Financial, Economic and Social Mood Update (April 2, 2021)
Citigroup has finally admitted that Bitcoin may indeed become the new global currency of the future. As always, large entities such as commercial banks are very late into the game. This admission merely proves that this is already taking place right now. The US Federal Reserve is planning an official American cryptocurrency which will eventually replace the paper fiat US Dollar (the so-called “Fedcoin” due in a few years………….too little & too late). The USA is entering this field very late, behind many other countries – especially in Asia. This is yet more evidence of the inflation (even hyperinflation) decimating the US Dollar and other primary global currencies such as the Euro and the Pound Sterling. Hyperinflation has no mercy whatsoever. Do you remember what happened to the former German Reichsmark during the time period of the Weimar Republic (1918-1933)? During the devastating hyperinflation of 1923, one BILLION German Reichsmarks could not even purchase one pound of butter. If this were to happen today (very likely considering what is already happening to the values between paper fiat currencies and digital electronic cryptocurrencies backed by high technology, the Blockchain & Artificial Intelligence) we will see retail prices increase by a whopping ten million fold.
The first step toward “basic minimum income” in the USA (i.e. “welfare for almost everyone) were the first 3 “retail” stimulus packages in the USA under both the Trump and the Biden Administrations. There were also at least 5 “corporate” welfare stimulus packages (i.e. subsidies for certain industries and businesses). Starting in July 2021, something of a monthly child welfare credit will go into place. The Blockchain is a part of this. The great “global economic reset” is already underway. The second step will be the “global currency reset” when digital currencies finally replace fiat paper currencies altogether. The third and final step will be the global “currency revaluation” when many digital currencies and many foreign currencies will skyrocket in relation to the US Dollar – undoing the damage of hundreds of years of colonialism & imperialism.
Bitcoin reached yet another record high on the primary markets on March 13, 2021 of USD $61,785.00. Total cryptocurrency trading volume to date (since April 2010) is a cumulative USD $7 TRILLION. More importantly, valid cryptocurrency prices on the secondary markets (i.e., legitimate offers of sales & purchases between any and all individual potential sellers & buyers) have already gone to the moon – a Bitcoin BTC domain name at USD $11,001,600.00 and an Ethereum ETH Wallet at USD $1,222,406.11 for sale from Austria as of February 26, 2021 (this is NOT a typo), asking prices for single Bitcoins on E-Bay are as high as USD $2 MILLION (briefly on March 3, 2021), Litecoin LTC at USD $795 and Basic Attention Token BAT at $15.99. NFTs (non-fungible tokens) allow people to invest in unique assets which have not enjoyed immediate liquidity up until now – assets such as art, collectibles, real estate, and even Twitter posts………….these have already sold for 6 and 7 figures – USD $500,000 for digital art and USD $2.9 million for the very first Twitter post.
Many people have noticed how the TV series “The Simpsons” has been eerily accurate in “predicting” future events. Perhaps another TV series to note is the “Star Trek” franchise. In their timeline going from now to the year 2024, the theme is “homelessness, poverty and technology.” This sounds like our world today, where those at the forefront of technology become ever more affluent, and most of everyone else becomes less prosperous.
Update on the Global Motor Vehicle Industry
In spite of the diesel debacle, the Volkswagen Group (includes the brands of VW, Audi, SEAT, Skoda, Bentley, Lamborghini, Bugatti, Porsche, Scania, MAN, Karmann and Ducati) maintains a very distinct advantage within the global motor vehicle industry – although if this holds remains to be seen. Their advantage is in what I will call financial “firepower.” It is a combination of things like market value, profitability, cash on hand and money invested – capital investments in future R&D and production. VW has a whopping 41 percent global market share of this financial “firepower.” The up and coming high technology firms (of which Tesla is by far the biggest) hold another 21 percent – largely investor money they have received from the stock market. Toyota-Lexus has 13 percent, Hyundai-Kia 6 percent, Daimler AG (Mercedes-Benz) 4 percent, BMW AG 4 percent, Ford Motor Company 3 percent, Honda-Acura 2 percent, Caterpillar 2 percent, John Deere 1 percent, Volvo-Mack Truck 1 percent, Geely-Volvo Car 1 percent, Paccar-Kenworth-Peterbilt 1 percent and all others combined statistical zero percent (General Motors, Peugeot-FiatChrysler Auto, Mazda, Harley-Davidson and Aston-Martin are here). These “stragglers” are so tiny I doubt that they will survive. They are repeating the post-World War 2 “death dance” of the once great American independents such as AMC-Rambler (included Nash-Kelvinator and Hudson-Essex-Terraplane), Studebaker-Packard (included Avanti, Pierce-Arrow, White, Erskine and Rockne), Willys-Overland, Kaiser-Frazer (included Henry J and Allstate) and Crosley. Notable companies in the financial red (they should die out even sooner than the “stragglers”) include Renault-Nissan-Mitsubishi, Tata (Jaguar Land Rover) and Koenigsegg-Spyker. Investments for the technology of the future (now largely electric) have always been hugely expensive, and the smaller players simply don’t have the resources and cannot afford to make mistakes. In the old days, this was referred to a “retooling cost.” Case in point: the sales failure of the AMC Matador Coupé introduced in 1974 sealed the fate of AMC as did 1962 introduction of the the Avanti Coupé for Studebaker-Packard. They were not bad cars, but they failed to sell in sufficient numbers to justify their capital outlay.
The opposite example is Volkswagen AG. VW currently plans no fewer than 91 electric vehicle models from today until the year 2030. Compare this to the fact that VW now has 40 models (of all types) for sale all over the world, and that there are 49 already discontinued VW models going back to 1938 when the first production air-cooled VW Beetle Sedan was introduced. In other words, there were 89 VW models from 1938-2021 (83 years) compared to no fewer than 91 models planned from 2021-2030 (merely 9 years) – a capital investment which requires massive financial resources. Tesla has invested heavily in the infrastructure of recharging stations – a business model which is already replacing / displacing gasoline stations.
I expect overall volumes to decline dramatically in the future. Simply put, there are too many car companies, too many cars on the road, too many cars being built and too many retailers. In the future, very few private individuals will own cars……….the future is Uber and Lyft. Private car ownership will be limited to “rich” people like it was before the advent of the Ford Model T. Remember also that the unique minerals required to make the large BEV (battery electric vehicle) batteries coming from countries such as Chile and the Democratic Republic of the Congo are in rather short supply.
Dealership groups will also face the challenge of survival. Marketing will be done online, directly between the manufacturer and the consumer. Look at Tesla – others are following suit. Simply put, the new “Telsa” business model has no use for these middlemen. This is all part of the high technology Blockchain, Artificial Intelligence (AI), robotics, nanotechnology, biotechnology and automated driving phenomenon.
