You Have 5 Years Left To Get Rich

So there's a very interesting theory out there that I want to share with you, and the theory says this. You've got about five years left to get rich, because once AI gets good enough to where anyone can make anything, if you don't own some part of that future, you'll never own anything at all. You'll be permanently stuck at whatever economic level you are at today. Now, Elon Musk actually talked about this future a lot, and he thinks there's two possible outcomes. Do you think it's going to be some sort of a universal basic income thing? Do you think there's going to be some other kind of solution that has to be implemented? Working will be optional, because you'll have robots plus AI, and we'll have, in a benign scenario, universal high income, not just universal basic income. The first outcome is the benign or good one, which says that if that were to happen, don't worry, money might not even exist. Robots will just do our jobs for us. Now, the second outcome, though, is not so good, which is this continuation of what we're starting to see, which is a K-shaped economy where the poor get poorer and the rich get richer, and AI draws the line through that dynamic, which will forever freeze whatever place people are in life right now. Now, that's kind of dark and depressing, but let's just assume that that's actually going to happen. What would that even look like? Well, it might look like what we're kind of seeing right now. The markets would start to go to all-time highs across the board. Stocks, aka the S&P 500, would hit an all-time high. The median age of first-time buyers would be at an all-time high. Gold would go to an all-time high, thanks to countries like China and the U.S. buying it and storing it as a possible alternative to the U.S. dollar. Silver would also go to an all-time high. And not just the metals, but all commodities across the board. Even debt, like government debt, corporate debt, household debt, would go to an all-time high. And it's kind of interesting to ask, why is that happening right now? Is there going to be some global conflict like World War III? Maybe. Is it an AI bubble and everything's about to crash? Maybe. Obviously, no one knows the truth, so I'm not going to sit here and make predictions about the crashes or the bubbles or the end of the world. Instead, I want to do something a little bit more interesting. I'm going to give you a high-level explanation of one of the most interesting experiments of money and what money could look like in five years' time. It's this experiment of running a global debt-based world with constant money printing at the same time that AI takes away the room people used to have to build something new. Now, this is super nerdy stuff, but it's the kind of nerdy stuff that I think is super fun. So with that said, let's get into it. Hi, my name is Andrei Jikh. Hope you're doing well. Come for the finance and stay for AI. So I just first want to say that this video is just a theory. It is not a prediction of what's going to happen. So let me just start right here with a very basic question, which is what is it that an economy is supposed to do? And what it's supposed to do is go through cycles, right? Go up and go down. But human beings don't like that. We're like, well, maybe I don't want it to go down and I wanted to go up for as long as possible because that's what makes me money. Well, because of that, we have economic tools that we use to keep things going up as long as possible because we like stocks to go up. So what do we do? We lower interest rates. We give out stimulus. We do quantitative easing. For example, 40% of all US dollars in existence were created after 2020. Thanks to central banks creating new reserves and using them to buy government bonds from investors, aka injecting liquidity into the system. Whatever you want to call it. Okay, but what if we didn't do any of that? What if we just left the economy alone? Here's what would happen. And it's a very simple idea by Jeff Booth, which is this. The neutral state of the economy would become deflationary. And all that means is that if the amount of money in the world stayed the same while technology kept improving, what would happen is the price of all the things in the world would go down. Things would get cheaper and they'd get cheaper because humans are awesome. And over time, we make stuff better, faster and cheaper. Now, obviously that does not describe our world today. Instead, our world somehow gets more expensive over time. The price of stuff a hundred years ago was less than the cost of stuff today. Why? It's not because stuff got harder to make. It's because the supply of money kept expanding because government kept printing more. And when they did that, our perception, the way we experienced life is global net worth or wealth quadrupled since the year 2000 from about 160 trillion to around 600 trillion, which is about 5.4 times the global GDP. Now, if you invested in those assets, then you got richer. Except what's really happened is the value of the dollar went down relative to those assets. And unfortunately, if all you did was save money without putting it into all that stuff, you lost how much you could buy with it. That's the way it's always been, which is why over the long term to us, those things look like they go up forever. Okay, then. So the next question is what is happening to the economy right now? And it's going into what people are calling the K-shaped economy. A K-shaped economy is what happens when society sort of splits into two different directions. One line goes up and the other line goes down, like the two arms of the letter K. Now, on the top side of that line are people who own assets. Stocks, real estate, businesses, intellectual property, anything that benefits from easy money. On the bottom side of the line are people who mostly rely on income and their savings. Their costs go up, but their income doesn't necessarily keep up at the same rate as their costs. That's what we have right now, because the top 10% of US earners now account for about half of all consumer spending. At the same time, the bottom 80% of earners account only for just 37% of consumer spending. That is a K-shaped economy. So that dividing line is roughly $175,000. Families that earn above that mark, they're living la vida loca. You know, they're out there, they're spending on birthday parties and lavish weddings and big trips abroad and growing their spending month after month. And the rest of America, the bottom 80%, they're cautious. Now, you might be thinking, okay, but so what? Hasn't that always been the case? We've all heard the saying, the rich get richer and the poor get poorer. And this is true. Something like the top 10% of people own 90% of stocks right now. And just the top 1% own something like 50% of all the stocks. There have always been rich people and poor people in this divide, this dynamic, right? But here's the difference between where we are right now and where we could be five years from now. Right now, people can move between the economic line. You could start on the bottom and work your way up. You could learn a skill, start a business, find an inefficiency and take advantage of some edge that hasn't been solved yet and become rich. The economy today is not frozen. The upward mobility comes from finding these inefficiencies, aka finding opportunities where things can be made better. That's where businesses exist. But now let's throw AI into the equation. Artificial intelligence makes the whole system so much more efficient and faster than any human being. Over time then, the gap between how things are right now and how things could be in the future is going to close. AI compresses that gap to almost zero because when everyone can use AI to build websites and write code, analyze stock markets, make content, automate workflows, whatever it is you do, then what happens is it becomes really easy for anyone to do anything and it becomes a lot harder to move from the bottom of the K to the top. Now, for the people at the top of this economy, right, the people who already own the assets, this is awesome. Their money becomes more productive than ever. But for people on the bottom of the arm, it becomes harder to own anything because less and less inefficiencies are left to solve. Right, that's how at a certain point, AI could potentially freeze wherever we are in life, economically speaking. So that means our goal has to be between now and the future to own some productive part of it. It can be anything, the stocks, the gold, the real estate, the IP or social media, anything you can trademark or copyright before someone makes a better version in the near future. Now, some people say that this could happen as quick as 8 to 12 months. I don't think it's going to be that fast, but it wouldn't surprise me if it was as fast as 5 to 10 years from now. Okay, so the next question then is if that were to actually happen, then wouldn't money just not exist anymore and wouldn't robots just do everything for us and wouldn't everyone get some kind of universal basic income? Maybe. That's what Elon says is one of the outcomes. Personally, I think the answer depends on what we think money actually is. What is money? And here's where things get very interesting and super nerdy because there's two competing theories. But first, here's something I've been personally doing to keep stacking sats while this plays out, the Gemini credit card, which is the sponsor of this segment and it's a card I've been using for a while now. All opinions are my own and we're not influenced by Gemini. I use it like any regular credit card for gas, groceries and travel, but I earn Bitcoin every time I use it. It has no annual fees. You can see the rates and fees in the description for more info, but you get up to 4% back in over 50 cryptocurrencies instantly and you can choose which one you want. Personally, I've got mine set to Bitcoin, but that's 4% on gas, transit and rideshare, 3% on dining, 2% on groceries and 1% on everything else. It's a MasterCard World Elite and I've used it internationally with no issues and every time I use it, it has Bitcoin in my portfolio. And the best part is you're investing as you spend. In fact, according to Gemini, cardholders who earned and held their Bitcoin for one year saw an average appreciation of 277%. Those are not your typical credit card points. So if you're interested, click the link in the description or go to Gemini.com forward slash Andre to get $200 in Bitcoin when you spend $3,000 in your first 90 days. Thank you Gemini for sponsoring this segment. And now let's get back to it. So here are the two competing theories. On one side, you have what's called Keynesian Theory of Economics and on the other side, you have the Austrian Theory of Economics. They're the two theories that tell us what money is by explaining what an economy should do and what role, if any, governments and central banks should play in all of it. Now, today, the experiment we're living through is called the Keynesian Theory of Economics. Every nation in the world is living through it and here's how it works. It starts with a very simple assumption. People are dumb, right? Economies are not stable on their own. If we leave the economy alone, it would fall into a recession or a depression which causes a lot of suffering, unemployment, makes a lot of people sad. Therefore, the governments and central banks have to help us during those times of crises. How do they help? Well, they help by making it easier to borrow money, by lowering interest rates, running deficits, aka borrowing more than earning and maybe injecting some money into the system so that people keep on spending money. In a Keynesian economy, stopping a collapse is way more important than letting the market reset even if that means we're going to have higher debt which is what we have right now as a country. It's even more important even if it means the price of stuff like real estate gets inflated and makes more people renters. So from that point of view, a world where stocks and housing and other assets are at all-time highs doesn't mean that something's broken. It's actually the system working exactly as it was designed. And Keynesians believe that inflation aka the price of everything in this world should go up by about 2% per year. Why? Because they believe it helps incentivize people to spend their money rather than to save it. Hold on, why would we want to encourage people to spend rather than to save? Because they argue, it's our constant spending that forces us to innovate to create better things. If all we did was save our money, there wouldn't be a Disneyland, there wouldn't be a McDonald's, right? That's the Keynesian point of view. Now the Austrian point of view looks at all of that and says, none of that is true. Don't believe any of that. Now the Austrian school of thought has a very different point of view about what money should be. And at the core, Austrian economics believes that the world works better when it's allowed to fail from time to time and our money is based on truth. Okay, what is the truth? The truth is this, if you save money, you should be rewarded. The price of stuff over time should get cheaper for you. But if it isn't, then you don't live in a truthful world. And let me just put this into a little bit more context because if the founding fathers were around today, they'd be debating the same exact thing and they actually did except they didn't call it Austrian versus Keynesian because it wasn't labeled that yet. But the debate they had was can money be expanded and borrowed against safely or does it always kind of end the same? Now, they didn't all agree at once but if you look at Thomas Jefferson, for example, he believed that borrowing money was so dangerous that if we were allowed to, we would create more and more paper money and that governments, if left unchecked, would do this to fund wars and make political promises with. Now, Thomas Jefferson warned us that allowing banks and central authorities to control money would, quote, deprive the people of all property until their children wake up homeless. So the Austrian School of Economics says if you give a government the ability to print, it will eventually become corrupt because by doing that, they'll remove the consequences of their bad decisions because if money can be printed and if you don't let the system fail from time to time and you don't let the economy go through recessions, then you sort of suppress the self-cleansing aspect of a fair economy. And that's why they argue central banks and businesses and economies should fail because they remove the bad corrupted actors. And if you don't let them fail and you save some banks and save some corporations but not the others, you're just allowing financial interests to decide which ones get to win and which ones get to fail and those decisions might be compromised because they may have an incentive because they are also corrupted. So for the Austrian economists, the answer to what is money is that money should be what's called hard money like gold or silver, for example. I mean, we could still use paper money but it should be tied to a base layer that the government can't make more of because that's the world where everything eventually breaks and then we just pass it on to the next generation. Okay then, so back to the original question. If in five years time AI takes over, will we live in a world of abundance where we don't need money or will we live in a world of economic slavery? And I think the answer depends on how we vote with our money. Now under the current system we live in right now, the Keynesian experiment, the optimistic version looks like, yeah, we're not gonna need a job because we have the robots do it for us and we'll probably have some sort of universal basic income, some kind of stimulus and the government will decide how much you need, when you get it and under what conditions. Digital ID, surveillance and all that stuff. And maybe that works. Maybe it doesn't. But the risk is that the more the system gets involved, the more power it concentrates. And once people don't produce any value for society, whoever controls the money controls access to life itself and who controls the power. And I would argue we're seeing a lot of independent journalists expose a lot of that system's corrupt incentives playing out right now. Now the Austrian version of this economy, I would say, looks very different because Austrian economists say, if technology truly makes the world cheaper, the money that we save should reflect that. If the world really is getting better at making stuff, then the prices should go down. If robots do the work, humans should benefit by being able to buy more stuff. Not because the government gave them more money, but because they own the stuff. They own the good money and the things that cannot get diluted. And on some level, I think people know that we're in this transition and we see the markets going higher and higher because we're all trying to get on the right side of this K-shaped economy. Now the real question of this video is actually this. Are we watching the last phase of an economy where mobility comes from inefficiency before we move into a world where mobility only comes from ownership of assets? In other words, this may be the last moment in time where you can get ahead by building a business and owning something important. Because in the future, the only way to get ahead is if you already own something of value. And if that's the case, then we have a finite amount of time. Might be five years, might be 10. I don't know. But we have a limited amount of time to position ourselves before that gap closes and we're stuck there for generations because there's no more room left to improve anything. All right, how do I tie this into Bitcoin? All right, I do know. So Bitcoin is one of the few things that you can own that allows you to live through the lens of this Austrian system of economics. Because all Bitcoin is to me is it's one of the only reference points that shows us the truth about the world. What is the truth about the world? This is the third time I'm asking this question, so hopefully you can answer it. The truth is if you save money, the world should be getting cheaper. Now I told you it isn't, but that's a lie. Everything actually is getting cheaper. Everything in relation to Bitcoin is worth less today than it was 10 years ago. Pokemon cards, gold, art, watches, cars, real estate, the stock market. They're all getting cheaper in relation to true hard fixed money. The way that Austrian economists believe the world should be today. The way that Thomas Jefferson envisioned it. Now that's obviously not an endorsement to buy or invest in Bitcoin, but it's sort of how I understand it. And it's how I choose to vote with my money. And I don't know the answer to this question. How much time do we really have? Maybe we have a hundred years or maybe it doesn't matter and everything will be great. I don't know, but that's why I made this video because I think it's an interesting thought experiment. I'm curious to get your thoughts on it. Let me know down in the comments below and I'll make a video showing all my investments in my plan for the next five years and how I'm personally preparing for this because it's been a while. But I hope you have a wonderful rest of your day. Smash the like button, subscribe if you haven't already. I'd love to see you back here next week. I'll see you soon, bye-bye.