to bring abundance to us and our world will instead destroy it.
We need to build a new framework for our local and global economies, and soon we need to accept deflation and embrace the abundance it can bring. On our current path, our world will become profoundly more polarized and unsafe. As we try to artificially drive an economic system built for the past, we are creating more than just economic trouble.
The only thing driving growth in the world today is easy credit, which is being created at a pace that is hard to comprehend-and with it, debt that we will never be able to pay back. That era is over, but we keep on pretending that those economic systems still work. Our economic systems were built for a pre-technology era when labour and capital were inextricably linked, an era that counted on growth and inflation, an era where we made money from inefficiency. These advances bring efficiency and abundance-and they are profoundly deflationary. Technological advances are happening at a rate faster than our ability to understand them, and in a world that moves faster than we can imagine, we cannot afford to stand still. The Price of Tomorrow: Why Deflation is the Key to an Abundant Future Jeff Booth, Stanley Press, January 14, 2020 What if it does not? Germany in 1923 provides a vivid, compelling, sobering moral tale. … Whatever the reason for a country’s deficit - necessity or profligacy, unwillingness to tax or blindness to expenditure - it is beguiling to suppose that if the day of reckoning is postponed economic recovery will come in time to prevent higher unemployment or deeper recession. However, “quantitative easing,” that modern euphemism for surreptitious deficit financing in an electronic era, can no less become an assault on monetary discipline. Germany’s finances descended into chaos, with severe social unrest in its wake.Money may no longer be physically printed and distributed in the voluminous quantities of 1923. People watched helplessly as their life savings disappeared and their loved ones starved. Expensive cigars, artworks, and jewels were routinely exchanged for staples such as bread a cinema ticket could be bought for a lump of coal and a bottle of paraffin for a silk shirt.
In 1923, with its currency effectively worthless (the exchange rate in December of that year was one dollar to 4,200,000,000,000 marks), the German republic was all but reduced to a barter economy. When Money Dies is the classic history of what happens when a nation’s currency depreciates beyond recovery. When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany Adam Fergusson, PublicAffairs, October 12, 2010
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