In a 2020 email, Thiel argued that high student debt and unaffordable housing would leave millennials with no stake in the capitalist system, inevitably causing them to turn against it. This prediction highlights the economic roots of modern political shifts among younger generations.

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Social and political chaos are symptoms of a foundational economic decay. When the work-to-reward feedback loop breaks—evidenced by housing becoming unaffordable—people lose faith in the system itself and become open to radical alternatives because they feel they have nothing left to lose.

When the economic system, particularly the housing market, makes it impossible for the youth to get ahead, it guarantees the rise of populism. Desperation leads them to vote for any promise of change, however destructive, such as socialist policies that ultimately collapse the economy.

Young people feel a sense of betrayal after following the prescribed path—good grades, college—only to graduate with immense debt into a job market with few opportunities and an unaffordable housing market. This broken promise fuels their economic anxiety.

Economic policies benefiting older, asset-owning generations at the expense of younger ones are reshaping politics. The traditional left-right divide is becoming less relevant than the conflict between classes, which is highly correlated with age, creating unusual political alliances between formerly opposed groups.

Rising calls for socialist policies are not just about wealth disparity, but symptoms of three core failures: unaffordable housing, fear of healthcare-driven bankruptcy, and an education system misaligned with job outcomes. Solving these fundamental problems would alleviate the pressure for radical wealth redistribution far more effectively.

Pro-socialist views among millennials can be understood as a logical reaction to a "broken generational compact." When economic realities like crushing student debt and unaffordable housing prevent a generation from accumulating capital and gaining a stake in the system, they are naturally inclined to question or reject that system.

The inability for young people to afford assets like housing creates massive inequality and fear. This economic desperation makes them susceptible to populist leaders who redirect their anger towards political opponents, ultimately sparking violence.

The modern economic structure is morally flawed. It pushes people from housing, the only asset they understand, into the stock market, then erodes their wealth via inflation. This act of "stealing" from citizens through monetary policy creates the economic insecurity that fuels populism.

Unlike previous generations engaged in culture wars, Gen Z's primary political motivation is economic stability. They are less interested in ideological battles and more focused on tangible issues like homeownership, affordability, and securing a financial future.

With wages stagnant and traditional assets unaffordable, crypto provides an essential outlet for younger generations to stay ahead of inflation. If this 'release valve' fails, it could channel economic frustration into political extremism and social unrest.