To investors, There is a massive financial crisis underway at the moment. Alarm sirens are going off almost every day. As a friend told me yesterday, “bodies keep floating to the surface.” This is really, really not good. The shut down of Silvergate Bank, along with the takeovers of Silicon Valley Bank and Signature Bank, have been well documented. Two days ago we got word that Credit Suisse was under immense stress and the Swiss National Bank agreed to step in with tens of billions of dollars in liquidity. Yesterday it was announced that First Republic Bank was going to receive $30 billion in deposits from 11 other banks.
I wish there were more passionate people like you that were out there trying to educate the masses. There are a couple points where I disagree with you, but I think it is healthy for those to understand where each person is coming from. I consider myself an expert with insurance, banking, investment management and risk management. I hold an active Series 7 license, formerly Series 66, I hold an MBA with a Finance specialty, and I also have certifications from the CFP board.
With that said, I believe your assessment about the Fed and the system in general not wanting to cause another crash is hopeful at best. But I believe the powers at be actually do want to cause a crash. If one were ignorant or unknowing, you would expect mixed results. However, it seems that their decisions always help those who seem to be in the know, and dumb money typically chases dumb managers. Smart money chase smart managers. Stock investors have been considered the dumb money, while bond investors have been considered the smart money for the last 40 years. This is changing, very quickly. Bond managers are blind to what's ahead, as we can see with failures within bank management such as SVB, Silvergate and Signature Bank. When it comes to investing, the masses are left believing indexing is the way to go, which is trickery of the worst kind, because people genuinely think that indexing is the right way to go. It becomes a self-fulfilling prophecy of more dumb money chasing more dumb indexes that a handful of corporations control, while investors like Warren Buffett and others have purchased the highest quality companies over the last 5 decades, and now these companies become unavailable to purchase on their own, without buying shares in something like Berkshire Hathaway.
The second point I will make is in regards to your comment on Bitcoin. I understand the arguments for and against the maximalist view. This is where having spiritual authority is powerful, because man created Bitcoin. God created precious metals in a massive supernova explosion billions of years ago. Precious metals provide the system a set of checks and balances that is also immutable, where inflation can be fought with deflation, and deflation can be fought with inflation. The most effective way for this inflation/deflation battle to happen is within the mining sector, which has to exist anyways for consumers to consume everything that we see. It is a similar fight of good versus evil, where without evil, people cannot perceive what is good. Both need to exist like YinYang for balance to occur. Commodity prices go up with natural demand, this attracts new investment allocations into the sector. There will be good investments and bad investments. It is up to investors to discern which projects are good and which are not. The facts are, everything is so distorted, that it is more than hard to plan projects a decade in advance. Bitcoin can seem like an immediate solution, but it's greatest strength is also its greatest weakness in having a fixed supply. Deflation naturally occurs as people lose their crypto keys, just like people forget about assets within the system, especially as people die and estates do not catch all assets previously owned by the deceased person. Precious metals naturally increase in supply to meet the demands of the marketplace, and this in turn affects price proportionally. If there is too much supply, as history has shown us from time to time, wealth is still created and dispersed in different ways, most notably with the discovery of massive gold and Silver deposits in the western half of the United States throughout the 19th century. But precious metals can also becomes a life raft. Now Bitcoin can theoretically function in this manner, but there are also substitute imposters that come into the crypto space to try to cause disruption. Bitcoin also becomes the life raft for those within the crypto system, so when other cryptos are imploding, there is this rush to BTC as "perceived safety" within the system, much like bank deposits will rush to JP Morgan under "perceived safety". However both exist within their own imperfect systems, created by man. Fiat is dead, and without access to a bridge to Fiat, BTC and crypto will be quite literally in its own universe of trading. As the old saying goes, Gold is the money of Kings, Silver is the money of Gentlemen, Barter is the money of Peasants, Fiat is the money of Slaves, and Crypto could become on a rung even lower than Fiat, if such a thing is possible. With the introduction of a CBDC impending, the Fed and or Treasury may just extend a temporary bridge for those wanting to escape crypto before the system closes on the crypto system entirely. It is clear the powers that be want to squash the crypto community, and barring any external action, this is what will happen. Precious metals exist outside all of these systems, because they too are incorruptible, but they exist in this reality where I can actually physically hold it and trade it with others, regardless of which tyrannical government we might be under. Not to mention huge adoption by investors into crypto, which exceeded 15%, while less than 1% of people hold physical precious metals. Most of those 15% have sustained major losses, and are at least a generation away from reentering the space with new money. These are just some of my thoughts, and I hope your readers find them enlightening.
I am starting to believe the current banking issues were either allowed to happen or simply orchestrated, with intent to assign blame to crypto-friendly banks, thus attempting (again) to tarnish Bitcoin's reputation, while simultaneously finding an excuse to return to loose monetary policy (saving banks = "greater good"). Our elected officials and other government folks have rarely taken ownership and blame over their own problems for decades, why start now?
This is what we get for pretending we could divorce humanity from the laws of physics and economics simply by green govt. diktat with regard to energy.
Environmental, energy, economic policy. Play stupid games, win stupid prizes. That is what we write about on our Substack.
Anthony,
I wish there were more passionate people like you that were out there trying to educate the masses. There are a couple points where I disagree with you, but I think it is healthy for those to understand where each person is coming from. I consider myself an expert with insurance, banking, investment management and risk management. I hold an active Series 7 license, formerly Series 66, I hold an MBA with a Finance specialty, and I also have certifications from the CFP board.
With that said, I believe your assessment about the Fed and the system in general not wanting to cause another crash is hopeful at best. But I believe the powers at be actually do want to cause a crash. If one were ignorant or unknowing, you would expect mixed results. However, it seems that their decisions always help those who seem to be in the know, and dumb money typically chases dumb managers. Smart money chase smart managers. Stock investors have been considered the dumb money, while bond investors have been considered the smart money for the last 40 years. This is changing, very quickly. Bond managers are blind to what's ahead, as we can see with failures within bank management such as SVB, Silvergate and Signature Bank. When it comes to investing, the masses are left believing indexing is the way to go, which is trickery of the worst kind, because people genuinely think that indexing is the right way to go. It becomes a self-fulfilling prophecy of more dumb money chasing more dumb indexes that a handful of corporations control, while investors like Warren Buffett and others have purchased the highest quality companies over the last 5 decades, and now these companies become unavailable to purchase on their own, without buying shares in something like Berkshire Hathaway.
The second point I will make is in regards to your comment on Bitcoin. I understand the arguments for and against the maximalist view. This is where having spiritual authority is powerful, because man created Bitcoin. God created precious metals in a massive supernova explosion billions of years ago. Precious metals provide the system a set of checks and balances that is also immutable, where inflation can be fought with deflation, and deflation can be fought with inflation. The most effective way for this inflation/deflation battle to happen is within the mining sector, which has to exist anyways for consumers to consume everything that we see. It is a similar fight of good versus evil, where without evil, people cannot perceive what is good. Both need to exist like YinYang for balance to occur. Commodity prices go up with natural demand, this attracts new investment allocations into the sector. There will be good investments and bad investments. It is up to investors to discern which projects are good and which are not. The facts are, everything is so distorted, that it is more than hard to plan projects a decade in advance. Bitcoin can seem like an immediate solution, but it's greatest strength is also its greatest weakness in having a fixed supply. Deflation naturally occurs as people lose their crypto keys, just like people forget about assets within the system, especially as people die and estates do not catch all assets previously owned by the deceased person. Precious metals naturally increase in supply to meet the demands of the marketplace, and this in turn affects price proportionally. If there is too much supply, as history has shown us from time to time, wealth is still created and dispersed in different ways, most notably with the discovery of massive gold and Silver deposits in the western half of the United States throughout the 19th century. But precious metals can also becomes a life raft. Now Bitcoin can theoretically function in this manner, but there are also substitute imposters that come into the crypto space to try to cause disruption. Bitcoin also becomes the life raft for those within the crypto system, so when other cryptos are imploding, there is this rush to BTC as "perceived safety" within the system, much like bank deposits will rush to JP Morgan under "perceived safety". However both exist within their own imperfect systems, created by man. Fiat is dead, and without access to a bridge to Fiat, BTC and crypto will be quite literally in its own universe of trading. As the old saying goes, Gold is the money of Kings, Silver is the money of Gentlemen, Barter is the money of Peasants, Fiat is the money of Slaves, and Crypto could become on a rung even lower than Fiat, if such a thing is possible. With the introduction of a CBDC impending, the Fed and or Treasury may just extend a temporary bridge for those wanting to escape crypto before the system closes on the crypto system entirely. It is clear the powers that be want to squash the crypto community, and barring any external action, this is what will happen. Precious metals exist outside all of these systems, because they too are incorruptible, but they exist in this reality where I can actually physically hold it and trade it with others, regardless of which tyrannical government we might be under. Not to mention huge adoption by investors into crypto, which exceeded 15%, while less than 1% of people hold physical precious metals. Most of those 15% have sustained major losses, and are at least a generation away from reentering the space with new money. These are just some of my thoughts, and I hope your readers find them enlightening.
God bless,
Silence DoGood
☕✝️
is this a peter schiff was right moment?
he's been saying forever that the fed will eventually paint itself into this corner.
dont call 2 consecutive quarters of contracting GDP a recession
dont call a massive injection of liquidity into a failing bank a bail out
dont call giving NEW money to special interests at the expense of all other dollar holders moral hazard
truly orwellian
I am starting to believe the current banking issues were either allowed to happen or simply orchestrated, with intent to assign blame to crypto-friendly banks, thus attempting (again) to tarnish Bitcoin's reputation, while simultaneously finding an excuse to return to loose monetary policy (saving banks = "greater good"). Our elected officials and other government folks have rarely taken ownership and blame over their own problems for decades, why start now?
"they never got inflation below 6%."
?? Headline inflation has been consistently running well below 5% since July. https://twitter.com/asymptosis/status/1636356973317988353
(Year over year is reporting ancient history.)
One of your best pieces yet. Appreciate the concise profile of current issues at hand and foreseen problems ahead.
Yes! Bitcoin will fix this
Great read!
Build Back Better! Here are the full receipts on how ESG/DEI played a role on the SVB collapse: https://yuribezmenov.substack.com/p/svb-linkedin-receipts
This is what we get for pretending we could divorce humanity from the laws of physics and economics simply by green govt. diktat with regard to energy.
Environmental, energy, economic policy. Play stupid games, win stupid prizes. That is what we write about on our Substack.
Name? environMENTAL.
Link next to our name above. (Click "Writes"...).
Join us.