Dear iGeneration, GenZ, Centennials, GenY and Millennials, roll up for the new wealth transfer

How the young tech savvy generation should take a risk and out invest the old generation wed to a dying system of money.

Scotty I will have eggs over easy, a fappacappamochachino and box ‘o’ Lucky Charms!

If you’re an old fart please pass this on to the youth. Actually I should come clean and say I’m passing this advice on because I might also be an old fart. I was born into a world where mobile communication devices existed only on Star Trek, Concord flew in the skys and men walked on the moon (see kids sometimes the past is better). I’m generation X, the so called slacker generation. I’m back from the past to tell you I have seen the future and it will be bigger than the 1970’s cereal packet imaginations of Kellogg’s or Golden Grahams. You all need to hop on board now!

“Hey man spare some long term financial planning”?

First off if we are going to talk wealth. How are you doing currently? Well paid satisfying job? If your living the dream good for you but spare a thought for the majority. It would be an opportune moment at this moment to point at some well researched charts and graphs showing the widening income between the generations but as I’m the slacker side of the family tree I can’t be bothered. Anyway facts are so last century so I’m told. So I’m just going to appeal to what you really know. You work harder to both find a job and ‘if’ you can get your foot in the door you ‘will’ be working harder in that job. At the same time you may have noticed your out going bills grinding up and that hard earned paper currency just not going as far as it used to each month.

Whilst there are a great many contributors to the dwindling power of the notes in your pocket the large elephant in the room is inflation or the now fashionable quantitative easing (QE). Both are just fancy terms for printing more money. Increasing the money supply by pressing the print button is a lovely cheap trick for a government central bank. Need a few hundred billion more to spend? Press print, viola! You now have that lovely moula to spend. Best you spend that money quickly however because when you inflate the amount of paper money in the economy that abundance waters down the power of the remaining currency. This trick is best performed as a lightning QE printing gorgefest. Print a stack of new money, buy a new aircraft carrier or two before all that extra money sloshing around gets priced in and becomes devalued by the businesses and citizens. Printing money is a great stealth tax, it tends to very slowly erode the wealth in your pocket so you hardly notice it happen. A win win for a government but a kick in the teeth for us the citizen and our children!

Press the button, wake the elephant, prep the easel, hey presto! Instant money!

After this sobering pep talk I think it is best I introduce you to Mr Gresham. Or should I say Sir Thomas Gresham. TG was an English financier to Queen Liz the 1st during the Tudor period. Tommy noted that just like today’s governments the royal mint of the time would make money go a bit further by watering down the gold and silver content with cheap metals like copper. He then noted that the old money with more gold content seemed to disappear from circulation leaving the debased money washing around. By Jingo, he had discovered Gresham’s law! “Bad money drives out good.” Folks who got hold of the good money would horde that and try to palm people off with the bad (debased) money.

Gresham would have been dismayed to find that our own currency does not have an ounce of gold in it. Don’t worry though says our current governments paper money might not have value Gresham would have recognised but paper or should we say digital currency is far more suited to the modern world than gold. You can’t buy the new I-pad from Amazon with gold, send you mother in Mexico gold or store lumps of gold efficiently but with modern digital currency you can do all these things! Gresham’s law applies globally as citizens in hyper inflated Venezuela try to swap local worthless currency for US dollars. Generally though our first world currencies are roughly equivalent, equally over inflated.. aren’t they? The answer to that question was yes up until 2009 when in a small corner of the internet a new currency was launched that would have Gresham all of a fluster. He would have noted that this currency was limited like gold but also matched the utility of the common currency as it was digital. On paper you would have to agree with Gresham this currency had best of both worlds. The name of this wonder currency? Bitcoin.

Mmmmm digital gold!

Yes you heard right, that strange geeky currency. You might recall bad headlines. Used for drugs and porn, big gains and big losses then… what? The world still turned we all still kept on using our old folding money right?… Yes ‘we’, most of us did but in the back ground bitcoin the currency has been growing up fast. Like a prize fighter touring the underground rings it has been battle hardened. Directly assaulted by hackers, undermined by the press and manipulated by government actors. Yet this constant attacking seems to only have spurred on development. The Bitcoin network’s ever increasing army of computers and code that runs on those computers has continually developed. Within seven years $17 billion worth of bitcoin value is now secured on the supercharged network.

And so today as of 21/02/2017 we are hovering around $1100 just below the all time high price of bitcoin. Companies, governments even the IMF are interested in bitcoin and it’s blockchain. A very important decision on the 11th of March will be made by the SEC (Securities and Exchange Commission) on a bitcoin ETF (Exchange Traded Fund). This fund will allow bitcoin to be used by hedge and pension funds. The influx of money into the Bitcoin network will be huge if approved. If it gets turned down then more ETF’s are on the books in the US and around the globe. It is only a matter of time before one of them is approved making this the best time to take the plunge and buy your very own ticket for the wealth transfer from worthless over printed dollars and pounds to the future of all money! Bitcoin!

Do yourself a favour take a chance and take the plunge.