It is about ten o’clock in the morning on Sunday and I am at the store.
There is a cute scene in the 1981 Disney classic “Dragonslayer” which I am reminded of often now. The story is a classic knight-saves-maiden-from-human-sacrifice tale, with our maiden selected from among the virgin girls to be fed to the dragon for the greater good. The scene I am reminded of takes place the evening before the scheduled, ritual feeding-to-the-dragon, and the knight, Galen, will almost surely be killed as he readies to face the dragon in its lair. Oh, if only there were another way out of this terrible dilemma for them both. The film makers of course are very aware there is another way out, and there is a little moment in the film to acknowledge it in an unspoken way. It’s cute. I keep having that same feeling as I listen to different podcasts and financial news outlets ponder the US dollar’s reserve currency status, where I think: ‘awe, isn’t that cute? They are talking about bitcoin but we are all playing it coy for the kids and not saying bitcoin. So cute!’. Of course, plenty of the pods are saying bitcoin, but the closer one gets to what I think is fashionably called the middle of the Overton window, the coyer the discussion. Just like movie theater audiences will invariably think to themselves (and one or two will invariably yell out) ‘Galen and Valerian should just have sex, then she won’t get sacrificed!’ I feel like yelling into my phone at these interviews: ‘oh, yeah, and there is already a politically neutral, high-functioning alternative with a booming financial services eco-system growing all around it!’. But they know that.
When I hear the discussions about secular transitions from deflationary to inflationary episodes, I have the view that bitcoin brings a lot of gravity with which to affect the process. So, within a framework of dialogues where participants seem to agree, more or less that 1) there will be a big impact from monetary and fiscal actions, 2) that impact should generally be negative effect on USD’s relationship with world trade, that 3) the timing and severity of the negative impact are ameliorated, domestically, by USD’s status as the pre-eminent global reserve currency, and 4) that the transition away from dollar denomination hinges on the lack of an alternative, it makes me think of Galen.
For those interested, I can think of two places where I have recently heard some strong discussions about macro trend shifts, where the discussion of USD’s global reserve status seems to blush toward bitcoin. Both are on Macrovoices podcast. One of those I mentioned previously on Twitter, where you can follow me @goodfindstores Check it out here: https://twitter.com/GoodFindStores/status/1265462553011871744?s=20
The other is a Macrovoices episode I listened to just last night. Check out guest Harley Bassman at about minute 41:00 as he gets into explaining the dynamics he thinks will impact the secular transition:
https://www.podbean.com/ew/pb-sbzi6-e12334
I mean, he even says “there is no plan B”, as if a coy nod to the prominent analyst, thinker and writer from bitcoin Twitter, @100trillionUSD, and all of the bitcoin community.
Mentioned in this episode are a couple other themes I am following, and which are coming up more and more. The first is the idea of investing in art, jewelry, and other stores of value as a hedge against the risks of holding cash during an inflationary episode. It just gets a passing mention in this episode, but this subject is very germane for me since I am naturally long both fine art and jewelry through my resale store. I think antiques will also see a resurgence, if not for their value as decor, or utility items, then for their scarcity of material and construction. The second is the spread trade Mr. Bassman talks about putting on the SPY, to get strong trading leverage on a macro thesis in this messed up market. These are the exact kinds of trades I have been using to deal with the environment, and my speculative objectives. I think even my most recent post about SIVR fits this model of trading, which I wrote about here: http://rwhadvisoryllc.com/animal-spirits-or-spirit-animal/ . So, nice to hear such an experienced voice advocating the strategy I have been using. I have been hating the high cost of premiums on SPY, but maybe will fish around there and some other broad indexes for an appropriate spread trade when the markets open tomorrow.
Final thought:
No day is complete
No cycle can be all through
but for some changes
