TwoCitiesCapital

Eh...I mean, I was aware of it 2012/2013 when it was around $100. I don't really frequent 4-chan and didn't live in a dorm at the time...but I am a nerd and did read a lot and follow its booms/busts. Despite hearing/knowing about it, I still didn't buy in and still thought it was a bubble and that Mt. Gox would be the end of it so I don't know really what value there is to ascribe to "hearing" about it that we would judge it by. But sure, I'll cede that it may not be fair to rewind 12 years to its inception. But the fact is rewinding over any period of time greater than 6-months provides outperformance to the USD and most other currencies in 99% of observations. So while it may not be fair to go a full 12-years back to BTC's inception, it's also no not fair to ignore an entire decade plus of outperformance to make a point that is only true of the most recent 6-month period. Also, China does not OWN 50% of BTC. They do represent a large percentage of the miners. I don't think that is necessarily problematic just like I don't think it's necessarily problematic China represents 80% of a lot of industries. But that IS changing and we are seeing businesses migrate to Western domiciles now that China is continuing to be hostile towards BTC while western governments have made soft commitments to regulation rather than outright bans.

They "lost" 65% of their wealth from 3 months ago and still have 300% of their wealth from a year ago. The CPI index was 211.143 in January 2009. CPI index in May 2021 was 269.195. Purchasing power of the dollar is down 22% for El Salvordorans over that period. Losing 22% of accumulated wealth in dollars seems terrible over the course of 12 years...and yet I don't here you talking about the "volatility" of the dollar or the risk they're taking by having their savings/economy denominated in it. For the record, BTC went from $0.01 to $33,000 and has been better than the USD over any time frame barring outside of the last 4-months. Zoom out and you'll get the bigger picture. Bitcoin remains volatile, but gets less so every year. Eventually it will be on par with traditional "major" or "influential" currencies and will have a market cap to match them at that point. Also, volatility is less important if the vast bulk of it is upside volatility as demonstrated by BTC's 12-year history thus far. There are services that exist to immediately convert BTC/USD or USD/BTC based on their preferences. PayPal is already doing this in the U.S. as well. People who do NOT want exposure to BTC do not need to have it to accept BTC as payment. +1. Bitcoin's value is its global network. This grows that network and could be a catalyst for larger adoption overall. I don't expect the U.S. to adopt it willingly - I expect it will do so out of necessity. We won't be the reserve currency forever and at some point we'll be settling our trade in another currency outside of the USD. If half of the global is already accepting BTC? Well, the decision is kind of made for us just like prior reserve currencies were forced into accepting USD. It will happen gradually and then suddenly. I think we're seeing the gradually piece right now as USD dominance is global trade settlements and central bank reserves has likely already peaked. We saw the peak in global reserves (correlated with global trade and need for USD) back in 2000. We're currently at 25-year lows in USD reserves at global central banks. At some point, something has to give.

Where else would you expect it to start? Places like the U.S. and China would PREFER to keep monopoly power over their currencies and continue to abuse the power and privilege that come with it. They'll be the late adopters and will change only when forced to. Countries that have a history of failed money? The perfect spot to implement actual sound money. I'll also add that just 4-months ago, people thought it was absurd that ANY country would accept BTC as legal tender. Now we have to dilute the argument of what it doesn't matter that El Salvador did and try to downplay the "quality" of the countries considering it. Adoption is adoption and the bulls call for increasing corporate and state adoption is turning out to be more accurate than the bears "no one would ever adopt this" argument.

Wish I had the trading acumen of you guys! ? The ride from 65k to 30k (or maybe 20k) has not been as fun as the ride from 10k to 65k was. Kind of crazy the crash is happening in an environment where countries are literally adopting it as use for legal tender...something the bears NEVER thought would happen...but here we are. I still think it's possible we hit 100k this cycle, but certainly looking less and less likely. 65k top is by far the shallowest of all prior booms - even 100k would have been shallow by comparison but we'll see.

To be clear, it wasn't the stablecoin that dropped to zero. The stablecoin dropped to ~0.60 which was the amount of actual backing it had. Any shortfall from a dollar was supposed to be arbitraged by the issuance of the Titan tokens which were valuable at the time. Edited b/c this explains it better: https://thedefiant.io/iron-finance-implodes-after-bank-run/

I dunno. Other "inflation hedges" like precious metals also got crucified. Silver is down 6% today. Gold? 4%. Long bonds are up. S&P is down while Nasdaq is up suggesting it's not just rates but ALL longer duration proxies outperforming. None of that seems right in response to a 0.05% hike in the IOER or inflation concerns being justified. The bond market has been saying there would be no sustainable inflation all along. I wonder if its time for commodities to catch down to that. I say that as someone who is heavily in commodity companies - not b/c of inflation fears but because they were dirt cheap from 2015 - 2020.

https://www.coindesk.com/iron-finance-defi-titan-iron-price-drop Algorithmic stablecoin loses its peg. I have concerns about algorithmic stablecoins. They make more sense to me than fiat backed ones (to the extent crypto should NOT rely on fiat inputs), but I struggle with the incentive structure of maintaining pegs in environments of fierce selling. I know ones like DAI are overcollateralized which is great, but if there is a wave of selling and the collateral value falls, the solution is to liquidate more of that collateral and put more pressure on the price resulting in waterfall liquidation like scenarios. The primary way to reduce the threat of waterfall liquidations? Collateralize with something less volatile and uncorrelated with crypto in general - i.e. stablecoins issued by the likes of Coinbase (USDC) which makes DAI just as centralized and just as dependent on fiat. It would be cool if DeFi could find a way to reliably fix this and have an algorithmic stable coin that is actually stable and not backed by fiat, but I don't think we're quite there yet.

Fed "surprised" the market by projecting two rate hikes (0.50%) over the next 18 month period and the long-bond rallies like crazy in response. Bond market is even LESS convinced of inflation after the Fed meeting acknowledging it and suggesting they'll accelerate rate hikes from prior projections.

Harley Bassman (the fixed income guru behind this ETF product) talks in depth about this on the Macro Voices podcast. I don't recall what the actual "delta" was, but he goes into detail about thinking about sizing in that conversation and provides examples of how much you'd expect this thing to move.

My Primary is my AmEx Platinum. I use it for all major purchases (trust in their customer service to handle any future problems) and travel expenses (5% back in AmEx points w/ very flexible redemption). The lounge access and Global Entry fundamentally improved my travel experience and the AmEx/Delta lounges are 1000x better than most Priority Pass lounges you get with Sapphire Reserve or similar travel cards. I also carry a Citi Double Rewards card that gives me 2% cash back on all purchases with no cap. Simple and Easy. Beyond that, I have in my digital/Google Pay wallet a USAA branded AmEx for use on groceries (3% cash back) and gas (5% cash back) and some other specialty cards like the Amazon branded Visa for 3% cashback on Amazon purchases (or 5% when I'm finessing the free Prime trials). About once a year, I'll sign up for a promotional offer for one card. I sign up, get the promo, refer my gf for the referral bonus, spend the rewards, cancel the card, and then we hit the promos on her card too. We did this with the Southwest card for two years of companion passes, we did this with the Chase Sapphire Reserve back when they were still doing the 100k start up bonus, and have done it with the AmEx gold card when they had attractive signing bonuses. I'm told Discover IT allows you to sign up, get their promo of the additional doubling of ALL cash rewards in the year, and then cancel be eligible for immediate re-up for the same promo. Have a friend who has been doing that for 2-3 years and getting the ~10% cash back which is lucrative, but I find having to keep up with the categories and opting into them every 3 months to be tedious and the additional earnings may not be worthwhile. I also have 2-3 cards that I keep around solely for balance transfer offers where I can float debt for 12-18 months for 2-4% in fees/interest as a cheap form of self-financing.

I'm considering buying more shares at $13 to try to tender for $15. Wouldn't be mad if I get stuck with them though.

I agree. I just think 'eventually' is likely later this decade or the next one IF it happens. My working theory is that demographics, globalization, technological advancement, and private sector debt explosion have all be disinflationary/deflationary over the last 1-2 decades. These factors offset the money printing and is why inflation hawks were wrong each time about massive inflation. After 2-3 decades of limited consumer price inflation, politicians will get comfortable with the idea that money really is free. And that will be precisely the point where the disinflationary drags from these offsetting factors is waning. I could see how we MIGHT get inflation in that environment. But even with demographics, productivity advancement from internet/personal computing/mobile phones, partial reversal of global supply chains, and less reliance on US dollar in global trade (from lower oil consumption) all moving away from being disinflationary, we would still have other deflationary/disinflationary trends to contend with. Technological advancement and productivity gains from A.I. may be massively deflationary. Consumer debt balances will likely grow and any rise in interest rates throttles discretionary spending and thus inflation/economic growth. The trillions printed may largely remain trapped as excess reserves and not circulated throughout the broader economy. Etc. etc. etc. It's a high bar to get lasting inflation in the U.S. and I can't see how it occurs any time soon without something major (like the loss of reserve status) occurring first.

Not to mention the very act of banks hoarding cash, as opposed to lending, is contractionary and disinflationary. This entire economy is floated on credit growth - you cut the growth rate of credit and the impacts on economic growth are dramatic. I can't speak for the big banks, but I know bankers here in the Midwest for local credit unions and the like. They're sitting on tons of cash too, but not because they think prices are rising. It's because they don't have enough money good projects to invest it in and things are arguably shakier today than they were 2-years ago when rates were higher. Or that inflation is already captured in the elevated inflation figures were CURRENTLY seeing and we're on the brink of massive disinflation unless donut prices go up by ANOTHER 50% over the next 2-years. To get consistently elevated inflation, you need consistently rising prices. And those prices need to rise at the same, or an accelerating rate. If a house changes in value from 100k to 200k in a year, your housing inflation rate is 100%. If it goes up by another 100k in year 2, housing inflation is only 50%. If it goes up by another 100k in year 3, inflation drops to 33%. The drop from 100%, to 50%, to 33% is disinflation - a slowing rate of inflation. Any bonds priced for 100% inflation at the beginning of this trend will PRINT MONEY in the environment of 50% and 33% inflation. The bond market knows this and will NOT move to reflect current inflation unless if it becomes convinced that inflation is sustainable and accelerating. So who cares that donuts were up 50% over the past 2-years? That impact is already captured in today's inflation figures and bond yields. All that matters going forward is if they go up another 50% or more over the next 2. B/c if they don't, the impact is disinflationary. What is going to drive a 50% increase in donut prices over the next 2-years? Ongoing stimulus? Ongoing supply chain disruptions? Ongoing wage hikes? Ongoing inelasticity of consumer demand? Most of these seem one-off and dare I say...transitory?

Utility bills? Mine are mostly unchanged from the last year. Real estate costs? Most people buy real estate with debt. And while the price of real estate has gone up, the interest on the debt has come down. The net effect? Real estate is MORE affordable today (from a monthly payment stand point) than it was 1-2 years back. Even rents in many major cities are down. Skilled Labor? Do you have data to back this up? The primary rises in wages I've seen have been at the lower-end of the payment spectrum where it's directly in competition with gov't stimulus. As someone who works in finance, I'm not seeing exploding wages here. We'll see a rise in lower-end wages, but it will likely be a one-time effect. Also, the reduction in stimulus will likely offset much of the impact as incomes are reduced as stimulus is phased out. Healthcare and education have been massively inflationary for the past two decades even while overall inflation remained muted. I don't view their continued trend as the start of a new normal for inflation rates. We can debate as to the causes, but it's not stimulus or supply related.

This will inevitably happen. And if you only focus on the one time it does happen, then you're value of tax loss harvesting will ALWAYS be negative. But if you're doing this regularly across the portfolio, you'll also have instances where you're buying back in lower or the at the same price (both of which are probably more likely since we know momentum tends to persist). And the tax savings in aggregate will probably be worthwhile even if a few of the trades go poorly. Treat it as a system instead of a one-off trade.