Magnificent Horses.

The remaining daylight hours of the 20th Century economy should challenge us to slow down and reflect on our remarkable progress over the last 100 years or so. We have transformed our North American economy through two major industrial revolutions, spent $50 trillion-plus fighting 6-7 major wars, built-up an impressive $28 trillion in national debt, mastered the art of printing money, and put an exciting and ubiquitous iPhone into the hands of just about every single person in the country. Clearly, what got us here won’t get us there. Although we currently have 4-5 new technological revolutions happening simultaneously for the first time in human history, in less than 10 years driverless cars/freight trucks using Artificial Intelligence will potentially displace tens of millions of jobs. (The 2nd most common job in our advanced economy involves a man/woman driving something to create economic value and a paycheck.) Our national and global economies are going to look much different in 2031; the formation and deployment of capital, and factors of production, will look much different, too. The wealthy will continue to accumulate assets and dominate world capital markets; the working classes in many countries will continue to face dramatic changes and challenges never seen before. If we draw a straight line off the current economic and social realities of our systems, what do we expect will happen?

The Ancient Phoenicians (2500 BC - 200 BC) revolutionized modern economics and established vast trading systems and routes all around the Middle East and Mediterranean Sea. They were highly innovative in shipbuilding, navigation, and agriculture; many argue they made the first so-called footprint and shaped the framework for future regional and global trading systems that we participate in today.

Alexander the Great and his magnificent Macedonian Empire innovated trading systems that expanded new boundaries that covered close to one quarter of the globe; but his death in 323 BC in Babylon (city in modern day Iraq) resulted in the predictable collapse of that kingdom. The Roman Empire (27 BC - 476 AD) took a page out of both the Phoenician and Macedonian playbooks and developed expansive and advanced trading systems that extended beyond the reach and frontiers of mankind in each of their respective periods. (As The Roman Empire started to flounder and disintegrate, they made sure the weekend adventures at the Colosseum became more grander and violent. Always remember to give the masses bread and circuses.) Both Empires depended on human thinking, human energy, and horses.

The British Empire (1707-1914) made one of the most significant footprints and modernized the center of world commerce in the 17th and 18th Centuries: Beginning with the 1st Industrial Revolution (1760-1840) and the innovation of the Steam Engine and the Bessemer Steel Making process, and then the 2nd Industrial Revolution (1870 -1914) with the multiple innovations of telegraphs and telephones, airplanes and assembly lines, and electricity and automobiles. Prior to 1914, it was difficult to find a middle class in any industrialized economy, including America or Canada.?The 1st and 2nd Industrial Revolutions set up a fundamental change for the formation, employment, and small - but somewhat meaningful - transfer of capital (wealth) between the wealthy and the rest of society. This meager transfer from the end of the 2nd Industrial Revolution through the 3rd Industrial Revolution (1950 -2020) with innovations in semiconductors, personal computers, and the Internet, provided 100 years of expanding middle class lifestyles and futures.

The last century of human progress has been remarkable. While factories and regional economies continued to industrialize and grow, and our grandparents and families had to endure two devastating World Wars (1914-1919; then 1939-1945), and four less major but equally painful wars (Korea, Vietnam, Iraq, and Afghanistan), the North American middle class expanded dramatically after 1914 through 2014. Then it dramatically stalled, and the gain-of-function folks in Winnipeg, North Carolina and Wuhan have now changed the game.

An interesting backstory to these powerful waves of industrialization - and manufactured global conflicts - are the global bankers of Germany, France, Belgium, Britain and America. We should turn on the floodlights to see who and what the "gods of global finance" are up to these days. Global bankers are a highly elite and a well-connected group; privacy and intrigue have always been an important part of these historic banking families and vast networks. There are perhaps two million of these movers-and-shakers in the world of global finance? This privileged group have successfully navigated around and through the waves of industrialization and wars over the last several hundred years by building one impressive global banking syndicate, where they somewhat privately, and in many ways, opaquely, control and run many Central Banks such as The Bank of England (established in 1694), or Bank of Canada (1871), or The Federal Reserve (1913.) These all-powerful Central Banks are private banks (neither owned or managed or voted on by the citizens of the respective countries; the oversight is close to zero) that have incredible influence over the 18,000 banks around the world. Financial denizens on Mount Olympus have also manufactured incredible financial engineering structures such as our global FIAT banking system that enables governments to print money on demand, and created more than $300 trillion in so-called Collateralized Debt Obligations (CDOs) over the last 30 years that pose a clear and present danger to the global banking and economic systems. Even Basel 3 and 4 (global banking frameworks and standards) can’t build a seawall around the risk and potentially destructive power of CDOs. The Federal Reserve printed over $3 trillion in new money since the start of the so-called Covid event; 1 in 5 dollars now circulating in our money supply were printed and created out of thin air in the last 18 months. If you printed money in your basement you would be arrested. If the global bankers - who own the private Central Banks- do it, no problem. Now we see frothy bubbles about to burst once again in housing, stock markets, and commodities. Not even the Phoenicians, Macedonians, Romans or British could have cooked up such a scheme. The average working American should learn more about these global banking players and what is happening.

We have entered new, unchartered waters and our generation will witness some of the most powerful changes in world economic history. It used to take 20 or 30 years of gradual change with technological advancements and diffusion of application; now that is often happening within months or days. Horses and human energy have always been critical components and factors of production and economic growth. Horses became obsolete a long time ago. The average American or Canadian on Main Street should pay closer attention to Wall Street and Bay Street (Canada) bankers and Washington, D.C./Ottawa politicians. They should learn more about their respective Central Banks and the most powerful people running the show: Jay Powell, the Chairman of the U.S. Federal Reserve; and Tim Macklem, Governor of the Bank of Canada. (It is a fascinating coincidence that the average person knows a lot more about Lebron James or Jennifer Aniston than they do about these two characters running their economic lives and largely shaping the futures of their children.)

The data reveals that global economic growth over the last 200-300 years has averaged 1.6% per year while the return on capital has been 5%. The rather tight concentration of manufacturing and equity ownership of major public and private corporations is now in the hands of a relatively small group of global players. A few years ago, Bloomberg reported that one analysis showed that about 200,000 people owned dominating concentrations of about 3,000 multinational corporations or hedge funds or private equity holdings, and that these 3,000 "entities of one form or another" had a dominating and impressive level of ownership and control over a large swath of both public and private corporations around the globe. Also interesting: Bill Gates is now the single largest landowner in America and Sir James Dyson (Dyson vacuum cleaners) owns the most land in Britain. Queen Elizabeth continues to one of the largest landowners in the world. About 1% of the humans controlled about 90% of the capital in 1780. One statistic cited by the?Gilded Age?documentary: In 1897, the top 1% of Americans owned more than 99.9% of the nation’s wealth. According a recent CNN analysis of Federal Reserve data, as of the end of 2017, the top 1% of Americans held 38.6% of the nation’s wealth. According to Forbes, “twenty million Americans lost their job in the pandemic. At the same time, roughly 650 billionaires in America saw their net worth increase by more than $1 trillion . . . and they’re now worth more than $4 trillion.” More than $30 trillion in family wealth from the Baby Boomer Generation will be transferred/ handed down to their offspring in the coming decade or so. Yes, the rich will continue to get much richer, and the formation and efficient allocation and deployment of capital to drive innovation and production – and economic growth – is arguably being stifled like never before. This will severely handicap innovation, productivity, economic growth, and opportunity for our children. We are clearly creating the potential for a dystopian economic future for many working American families.

Now is a good time to be asking more questions. We should be asking better who/what/why questions. Just before horses became obsolete as a source of moveable power, there were about 26 million horses in the United States in 1915. By the early 1950s, only 2 million horses remained.?