•Housing affordability has declined sharply in recent decades, leading many younger generations to give up on homeownership.
•Using a calibrated life-cycle model matched to U.S. data, it is projected that the cohort born in the 1990s will reach retirement with a homeownership rate roughly 9.6 percentage points lower than that of their parents’ generation.
•As households’ perceived probability of attaining homeownership falls, they systematically shift their behavior: they consume more relative to their wealth, reduce work effort, and take on riskier investments.
•Renters with relatively low wealth exhibit the same patterns. These responses compound over the life cycle, producing substantially greater wealth dispersion between those who retain hope of homeownership and those who give up.
The real reason for Gen Z being all in on crypto
Gen Z is all in on the crypto market, according to the latest crypto news. Young Americans are turning to crypto gambling because buying a home is out of reach, a study released on November 19 has found.
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The research indicates that a rise in the median US house price-to-income ratio from 1984 to 2022 has added almost two extra years to the time needed to buy the same home, prompting young adults to seek alternative ways to finance their aspirations for homeownership.
It is widely understood that younger generations invest in digital assets more often than their parents.
This is usually attributed to a stronger faith in crypto or a better understanding of online finance compared to older age groups.
The report, however, offers a bleaker view, arguing that many of those placing bets on digital assets are not driven by ideology or a desire to replace the financial system, but by a sense of desperation.
Why Are Renters More Likely Than Homeowners to Invest in Crypto?
Although the research focused on US youth, it reported a comparable pattern in other countries.
‘Discouraged renters’
When renters decide that owning a home is no longer realistic, their conduct shifts sharply and for the long term.
For example, according to a recent FINRA research paper, American Renters and Financial Fragility, discouraged renters spend about 10% more on credit cards than homeowners with the same level of wealth.
They are also almost twice as likely to say “working hard is not important,” a sign of what researchers, and many employers, describe as “quiet quitting.”
Renters with assets under $300,000 are far more involved in crypto markets than homeowners with similar finances.
The trend is strongest among people holding between $50,000 and $300,000, too well-off to give up, but unable to buy property.
When renters have a net worth of less than $50,000, investment activity largely stops, not due to a lack of interest, but because there is no spare cash left to risk.
Researchers Lee and Yoo describe crypto investing among younger people as a “last resort” a high-risk gamble taken to close an affordability gap that everyday savings can no longer bridge.
Two Renters Who End Up on Very Different Paths
They argue the reasoning, while bleak, is not hard to follow.
With basic living standards partly protected by welfare support, discouraged renters feel able to take speculative bets on assets such as cryptocurrency, believing the worst-case outcome is limited, the authors wrote.
But the long-term effects, the study warns, can be severe.
Over time, two renters who begin with similar savings can drift onto very different paths. Those who give up on owning a home are more likely to sink into what the report describes as a near-zero wealth trap.
By contrast, peers who still believe homeownership is achievable continue to build assets gradually.
The outlook for younger generations is stark. People born in the 1990s are expected to reach retirement with a homeownership rate 9.6 percentage points lower than their parents, according to the projections.
The pressures described in the research are not limited to the United States.
In South Korea, many young adults refer to themselves as the “Sampo generation,” a label for those who have given up on dating, marriage, and having children because housing has become too expensive.
In Japan, a similar mindset has taken hold among younger people who identify with “Satori,” a term meaning detachment from material goals.
For many, it reflects the belief that owning a home and building a traditional career are out of reach.
I agree with this article from Business Insider. AI is deflationary in nature. It won’t bring deflation, but it will lower the inflationary run rate. The income-generating asset owners should be happy here as costs of capital should continue to decline over time.
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Elon Musk says AI will end America’s debt crisis within 3 years
Elon Musk says AI and robotics are the only way to solve the US debt crisis.
He predicted that growth in goods and services would outpace inflation within three years.
Musk said last month that his Optimus robot could eliminate poverty and the need for human labor.
Elon Musk says the US debt problem has only one escape hatch: AI.
Musk, in a conversation with investor and podcaster Nikhil Kamath published on Sunday, said that the only way out of America’s deepening fiscal hole is productivity driven by AI and robotics.
“That’s pretty much the only thing that’s going to solve for the US debt crisis,” said Musk. “It probably would cause significant deflation,” he added.
The national debt reached $38.34 trillion as of November 26 — more than double its value a decade ago, per data from the US Treasury.
AI has not yet boosted productivity enough to push economic output above the pace of inflation — but that’s about to change, Musk said.
“In three years or less, my guess is goods and services output will exceed the rate of inflation,” he added.
Musk said the advancements in AI and robotics would bring humans to “the point where working is optional,” likely in the next two decades.
Musk described this outcome as “universal high income,” a world where productivity is so high, and goods and services so abundant, that people don’t have to work to meet their basic needs.
Over the past few weeks, Musk has outlined his vision for how AI could remake the global economy.
At a Tesla shareholder event last month, the CEO said its Optimus robot could eliminate poverty and the need for human labor.
“People often talk about eliminating poverty, giving everyone amazing medical care,” Musk said at the shareholder event. “There’s actually only one way to do that, and that’s with the Optimus robot.”
Musk also said at the US-Saudi Investment Forum last month that money would “stop being relevant” in the future of AI.
“There will still be constraints on power like electricity and mass,” Musk said. “But I think at some point currency becomes irrelevant.”
Economists have long touted shorter workweeks from tech-enabled productivity boosts. John Maynard Keynes predicted in 1930 that future generations would work just 15 hours a week thanks to technological progress.
AI will transform the economy
Tech leaders have been vocal about AI’s power to reshape the global economy.
Google CEO Sundar Pichai told the BBC in an interview last month that AI carries the “potential for extraordinary benefits” but will also spark “societal disruptions.”
“It will create new opportunities,” said Pichai. “It will evolve and transition certain jobs, and people will need to adapt. And then there will be areas where it will impact some jobs, so as a society, I think we need to have that conversation.”
Investor Vinod Khosla said in September that AI will eventually handle 80% of the work in 80% of jobs, a shift he said will erode the value of human labor and give people more free time. To avoid a spike in inequality, Khosla said governments will need to adopt a universal basic income.
Not everyone believes the benefits of AI are positive and equally distributed. Geoffrey Hinton, often referred to as the “godfather of AI,” said in an interview with the Financial Times that while AI will generate a “huge rise in profits,” most of that wealth will flow to a small group of people at the top.
“It will make a few people much richer and most people poorer,” Hinton said in September, adding that AI is likely to create “massive unemployment.”
He said the problem isn’t the technology itself, but the “capitalist system” that determines who captures the value AI creates.
Maybe robots can pick up all the rubbish in the third world and stop it going in the sea.
The third worlders won’t do it.
Perhaps the young folk who have given up on any meaningful life other than their fake social media and Tik Tok can pick up trash in exchange for their UBI.
Most of them have been bred and engineered to fear climate change and embrace faggotry.
I suppose you are right. Bending over can be repurposed for picking up trash.
The price of Bitcoin is getting very comfortable down at this level. I’d love to see a big price slash. I’d love to see MSTR get decimated. MSTRs official filings state that its weighted average cost basis on over half a million Bitcoin is about $74,000.
Bitcoin’s price is getting perilously closer. You and I both know there are big traders on the street that are gunning for it. Imagine a scenario where Bitcoin drops to $50,000 and there is a mass unwinding of all of that leverage. The longer it stays down here, the more likely this scenario becomes a reality.
I recall Saylor’s proclamations of Bitcoin purchases between $110,000 and $125,000. He wasn’t deftly trading, he was trying to make a statement. It was an expensive statement. And that’s the way these asset advocates usually are.
I have ample cash in my coinbase account and will wait for this outcome. For those who are patient, I estimate the likelihood at 75%.
One more note. The crypto craze was coincidentally centered around Trump’s Ascension back into power. The mini Republican wipeout this past election day seems to conflate with the recent drops in crypto prices.
If Trump’s power and influence continues to recede over the asset markets, we could see a big crypto Wipeout. If the Democrats take control of the House and Senate next year, I would not really want to be long cryptocurrencies in any true form. At least in the shorter term.
A false binary has been formed. One in which Republicans are proponents of cryptos and the Democrats are seen as the enemies. Whether this is reality or not doesn’t matter.
Of course, there was a similar tableau established with the bioweapon injections. This is why the Democrats took control in the 2020 election. This ensured full bioweapon injection roll out.
Many are waiting for that car crash, although at this point we know it’s here to stay. Seems like an end of year profit taking selloff. Soon expecting a statement Pump, from Trump.
Trump’s losing his grip. His pumps are meaning less and less over time. The false binary anti-crypto Democrats gaining momentum.
Thank the Federal Reserve for this one.
Japan Government Bonds are showing yield spikes that are terribly concerning.
Japan’s 2-Year Yield jumps to the highest level since the run-up to the Global Financial Crisis.
Japan’s 10 year Government Bond has spiked to a yield of 1.838% which is the highest rate since 1998.
And finally, Japan’s 20 Year Bond has jumped to 2.891%, the Highest level since 1998:
The yen continues to fall in value and the BOJ is trying to staunch the bleed.
What’s so sad about the anti-home ownership propaganda is that many of these writers have a vested interest in the growing crypto market. They sucker in the reader from ever wanting to own a home or taking their eye of the ball.