Super gambling devours the world, and you are also becoming a source of income for the market maker.

After all, if we can start over next month, what loss is there in using this month's money for speculation?

Written by: jez

Compiled by: AididiaoJP, Foresight News

What is "Long-term Deterioration"?

"Long-term depravity" is a mental model centered around super gambling. In the author's words, long-term depravity represents "a belief that the world will only become more depraved, financialized, speculative, lonely, tribal, and bizarre."

The most concise and comprehensive explanation for this trend is:

As the real rate of return continues to decline, people often compensate for losses by increasing risk.

The reasons discussed below are diverse, but I hope that after reading this article, as a smart reader, you will return to this sentence and deeply agree with it.

South Korea is the canary in the coal mine, with a vast wealth gap and low social mobility. This means that once you are at a disadvantage, it is difficult to turn your situation around. This has given rise to a crazy tutoring culture, where students study desperately for the College Scholastic Ability Test (CSAT), an exam so important that the entire country makes concessions for it.

For those who perform well in exams, prestigious universities and a good life are beckoning them.

For those who perform poorly, it essentially means there is almost no chance of turning things around.

So, does it mean that many of the largest "fallen" group in the world are Korean? Is that strange? Think about Bill Hwang, Masayoshi Son, and Do Kwon. When traditional upward channels are blocked, the only way to increase returns is to raise risks, and this is super gambling, a future that is approaching everyone.

Long-term degeneracy is your college friends in sports betting; your relatives in trading options; you participate in online communities instead of real-life socializing. These trends are a manifestation of human nature under modern efficiency, seeking the shortest return cycle.

AI will only accelerate long-term decline, and its core logic is that the time window for "success" is shrinking, while any new technological advancements will only make that window shorter.

Although some may try to use this cognition to "save the world," this giant ship is heading straight for the rocks. Instead of trying to change course, it is better to ensure you have a safe spot on the lifeboat.

What is Super Gambling?

Super gambling is a high-risk behavior triggered by the fear of an uncertain financial future.

Rather than trying to define it accurately, it is better to describe the feeling it evokes:

Imagine you are a new college graduate from a middle-class family.

If you don't have student loans, many others do. If you are lucky enough, you find a job with a salary of over $100,000 a year, but many people do not. Even if you are lucky, you will still look up at the sky-high assets (houses, stocks) and try to figure out how you might be able to afford one in 20 years, all while understanding that these assets will only continue to rise during that time.

You are surrounded by successful case studies (often false or survivor bias), and your attention is destroyed by TikTok and YouTube short videos. You have no patience or discipline to take that slow path.

So you start taking excessive risks with your monthly salary: cryptocurrencies, options, meme stocks, meme coins, sports betting. Your logic is: this little money will never be enough to buy a house, but if you win the bet, maybe it could. And if you lose, you just need to wait a week or two to start over.

This is super gambling. If a considerable portion of your net worth is invested in cryptocurrency, congratulations, you are also in super gambling.

Super gambling came into public view during the COVID-19 pandemic. In January 2020, Peter Thiel wrote in a letter to Mark Zuckerberg:

"From the perspective of a generation's broken contract, the answer seems simple: when a person is burdened with too much student debt or when housing prices are unaffordable, they will remain in a state of negative assets for a long time or find it difficult to start accumulating capital in the form of real estate."

Although he talks about the socialist tendencies of the millennial generation, this is just the other side of the same coin. Super gambling is the emerging anger, while socialism is a helpless response.

The core issue is the cost of home ownership and the expected timeline to achieve this goal based on average wages. When this social contract breaks down, people look for shortcuts. The rise of cryptocurrencies, meme stocks, options, and leveraged trading reflects the public's desire for volatility and asymmetric returns, as linear growth has already made homeownership unaffordable.

The downside of repeatedly engaging in high-risk investments is that many people will fail. If you reach the end of the tunnel with nothing to show for it, you will be poorer than before.

Cause

Inequality is an obvious reason that runs through many causes. However, before further discussion, it should be pointed out that in the author's view, the current trend is a return to historical norms. The modern middle class originated from the prosperity after World War II and global labor arbitrage. The traditional definition of the petite bourgeoisie specifically refers to owners of businesses and capital, while knowledge workers still belong to the working class. It is the anger over this compression of life that drives these issues to amplify.

income gap

The key factor is the exacerbation of income and asset inequality. It is not the ratio of the highest earners to the lowest earners, but rather the relationship between wages and housing prices.

As this trend worsens, the linear timeline (finding a regular job, saving money to buy a house) will only get longer until it becomes completely unfeasible. This reflects the compression of expected returns ("finding a good job after graduating from university"), fundamentally driving people to pursue higher returns through higher-risk investments.

Asset prices rise / Denominator approaches zero

At the time of writing this article, housing prices, the S&P 500 index, and Bitcoin are all at historical highs.

It is important that houses cannot be purchased in shares; you can only spend money on rent (or living at home) while saving money. In the worst case, the increase in asset prices outpaces the rate of savings, resulting in never being able to afford it. This fear of "not being able to catch up" drives a higher risk appetite.

The other side of rising asset prices is that the denominator approaches zero. The dollar has depreciated by 10% since the beginning of the year. In a world where consumers continue to experience rapid inflation, how much savings is enough? What can outpace future fiat currency inflation?

Gambling speculation deregulation

Rules are written with blood and tears. Although the author himself may benefit from deregulation, he believes that the gambling trend in the mass market is antisocial.

With the invention of sports betting, prediction markets, online casinos, 0DTE options, and the impending popularity of perpetual contracts, ordinary consumers can enter the world of the fallen with just a click.

This is not a good thing. Many of us who have survived in the cryptocurrency space did so merely by happenstance, having chosen an asset class that rises tenfold every four years. But repeated high-risk financial opportunities can destroy dopamine receptors, disrupt the relationship between effort and reward, and lead to a "complete loss of employability."

Online Dating

The rise of online dating has not only exacerbated the loneliness epidemic.

It also shapes the value of men, at least in terms of how the market perceives male value. Online dating follows a power law distribution, with the top one percent of men receiving disproportionate attention. A common way for men to enhance their market value is through wealth.

Even sex drives men to take on higher risks.

Pay attention to the inevitability of these reasons: increasing income inequality, rising asset prices, increased speculation, and online dating. These trends will only intensify, and the long-term decline will also continue.

Short-term Impact

Cryptocurrency is on the rise. Sports betting is growing, and "buy now, pay later" has become the norm. Savings are decreasing, attention spans are shortening, and money has turned into numbers on a screen. Discord has become the new church, with quasi-social relationships replacing real ones. Birth rates are declining, happiness is decreasing, and the result is further polarization into winners and losers.

Long-term Impact

Derivatives Devour the World

Whether it's perpetual contracts, binary options (prediction markets are a form of binary options), or new tools, the more retail investors are exposed to and adopt, the more you cannot fight against the market.

Effort / Reward Model Crash

Traders are the most affected profession. The work ethic of traders collapses the first time they make a profit; how can they accept working 40 hours a week when they earn less in a year than the numbers that fluctuate on the screen in 40 minutes?

inequality intensifies

The ultimate result of many people's failures is that funds increasingly flow to the winners. Sadly, this further leads to a vicious cycle.

If universal basic income (UBI) is implemented in the future, it will elevate long-term degeneration to new heights. Will people survive on meager allowances, or will they take a gamble for elite status? After all, if next month can start over, what loss is there in using this month's money to speculate?

This viewpoint has been my motto for nearly a decade. I attribute my miraculous recovery to an unwavering belief: "The world will only become more degenerate, financialized, speculative, lonely, tribal, and bizarre," but I have never turned things around through "deeper research," unless you consider any speculation as research. Perpetual contracts, meme coins, and gambling are usually negative expected value (-EV); if you keep participating and losing money, you are a source of profit for others.

Find a way to follow the footsteps of the market maker.