It's half of my portfolio and what I signed up for.

Hi Graham, I talked about points only to set-up my comment about IBM. Really, I shouldn’t be talking the Dow at all. It is an antique of an index. United Health is weighted higher than Apple merely because of the price (rather than market cap)...

@ graham r : there's always another point of view. As someone that always looks to express positions using options (primarly short & occasionally long) I always think in $$ movement not %. Why? Because as new positions are established I know my breakevens in $$, the width of spreads in $$, the width of Strangles in $$, etc I find it much easier to mentally process far more quickly by constantly monitoring price movement in $$. Just my $0.02

Well after watching the Jeff Booth's interview with Raoul. I think everything else is noise. In 1800 80% of economy has been farming. If you paid attention to farming you missed industrial revolution. If you pay attention to things mentioned you are going to miss the 80% of the future economy in 100 years. There is a reason to pay unproportional attention to bitcoin. It has a chance to become THE economy.

You may be right John D, and I would even say that Cyrpto Revolution 1.0 is already here, but going back you your example, as long as people continue eating, we must also discuss farming...

Bitcoin is not the economy. It is a medium of exchange and a store of value. DLS

And that daily briefings end up for free on youtube/podcasts.

Altcoins sorry.

Miners have fixed costs and could easily ride down to zero if bitcoin goes to winter for a while.

Hey Robert M, excellent explanation regarding the value of money from a debt, credit and time perspective. Tether on or around Jan 18th, was reported (coinlib) to have purchased $10 Billion worth of Bitcoin, which implies they are by far largest in the bitcoin market. Seems to me Bitcoin and others provide a "legal right" to the crypto holder rather than an "equitable/legal right", such as with stocks, bonds, etc. For myself only, the taking of such risk is spelled: SUCKER. Blockchain certainly appears to have real value, in our ever expanding techno world.

You're assuming this is all about depreciation as some sort of abstract percentage of the dollar from now to some fixed point in the future. Big assumption that as you yourself point out does nothing to explain bitcoin prices or any other price of any other store of value or high-performing asset. An explanation that explains nothing is not worth even one satoshi.

Grow up

I too was curious, with his network and all the great guests on the show with Defi etc. why didn't he just phone them up instead of Twitter plebs

Because it's not about information but beating the tribal drums.

Crypto is the market

It will be crypto winter again soon. In the meantime, there is money to be made

Love this idea of the Gulfstream and my neighbor pilots a Gulfstream for the executives at local utility. 30 million for the jet, 5 million a year to operate. Bitcoin really needs to "take off".

Good response. The market is looking past crypto but now and again looks in the mirror and adjusts corrects. Correct lower tier getting hit now but in time soon upper half will get their turn. Why because demand will fall and the central bankers pull back. What stoppes CB Intervention in markets ? When that happens top tier watch out

Re central banks, I would argue the Fed has almost become a fixed variable now which lessens their importance. Powell has the accelerator pressed to the floor and he isn't going to take it off any time soon. The big questions now revolve around the fiscal path (will it get through congress -- how much and how soon) and yield curve control (how high can 10-year yields rise before the Fed has to implement it, and what will happen to markets if they spike). I also don't understand the 10X BTC call (though I am bullish on BTC and have had a very large position) because it seems completely contra to the other views. If Pal is expecting bonds up, dollar up, stocks down, that implies a liquidity contraction and a withdrawal of risk appetite which at minimum implies a cooling off period for crypto. Then, too, to the extent the BTC use case is rooted in store of value / digital gold, BTC is vulnerable to rising real yields, just as gold is, which could easily be a thing if the 10-year yield rises faster than inflation expectations, which could easily happen in the interim between here and when the Fed is forced to implement YCC.

Ugly but reasonable view. Bitcoin has its adoption curve independent on other stuff, sure short term correlated but not longterm. Adoption of cars went from 10% in 1910 to 80% in 1920 during the World War 1. When the technology is ready nothing stops the S curve.

@ John D. I'm very bullish on Bitcoin longer-term. The challenge I see is that, if Bitcoin's primary use case is digital gold / global store of value -- which I would argue is correct -- that would imply: -- Bitcoin does gold's job better than gold -- Bitcoin is like 21st century gold with a higher beta -- Bitcoin should respond to the same macro drivers as gold By implication, if rising real yields are negative for gold they could be an even larger negative for Bitcoin. Eventually, either runaway inflation breaks out or catastrophic deflation hits, either of which are a recipe for gold $5,000 and Bitcoin $250K or some such, because the first scenario implies plummeting real yields and the second implies runaway debt monetization. But neither are on deck for 2021 -- whereas rising real yields very well could be.

@JL is there not a danger of an another USD spike in the near term? This WSJ news item seems to be in that direction "Yellen to Make Clear U.S. Doesn’t Seek Weak Dollar" https://www.wsj.com/articles/yellen-prepared-to-affirm-commitment-to-market-determined-dollar-value-11610917212 If this happens will it not create a march 2020 like situation? On the other hand Yellen is supporting a big US stimulus package https://www.reuters.com/article/us-usa-biden-treasury/yellen-says-u-s-must-act-big-on-next-coronavirus-relief-package-idUSKBN29N1YJ How does this work, A strong dollar combined with A big US stimulus package? seems contradictory. This part gets confusing. Whats your take?

@ Sara J. Yellen's comments were specifically meant to allow as air cover for CONTINUATION of a weak dollar policy. The Trump administration advocated for a weak dollar to help manufacturers and reduce trade deficits. Trump was very vocal about it. He was probably the only POTUS in history to give an aggressive opinion, repeatedly, on the direction of the currency (rather than letting the Treasury Secretary talk about it). Trump wanted the dollar to be weaker as a form of trade stimulus. This was part of his thing with beating up on Powell for being too hawkish prior to the pandemic. Under the Biden administration, the USD is almost certain to continue weakening for reasons cited already. The U.S. fiscal program will be outsized relative to China and the G7, and there is a global rebalancing going on against the dollar. Yellen is razor sharp and probably knows this. At the same time, she doesn't want the Biden administration accused of trying to weaken the dollar deliberately (a form of currency war). Nor does she want the optics to appear as the Biden administration adopting the vocal weak dollar policy of the Trump administration. So Yellen's comments were a kind of game theory adjustment to the optics. She knows the dollar will probably continue to weaken -- by a lot -- as the Biden administration pumps trillions into the lower half of the economy. So what she does is vocally say, in advance, "WE AREN'T ADVOCATING FOR A WEAK DOLLAR, MARKETS SET POLICY ETC.," specifically so nobody can ACCUSE the Biden admin of wanting a weak dollar policy, or weakening the dollar deliberately, when it continues to fall like a stone. Yellen's husband, George Akerlof, is a specialist in game theory and behavioral economics who won a Nobel Prize for a paper on asymmetric information impacts in the marketplace. And she is probably smarter than he is. She's playing a game. The game is: "Pre-emptively shift blame for the dollar falling further by pointing out loudly that a weak currency isn't our policy" -- it's just something that, you know, happens to occur when you blow away everyone else's fiscal impulse by trillions.

@JL, thanks and I agree, it seems a much clearer. What do you think of Stanley Druckenmiller quotes when he said something in this similar context, He says " if a huge deficit were accompanied by an expansionary fiscal policy and tight monetary policy, the country's currency would actually rise. The dollar provided a perfect test case in the 1981-84 period. At the time, the general consensus was that the dollar would decline because of the huge budget deficit. However, because money was attracted into the country by a tight monetary policy, the dollar actually went sharply higher. " Its from the book "The New Market Wizards" http://y0ungmoney.blogspot.com/2018/06/will-tight-monetary-policy-and-loose.html China is drinking US's milkshake and this might be a way to bring back the capital? What do you think of the chances of Druckenmillers quoted playing out? .

@ Sara J. I think Druckenmiller was correct in the context of a desire for safe haven assets. But the situation he described is different now, and it is important understand the whole context. Druckenmiller used comparable logic (playing the attractiveness of bonds as safe haven assets) in making giant bullish bets on the German deutschmark — once around the fall of the Berlin wall and reunification period, and then once again as an addendum to the famous short British pound trade of 1992, where Quantum Fund made a billion dollars in one day. The way I see it, the question here is desirability of the government securities being issued. Will investors want to buy the bonds? Will there be sufficient appetite for them? In the early 1980s you had a specific set of circumstances that favored U.S. Treasury purchases: — U.S. debt and leverage levels were starting from a low base — U.S. interest rates were high and coming down post-Volcker — U.S. Treasury bonds, and the U.S. economy, had a very bullish outlook In 1984, the 10-year yield was still above 13 percent. So basically, halfway through Reagan's term, you could look at bonds and say: America's outlook is bullish, and interest rates are so high they are likely to fall, which means bonds will rise — so buy treasuries for long-term price appreciation. That was also a point when central banks and emerging markets were building up their U.S. dollar reserves, having observed various crises in Latin America and so on. So their treasury demand was coming off a low base. Druckenmiller was right because he saw, in the mid-1980s environment, that U.S. treasury bonds were highly desirable assets. They had very high rates that were likely to come down, which meant price appreciation, and the world had a growing hunger for dollar assets (especially as the U.S. showed sign of winning the cold war). If you fast forward to 2021, though, the situation is completely reversed: — In the mid-1980s the 10-year yield was above 13%. Now it is close to zero (around one percent). — In the mid-1980s U.S. debt and leverage were coming off a low base. Now it is sky high. — In the mid-1980s global central banks needed to add to their dollar-denominated reserves. Now they are full. But here is the funny thing: I would say the debt expansion argument still applies — but it applies for EUROPE today, not the United States. Central banks already have way too many dollar-denominated assets (reserve mix above 60%) and USTs are not attractive at rock bottom yields and negative real returns. But the more stable the eurozone becomes — and it just got a lot MORE stable after parting ways with Britain — the more that an appetite will exist (particularly from Russia and China) to build up euro-denominated reserves. Imagine if the average central bank reserve mix shifts from USD 60% — > 40% and euro 20% —> 30%. With a shift like that, you would see a LARGE rebalancing away from the dollar and TOWARD euros. That, in turn, would mean a hunger for euro-denominated safe assets. They don't want or need USTs, in part, because they already have a full boat of them. So Druckenmiller was 100% spot on (no surprise) — but you have to look at the desirability of safe haven assets to understand why debt expansion can be favorable to a currency. It happens when there are broader context reasons for global investors to want the debt. With the U.S. in 2021, they aren't going to want more debt. They've already got too much! We already saw evidence of this in 2020 by the way. If I recall correctly, the Fed bought something like $2.8 trillion (or in that neighborhood) worth of USTs in 2020, and they bought MORE than foreign investors did. Then, too, the Biden administration is going to more or less continue the Trump administration's hawkish policies toward China, and emphasize domestic production over international trade. Guess what happens when you reduce the demand for dollars used in international trade transactions? More rebalancing away from dollars, as global exporters don't need so many of them anymore. And on top of everything else, the world is ALSO loaded up on overinflated U.S. equity assets! Guess what happens if the stock market corrects from its crazy-high valuations because the yield on the 10-year spikes? Global investors who are overexposed to U.S. equities will sell their U.S. equities… which means selling dollars… And U.S. investors, meanwhile, are starting to cast a hungry eye on E.M. equities, which look incredibly cheap in comparison to U.S. valuations — but to buy E.M. equities U.S. investors will have to sell dollars! The long-term dollar outlook, quite frankly, is just bearish as hell. Dollar bulls have been dead wrong for a long time now, as I started pointing out on these boards like six months ago.

p.s. Also re Druckenmiller, there is another simple way to look at it (without changing the conclusion). Apart from the desirability of bonds, the U.S. dollar bottomed out in 1978 because Volcker killed inflation expectations with super-hawkish policy. Volcker, the inflation slayer, then just kept ratcheting up the tightness (taking rates into the teens). But how could that ever be possible now? Under what circumstances could the Powell Fed in 2021 implement a Volcker-style monetary tightening? They couldn't. There is too much leverage in the system. If Powell raised the Fed Funds rate just a few hundred basis points, the whole financial system could crash. Meanwhile there is no way long rates will be allowed to go above, say, four percent, because the debt service cost would then become too high. So apart from the safe haven assets argument, if you predicate dollar bullishness on a tight monetary policy environment, that won't exist in the 2020s because the Fed does not have the ability to be tight anymore. They won't have it for a very long time.

@JL Fantastic, really appreciate you taking time to write this insigtful and detailed comments. I really envy your Macro knowledge and clarity around such difficult topics :) Thanks again.

p.p.s. Or rather I should say, the USD bottomed in 1978 even BEFORE Volcker became Fed Chairman -- he was appointed in 79 -- which is interesting too because it implied dollar bearishness due to 1970s inflation had ALREADY burned itself out, before Volcker came in -- and then Volcker's superhawk stance fueled a big multi-year dollar upmove for reasons Druckenmiller described (a super-hawk, insanely tight monetary policy that is no longer an option today).

JL, I am appreciative of your investment insights & views. RV should get you on hehe ... another acceleration to Raoul's platform effect .... RV, one more. Please allow us to reach out to each other subject to both sides consent. For example, I would love to follow JL's work / thoughts, ... Thank you Peter

Hi JL, regarding the weak dollar forecast, would you please comment on why Biden terminated the keystone pipeline project? US$ is closely tied to crude oil since long time ago. Will it turn US from an oil exporter to importer? I don't think it is for the green energy purpose.

@ Lynn J Biden also halted oil and gas development in the Arctic Refuge and plans to freeze oil and gas leasing on federal land. I'm no expert in that area, but my sense is that aggressive movement against fossil fuels is a political strategy meant to appease the progressive wing of the Democratic party. To the extent Biden racks up progressive points on climate change issues, he keeps his political coalition more unified. It's also logical politics for the Democratic base in general (which ranks climate change highly as an issue). I don't really know what reduced U.S. oil and gas supply means for the dollar, other than to say it is generally good news for OPEC-Plus. In the past, the dollars spent on oil imports were parked in U.S. treasuries, but Russia and China are actively trying to shift away from dollar-denominated energy transactions as a response to hostile U.S. policy. If Saudi Arabia joins them (in moving away from dollars as the Biden administration turns hostile toward them too), you have further impetus for dollars going out (via purchase of oil imports) to be dumped on the open market, versus parked in treasury bonds, even as higher oil prices at the margins (via less supply and less shock absorber capacity in U.S. production) increases inflation pressure, which further makes bonds less attractive. So I guess, on balance -- it's political strategy on Biden's part and, probably, another bearish USD element given the growing hostility of OPEC-Plus members to adversarial U.S. foreign policy?

Maybe we should get Raoul a filing cabinet too ...... :-)

Raoul's amazing. Love his perspective. Please have him often. And don't hold back on crypto :)

Are they using make-up now?

His interview questions need an AI Injection. This constant pandering to to Raoul is really wearing thin. Quality of his questions is poor

Mylene: Ha. No AI, filters, or special lights. The trick is...sunlight. My new studio room has a massive window behind my camera.

i think what he is saying is that things are in a log jam right now with no real movement, waiting for a domino to fall, which one nobody knows. As Raoul said; waiting around for a bus and then 3 show up at the same time IMO

It doesn't sound like they will. Janet Yellin just gave a positive speech on regulation.

Actually they floated a CB Crypto....not BTC

Looks like that ‘ gov will ban’ train has left the station but there may be some stops along the way. How a bit (vs an atom) can become an asset is via the same mechanism that determines how a bead, a button or a stone and yes, a gold coin, can become an asset - trust and consensus. If you have the time perhaps read Saifedean Ammous’ book ‘The Bitcoin Standard’. (And btw, most of that book is not about Bitcoin at all !).

You aren't framing the question properly. Why did gold become a store of value? It's just another form of metal. The ultimate answer is because, of all the elements on the periodic table, gold had the most useful set of properties for fulfilling a store of value function. Eventually there was global agreement on this point, because the utility and scarcity of gold was obvious. For Bitcoin it's the same story, but with a digital substrate rather than physical. Whether or not something is a store of value or not is a subjective judgement assigned by a group. But that judgement is often attached to some tangible form of utility. Bitcoin has significant and tangible utility aspects. It can't be copied either, because you can't copy a ten-year transaction history or a global network with millions of users buying in (and the footprint expanding). And it doesn't need to be physical to do what it does. The physicality is in the network, and the shared judgement of those who participate. If you still don't get this, you should ask yourself how abstract concepts like money and credit and sovereignty work. They aren't as obvious as one might assume either.

https://youtube.com/playlist?list=PLSKbCQY095R4jp6PoFulCDLYIzzdbD1DI

Ok, it got better after a while. Ash shook out of his robot self and even managed to feel like a hot-bloodied creature when he talked about Chainlink :D Ah the power of oracles... Am actually looking fwd the breakthrough article and the kick-ass interview ;-)

okay, don't watch.

No, we pay to hear Raoul.

People who like Bitcoin and people who hate Bitcoin all trade Bitcoin because it's volatile and (so far) a tad inefficient. That's the attractive. Bitcoin = alpha.

For the northern hemisphere it’s referred to as seasonality. Flu season starts in November and runs down in March. The charts are truly fascinating. This cycle has tended to reoccur since the European settlement of North America.

Shit accidentally hit submit to soon. ... the most sense for stabilizing the grid. For example the energy web will be used to incentivize EVs to charge when the grid had excess renewable capacity, or setback thermostats when the grid is stressed. The grid is going through the same transition that telecom went through when it converted from landline to wireless. It's a play on metcalf's law (lots of internet connected devices that use energy and the number is growing fast). It's also a play on renewable energy. Look into FERC Order 2222. The stars are aligning.

if you like energy web check out powerledger. Pretty much the exact same goal/ product except not as focused on consumer incentives. They're EWT but mainly have customers in the east. They just partnered with the Indian government for an energy trading p2p POC. They also teamed up with the two largest entities ( one is a public utility) in Thailand for rec and p2p trading.

so do I, maybe we should have a platform poll to ask Ash to bring it back. Maybe Milton can help? :-)

Thanks, Egemen!

hehe

What do We want? the Filing Cabinets back!! When do we want them? Now!!!

We so need action. Indeed, it is to swim together or down together.

Yep! Good to be back!!