You just lived through history again. Of course, so many events over the last few months have been historic but the oil rout yesterday is one of the biggest.
In this episode I tackle different types of money, debt, fiat and commodity monies. I discuss how they behave differently as a global money standard. Debt has a unique aspect of global deflation that’s not shared with other forms of money. I discuss bailouts at money replacement, not money expansion. Finally, I wrap up with how this all ends.
In part one of this series I describe two important schools of thought on the global monetary system and the future of the dollar: the Dollar Milkshake and the Eurodollar. Then I try to establish a definition for inflation as a monetary phenomenon based on mainstream Milton Friedman, Mises and my own defintition. Lastly, I ask the question if what we think of as monetary expansion today, is actually monetary expansion.
Legacy markets are beginning to roll back over as the crisis continues. The dollar ($DXY) is breaking 100 again, gold is hitting cycle highs, US 10Y yields are falling, oil broke $20/bbl again, and bitcoin is having a strong green day, with elevated volume. Even stocks are looking droopy.
The holiday weekend was a depressing one for many. Over the past month, on stay at home orders, people have been coming to grips with the current situation (what readers of this newsletter did back in February). Perusing the headlines and social media over the long holiday weekend, I got the feeling a shift is occurring in our thinking. Instead of coming to grips with the current situation, people are starting to process their thoughts about the future.
The Greatest Depression has started. We won’t sugar coat things, it’s going to get much worse before it gets better. While the stock market and other asset prices have stabilized for the time being, fundamentals like unemployment and productivity are still collapsing. We are in the eye of the storm.
Traditional markets are in the eye of the storm. They are enjoying a rally that won’t last. The virus panic, which our benevolent leaders induced, is starting to subside (by design?). The Chinese strategy of lock downs and fabricated numbers to manage public reaction, has been copied to a T. But fake numbers can create productivity.
Hi Bitcoiners, I’m reading through my Friday newsletter The Fundamentals Report #83 along with my extra commentary. Topics covered are the virus and effects of lock downs and shortages in gold and the dollar. I also talk about how bitcoin fits into this market. I touch on bitcoin price analysis, stablecoins, unemployment in the US, and network stats.
Several interesting threads have developed this week. People questioning the government story of the coronavirus and the need for the lock downs and shortages in gold and dollar. The Bitcoin specific news cycle is slow. It’s chugging along. As we’ve said in the past, Bitcoin is in its own world, only affected by deep fundamental cracks in the traditional system.