Tuesday, June 8, 2021

Random Thoughts

 On the Fed/Treasury money torrent:

1.  Ms. Yelled just said that higher interest rates may be a good thing.

2.  The Fed reverse overnight repo is at approx. $485 billion. So, with one hand the Fed is adding $120 billion per month “permanently” and with the other it is removing 4 months’ worth “temporarily”. An untenable situation, obviously.

==> Conclusion, IMHO? The tapering process has started, even if with the tiniest baby steps.

On Cryptos:

1. The US government identified the digital wallet  used for the pipeline Bitcoin ransom payment, reached in and got most of it back. Doesn’t look too “crypto” to me, eh?

2. El Salvador wants to make Bitcoin legal tender. El Salvador, not, say, Japan…

==> Conclusion, IMHO? The crypto insanity mania is over, from now on only fundamentals will rule their prices.  Most of them (like 99%) will become worthless.

On financial markets:

Deutsche Bank just came out with a scathing critique of printing money, predicting inflation will not be a passing phenomenon and will cause the Fed/ECB to raise rates sharply later, leading to a deep recession. Deutsche is very much going against Wall Street conventional wisdom which, predictably enough, wants the party to keep going.  

==> Conclusion: Deutsche joins a growing list of heavy hitters such as Dalio, Kravis, Grantham, Summers, Druckenmiller and Gross.  Who’s on the other side? Goldman and millions of froth in the mouth Reddit “investors” who plunge into (basically worthless) meme stocks and cryptos.  Oh, fun… (not!).


  1. the Germans should know best eh ... =)

    1. To each their own historic atavism: For Americans it’s deflation, for Germans it’s hyperinflation… 😄

    2. Ah... yes... it is only the Chinese that don't learn from their history.

      In the Ming dynasty, we collected all of Spain's silver; that never made us rich... then we collected all the U.S. dollars; do we feel richer? maybe the solution is to collect all the gold...

      jokes on us... money cannot make you rich...

  2. Say what?

    "MicroStrategy Is Selling Corporate Bonds to Buy Bitcoin"


    1. "MicroStrategy Inc. is borrowing $400 million to buy more Bitcoin while also writing down the value of its existing holdings."

      ...oh boy.

    2. We pursue two corporate strategies: (1) grow our enterprise analytics software business to promote our vision of Intelligence Everywhere and (2) acquire and hold bitcoin,

    3. aka double or nothing… rarely works.