1/ US Fed min wage bought 2.2 Big Macs in ‘70. Today — only 1.3 Big Macs. If Biden raises to $15 per hour, that’s 2.6 Big Macs. Shows that labour has lost to capital. Gold, SPY, Houses have seen multi-bagger increase in Big Mac buying power over same time.

2/ But size capital doesn’t buy Big Macs, it only buys more capital. You need ~$2.6 million net worth to make it to the top 5% percentile in US. Some of your money goes to food, gas, big screen TVs but not much compared to earning min wage. So why don’t you feel wealthy?

3/ Because the inflation that matters to you is the cost of the Toronto home or the Muskoka cottage you want to buy one day, or university education for your 3 kids. So you add your annual savings to your capital pile but it buys less and less capital each year. You have FOMO.

4/ We are already at the point where it is almost impossible to accumulate meaningful capital by saving a portion of what you are paid for basic labour. As shown by the Big Mac math, living expenses eat most of it up. Many people have just given up trying.

5/ They known they’ve been left in the dust by capital. Trump appealed to these voters but his Presidency extended capital’s dominance. The top 10% who own the vast majority of the stocks and real estate know that the underlying problem has not gone away.

6/ And so the capital owners have voted for $2,000 stimmy checks, rising min wages and MMT. This is a large and ever growing off-balance sheet liability for everyone with capital. It’s the charge we all have to pay because we’ve screwed the system up so badly.

7/ It’s basically a tax on wealthy people to keep order and a functioning society. But people don’t like to pay taxes. So we’re trying to conjure the money out of thin air (money printing, deficits) for as long as we can. When this approach fails, the bill will arrive...

8/ in the form of higher inflation and a reduction in corporate profit margins in favour of labour. This is the only way to restore balance. Capital needs to feel some pain for a decade and labour rewarded so that people with no capital (millennials) have a chance to buy some.

9/ If I’m wrong it will be because we will be able to keep playing this game of capital being repriced to infinity while we subsidize people without capital so they can survive. But surviving isn’t thriving and people know the difference. If we keep playing the same game we end

10/ up with a highly unstable society (2020 was nothing compared to what could happen). I don’t want to seem too negative. Technology is amazing, healthcare advances, fewer deaths from accidents, advances in racial equality, our environment is cleaner. There is a lot to be

11/ thankful for. But there’s also something that we’ve lost along the way. People used to be able to own a home and a car on one income. People used to expect their kids to have a better life than themselves. There used to be good jobs for people without college educations.

12/ In 1959, only 8% of the US population had college degrees. You could actually stay in your home town without ever going to college and make a good living. Believe it or not there was time when almost no one had a credit card or used Afterpay.