The decade of the 2020's started much like any other. It kind of crept in quietly. Most people thought things would go on as they always had. And then...
We are now 27 months into the Tumultuous 2020's, probably the craziest decade any of us alive now will ever see. On August 9, 2019, I wrote the blog post below, explaining trends playing out that I thought would turn the 2020's into a really crazy decade. Check out the second to last paragraph in that post:
When I wrote that post, the business media was saying that we might have a mild recession in 2020. Nothing to really worry about. As a lifelong student of long term trends, cycles, and futurist thinking, I knew they were wrong. I just wasn't sure how wrong. In September 2019, the Repo Market crisis happened, and the U.S. banking system seized up, and a continuous, low key bailout of the banking system began. It's still going on now. But everyday life didn't change much, most people barely noticed the Repo Market crisis. Then Covid happened six months later. As we all know, everyday life changed dramatically, for almost everyone. 2020 seemed like the craziest year ever... until 2021 happened.
One of the big, underlying trends, is what the futurists Alvin and Heidi Toffler called The Third Wave. Very simply, we are making the long, sticky, messy transition from the Industrial Age into the Information Age. Many of our businesses and institutions have made the transition, like high tech and much of the media. Many other parts of society are still working from an Industrial Age mindset and business models. Like the difference between shopping at Sear's 30 years ago, and shopping online or on phone today. Old school businesses and parts of our world are breaking down, and new versions, usually using lots of tech, are being created, and growing. This is happening all around us, in schools, colleges, banking, government, political parties, and organizations of all kinds. It's really stressful to all of us. I call this The Big Freakin' Transitition. With this concept as a background, I see a lot of trends headed our way before they become really obvious.
2020 and 2021 have been nuts. So where do things go now? Here are some of the main things I believe will happen in the 7 years and 9 months left of this decade:
Prices on most things keep going up, though slower- For a whole bunch of reasons, it appears that prices on much of what we buy will keep going up for many more months. The money supply has been greatly increased, that's the big reason. I think inflation will stay pretty high, but slow down as we head into another recessionary wave. Stocks and real estate should drop quite a bit later this year. But I think consumer goods will keep rising. I wrote this yesterday, and the inflation rate came in at 8.5%, highest since 1981, this morning. Figure out how to earn more money people, because prices will keep rising for quite a while to come.
Another, bigger, "recession"- Simply put, we didn't let the 2020 recession (actually a depression, by definition) do its job. Recessions generally weed out poorly run businesses, small and large, and lead to more innovation and new business and social models. Instead, everyone, EVERY PERSON, EVERY BUSINESS, got bailed out, in some way, in 2020 and 2021. Because the entire banking system has been continually bailed out (and still is), we all got bailed out, in addition to stimulus checks, PUA, PPP, and other money the federal government handed out. So another recession was inevitable, and we're heading into it now (April 2022). This one won't be as deep, but it will be much longer, and harder to crawl out of.
Real estate slowdown- Instead of crashing during the 2020 downturn, the trillions in newly created dollars fueled the real estate market to go completely nuts. A low inventory of houses, millennial FOMO, and corporate/high tech home buying threw it into hyper drive. In early 2022, that is slowing down, and as interest rates keep going up (already up 1.5% from 6 months ago) I believe we'll see a dramatic slowing down in real estate, and price drops in most areas, in late 2022 and into 2023.
The College Apocalypse- After a conversation about colleges, with a couple friends in 2017, I looked into why student loan debt has soared so much since the Great Recession. The reason is because since 2009, student loans have been sold and repackaged as investments (called SLABS), just like the infamous "sub prime" home loans in the 2000's. Those sparked the Great Recession. Right now, banks and institutional investors are sitting on over $1 trillion in student loan SLABS (investments), which are pretty much worthless, because hardly anyone is paying their loans back right now. The system is in crisis already. This isn't something in the future, this is where we are at now. This will eventually lead to some colleges and universities going out of business, or closing smaller branch campuses. This has happened already happened to dozens of small colleges. Ultimately, I think we'll see 20% to 40% of today's colleges and universities close down in the 2020's and early 2030's, much like what already happened in the Retail Apocalypse.
Student Loan Debt Crisis/restructuring- Student loan debt is crushing Millennials, and older generations, too. It is one of the biggest, possibly the biggest drag, on the consumer economy. We will have to find a better way to pay for college, if we want people to keep attending colleges in large numbers. In addition, college itself will have to restructure into a model that works in today's high tech based, hyper-communication enabled world, where most information is available for free. A complete restructuring of the higher education financing system simply must happen. This will take 10-15 years to play, I believe. It's just getting started now.
Eds and Meds ghost towns of the 2020's- When colleges and universities do start closing down in numbers, this will have a major effect on the cities where these schools are located. These days, years after the loss of high paying factory jobs, a lot of small and mid-sized cities are known as "Eds and Meds" towns. That means the local college or university, as well as the hospitals, are the main employers in town. There are probably 100-150 cities in this category across the U.S.. When colleges get shut down, many of these cities, will shrink dramatically. I believe most of these will be the second and third tier cities, far from the major cities and large metro areas. Put it this way, if your mall and your discount store have shut down, check to see how strong your local college is. There will be a lot of ghost towns ten years from now.
Blockchain/crypto goes mainstream- The global banking system crashed in 2008, and hasn't been truly functional since. We've basically been in continual bailout mode, since, living on the government's credit card, so to speak. While the central bank centered, worldwide banking system uses a ton of high technology, the basic structure of banks goes back to the Medici days of the 1400's. Crypto, smart contracts, decentralized finance models (DeFi), NFT's and all kinds of new fintech have been invented and implemented since. Since the banking system doesn't work well for MOST people at this point, we will all keep trying to models, until we find a system, using many of these building blocks, that works in today's world. It will be pretty chaotic for a while, as some of these things go mainstream, and others fall by the wayside. 10-15 years from now, we will have a completely different worldwide monetary system, and it WILL NOT be based on central bank digital currencies. We probably won't have central banks at all.
What will this system look like? I have no idea. But many of the technologies, like crypto, phone based payment systems, and other pieces of today's world, will be parts of it. Again, the old system is breaking down, and a new system is being built, like in every other industry that hasn't made the transition already.
A new standard money- Warren Buffet, one of the world's best investors, recently said that the U.S. dollar has lost 94% of its value, in his lifetime (he's 91). The Fed is testing a "digital dollar" it will try to force on us soon. That's fact, you can google it. But a central bank digital currency, any of them, will be an even more fiat form of fiat currency, They ARE NOT cryptos. And they won't work for the long term. They'll just lead to hyper inflation and more problems, most likely. We will have some new form of currency in the coming years, but we don't know what it will actually be. Or we may have many private-based currencies, because right now, a lot of people have more faith in things like Bitcoin and Ethereum than central bank digital currencies. Basically, the world will figure out some new kind of currency that will actually work in today's hyper connected world. We just don't know what it will be... yet.
A heck of a lot of protests, marches, and a few riots- The U.S. Constitution acknowledged that all people have certain inalienable rights, rights which CAN NOT be taken away by legislation or the government. But, in practice, many groups are harassed or have been victims of all kinds of prejudice for decades. We've seen Black, gay, and trans rights groups rising up a lot in the last couple of years. We will see many more groups fight for rights that have been stripped of them in previous decades. Simply said, I believe there will be a lot more protests, and fights for legal rights for many more minority groups in society. These may include immigrants, the homeless and poverty stricken, old people, young people, artists, thinkers, and creative people, and several small ethnic minorities. This will be a big decade for social movements and social change, in general.
Change. If there is one word to sum up what I call the Tumultuous 2020's, that word is change.
These are not the only things that will happen in the next 8 or 9 years. But these are some of the biggest trends I see headed our way, ones that will affect a large number of people. These are my thoughts. If they makes sense to you plan accordingly going into our weird and wild future.
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