Wednesday, October 04, 2017

The Tech Meltdown

Not everyone agrees with what I write here. In fact, whenever I opine about things, most of the reactions are of the pooh-pooh variety, pummeling me with posts about how far off the mark I am. I know I see things playing out politically, socially or economically, but that's because I view them through a different lens. Every once in a while, though, some of my most fervent critics will return to admit my analysis was correct, albeit a tad premature.

This may be one of those times. So tighten your chinstrap. You may not agree with what's coming.

At the time of this writing, the current national pastime seems to be the undermining of anything having to do with Donald Trump, both personally and professionally. The facts notwithstanding, an ever-shrinking contingent is still protesting pointlessly, although nobody seems to know about what. The entire "progressive" left seems to be riding on momentum now, fueled by their bitterness left over from their losses in the 2016 election. It hasn't much longer to live, however, as Trump's rising economic tide is indeed lifting all boats: Even the most vocal protesters are spending more time watching their 401Ks grow and less time whining about it.

If you're a student of history -- real history, not the revisionist stuff that tears down statues and builds bathrooms dedicated to gender confusion -- you can see that Trump's recovery and reconstruction efforts are working even faster than Ronald Reagan's did during his first term. When Reagan was saddled with repairing the widespread damage done by Jimmy Carter, it took him two full years before the country could begin to feel the ship being righted. In less than nine months after his inauguration, Trump is already way ahead of Reagan's schedule, with just about all sectors of the economy up and improving -- and feeling it.  That's all good news. One sector, however, is likely to head south, and even though nobody wants to hear about it, I'm here to tell you:

The Tech Meltdown is coming -- and way sooner than you think.

Tech giants like Apple, Google, Amazon and even newcomers like Snapchat and other tech-based ventures are completely out of step with what's happening in America. Sure, they're huge and well capitalized. But that's the result of decades of a lackluster economy, when nothing was happening and nobody had any reason to invest in anything else. Decades of malaise instilled the notion that innovation and technology were the future, and millions of boomers and millennials bought into it.

That's all changing.

Of course it's not fashionable to  say it, but America has always been, and likely will always be, an industrial economy. That's not to say that services and technology don't have their places. But industry and manufacturing have always been the engines powering our progress.  You can see it happen now, if you know where to look. Energy, defense, manufacturing and all of their ancillary industries have soared in value -- and real business orders -- since Trump was sworn in.  Don't take my word for it. Check your own stock ticker to see who's up and who's not. Look at GDP rates and real unemployment figures.

All the needles are pointing in the right direction -- and tech has nothing to do with it.

Now that the market has more real options to invest in real companies with real products that pay real dividends and offer real growth, the two decade illusory-yet-unfulfilled promises of tech are becoming increasingly vulnerable. Dark concerns about Apple's built-in obsolescence, Google's omnipotent disregard for privacy and Amazon's anti-trust behavior only add to the mix.  The Silicon Valley venture model of pumping and dumping short-lived, valueless propositions is just as unsustainable. As the internet bubble once taught us, corporate hubris takes you only so far.

That's why the glory days of tech are over. It's only a matter of time until the big selloff hits.

That's the bad news. The good news is that it may just be the ticket to make Bay Area real estate affordable again.


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