tede02

Is anyone else worried that the central banks (the Fed in-particular) have backed themselves into a corner they can't get out? They know as soon as they start to raise rates and slow bond purchases, it's highly likely asset prices go south. If severe enough, it could impact the real economy. Additionally, some suggest there isn't enough demand in the market for treasurys without Fed purchases so they can't stop QE even if they want to without rates going up significantly. Obviously if the 10-year jumps to 5% for example, that is going to create some real problems. So does the Fed just keep right at it because they can't stop? Basically it just seems like we're screwed. LOL.

One of my clients got me into Jameson whiskey. I can see why he likes it. Goes good with lemonade and hot weather.

That's a great line. LMAO over here!

The point around the birth rate slipping to 1 child per couple is well taken. It illustrates how quickly a shift could occur. Even if the birth rate slides to 1.5 children per couple, that causes a 25% reduction in global population. What's kind of crazy is over half of all countries already have a birth rate below 2 according tothe CIA world factbook. https://www.cia.gov/the-world-factbook/field/total-fertility-rate/country-comparison

The inflation topic is interesting. It is weird that as a consumer, one sees inflation everywhere, and yet the CPI figures are still hanging around 2%. It seems like the bigger question is whether the inflation is here to stay. Is most of the inflation due to demand build up and supply constraints related to the pandemic? Does all this get resolved over 12-24 months? Or are we setting up for an extended period of growth and higher prices globally? There's smart people on both sides of this debate.

I appreciate the comments. Was thinking about this further in the context of more immediate implications. In the US, there's a growing fear of China's ascent. In terms of population growth, China is expected to top out by the middle of this decade. It will be quite interesting to see how this impacts growth as the population ages and starts to decline over the coming 20 years. Will the Chinese face the same challenges with growth as basically all the other advanced economies with similar demographic issues (Japan, many European countries, etc.), and therefore all this fear in the west turns out to be over-blown? They still have a much lower GDP per capita so perhaps they can continue ramping that up for decades, but I simply wonder how big of a headwind these demographics will be.

Curious if anyone else is as fascinated with the subject of global population as me. There are different aspects of this subject that are intriguing. As a sportsman, I always wonder what it would have been like to travel North America pre-European settlement. Just to see the mostly virgin land and amount of wild game must have been amazing. As an investor, I always think about what happens when the global population starts to decline. Basically all estimates conclude the world population will peak by the end of this century. Some developed world countries are already shrinking. This BBC article was striking in highlighting a number of countries that could see their populations halved by 2100 (Japan, Italy and Spain in particular). https://www.bbc.com/news/health-53409521 It seems obvious this will lead to massive economic problems. The world economy is based on growth in every respect. What happens when there are empty buildings and houses everywhere because there literally is no one to occupy them? There won't be enough taxpayers to support infrastructure, entitlements, etc. The list just goes on. I don't expect any good answers but it's just a mind-blowing idea to me that we're presently living on the J-curve of the good times but the end of this economic goldilocks period may not be too far off. I think my kids and future grandkids likely won't have to deal with these issues. But my great and great, great grandkids likely will. Side-note - I've also been thinking a lot about the Fermi Paradox. Perhaps the answer is advanced civilizations all eventually implode because they quit reproducing!

I appreciate the comment. The internet analogy resonates with me. I really struggle to see where this is going beyond what looks like wild speculation. But I'm sure many people felt the same in the mid to late nineties regarding the internet. I've spent a fair amount of time reading about crypto to keep an open mind and understand it better. The more I learn the more questions I have. Digital central bank currencies and good old fashion regulation appear to pose some real hurdles. But the blockchain technology itself is interesting and seems to have utility even outside of finance.

Question - Aren't exchanges, like Coinbase, in conflict with the concept of peer to peer/decentralized finance? Aren't these exchanges very much centralized and just more big financial intermediaries that crypto was supposed to displace?

Visa and Mastercard have got to be pretty nervous.

Listened to the Coinbase CEO on CNBC this morning. He had some interesting things to say. For example, his view is most countries will roll out their own digital currencies over time and crypto will be complimentary to them. He also talked about his expectation that governments will regulate as they normally do to maintain control of their respective monetary systems. I'm curious what crypto advocates see for the future? Do people envision going into an ice cream shop or car dealership and having the option to pay in digital dollar, digital yuan, digital euro, bitcoin, ether, etc.? Do people see other means of digital payments as likely (such as paying for things in shares of common stock)? Eliminating intermediaries and instant settlement seem like very important things. But I struggle to see all of these different units being used/accepted for payments ubiquitously. It seems like it would be very complicated administratively and there would be lots of "currency" risk. Alternatively I keep contemplating as to whether crypto currencies end up as more of a trading unit like precious metals and never really take hold as a system of payment. Thanks for any comments. This is an intriguing topic.

I'm surprised there was no discussion about the lengthy article in WSJ about China's rollout of digital currency: https://www.wsj.com/articles/china-creates-its-own-digital-currency-a-first-for-major-economy-11617634118?mod=trending_now_news_pos1 It was a very interesting read. Brings up a number of points of how crypto threatens the control a country has over its monetary system and sovereignty more generally. Also discusses how much leverage the US presently has over foreign governments, businesses and individuals by being able to freeze them out of the global financial system. This leverage could be totally undermined obviously if transactions start settling in other currencies, soverign or defi crypto. The article says 60 countries globally are evaluating the prospects for issuing digital currencies. My takeaway was there is growing pressure for central banks to move forward with digital offerings because of the issues mentioned above. There's also obviously growing competition between the US and China in all kinds of respects, including dominance over the global financial system. The article generates the narrative that western nations are feeling more urgency to get into the game. Lets just say within 10 years, every major nation has a digital currency. What does this mean for crypto and defi? Don't soverign digital currencies present a major threat to non-soverign cryptocurrencies? Are there reasons why soverign and non-soverign would co-exist?

This is not an academic or how-to book but the section of The Big Short describing Cornwall Capital's first big successes buying long-calls on Capital One in the early 2000s was very interesting. The book describes how they figured out that option models tended to misprice situations where a binary outcome existed (recalling this off the top of my head). It is very interesting. Joel Greenblatt's book, You Can Be a Stock Market Genius, also gives a number of case-studies where options were utilized. Worth noting that these books largely highlight situations that worked. Buyer-beware - Options can wipe you out if you don't know what you're doing.

There was an article in the WSJ within the last week that I thought said it best...ultimatley bitcoin is software. More specifically, it is a decentralized account ledger that tracks the finite digital coins & transactions within the network.

Sir I beg to differ. I bought a very average honda suv for $26k, including added after market self driving. If we go back in time to 1990, how much would such a car be worth? I mean it can almost drive itself on hwy. Based on the inflation calculator prices have doubled from 1990 to now. So can I buy a smiilar car for $13k then? I wouldn't think so, so there..... in terms of suvs the price real costs have gone down. In terms of computers, I can buy a minimalist non-laptop computer with a basic monitor for about $200. In 1990, that computer would cost 2-3k? Cell-phones? they didn't exist. Jeans, I remember I had to work hard to save $50 to pay a decent pair of jeans, now? $20! I was a kid and we weren't wealthy and I wanted a chess clock (the type you see on the Queen's Gambit on neflix), those cost $50-80, I had to deliver papers to save up to pay for it. Now? we got the digital chess clocks that are much better, and they are $35, so now I can get a better quality product for less than 1/2 price. Travelling by airlines was a luxury, now it is so common it is like taking a bus. I feel we all just too easily fall into groupthink and don't challenge the complaints and negativity in the media. Inflation index calculates the average living expenses and for the most part I feel it is an accurate reflection but the cost of really long term assets like land and money generating assets, have gone to absurd levels..... cough cough hmmmm tesla cough hmmmmm. All very good points. I was trying to think of where we have experienced inflation. The ones that come to mind are: 1. healthcare 2. childcare 3. education 4. housing The whole debate about inflation vs. deflation is interesting. I heard about a study that valued Google's "free" services (search, email, storage, etc.) at over $20k per year per person. I have no idea of the methodology used. But the greater point is all these things that the internet provides for no-out-of-pocket to consumers definitely does appear deflationary. I heard someone say just this morning that the "inflation animal" that economists are trying to measure today is one that no one has ever seen in the wild. The point this person was making is there are all these online services that are virtually impossible to measure so no one really knows where the hell things are at. That resonated with me.