Traditional markets were wobbling this week. Interest rate cuts again around the world and all out currency wars, with China weakening the Yuan and most Asian currencies coming under real pressure.
Macquarie bank went first, advising clients to buy “assets with fixed supply”. Well, there is only one such thing in the world and it is bitcoin (even land can be reclaimed), so not exactly a subtle hint. Credit Suisse followed up this morning with advice to private clients “……..negative rates are coming, consider gold, bonds…..and bitcoin”
Remember, central banks have three options. Cut rates, print money or do both. They will do both.
The FT remains one of the few surviving independent newspapers. This weekends opinion piece was quite something, pointing out the madness of central banks, particularly in Europe.
Negative interest rates scare people and aren’t working
The option of central banks buying equities is highly inequitable since only the holders benefit
So, if you are going to give away money, simply do that, print it and give it away
This is where we are, from the leading financial newspaper in the world.
The Weimar Republic
Change a few dates and names and you wouldn’t know this was 100 year’s old.
In 1922 the ministry ordered increased print runs of banknotes, hoping to stimulate the economy and pay striking industrial workers in the Ruhr. Government economists understood the dangers of flooding the economy with paper money; it was intended as a temporary measure rather than a long-term policy. But as the French occupation and the Ruhrkampf continued into the summer and autumn of 1923, the government could find no alternative way to address the crisis. Berlin continued to pump paper money into the German economy, an approach that devalued banknotes and gave rise to the hyperinflation of late 1923. The effects of hyperinflation on German society were disruptive for many and utterly disastrous for some.
Q2 results are in
Another strong quarter of bitcoin sales for Jack Dorsey’s Square. Sales doubled in Q2, with one app now consuming nearly 10% of the entire new bitcoin supply in the quarter.
Feeback from readers
It’s always good to get feedback from readers, if only to confirm that there are any. This week’s was particularly frank:
“you guys are such doomsayers predicting the world is going to end”
A fair comment, and this weeks content proves it. This column generally seeks to highlight some of the imbalances that have built up over the last 10 years. So let’s be positive. Our reason for existing is to tell people that the investment opportunity of a lifetime, with an asymmetric payoff, is now available and a small portion of their investment portfolio should be considered for it.The genius of humanity has created something really amazing. Digital scarcity, it’s exciting, buy some. With this in mind we have written a series about bitcoin, how it works and the economic case for buying some. We’ll circulate this to subscribers in the next few weeks.