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Problem is that our whole economic system is basically a Ponzi scheme. You get your payoff when you are selling stocks on your retirement to "next fool in chain

by ozim 4y ago

Problem is that our whole economic system is basically a Ponzi scheme. You get your payoff when you are selling stocks on your retirement to "next fool in chain" so 20-30 year olds. Land, houses will not go up in value if there would be not enough people to buy them. While yes people migrate to the cities or to areas like Randstad and while yes there is housing shortage in such areas but if immigration from rural areas drops a lot there is going to be drop in housing prices. More people have more diverse needs which creates demand - more people more demand - easier to have higher quality of life if it is easier to find 100 customers to come to your shop than 10 customers. People are not starting new grocery shops in rural areas because it is good investment - mostly it is that they already live there and have possibility to make additional income on property they own. People are starting new grocery shops in big cities even if they have to lease property to do so, because they still can profit on top of that.

ozim 4y ago
To complete comment I have to add one more thought. Infinite growth is also required for high quality of life unfortunately. Once there is no promise of future earnings by spending now - we start going into zero sum game. Living in a society where every day you have to worry about not loosing piece of pie is really a bad life to live. Less people means lower pressure to find new ways of getting resources - if there is enough people on earth we might have enough money to get resources from astro-mining if needed.
- vanviegen 4y ago
  I don't buy that line of thinking. People can still (on average) have career growth by taking an ever larger piece of the pie. And then they retire/die, leaving more pie for the young ones. Also, we have the tech to make this pie comfortably big.
- imtringued 4y ago
  There is this dude that is constantly pulling money out of the economy, leaving less for everyone else. Stop him (the rent seeking) and he won't bother you anymore.
BirAdam 4y ago
It's not just a Ponzi scheme due to population growth pressure and the old cashing out. It's also a Ponzi scheme because younger folks are literally paying for the older folks through taxation. Low interest rates also disincentivize saving while subsidizing the accumulation of debt, and spurring more investment into asset classes (land and stocks mostly). This creates a Ponzi like effect where in as long as people keep responding to the incentives, number goes up. A population drop implodes all of it. Of course, presently, it may already be collapsing. When it does, I don't think that the Fed is going to respond by tightening and letting things correct to a healthier slow growth sustainable economy funded through real savings and value production. They will most likely immediately attempt to reinflate the bubbles with negative rates (0.00% FOMC, < 10% reserve requirement, and purchase operations on the open market).
- jstarfish 4y ago
  > because younger folks are literally paying for the older folks through taxation. This is symbiosis, not a scheme. Like them or not, the older folks literally built and/or paid for everything the young end up inheriting. The young are otherwise parasites.
  - BirAdam 4y ago
    Older generations also created a debt level in the USA (public and private) that the young will be burdened with. They created corrupt governments that waged horrifying wars around the globe. They built nuclear weapons that threaten the globe. They did a lot of good too, but I wouldn’t call it symbiosis.
- imtringued 4y ago
  >Low interest rates also disincentivize saving while subsidizing the accumulation of debt, and spurring more investment into asset classes (land and stocks mostly). You're talking about how low interest rates are a Ponzi scheme yet it doesn't occur to you that maintaining positive interest forever is an even bigger Ponzi scheme.

by ozim 4y ago

ozim 4y ago

To complete comment I have to add one more thought. Infinite growth is also required for high quality of life unfortunately. Once there is no promise of future earnings by spending now - we start going into zero sum game. Living in a society where every day you have to worry about not loosing piece of pie is really a bad life to live. Less people means lower pressure to find new ways of getting resources - if there is enough people on earth we might have enough money to get resources from astro-mining if needed.

vanviegen 4y ago
I don't buy that line of thinking. People can still (on average) have career growth by taking an ever larger piece of the pie. And then they retire/die, leaving more pie for the young ones. Also, we have the tech to make this pie comfortably big.
imtringued 4y ago
There is this dude that is constantly pulling money out of the economy, leaving less for everyone else. Stop him (the rent seeking) and he won't bother you anymore.

BirAdam 4y ago

It's not just a Ponzi scheme due to population growth pressure and the old cashing out. It's also a Ponzi scheme because younger folks are literally paying for the older folks through taxation. Low interest rates also disincentivize saving while subsidizing the accumulation of debt, and spurring more investment into asset classes (land and stocks mostly). This creates a Ponzi like effect where in as long as people keep responding to the incentives, number goes up. A population drop implodes all of it. Of course, presently, it may already be collapsing. When it does, I don't think that the Fed is going to respond by tightening and letting things correct to a healthier slow growth sustainable economy funded through real savings and value production. They will most likely immediately attempt to reinflate the bubbles with negative rates (0.00% FOMC, < 10% reserve requirement, and purchase operations on the open market).

jstarfish 4y ago
> because younger folks are literally paying for the older folks through taxation. This is symbiosis, not a scheme. Like them or not, the older folks literally built and/or paid for everything the young end up inheriting. The young are otherwise parasites.
- BirAdam 4y ago
  Older generations also created a debt level in the USA (public and private) that the young will be burdened with. They created corrupt governments that waged horrifying wars around the globe. They built nuclear weapons that threaten the globe. They did a lot of good too, but I wouldn’t call it symbiosis.
imtringued 4y ago
>Low interest rates also disincentivize saving while subsidizing the accumulation of debt, and spurring more investment into asset classes (land and stocks mostly). You're talking about how low interest rates are a Ponzi scheme yet it doesn't occur to you that maintaining positive interest forever is an even bigger Ponzi scheme.