"This world of a stable dollar would be wildly bullish for emerging market equities and equities overall" Raoul, is this because less currency risk / more predictability for international investors in equity markets? What else?

"If you adjust the SPX Price-to-Revenue by the Fed Balance Sheet, it actually looks undervalued...This recession saw the cheapest equities in recent history if you use the right denominator." Not sure about the logic here. SPX price and revenue are both measured in fiat currency. If everything is due to fiat currency's overall devaluation, it should affect both price and revenue of SPX. But you're implying it affects only SPX price, but not SPX revenue. For latter, well you can say because real-world inflation is low. But then we're just running in circle of argument. "This recession saw the cheapest equities in recent history if you use the right denominator..." would only be true if you are assuming fiat currency devaluation has no impact on raising SPX revenue. That's hard to justify. You can say SPX revenue is negatively affected by debt, demographics and deflation. But hard to imagine they are not affected by currency devaluation at all, i.e. the actual inflation rate without money printing would be even lower. If both SPX price and revenue are affected by fiat debasement, then you cannot use the Fed balance sheet as denominator for the price/revenue ratio. That just doesn't make sense.

Raoul, this is a freaking amazing report! I have some small gripes but you did an extraordinary job with this. Thank you thank you thank you! Also, please do tell how you manage to be so prolific. Any tips on content creation workflow and time management? Whoever is your research assistant is utterly amazing as well. How do you find and manage your research assistants? Would love to know how you work in general. Anything you can share would be much appreciated.

"I can hear a bunch of Gen X macro cynics sucking in through their teeth, “Cathie Wood!!! She is crazy, ARK is just a retail speculative vehicle. It’s full of illiquid stuff! It’s going to zero when rates go up!!”" Hahaha, I feel attacked. =)

PROFOUND! Thank you for sharing!

So if you are only half a Gen X cynic, instead of ARK, would you just replace that with QQQ?

How do you think Covid will impact your thesis? I think it's early days for the virus variants. There are now over 15 variants in the world, some not of concern but some are. That's in under 18 months. In another 18 months there will potentially exponentially more. I know it feels like we have this thing beat, and I am sure that some countries will adapt quicker than others to new variants. But it feels a tad premature to think this is over by this year. My pharma sources tell me that the vaccines appear to cover the UK and SA variants, but not Brazil. Yes technology will respond, but I can't help but think Covid may change our world for a long time. And many will misjudge how this plays out, maybe myself as well.

Crypto is still in early adoption phase, not clear how to invest. Maybe Bitcoin because of Lindy effect and clear store of value use case. +1 for arkk, other ideas are also interesting. Larger penetration of tech will lead to more regulations. This will slow down innovation. Benedict Evans has a good view on this and other trends. https://youtu.be/6E-r55HS0j4?t=2242 https://www.ben-evans.com/presentations Raul, maybe you can do an interview with him. For network effects deep dive I really like https://www.nfx.com/post/network-effects-manual/ Personally, full-on metaverse is super depressive.

Amazing to be able to bring this level of thinking down to a level that 95+% of readers can understand. No doubt this is a brilliant piece and this sort of thing is why RV is such a great bargain. But the world Raoul has outlined seems potentially very fragile in many ways. What happens to the Facebooks, Netflix, Tesla's, or ARKK's for example, if there is a major/destructive war? Or, what if the income disparity that he has convincingly accounted for causes violent societal upheaval that changes everything? Because if history teaches anything, it is that major change usually brings major stresses/fractures (some of which resolve well and some of which do not - i.e. the difference between the American and French Revolutions). I suppose my over-arching question is this: Let's assume that Raoul is very much on target for how things "might well" develop (makes a lot of sense) in a relatively stress-free world. How do we best protect against the risks typically inherent in the often stressful 4th Turning levels of change?

If you haven't see that already: Cathie Wood and Brett Winton Discuss Big Ideas 2021. https://youtu.be/qKAVn58q5bA

Neal Stephenson would be an interesting guest to provide colour to the Metaverse discussion (did he coin the term?)... much like Neil Howe's prescient observations about our real-world demographic changes, Stephenson long ago imagined the world Piers Kicks described, in the rather dystopian book Snowcrash.

Interesting you mentioned Taiwan, Raoul. Is it a better bet to simply buy TSMC stock? The whole Taiwanese semiconductor ecosystem pretty much revolves around TSMC.

Excellent Raoul. Thank you. If your target for Bitcoin is around $400k this year, which is about 7x from current price of $55k, then has your target of $20k for ETH changed? $20k from current price of $2750 is also 7x. Are you still expecting ETH to outperform BTC for the rest of 2021?

I appreciate you putting yourself out there. This is pretty much the thesis of every inflationist out there (CBs run amok / hyperinflation). However, a denominator problem will have a universal impact, not a select impact. What you're proving it that it is ONLY impacting prices of mainly US equities and mostly US speculative issues (tech/crypto; I'll get to why below). To prove a denominator problem you need to be able to show it in all things denominated by said denominator. Why for example are milk or eggs, etc not going up 15% per year? Why are earnings per share (denominated in dollars) not keeping up with prices per share (using that same denominator)? Why are revenues (also denominated in the same dollar) not following your thesis? Why are dollar wage earners not seeing the same benefit? All of this should scream fed flag on the denominator thesis. A denominator has indiscriminate impact. To prove this to yourself use your Venezuela example and model revenue / earnings / wages, etc as you've done with share prices. Obviously high/hyper inflation will reduce revenues and earnings but you'll see a much more correlated denominator problem vs the dollar today. What I think you're instead witnessing is the incredible wealth creation from the internet age and now with the crypto age. This wealth isn't interested in old industry. It wants to go into the next 100x thing and why not all they know is success. AI, new Tech, Genomes, etc. Trendy assets are in short supply vs all the wealth being created (and yes money does leak from the Fed / BOJ / Ecb etc into assets by design; every secondary issue the fed buys creates a buyer further out on the risk curve lessened by new issuance from the treasury; we can't discount this). Why aren't you seeing it in volumes? Because you need to transact to show up in volume. People are holding (see the passive work from Mike). In fact Mike's black/white marble is the best analogy to use when understanding these bubble dynamics. The asset price issue highlights the problem when too much money chases too few assets. Will it ever become a denominator problem, yes. For every dollar in new deficit matched by a Fed purchase that money goes into the economy and not the asset markets. But in order for that to continue you need to see an ever expanding deficit. If the deficit just stays at this level then all new Fed buys go back to assets. To fix the debt issue they will have no choice but to eliminate it thru the denominator.

Raoul, either you've lost your mind or you are a true visionary....thanks for doing the work to lay out your thesis on the great digital pivot. I understand your thesis, but I agree with others that we face a number of bumps in the road....social disrest, war, climate issues, the stress of citizens migrating from the analog economy to the digital economy (I think this is bigger than most people think) will make adoption from analog to digital a very bumpy, geometric progression. Thanks for the courage for taking a view and putting yourself out there...not too much original thinking back in the analog world.

Raoul, thank you for sharing. I don't doubt you for a minute and what an exciting couple of decades ahead. Brilliant.

Raoul, you either have spent too much time diving and the lack of oxygen is having an effect on your thinking, or you have emerged from numerous days in the metaverse where you can't differentiate reality from the metaverse. This piece expands on themes of past years of work. It is a fascinating theorem that does leave out the human factor. Humans do not like change, and those that do not adept well to change, tend to revolt. The fourth turning may in fact become reality if your metaverse, AI world becomes a reality and thousands find themselves under-employed with a lot of time on their hands or hopelessly enslaved by the metaverse addiction. (Worse than opioids) Just my cynicism rising to the surface. For a guy who doesn't like sci-fi you certainly espouse a lot of it. Keep up the good work. Cheers

Raoul, Brilliant insight, thanks, love the "both ends of the telescope" context, so important, things are never one thing. As an ex gold bug who was always uneasy about the re-introduction of a gold standard, how do you feel about deflationary / hard money? What effect would the hoarding tendency (rather than spending, as there will always be more value tomorrow with hard money) have on the world's broader economy? The idea of hard money is great but what about the reality and unintended consequences? For me this is a really difficult nut to crack, can't see the wood for the trees. Thanks for all you do for us :)

Raoul has now generated some visionary papers over the past few months. They are stretching my “average” brain to its limits I will admit. I like the supporting evidence provided which is sufficient to give me confidence to get involved and see what happens. Raoul you should submit a formal economics paper and if you are proven right, who knows perhaps in 15 years that Nobel Prize for economics could be yours!😉 My only “fly in the ointment” in all of this is your optimism that this will lead to a better world. I worry that humans (and political powers) will do what they seem to do best and screw it up. As a famous UK politician once said “Chance will always play the winning hand and probability has no memory”. We seem to be approaching some form of climax globally and I am not sure it’s a pleasurable outcome. Thoroughly enjoy your work.

Raoul, Excellent report, thank you! So, do you no longer see an equity crash pattern similar to 1929, and what about the insolvency phase bringing the market down? Previously, you have shown charts of the Great Depression and compared equity markets to illustrate that while the market bounced up hard after March 2020, we would have a fairly violent leg down coming. Do you still believe this, or do we have blue skies and clear sailing in equities into the foreseeable future? Thank you!

Raoul, How about spending more time answering your Pro subscribers questions, and maybe a bit less answering every non-subscriber's questions on Twitter?