The Ford Factor – Fat Tail Daily | Australian Markets

We’ve left a few important dots, like blended cement ready in wheelbarrows… we need to attach them earlier than they harden up.

How come we are saying that shares don’t go up over the long run, when they’re up 366 occasions since 1925?

Why is the price of a Ford pickup truck remains to be a good approach to measure actual worth?

And is that this a good time to buy gold, even at report high costs?

Let’s clear up the F-150 Deflator problem at the moment… we’ll transfer on to the others later. However first, the dots keep coming…

Yesterday, whereas we have been nonetheless incarcerated by the snow, we watched essentially the most outstanding White Home press convention we’ve got ever seen. Trump, Musk and little four-year-old X within the Oval Workplace. And Musk did the speaking!

As traditional, the mainstream press went wild. They’d labored months to tag ‘The Donald’ with fomenting an rebel in Jan, 2021… and now… one other coup d’etat!

• Newsweek: High Historian Warns Elon Musk is Performing a Coup
• The Nation: Who Will Cease Elon Musk’s Coup
• The Atlantic: Elon Musk’s Bureaucratic Coup

However there’s no more of a ‘coup’ at the moment than there was 4 years in the past. A coup is a violent takeover, like the handfuls which have been organised by the CIA since WWII. One group seizes energy from one other group — by power. That isn’t what’s going on at the moment within the US. Elon could also be shopping for affect. Trump could also be promoting it…or maybe simply renting it out for a whereas…nevertheless it’s not a coup.

The query for us is: What’s the which means of it? Is Musk actually lowering the deficit? Is he actually altering the course of historical past? We’ll see…

Within the meantime, the snow has melted away. Day after day, the climate adjustments. One heat day. One cold day. And but, there’s a deeper sample at work, a Major Development. Spring is coming. It’s the ‘eternal return.’

The Earth spins…and circles the Solar. Every little thing begins…and ends the place it began off, from mud to mud. Internet zero. The one factor that’s linear, with neither starting nor finish, is time. Ultimately, time is all we’ve got. And most people earn their approach in life by promoting it, hour by hour, week by week.

The average wage was about $5,400 in 1925. In the present day, it’s $60,000 based on the Labor division. That places the gain at eleven occasions. However the fee of a new Ford truck (primary, working man’s model) has gone up from $500 to $42,000 — 83 occasions.

In 1925, it took a wage earner solely a bit more than a single 12 months’s work to buy an average home. Now, it takes more than eight years. However for an investor, it took solely the equal of 50 Dows to buy a home a hundred years in the past. Now, it takes solely twelve.

It’s all a bit puzzling and complicated. However we’ll determine it out.

Once we have been in faculty, we labored within the summers as a roofer. It meant carrying heavy packs of shingles on our shoulders up a steep ladder. In the present day, no person does that; all of the supplies are unloaded from a truck by a forklift and telescoped onto the roof.

Carpenters at the moment not often fashion home windows or doorways on the job web site. Nor do they cut wooden with a handsaw. As a substitute, the components are pre-fabbed in factories and assembled on web site with nail weapons, laser ranges, and lifts.

However each time we point out homes or autos as a approach of protecting observe of actual wealth, we get a notice from George Gilder or one other of the ‘Time Prices’ crowd telling us that our methodology is invalid. “Of course they are more expensive,” they are saying, “they’re better.”

However first, how come technology solely improves the product…and never the manufacturing? In fact, it really works on each ends of the assembly-line and in all places in-between. Enhancements on the manufacturing facet — robotics, higher supplies, new techniques — ought to make it cheaper to end up good merchandise. It takes much less human labour to construct a Ford pickup than it did a century in the past; it must also take much less labour to buy it.

Additionally, if technology delivers a higher car, and you need to pay more for it, the tech gain is a fraud. If you need to pay more — in time — for the higher product, you’ve gained nothing. As a result of your time is restricted and must be taken away from the opposite stuff you wished. Actual web gain = zero.

Lastly, the entire concept that fashionable issues are ‘better’ is unproven. Is a cherry pie higher at the moment than those we ate as kids? Are our blue denims stronger, more sturdy? And our homes? Is Monticello inferior to a fashionable McMansion?

We don’t suppose so.

Extra to come back…

Regards,

Invoice Bonner,
For Fats Tail Day by day

All advice is basic advice and has not taken into consideration your personal circumstances.

Please search unbiased financial advice concerning your own scenario, or if doubtful concerning the suitability of an investment.