2023.45 - Quality

IMHO

Last week Fed Governor Lisa Cook:

"Households, businesses and banks are in pretty good financial health and don’t appear to pose a big threat to the U.S. economy. —Marketwatch

The Personal Savings Rates and Credit Card Debt levels beg to differ, but let's leave that aside for now.

She conveniently failed to give any mention US Government debt.

Just four days later —in an auction that was described as "outright bad"— the government struggled to find buyers for $24 Billion in 30 year debt.

I was surprised to learn this amount would cover only 5 days of US fiscal deficit, then I saw interests now exceed $1 Trillion, an All-Time High.

Never letting a crisis go to waste, they low-key used the lame auction to insert some predictive programming around "cyberattacks" (coming soon to every screen near you) claiming the US arm of a Chinese bank had been crippled by evil hackers.

The colorful story came complete with a slapstick skit featuring USB-stick toting couriers rushing to save the day.

On Thursday, trades handled by the world’s largest bank in the globe’s biggest market traversed Manhattan on a USB stick. —Bloomberg

(I look forward to the Netflix dramatization with Zendaya as the plucky courier who wasn't even supposed to work that day).

The reality is, not only has international appetite for USTs decreased, some countries are being forced to sell US denominated assets (including, but not limited to USTs) to prop up their own currencies.

and US sovereign debt, for all its real preeminence as the anchor of the global financial system, is losing some of its luster. That's not my just opinion, Moody's changed its outlook on US debt from stable to negative, becoming the 3rd major rating agency to downgrade the debt.

It probably didn't help that the Reverse Repo Facility —think of it as the cash equivalent of the Strategic Petroleum Reserve— is being drained at a rapid clip. This "parked" money is being used to buy T-bills. What happens when it runs out?

I have no doubt they'll find some other way to magickally soak up the obscene amounts of debt they'll be issuing, they are absolute masters at this game, but it will be harder for them to keep pretending "everything's fine" like Fed Gov. Lisa Cook is trying to do.

The writing is on the wall. The US is hurling towards a fork in the road, on one side lies a global market meltdown on the other Giga-turbo-moneyprinting.

Spoiler alert, when the sh*t hits the fan, they'll blame the war

Protect Your Ass(ets)

It's no surprise Central Banks (not just India China and Russia) are buying gold at a record clip these days, and they're not buying the paper stuff. The London Vault (LBMA) data shows big drops in gold and silver inventory thanks to buyers taking physical delivery.

Moving gold around and storing it is expensive though as the Dutch Central Bank demonstrated.

Speaking of the Dutch Central Bank, a former Governor thinks adding Bitcoin to their Balance Sheet would be fairly natural

Interestingly, Bitcoin is up almost 4% since the failed auction andGold is down 0.6% could this be —as BlackRock CEO's said a few weeks ago— a "flight to quality"?

Today, you still have the chance to front run institutions, governments, central banks, corporations and most (not all) high-net worth individuals and tech-phobic retail investors (who'll opt for the ETF) to Bitcoin. This window will close faster than you think.

This is not to say Bitcoin is without risks —witness this old-time Bitcoiner having all of his coins stolen:

The good news is the biggest danger to your Bitcoin —without a shadow of a doubt— is the man in the mirror. The user in the example above made a horrible, rookie mistake that was as preventable as not leaving an open briefcase full of cash in a locked car parked in the street.

Your Bitcoin education is one of the highest ROI investments you can make.

Bitcoin News

Friends in High Places

It's nice to see a growing trend of people with influence waving the Bitcoin flag.

Same goes for credible institutions publishing positive, well informed, reports.

Most people are nowhere near ready for Bitcoin, but these little markers suggest that next time they bother to look, they'll see a much more supportive environment.

Legend

I don't remember hearings about Brad Jones before. He presided over the Electric Reliability Council of Texas (ERCOT) and after a tragic Winter storm, he was brought in to help prevent such a disaster from happening again.

The Texas grid has not experienced another blackout since he designed and implemented his grid stabilization program, which was based on "weatherization of old generation equipment and upgrading the ERCOT demand response program through Bitcoin mining."

Brad put in the work to understand how Bitcoin mining could give flexibility to the grid and help make renewable energy generation functional and sustainable.

He was not a hodler himself but he understood and demonstrated BTC's usefulness for stabilizing the grid. May he rest in peace.

if you want to know more about the beneficial impacts of mining, you can check out the report WorldBank released this week:

Growth Spurts

As BTC rises its market cap gets to play the fun game of climbing the ranks of the world's larges assets / currencies. It currently surpasses Visa and Mastercard and Tesla. Berkshire Hathaway is up next.

Sophon

BRC-20 tokens seemed idiotic to me from the get-go, but I never took the time to aticulate why/how. The creator of Sophon just spared me the trouble.

BCR-20 tokens —which are issued and transacted through Inscriptions— are like trying to run a blockchain on a fax machine, funny thought experiment but worthless in real life.

So it was sweet to see someone take the time to demonstrate the stupidity of BRC-20 tokens by breaking them with a few lines of code.

This won't stop Crypto-degens from trading them. They'll trade anything that moves, including tokens that are known frauds:

But it's nice to know I can simply point to this instead of having to tediously explain why BRC-20s are garbage.

Rules

Swan announced your account could be terminated if you deposit straight from or withdraw directly to a mixing wallet. As you might imagine, this ignited quite the sh*storm.

If you take a minute to hear Swan's side of the story, these are simply rules set by the banking entities they need in order to help you convert fiat to Bitcoin.

You can mix (in a separate wallet) one step before sending to or after withdrawing from Swan, they basically need to cover their asses because of regulations.

Quite a bit more concerning is the Travel Rule, which is now being implemented in the UK. Under this rule you can't withdraw to your own wallet unless you have fully KYC'd your address first.

"Crypto" News

The jokes often write themselves

Popcorn

Seems things are about to get spicy in Crypto. Will justin Sun be next to wear the wrist accessory that's all the rage in "crypto" these days?

Speaking of crime. Major Eric Adams had his devices seized, allegedly as part of the FTX investigation. It will be interesting to see how many other politicians get similar treatment (lord knows a ton of them took FTX's money).

This couldn't be just because Adams complained about Biden's open borders now, could it? I guess we'll find out soon.

If you think you're exempt from these dragnets, make sure to dot your "i"s and cross your "t"s because the tax man will not be playing around either.

Last Pass Indeed

Never store your keys digitally. Simple as.

See Spot Run

Seems BlackRock is preparing to file for a spot Ethereum ETF.

This could be funny because —unlike Bitcoin's POW consensus— Ethereum's POS gives large owners the automatic possibility of becoming large stakers, and therefore a larger influence on consensus. I call this tendency to become more centralized over time "centralizing gravity".

'Tarded

If you want to work at the SEC as a "crypto expert" you can't own any crypto. This actually explains a lot.

Fiat News

Cliff

The Shiller PE ratio is:

a valuation measure usually applied to the US S&P 500 equity market. It is defined as price divided by the average of ten years of earnings (moving average), adjusted for inflation.

Meaning it's just one way to sus out whether stocks are historically "cheap or expensive". Right now they're quite expensive by this metric. You can dismiss this as financial astrology but current PE ratios are insane to me.

WeDidn't

WeWork's bankruptcy will likely rock the Commercial Real Estate market.

Dystopian News

CBDEU

The Digitsl Euro is launched. Radioactive cash would be better for your long-term well being than this garbage.

I you want some color on just how bad CBDCs are Ed Dowd (ex BlackRock) spells it out.

El Jefe

This kind of thing is very common in the 3rd world:

A week before "El Jefe" comes to visit the Pueblo, streets are paved, potholes fixed, there are fresh coats of paint everywhere, public lighting is installed —all with impossible efficiency and speed.

In this case, the Pueblo is called San Francisco, and "El Jefe" in question is Xi Jinping who will be visiting Joe Biden.

Message Received

Amazon converted a jail into office space. Consider commercial real estate is in a horrendous slump and Amazon is one of the most profitable companies on earth.

They had their pick from an almost infinite number of office buildings which would have required zero work to "convert them", yet they chose this.

It's not about money... its about sending a message.
—The Joker

Hush

We still pretending Epstein had no customers?
On that note, are we still pretending JPMorgan is reputable?

ThoughtCrime

The EU is considering lesgislation that would scan All messages and content (email, chat, files) for potential thoughtcrime. If your AI overlord finds you suspect you'll be auto-reported to the police. I hear the locust-burgers in the re-education camps are scrumptious.

Price News

ATH

Two years ago, Bitcoin was at its $69,000 All-Time High, but tht's not the only precedent worth keeping in mind

Surfing Bitcoin

This was the 2nd week of Bitcoin enjoying some fresh Air, just standing on the Sand ($34k) surface

Dip Fishing

Bitcoin touched $38k briefly last week, but has mostly hung around $37k, if it keeps it up I'll add it as s support next week. If we dip to $35k snatch some sats.

Calm Chart

November remains modestly green.