Perry Rod

At the age of sixteen, I took a bus to a local community college and enrolled in a course about stock market investing. The professor introduced himself as a millionaire and said he was just doing this one course for fun. I listened intently and tried to grasp what I could because I wanted to be a millionaire too.

I was the only young kid in the class and all I knew was that important people seemed to read the Wall Street Journal and put their money into the stock market. I heard important people on television talking about the Dow going up and down and all that, but I – nor my family – had any money to actually invest in the stock market.

But I was an optimist. As a sixteen-year old interested in stocks, you would be right to assume that I was terrified of girls and school dances and parties and all that stuff. I focused on politics, business and reading. When I finally found a girlfriend, it was from the internet. This was back when it was really embarrassing to find someone on the internet. Nobody would admit to that. “Uh, yeah, we met at a bookstore.” (We met online and after days of exchanging messages agreed to meet at a bookstore).

Now, people don’t care if you say you met the love of your life online. It’s normal.

What the hell does this have to do with cryptocurrency?

Well, it’s happening again. The things I did as a young man that were weird and unusual are becoming normal. Who knew I was a trendsetter! I was interested in the stock market at the age of sixteen because I wanted to have more money. Well, who the hell doesn’t want to have more money?

Cryptocurrencies are bringing the stock market to your fingertips – your phone and tablet, that is. Right now, they are still weird and for the nerds, and have a misleading name. Currency? No sir. Nobody is using these things to buy their groceries. Instead, cryptocurrencies are operating like stocks in a stock market. But the magic is there is no stock market. They are completely unregulated and accessible.

That’s why the scammers are having the time of their lives. Most cryptocurrencies, including Bitcoin, have little to no fundamental value. They are essentially pyramid schemes of inflated value and hype. They are suckering in people who have too much trust and too little investment experience. But they are also a precursor of a world without the need of a stock market in order to make investments and get investment experience. In fact, they are a precursor to the extinction of entities like the New York Stock Exchange and London Stock Exchange altogether.

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A few of us were dabbling in the world of online dating a couple decades before it was normal. Now, a few of the younger people today are dabbling in an unregulated investment market a couple decades before that becomes normal. What this foreshadows is an accessible worldwide stock market of the people.

There’s one other part of my story – I studied philosophy, government, and music. Yet, I became a full time investor who learned about income statements, balance sheets, good managements, shady accounting, etc. – all on the internet. I learned a lot the hard way. I also learned how useless and unproductive it was to hold cash rather than invest.

Now, the kids don’t have to jump through the hoop of opening a brokerage account. They have immediate access to cryptocurrencies. Sure, they’re going to get scammed and crushed and learn the hard way too. But among the rubble will be a whole generation of kids who will realize the uselessness of cash and the opportunities of investing.

This has tremendous implications. As time goes on, cryptocurrencies will further expose the fact that fiat currency – cash – has little long term fundamental value.  Cryptocurrencies are in a boom and bust period much like the internet bubble. The booms and busts will become severe as people learn to distinguish cryptocurrencies with and without fundamental value. But the ultimate bust will be a dramatic drop in the value of cash against the values of stocks, commodities, and hard assets including cryptocurrencies that represent those assets.

In other words, a world is coming where investment understanding and knowledge has become so widespread and democratized that stocks will essentially morph into currency. Instead of buying something with a dollar, I see a future where people are buying with stocks. This will dramatically reduce the need and value of cash. This destabilization may be so severe that it could cause rampant inflation of cash and even a great depression. But it will also eventually lead to a smarter and more dynamic economy.

Summary: Cash has been dropping in value for decades. Seemingly worthless cryptocurrencies with increasing value foreshadows an accelerated drop in the value of cash. As cryptocurrencies begin to represent things with actual fundamental value, they will replace cash as a means of transferring value and they will also replace stocks in a traditional stock market.

An economic disruption of this magnitude has never occurred.

Be prepared.