While the bubble was still expanding, everything was going up. "It's all one trade" was the mantra and everybody from private equity, hedge funds, even small businesses and retirees were trying to reach for yield after a decade of anemic interest rates, and trying to outrun inflation - which officially didn't exist - but everybody in the real world knew it was there. At least in terms of asset prices.
Whether you were trying to
And then, as all things must, it came to an end. With inflation surging to generational highs the world over, central banks, led by the Fed were forced into action. They now faced an intractable dilemma - while policy makers pursued a "just right" level of inflation as orthodox canon, runaway inflation is an existential threat to the established order.
Remember the Arab Spring? When about half a dozen governments, were swept away in a matter of months? All of them had stronger, more despotic holds on their populations than ours here in the G20 do, and many of them held an iron grip on power for decades. Their regimes turned to dust in realtime, for all to see.
Seeing that inflation was not at these purportedly benign levels, and that it was definitely not transitory - the central banks of the world were forced to act.
That popped the Everything Bubble. And since then it's still all been One Trade: down.
Since that occurred, the entire investing world, credit markets and financial interests have been waiting for one thing:
It seems inevitable - not the least in which because some central banks have already broken ranks with the Fed and started stealthily propping up their own internal bond markets: the $2 Trillion UK gilt market almost vaporized in October, which ran the risk of sucking up that nation's pension funds into oblivion. They printed.
In Japan they've never stopped printing, it's just stopped working. The Japanese Yen having lost over 20% against the USD this year and their sacred dollar peg is being held together with spit, twist-ties and ever intensifying overnight repo operations.
All that changes.
Vladimir Putin, greedy CEOs, climate change, racism - you name it, as long as it's not central banks printing trillions of dollars for decades or governments buying your votes with borrowed money, it's going to get blamed for inflation.
Investors will be discouraged and scared because even if their stocks are going up in nominal terms, inflation will outpace the nominal gains in a lot of sectors.
Inflation is not good for a lot of companies, and a lot of sectors will underperform for decades or just turn to dust:
Money losing tech unicorns, zombie companies, meme stocks - all the businesses and assets that rode the crest of the Everything Bubble, will not maintain their position when inflation is secular and soaring.
Because here's the next tectonic shift that happens in terms of investment classes is that
But we do know that the zombies and unicorns, and even the juggernauts of the last cycle (like Meta) won't lead the next cycle.
The next cycle will be anchored to the real world (not some fake "meta verse") because inflation, self-inflicted scarcity and supply chain constraints and geo-political tensions will force it to be.
Things not thoughts will be what everybody will be scrambling to own. Hard assets, commodities, energy, cashflow producing businesses (with pricing power) - this is what will be sought after, and investors are going to trade mindshare, "future potential", eyeballs and all other forms of unicorn farts to get it.
You've probably heard a lot of talk about Central Bank Digital Currencies (CBDCs) and how every country on earth wants to roll one out, and how privacy experts are afraid they'll look like China-style social credit systems.
These concerns are 100% warranted because this is exactly where we are going.
But the most important thing to know about this coming transformation of the global financial system isn't that it's a mere switch from one currency to a different one...
In astrophysics, an event horizon is a theoretical border around a black hole, the point at which once a beam of light crosses over it, it can never come back.
Back in 2018 I made an analogy that something similar applied to interest rates: once central bankers touched the zero bound, they were essentially stuck there and could never normalize without wrecking the economy.
We're seeing right now my thesis playing out in the real world - the Fed is trying to come back across the event horizon - and they're crashing the global economy in the process.
Something like this can also happen monetarily - where the current debt-based monetary regime is like a black hole, sucking in all future value into the present (this is what "debt" actually is) at ever accelerating rate until it collapses in on itself.
In human time scales, this could play out over decades, but don't kid yourself into thinking you have the luxury of time to get ready.
When I wrote The Crypto Capitalist Manifesto nearly two years ago, I had a 10 to 20 year time horizon in mind for key aspects I prognosticated therein it to play out.
A lot of hit happened within 18 months
And that point, dear reader, it will already be too late to position yourself for what comes next.
Born in 1930, my mom's childhood consisted mainly of growing up under the Nazis. Near the end of the war she was kicked out of the Hitler Youth for insubordination. In the waning days of WWII, as the Russians were rolling across East Pomerania, where my mom's family lived, the name of the game was to surrender to Western Allies like the Americans, the Brits or the Canadians. No matter what: do not get captured by the Russians (my mother's step-grandmother even gave them cyanide capsules to take should that happen. She would have been 14 at that point).
Her entire village fled, her best friend, cousin Ulla and her family heading out a day before her own - in the same direction, using the same methods as everybody would go - West. By motor-car, open railcars even some horse drawn carts
However, one key difference meant that Ulla's family would never make it to the West, as they were never able to get across the Oder River, and ultimately, they were trapped behind Russian lines. My mom's family, her mother, sister and younger brother - (her father had been sent to the front), made it across.
Germany was carved up as East and West. The East became a communist gulag, while in time, the West became the economic powerhouse of free Europe
She never saw Ulla again, who eked out a meagre, subsistance existence for the remainder of her life in communist East Germany.
The moral of this story is that it only took a small amount of hard assets (and capital mobility) to forever sort these two families into the winners and losers of history. When these Great Bifurcation moments arrive, that can be all it takes to get yourself onto the right side of it.
And history never stops riffing.
The Post-World War II era gave rise to an architecture where American hegemony and a monetary system called Bretton Woods, divided humanity into two spheres: capitalism and communism.
If you wait for the Fed pivot to embrace Crypto Capitalism, you'll be too late.
The reason why is because inflation will kick into overdrive then, and you'll be playing catch-up the entire time.
Most asset prices, including Bitcoin have had a brutal year. Down about 75% from its all time highs close to $70,000 USD in October 2021.
This is pretty typical for Bitcoin. It runs in distinct cycles, but each up-cycle follows a geometric progression.
Let's take a look at the 2013 bear market for Bitcoin:
When the Fed pivots, hard assets like gold and Bitcoin will blast off to the next level up.
If you aren't in Bitcoin already, when that happens, you'll be left behind, and playing catch up. Forever. That's even if you can scrape together enough excess economic value in "carbon world" to buy some Bitcoin with it, and if anybody who already has Bitcoin will even trade it for anything from carbon world.
Most analysts are mis-interpreting where crypto fits in the popping of The Everything Bubble
It means that while the post-Everything Bubble bear market is still fairly young, and may still have a way to play out, when you compare it with previous winters: the crypto winter is actually getting quite long in the tooth,
We've been waiting to see that since at least April of 2022, through all the carnage of this year: Terra/Luna, 3AC, Celsius, Voyager, et al.
But when FTX melted down recently, setting off Yet Another Crypto Contagion, we finally saw one thing we haven't seen yet throughout all the previous mayhem...
With this latest FTX contagion, this has been the the final straw for a lot of market participants. They're done with crypto now. It's over.
There were similarities with today - at least in terms of the stock market.
After a decade of churn, false rallies and downdrafts, and with World War 2 looming in the immediate future, hope was gone - and in 1939 the they couldn't take it anymore, and sold, that last, tragic wave of sellers threw in the towel.
Templeton went on to live a prosperous life. He was given a knighthood. He became a billionaire philanthropist, never losing touch with his deeply held spirituality. He passed away peacefully as at his compound in Bahamas, at age ___
The similarities of the charts between the Great Depression and the crypto winter since the top of the 2017 cycle high are [ something ]
In previous years I had uncovered Tucows when they were a penny stock and bought boatloads of it. It was a nine year hold for me, included an 80% drawdown. I held through that and yet I still sold too early.
Until crypto, this was my single greatest trade of my life.
It was a no-brainer asymmetric trade, and I made my entry into this space - buying some companies at prices so low, than now, even today, after all this crypto carnage, I'm still up 2X or more on a couple of these:
In early 2021 I launched the Crypto Capitalist Letter (now The Bitcoin Capitalist) which started out as the first ever newsletter covering crypto stocks. We've seen astonishing highs that have been followed by mind-numbing, bone grinding lows.
We've expanded the scope to include analysis of the entire digital asset space:
(we issued an urgent bulletin to members to get any assets out of FTX two days before they
And we're positioning now to take full advantage of this point of Maximum Pessimism that is permeating the entire space.
To truly maximize your torque and garner outsized, possibly exponential gains (that you thought only the OGs from prior waves were lucky enough to capture), you step in during the point of Maximum Pessimism - and that point comes after The Capitulation.
You may have seen my writings on technology, surveillance, Big Tech, privacy on Hackernews or AxisOfEasy, you may have read my work on Cantillon Effect, and the coming monetary regime change on Zerohedge, or seen me in Revealed Films. I've written for Coindesk, Bitcoin Magazine and been covered in Wired, Bloomberg, the New York Times and elsewhere.
I don't view this historic transformative shift as a mere money making opportunity, otherwise I would have just been shilling shitcoins regardless of the outcomes. I'm just a small figure in a much, much larger movement.
This movement marches to the mantra "Fix the money, fix the world".
Things are reaching a climax - a long-wave historical process which will culminate within the next few years in a tectonic shift. But the crucial, irreversible milestones could happen within months.
The Crypto Capitalist Letter is your high signal, no bullshit advisory service to help you navigate this arcane and labyrinthian world. Our goal is to preserve wealth, get as much of it out of the reach of the coming social credit / quota based monetary system so you and your family can remain free and self-sovereign.The added benefit is we may even amass even greater prosperity and wealth in doing so, resources that can then be used to
If you front-run the Fed Pivot and get in now, you'll also get these bonuses:
Trial offer is $7 for the first month, renews at $49/monthly. Cancel at any time.
Your information remains private and will not be shared with external sources.