Black Swans need to pay attention to this topic. Many of you may not understand how health and wealth are linked but in the world being built right now by politicians that linkage in a few years will be undeniable and dangerous for those who fail to heed the warnings I am sharing now. This will be the antidote to the medical algorithms you’ll face from the aftermath of this pandemic. The relationship between health and wealth is called “gradient”: the health improves when the income grows, and the poor has worse health than the rich, what means the higher the gradient the better the health.
Now I want you to look at what a leading UK politician recently said to the news below.
^^^^The thinker who is linear will find this argument compelling. But the thinker who plays 4D chess when everyone else is playing checkers will know the data behind these ideas show us something else.
This blog series is about the relationship between health and wealth. The goal is to show that they are connected to each other, and that improving health can lead to improve of wealth.
The first part discusses the effect of health on wealth and vice versa. It shows that better wealth is connected to better health and health increase lead to the wealth increase. This is opposite to what the politician says above.
Then there is a theoretical model by Grossman (1972) and which was modified by Jacobson (2000). The model shows that the health is seen as “a stock” and that individual can invest into the health during the lifetime. The model shows also the change, when there is a family without children (partners can invest into each other’s health) and the family with a child (parents invest into child’s health).
The wage and education effect is shown and developed by Grossman (1972). The increase in wage leads to increase in health, individual has more money to visit the doctors who can give the correct answers to problems and not the ones designed in a government algorithm which goal is to limit government costs. The algorithm is not optimized to your health. This is why it is given away in free healthcare systems.
Why should you come to this site or become my member longer term? I will improve your health and wealth in ways few of you understand now. Any increase in education should also leads to increase in health, but in this case individual gets more information on healthy lifestyle and follows it.
Many literature reviews show how education, social status, early childhood, family and nutrition affect the health span. The better educated (mitochondriacs) have better health and higher income over time. An additional year of education increases the life. I am going to tell that only corresponds to those who get the RIGHT education that marries to ideas that follow nature’s laws.
Lower socioeconomic status increases the probability of consuming unhealthy goods and being less educated. Medical algorithms are built to educate the masses for the benefit of govenrment, not for the public’s good. This defines what a medical tyrrany is.
The subjective social status affects the childhood, the mental health and the income. Family plays a crucial role: the mother’s health, parents education, family’s socioeconomic status effect the health of a child and the future income. The low birth weight, mental health problems in childhood and bad nutrition lead to problems in health in the future and lower income.
When the connection between health and wealth, and factors affecting the health become known, it is easier to implement policies to increase the total health and wealth. The healthy individual is more productive and it eventually leads to economic growth. Right now the world is imploding economically because of virtual reality pandemic built by politicians to bail out a failing monetary policy that is happening globally.
As I mentioned above the relationship between health and wealth is called “gradient”: the health improves when the income grows, and the poor has worse health than the rich, what means the higher the gradient the better the health. Poor health decreases the time available for working and decreases the earnings, at the same time it increases medical expenses, all of these lead to even poorer life than before.
I believe that increasing the health is one way to increase the wealth. Here is an example to support my contentions above.
Candeias (2016) studied the effect of diabetes on the economic growth. The number of people having diabetes is rising. In 2010 around 11.6% of the total health expenditures in the world were spent on diabetes. Candeias writes: “Diabetes, and other preventable non-communicable diseases, can lead to increased absenteeism and reduced productivity while at work, inability to work as a result of disease-related disability, and lost productive capacity due to early mortality and exclusion from the workplace to take care of sick family members.”
Candeias (2016) concludes that preventing diabetes will help to prevent other diseases, like cardiovascular diseases and cancer, and the households can spend more money on other goods and services.
The relation between health and wealth
James P. Smith (1999) made calculations using data from Panel Study of Income Dynamics (PSID). His researches are based on the data from the United States of America. He made a table (Table 1) for different age groups and 3 different years (1984, 1989, 1994), where he showed the correlation between self-reported general health status and income (in 1996 dollars). He noticed that those in excellent health in 1984 have 74 percent more wealth than respondents in fair or poor health do. This difference in income is also related to schooling, “median incomes of 1984 college graduates were $77 000 compared to $ 28 000 among high school dropouts – virtually the same as the income gradient from excellent to poor health.”(Smith, 1999).
According to Smith, changes in health lead to changes in income. Among those in the age group 35- 44, who reported excellent health in 10 years (from 1984 to 1994) the medium income almost increased by $100 000, at the same time the income of those who reported fair or poor health increased only by less than $10 000. So, if the person’s self-estimated health increased from 1984, his or her income also increased.
The other factors which influence health are risk behaviors – like smoking, eating unhealthy food, drinking alcohol etc. These risk behaviors are more common in lower socioeconomic groups. For example, Marmout (1999) has found that the percentage of those with lower incomes or less education smoking is higher than of those who are well educated or earn more. In 1995, 40 percent of men who had not studied in a high school smoked, while only 14 percent of male college graduates smoked. Similar health patterns exist for other risk behaviors.
It is also important to mention that periods of poor health in the middle age has a negative impact on retirement. If the earnings are reduced in the middle age, it will lead to reducing of the pension and social benefits later on. Smith (1999): “Since health status is positively correlated even across quite distant ages, a correlation of retirement income and current health may flow from past health to current retirement income”.
As was mentioned before, health has an important influence on wealth, if the person experience poor health it may reduce the savings and the current income, at the same time it may increase out- of pocket savings. In this sense, the Black Swan should look at “health is a stock“, which has potential effects on future income, consumption and medical expenses.
Smith (1999) made a table using the data from Health and Retirement Survey (HRS) and from the Asset and Health Dynamics of the Oldest Old Survey (AHEAD). The table consists of two households, ages 51-61 and ages 70+, and distributions of out-of-pocket medical expenses separately for those who experienced severe, mild or no new chronic diseases. Smith explained that severe conditions were defined as cancer, heart condition, stroke, and disease of the lung. All other onsets defined as mild.
The results show that the expenses with severe new chronic diseases for average 70+ aged individual are almost double compare to the one with no new chronic disease. And in the age group 51-61 the difference in expenses is more than double. And in both age groups 2 percent with new chronic diseases spent more than $30 000.
Smith argues that these results can be helpful to understand savings behavior that “some current wealth may have been accumulated to deal with today’s health problems”.
The problems in health reduce also the labor supply. In case of family, the spouse can work more and invest into the partner; this can be seen in section 3. But anyway the current health problems may reduce the household income in the retirement period.
Another way when health affects savings is when the individuals want to consume more when they are healthy than during the period when they are sick. So it can be that savings rise if the individual expect himself to get sick.
Smith (1999) also made an empirical model which estimates effects of new chronic health problems on household wealth accumulation and the pathways through which savings effects take place. The data he used was from panel surveys of HRS and AHEAD, he used the ordinary least square regression models and the results are in table 3. The table has 3 columns (dependent variables), which shows “between-wave” (there were several surveys conducted in three different years, and Smith calls these surveys as “waves”) changes in total household wealth, OOP=out-of-pocket medical expenses and total medical expenses. The results are mean estimates.
The table 3 shows that even with the mild onset in ages 51-61 with total medical expenditures $2 555, and the out-of-pocket expenditures are $635, the household wealth is lowered by $3 620. But with the severe onset diseases, when the out-of-pocket medical expenditures are not yet that high, the wealth is lowered by $16 846. The change in wealth is even more dramatic for the household with above median income, the household wealth is lowered by $25 371. There are alsoresults showing that health insurance doesn’t affect much on the incomes lowering, the difference is $175.
Because there was not enough data available for AHEAD, there is no information for mild and severe onset separated. The table 3 shows that any disease lows the income by $10 481. There is no information on total medical expenditure in AHEAD, that’s why Smith put NA in the column. In case of households ages 70+ the income is also has a dramatic lowering for the ones with above median income – $17 040.
Because table 3 doesn’t show the reasons behind the income lowering, except the health conditions, Smith made calculations using “empirical models of the alternative pathways though which wealth accumulation can change – out-of-pocket and total medical expenses, changes in labor supply and household income, changes in bequest intentions, and changes in mortality expectations. Three waves of HRS and two waves of AHEAD were used with separate models estimated for changes observed between each survey wave”. Table 4 shows the results.
From the table 4 can be seen that the out-of-pocket medical expenses are over $1 600, what is low enough compare to the total medical expenses. So the out-of-pocket expenses are not the main reason for the low income. When the new health problem is severe – the change in weekly hours is about 4 hours per week and a 15 percent point decline in the probability of staying at work. And there is no evidence if the person returns to normal weekly hours. The change in own earnings is lowered by around $2 600. The table 4 also shows that with new health “shocks” the person also changes the expectation in probability of living to 75.
Where does BTC, the new stock for the Black Swan fit in this story?
At the same time Smith agreed that these results create a puzzle for us to solve, the out-of-pocket medical expenditures are not that high compare to the total medical expenditures, and the change in income own earnings is not that big, but the total change in wealth, shown in table 3, can be dramatic. This is where the idea of BTC comes in to build your future health.
Smith explained that it can be caused by “measurement issues that understate medical costs or household income changes, or that overstate changes in household wealth. Out-of-pocket medical costs may well understate the full financial costs of an illness. Becoming chronically ill is devastating to wealth, more than any other factor I have researched including taxes. There are expenditures associated with an illness of a family member – transportation, reconfiguration of home care environments, and so on – which people may not think of as medical costs and are often not reimbursed.
“Although household wealth is notoriously difficult to measure, it is not apparent why any errors should be systematically related to health events unless estimates of wealth shift from optimistic to pessimistic with the onset of an illness.”
At the same time with the reduction of income, there is possibility for rising consumption of household; Lillard and Weiss (1993) found out that the marginal utility of consumption increases in periods of poor health. Also people may “invest” in their siblings or consume at a very high rate. So if you begin to spend a lot this will draw down your savings. Relocation to optimal environments is a key health span cost that Black Swans rarely plan for.
The case for membership with me is about education and thinking.
The day this picture was lifted out of the paper BTC was at 14K dollars. Today, it is close to 19K and today is only two weeks later. I told all my members at my July 4th, 2020 event the single greatest thing I could do to help their health right now was to make the case for them to buy any amount of BTC before the election closed in November. On July 4, BTC was below 10K per BTC. Why did I say it? What did I see coming that too few saw coming?
I believe Black Swan mitochondriac education will also help to train people for decision making and problem-solving, to get information about healthy lifestyle and possible treatments. This will help them avoid medical algorithms designed to harm them. Under a Biden regime medical algorithms will take center stage in American healthcare to limit costs by taking care out of healthcare.
Moreover, we know education may have biological effects on the brain.
The other important factor which affects health in the future is the childhood. What will our kids look like in a technocracy going forward? Blue light has a massive effect on embryonic health and this implies the cost of having children is going to skyrocket.
Barker (1997) wrote that the health of an embryo has an effect of the future health problems. For example, the lack of natural light and lowered oxygen tensions for an embryo leads to the low birth weights and to the disproportionate growth in different parts of the body and these can lead to the coronary heart diseases 50 or 60 years later.
Another effect on health during lifetime is stress related to the job and family. In a technocratic society that is limiting our freedoms to gather, celebrate, and live, this has driven the cortisol melatonin axis in health to dangerous levels. This is why suicide and diseases have climbed tremendously this year. More people are dying now of non covid diseases because of policy changes instituted by govenments. None of the policies are sceintfic. When you lose control of freedom you better have a stable of value to support you in a storm. This is why this series is being written. The time is now……..not later to make changes to your life. You may never get this opportunity again.
When the person is under the stress or threat, the level of adrenaline can increase which allows body to perform at higher levels. The trade off is it destroys dopamine and melatonin and sets up the stage for chronic health demise. Increased adrenaline provides simultaneous challenges for blood pressure, heart rate and the immune system. In the short-run this changes are not dangerous, but when the stress occurs too often, the results can lead to disease, like high blood pressure, diabetes or poor sleep.
Income inequality is also one of the key factors which affect health. A common idea is that the social inequality raises levels of psycho-social stress which negatively affects adrenaline and immunological processes. In industrial countries the material level matters less than the fact being at the bottom in the social ranking. (Smith, 1999). Many of you may not understand these linkages but I want you all to know that this doctor does understand it and I want you all to know that talking to your doctor about wealth is a health discussion.
THE TAKE HOME FOR THE MITOCHONDRIAC: Three most important comments made in interview above:
Does he own BTC? No. This means his bias is low.
Is it worth the price today? He says, I don’t know. That is an honest answer.
Is it a durable asset class, that is trackable and has the potential to replace gold? Yes. That tells us he sees the thermodynamic value of BTC to generate wealth to increase our health span.
Black Rock controls 7 Trillion dollars for clients. This tells us, that the Cheif information officer at a behemoth sees the case this asset.
The present reality is now flipping before our eyes my swans – everything will eventually settle in Bitcoin. Data is the new dollar in a post COVID world. Oil -> Bitcoin-> <Bitcoin -> Fiat -> Next commodity Gold -> Bitcoin-> <Bitcoin -> Fiat -> Next commodity. That is the new flow chart.
My parting shot comes from current Kruse Longevity Center member Johan Lindstrom: He made this statement yesterday to me at the pool in Tulum yesterday after he arrived from Norway. “Jack, my family initially thought it was nuts for me to pay out of pocket to see a physician in the USA when I am in pretty good shape, but the results of my visit have not only helped my health, you have helped me create a new wealth platform that has paid for my membership many times over in less than a year. That ability to think outside the box is extremely valuable to me and my family and I appreciate it.”
Health is a function of how well we are able to think.
Johan, a father of three young children now sees how health and wealth are linked. This makes me happy that a citizen of an EU country sees the forrest through the trees.
It is time for some of you to begin to think in non-linear fashion as well. Are you ready? Join my tribe. kruseatdestin.com
CITES:
Grossman M (1972) On the Concept of Health Capital and the Demand for Health. Journal of Political Economy, 80: 223-255
Grossman M (2015) The Relationship between Health and Schooling: What’s new? Nordic Journal of Health Economics, 3(1): 7-17
Jacobson L (2000) The Family as Producer of Health – an Extended Grossman Model. Journal of Health Economics 19: 611-637
Smith JP, Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status, 1999
Candeias V (2016) 5 Reasons why Tackling Diabetes will Boost Economic Growth. https://www.weforum.org/agenda/2016/04/5-reasons-why-tackling-diabetes-boosts-economic- growth/
Strulik H (2018) The Return to Education in Terms of Wealth and Health. The Journal of the Economics of Ageing, 12: 1-14
https://cryptoticker.io/en/bitcoin-over-gold-investment-bank/