Why Bitcoin Is Antifragile. Collective Skin In The Game ...

”[Bitcoin] is a remarkable cryptographic achievement… The ability to create something which is not duplicable in the digital world has enormous value…Lot’s of people will build businesses on top of that.” –Nassim Taleb, Statistician, former trader and risk analyst..

”[Bitcoin] is a remarkable cryptographic achievement… The ability to create something which is not duplicable in the digital world has enormous value…Lot’s of people will build businesses on top of that.” –Nassim Taleb, Statistician, former trader and risk analyst.. submitted by Janetisla0 to u/Janetisla0 [link] [comments]

The Fed's Losing Battle with Technological Deflation

PART 1/4 - FREE MARKET?
First off, let's set the scene.
The stock market is telling you nothing about the real economy anymore.
Economic fundamentals have never mattered as little for the stock market as has been the case during this 11-year bull market.
The correlation between gross-domestic-product growth and the direction of the S&P 500 Index has only been 7% in this cycle - historically it has been 30% to 70%.
Why?
Well, it is the Central Banks, led by the Fed, who printed their way out of the Recession in '08.
In doing so, they have papered over the cracks, and we have seen the longest economic expansion in US history.
However, this is not a particularly meritocratic process: money creation itself increases inequality via the Cantillon Effect, as money printing leads to asset price inflation, which disproportionately benefits the rich and hurts the poor.
Former Federal Reserve Chairman Paul Volcker told the New York Times in 2018:
“The central issue is we’re developing into a plutocracy. We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive."
The reality of course is that this is largely not the case - it is because the game is rigged in their favour.
Now, it is important to emphasise the fact that the path we have taken has resulted in the highest living standards we have seen in human history.
However, the issue, particularly since the US completely abandoned the gold standard in 1971, is that debt has exploded to obscene levels.
We are not operating in a free market if it takes $185 trillion of debt over the last 20 years to create 'growth'.
In fact, the global debt to GDP ratio hit an all-time high of 322% in the third quarter of 2019.
Inflation means that your dollar loses value and thus your purchasing power goes down.
Deflation means that the value of your dollar goes up and your purchasing power goes up.
That's a good thing right? You get more goods and services for less.
Well, no.
If you have deflation, debt explodes in real terms and you can never pay it back.
As the economy is based on debt, if you allow deflation, then you have to reset the debt.
This is why central banks fear deflation so much.
However, the major force driving the human race is technological progress - and this stops for no mortal...
PART 2/4 - TECHNOLOGICAL DEFLATION:
The increased abundance created by technology will result in massive job losses.
Throughout history, doom porn enthusiasts have screamed that the machines are coming for jobs. This is not a new phenomenon.
All technological revolutions are deflationary - since they create "supply side shocks", meaning that they allow for more intensive use of resources and thus higher production. With more goods being produced, all other things being equal, the price of those goods will fall.
In the last 20 years or so, software has disrupted and replaced many established goods and services.
It is in the next 20 years that another disruptive technology is set to take the stage: AI
According to Steve Schwarzman, the co-founder and CEO of The Blackstone Group who has a net worth of $17.6BN:
"This is going to touch everyone's life....you're not going to be able to get away from this technology"
Moreover, this virus will only accelerate this trend towards tech. Zoom is a fantastic example of exactly this.
Old legacy economic systems were not built for this tech deflation, and the thing about exponential growth is that we humans do not intuitively understand it.
As an example, if you folded a piece of paper 51 times, of course you can only fold it seven times, but if you could fold it 51 times, it would reach the Sun!
PART 3/4 - IMPLICATIONS FOR SOCIETY:
The question is: how does this play out?
In the long term, it is the fundamental structure of the economic system that has a significant impact on people's lives, not who is President for 4 to 8 years.
In reality, politicians have limited power and are effectively all puppets. We have seen what happens when a President doesn't stay in their lane...
One could argue that the two main mechanisms of control are:
  1. Divide and Conquer and
  2. Order from Chaos
As we have seen many times in the past, herd psychology is worryingly easy to manipulate...
Speaking of the censorship, in his book Antifragile, Nassim Taleb discusses the anti fragility of information.
Information feeds more on attempts to harm it than it does on efforts to promote it.
A fantastic example of this process is what has happened with London Real: they were banned on LinkedIn and David Icke's interview was censored. Now, regardless of what you think of this particular channel or your thoughts on David Icke and the theories provided, censoring information in this way actually spreads it more virally.
It's fascinating to observe how many views the videos regarding the bans and censorship have relative to the others. And the impact this has had on subscribers.
It is always easier to blame a bigger enemy (or create a new one) rather than to admit it's a structural problem.
Therefore, you avoid short term pain...whatever the cost.
The real question is if and when this situation will lead to social unrest...
PART 4/4 - INTELLECTUAL CAPITALISM:
The depth and width of jobs impacted by AI will continue to increase in the future.
Now this will not necessarily happen straight away.
However, our transition from commodity capitalism to intellectual capitalism is inevitable and the people and nations who fight against this trend will be on the wrong side of history.
From a practical investment perspective, and disclaimer this is not investment advice, network effects are a crucial aspect to consider moving forwards.
Essentially, this means that the value of the network increases with each additional user - all of the tech monopolies have exhibited this property.
An asset which could in time demonstrate very strong network effects is Bitcoin.
Looking at the market cap relative to other asset classes, Bitcoin provides an asymmetric investment opportunity.
Only time will tell...
https://www.youtube.com/watch?v=7nFbKzt-uwE
submitted by financeoptimum to Bitcoin [link] [comments]

The Fed's Losing Battle with Technological Deflation

PART 1/4 - FREE MARKET?
First off, let's set the scene.
The stock market is telling you nothing about the real economy anymore.
Economic fundamentals have never mattered as little for the stock market as has been the case during this 11-year bull market.
The correlation between gross-domestic-product growth and the direction of the S&P 500 Index has only been 7% in this cycle - historically it has been 30% to 70%.
Why?
Well, it is the Central Banks, led by the Fed, who printed their way out of the Recession in '08.
In doing so, they have papered over the cracks, and we have seen the longest economic expansion in US history.
However, this is not a particularly meritocratic process: money creation itself increases inequality via the Cantillon Effect, as money printing leads to asset price inflation, which disproportionately benefits the rich and hurts the poor.
Former Federal Reserve Chairman Paul Volcker told the New York Times in 2018:
“The central issue is we’re developing into a plutocracy. We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive."
The reality of course is that this is largely not the case - it is because the game is rigged in their favour.
Now, it is important to emphasise the fact that the path we have taken has resulted in the highest living standards we have seen in human history.
However, the issue, particularly since the US completely abandoned the gold standard in 1971, is that debt has exploded to obscene levels.
We are not operating in a free market if it takes $185 trillion of debt over the last 20 years to create 'growth'.
In fact, the global debt to GDP ratio hit an all-time high of 322% in the third quarter of 2019.
Inflation means that your dollar loses value and thus your purchasing power goes down.
Deflation means that the value of your dollar goes up and your purchasing power goes up.
That's a good thing right? You get more goods and services for less.
Well, no.
If you have deflation, debt explodes in real terms and you can never pay it back.
As the economy is based on debt, if you allow deflation, then you have to reset the debt.
This is why central banks fear deflation so much.
However, the major force driving the human race is technological progress - and this stops for no mortal...
PART 2/4 - TECHNOLOGICAL DEFLATION:
The increased abundance created by technology will result in massive job losses.
Throughout history, doom porn enthusiasts have screamed that the machines are coming for jobs. This is not a new phenomenon.
All technological revolutions are deflationary - since they create "supply side shocks", meaning that they allow for more intensive use of resources and thus higher production. With more goods being produced, all other things being equal, the price of those goods will fall.
In the last 20 years or so, software has disrupted and replaced many established goods and services.
It is in the next 20 years that another disruptive technology is set to take the stage: AI
According to Steve Schwarzman, the co-founder and CEO of The Blackstone Group who has a net worth of $17.6BN:
"This is going to touch everyone's life....you're not going to be able to get away from this technology"
Moreover, this virus will only accelerate this trend towards tech. Zoom is a fantastic example of exactly this.
Old legacy economic systems were not built for this tech deflation, and the thing about exponential growth is that we humans do not intuitively understand it.
As an example, if you folded a piece of paper 51 times, of course you can only fold it seven times, but if you could fold it 51 times, it would reach the Sun!
PART 3/4 - IMPLICATIONS FOR SOCIETY:
The question is: how does this play out?
In the long term, it is the fundamental structure of the economic system that has a significant impact on people's lives, not who is President for 4 to 8 years.
In reality, politicians have limited power and are effectively all puppets. We have seen what happens when a President doesn't stay in their lane...
One could argue that the two main mechanisms of control are:
  1. Divide and Conquer and
  2. Order from Chaos
As we have seen many times in the past, herd psychology is worryingly easy to manipulate...
Speaking of the censorship, in his book Antifragile, Nassim Taleb discusses the anti fragility of information.
Information feeds more on attempts to harm it than it does on efforts to promote it.
A fantastic example of this process is what has happened with London Real: they were banned on LinkedIn and David Icke's interview was censored. Now, regardless of what you think of this particular channel or your thoughts on David Icke and the theories provided, censoring information in this way actually spreads it more virally.
It's fascinating to observe how many views the videos regarding the bans and censorship have relative to the others. And the impact this has had on subscribers.
It is always easier to blame a bigger enemy (or create a new one) rather than to admit it's a structural problem.
Therefore, you avoid short term pain...whatever the cost.
The real question is if and when this situation will lead to social unrest...
PART 4/4 - INTELLECTUAL CAPITALISM:
The depth and width of jobs impacted by AI will continue to increase in the future.
Now this will not necessarily happen straight away.
However, our transition from commodity capitalism to intellectual capitalism is inevitable and the people and nations who fight against this trend will be on the wrong side of history.
From a practical investment perspective, and disclaimer this is not investment advice, network effects are a crucial aspect to consider moving forwards.
Essentially, this means that the value of the network increases with each additional user - all of the tech monopolies have exhibited this property.
An asset which could in time demonstrate very strong network effects is Bitcoin.
Looking at the market cap relative to other asset classes, Bitcoin provides an asymmetric investment opportunity.
Only time will tell...
https://www.youtube.com/watch?v=7nFbKzt-uwE
submitted by financeoptimum to CryptoCurrency [link] [comments]

The Fed's Losing Battle with Technological Deflation

PART 1/4 - FREE MARKET?
First off, let's set the scene.
The stock market is telling you nothing about the real economy anymore.
Economic fundamentals have never mattered as little for the stock market as has been the case during this 11-year bull market.
The correlation between gross-domestic-product growth and the direction of the S&P 500 Index has only been 7% in this cycle - historically it has been 30% to 70%.
Why?
Well, it is the Central Banks, led by the Fed, who printed their way out of the Recession in '08.
In doing so, they have papered over the cracks, and we have seen the longest economic expansion in US history.
However, this is not a particularly meritocratic process: money creation itself increases inequality via the Cantillon Effect, as money printing leads to asset price inflation, which disproportionately benefits the rich and hurts the poor.
Former Federal Reserve Chairman Paul Volcker told the New York Times in 2018:
“The central issue is we’re developing into a plutocracy. We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive."
The reality of course is that this is largely not the case - it is because the game is rigged in their favour.
Now, it is important to emphasise the fact that the path we have taken has resulted in the highest living standards we have seen in human history.
However, the issue, particularly since the US completely abandoned the gold standard in 1971, is that debt has exploded to obscene levels.
We are not operating in a free market if it takes $185 trillion of debt over the last 20 years to create 'growth'.
In fact, the global debt to GDP ratio hit an all-time high of 322% in the third quarter of 2019.
Inflation means that your dollar loses value and thus your purchasing power goes down.
Deflation means that the value of your dollar goes up and your purchasing power goes up.
That's a good thing right? You get more goods and services for less.
Well, no.
If you have deflation, debt explodes in real terms and you can never pay it back.
As the economy is based on debt, if you allow deflation, then you have to reset the debt.
This is why central banks fear deflation so much.
However, the major force driving the human race is technological progress - and this stops for no mortal...
PART 2/4 - TECHNOLOGICAL DEFLATION:
The increased abundance created by technology will result in massive job losses.
Throughout history, doom porn enthusiasts have screamed that the machines are coming for jobs. This is not a new phenomenon.
All technological revolutions are deflationary - since they create "supply side shocks", meaning that they allow for more intensive use of resources and thus higher production. With more goods being produced, all other things being equal, the price of those goods will fall.
In the last 20 years or so, software has disrupted and replaced many established goods and services.
It is in the next 20 years that another disruptive technology is set to take the stage: AI
According to Steve Schwarzman, the co-founder and CEO of The Blackstone Group who has a net worth of $17.6BN:
"This is going to touch everyone's life....you're not going to be able to get away from this technology"
Moreover, this virus will only accelerate this trend towards tech. Zoom is a fantastic example of exactly this.
Old legacy economic systems were not built for this tech deflation, and the thing about exponential growth is that we humans do not intuitively understand it.
As an example, if you folded a piece of paper 51 times, of course you can only fold it seven times, but if you could fold it 51 times, it would reach the Sun!
PART 3/4 - IMPLICATIONS FOR SOCIETY:
The question is: how does this play out?
In the long term, it is the fundamental structure of the economic system that has a significant impact on people's lives, not who is President for 4 to 8 years.
In reality, politicians have limited power and are effectively all puppets. We have seen what happens when a President doesn't stay in their lane...
One could argue that the two main mechanisms of control are:
  1. Divide and Conquer and
  2. Order from Chaos
As we have seen many times in the past, herd psychology is worryingly easy to manipulate...
Speaking of the censorship, in his book Antifragile, Nassim Taleb discusses the anti fragility of information.
Information feeds more on attempts to harm it than it does on efforts to promote it.
A fantastic example of this process is what has happened with London Real: they were banned on LinkedIn and David Icke's interview was censored. Now, regardless of what you think of this particular channel or your thoughts on David Icke and the theories provided, censoring information in this way actually spreads it more virally.
It's fascinating to observe how many views the videos regarding the bans and censorship have relative to the others. And the impact this has had on subscribers.
It is always easier to blame a bigger enemy (or create a new one) rather than to admit it's a structural problem.
Therefore, you avoid short term pain...whatever the cost.
The real question is if and when this situation will lead to social unrest...
PART 4/4 - INTELLECTUAL CAPITALISM:
The depth and width of jobs impacted by AI will continue to increase in the future.
Now this will not necessarily happen straight away.
However, our transition from commodity capitalism to intellectual capitalism is inevitable and the people and nations who fight against this trend will be on the wrong side of history.
From a practical investment perspective, and disclaimer this is not investment advice, network effects are a crucial aspect to consider moving forwards.
Essentially, this means that the value of the network increases with each additional user - all of the tech monopolies have exhibited this property.
An asset which could in time demonstrate very strong network effects is Bitcoin.
Looking at the market cap relative to other asset classes, Bitcoin provides an asymmetric investment opportunity.
Only time will tell...
https://www.youtube.com/watch?v=7nFbKzt-uwE
submitted by financeoptimum to investing_discussion [link] [comments]

The Fed's Losing Battle with Technological Deflation

PART 1/4 - FREE MARKET?
First off, let's set the scene.
The stock market is telling you nothing about the real economy anymore.
Economic fundamentals have never mattered as little for the stock market as has been the case during this 11-year bull market.
The correlation between gross-domestic-product growth and the direction of the S&P 500 Index has only been 7% in this cycle - historically it has been 30% to 70%.
Why?
Well, it is the Central Banks, led by the Fed, who printed their way out of the Recession in '08.
In doing so, they have papered over the cracks, and we have seen the longest economic expansion in US history.
However, this is not a particularly meritocratic process: money creation itself increases inequality via the Cantillon Effect, as money printing leads to asset price inflation, which disproportionately benefits the rich and hurts the poor.
Former Federal Reserve Chairman Paul Volcker told the New York Times in 2018:
“The central issue is we’re developing into a plutocracy. We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive."
The reality of course is that this is largely not the case - it is because the game is rigged in their favour.
Now, it is important to emphasise the fact that the path we have taken has resulted in the highest living standards we have seen in human history.
However, the issue, particularly since the US completely abandoned the gold standard in 1971, is that debt has exploded to obscene levels.
We are not operating in a free market if it takes $185 trillion of debt over the last 20 years to create 'growth'.
In fact, the global debt to GDP ratio hit an all-time high of 322% in the third quarter of 2019.
Inflation means that your dollar loses value and thus your purchasing power goes down.
Deflation means that the value of your dollar goes up and your purchasing power goes up.
That's a good thing right? You get more goods and services for less.
Well, no.
If you have deflation, debt explodes in real terms and you can never pay it back.
As the economy is based on debt, if you allow deflation, then you have to reset the debt.
This is why central banks fear deflation so much.
However, the major force driving the human race is technological progress - and this stops for no mortal...
PART 2/4 - TECHNOLOGICAL DEFLATION:
The increased abundance created by technology will result in massive job losses.
Throughout history, doom porn enthusiasts have screamed that the machines are coming for jobs. This is not a new phenomenon.
All technological revolutions are deflationary - since they create "supply side shocks", meaning that they allow for more intensive use of resources and thus higher production. With more goods being produced, all other things being equal, the price of those goods will fall.
In the last 20 years or so, software has disrupted and replaced many established goods and services.
It is in the next 20 years that another disruptive technology is set to take the stage: AI
According to Steve Schwarzman, the co-founder and CEO of The Blackstone Group who has a net worth of $17.6BN:
"This is going to touch everyone's life....you're not going to be able to get away from this technology"
Moreover, this virus will only accelerate this trend towards tech. Zoom is a fantastic example of exactly this.
Old legacy economic systems were not built for this tech deflation, and the thing about exponential growth is that we humans do not intuitively understand it.
As an example, if you folded a piece of paper 51 times, of course you can only fold it seven times, but if you could fold it 51 times, it would reach the Sun!
PART 3/4 - IMPLICATIONS FOR SOCIETY:
The question is: how does this play out?
In the long term, it is the fundamental structure of the economic system that has a significant impact on people's lives, not who is President for 4 to 8 years.
In reality, politicians have limited power and are effectively all puppets. We have seen what happens when a President doesn't stay in their lane...
One could argue that the two main mechanisms of control are:
  1. Divide and Conquer and
  2. Order from Chaos
As we have seen many times in the past, herd psychology is worryingly easy to manipulate...
Speaking of the censorship, in his book Antifragile, Nassim Taleb discusses the anti fragility of information.
Information feeds more on attempts to harm it than it does on efforts to promote it.
A fantastic example of this process is what has happened with London Real: they were banned on LinkedIn and David Icke's interview was censored. Now, regardless of what you think of this particular channel or your thoughts on David Icke and the theories provided, censoring information in this way actually spreads it more virally.
It's fascinating to observe how many views the videos regarding the bans and censorship have relative to the others. And the impact this has had on subscribers.
It is always easier to blame a bigger enemy (or create a new one) rather than to admit it's a structural problem.
Therefore, you avoid short term pain...whatever the cost.
The real question is if and when this situation will lead to social unrest...
PART 4/4 - INTELLECTUAL CAPITALISM:
The depth and width of jobs impacted by AI will continue to increase in the future.
Now this will not necessarily happen straight away.
However, our transition from commodity capitalism to intellectual capitalism is inevitable and the people and nations who fight against this trend will be on the wrong side of history.
From a practical investment perspective, and disclaimer this is not investment advice, network effects are a crucial aspect to consider moving forwards.
Essentially, this means that the value of the network increases with each additional user - all of the tech monopolies have exhibited this property.
An asset which could in time demonstrate very strong network effects is Bitcoin.
Looking at the market cap relative to other asset classes, Bitcoin provides an asymmetric investment opportunity.
Only time will tell...
https://www.youtube.com/watch?v=7nFbKzt-uwE
submitted by financeoptimum to InvestmentEducation [link] [comments]

The Fed's Losing Battle with Technological Deflation

PART 1/4 - FREE MARKET?
First off, let's set the scene.
The stock market is telling you nothing about the real economy anymore.
Economic fundamentals have never mattered as little for the stock market as has been the case during this 11-year bull market.
The correlation between gross-domestic-product growth and the direction of the S&P 500 Index has only been 7% in this cycle - historically it has been 30% to 70%.
Why?
Well, it is the Central Banks, led by the Fed, who printed their way out of the Recession in '08.
In doing so, they have papered over the cracks, and we have seen the longest economic expansion in US history.
However, this is not a particularly meritocratic process: money creation itself increases inequality via the Cantillon Effect, as money printing leads to asset price inflation, which disproportionately benefits the rich and hurts the poor.
Former Federal Reserve Chairman Paul Volcker told the New York Times in 2018:
“The central issue is we’re developing into a plutocracy. We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive."
The reality of course is that this is largely not the case - it is because the game is rigged in their favour.
Now, it is important to emphasise the fact that the path we have taken has resulted in the highest living standards we have seen in human history.
However, the issue, particularly since the US completely abandoned the gold standard in 1971, is that debt has exploded to obscene levels.
We are not operating in a free market if it takes $185 trillion of debt over the last 20 years to create 'growth'.
In fact, the global debt to GDP ratio hit an all-time high of 322% in the third quarter of 2019.
Inflation means that your dollar loses value and thus your purchasing power goes down.
Deflation means that the value of your dollar goes up and your purchasing power goes up.
That's a good thing right? You get more goods and services for less.
Well, no.
If you have deflation, debt explodes in real terms and you can never pay it back.
As the economy is based on debt, if you allow deflation, then you have to reset the debt.
This is why central banks fear deflation so much.
However, the major force driving the human race is technological progress - and this stops for no mortal...
PART 2/4 - TECHNOLOGICAL DEFLATION:
The increased abundance created by technology will result in massive job losses.
Throughout history, doom porn enthusiasts have screamed that the machines are coming for jobs. This is not a new phenomenon.
All technological revolutions are deflationary - since they create "supply side shocks", meaning that they allow for more intensive use of resources and thus higher production. With more goods being produced, all other things being equal, the price of those goods will fall.
In the last 20 years or so, software has disrupted and replaced many established goods and services.
It is in the next 20 years that another disruptive technology is set to take the stage: AI
According to Steve Schwarzman, the co-founder and CEO of The Blackstone Group who has a net worth of $17.6BN:
"This is going to touch everyone's life....you're not going to be able to get away from this technology"
Moreover, this virus will only accelerate this trend towards tech. Zoom is a fantastic example of exactly this.
Old legacy economic systems were not built for this tech deflation, and the thing about exponential growth is that we humans do not intuitively understand it.
As an example, if you folded a piece of paper 51 times, of course you can only fold it seven times, but if you could fold it 51 times, it would reach the Sun!
PART 3/4 - IMPLICATIONS FOR SOCIETY:
The question is: how does this play out?
In the long term, it is the fundamental structure of the economic system that has a significant impact on people's lives, not who is President for 4 to 8 years.
In reality, politicians have limited power and are effectively all puppets. We have seen what happens when a President doesn't stay in their lane...
One could argue that the two main mechanisms of control are:
  1. Divide and Conquer and
  2. Order from Chaos
As we have seen many times in the past, herd psychology is worryingly easy to manipulate...
Speaking of the censorship, in his book Antifragile, Nassim Taleb discusses the anti fragility of information.
Information feeds more on attempts to harm it than it does on efforts to promote it.
A fantastic example of this process is what has happened with London Real: they were banned on LinkedIn and David Icke's interview was censored. Now, regardless of what you think of this particular channel or your thoughts on David Icke and the theories provided, censoring information in this way actually spreads it more virally.
It's fascinating to observe how many views the videos regarding the bans and censorship have relative to the others. And the impact this has had on subscribers.
It is always easier to blame a bigger enemy (or create a new one) rather than to admit it's a structural problem.
Therefore, you avoid short term pain...whatever the cost.
The real question is if and when this situation will lead to social unrest...
PART 4/4 - INTELLECTUAL CAPITALISM:
The depth and width of jobs impacted by AI will continue to increase in the future.
Now this will not necessarily happen straight away.
However, our transition from commodity capitalism to intellectual capitalism is inevitable and the people and nations who fight against this trend will be on the wrong side of history.
From a practical investment perspective, and disclaimer this is not investment advice, network effects are a crucial aspect to consider moving forwards.
Essentially, this means that the value of the network increases with each additional user - all of the tech monopolies have exhibited this property.
An asset which could in time demonstrate very strong network effects is Bitcoin.
Looking at the market cap relative to other asset classes, Bitcoin provides an asymmetric investment opportunity.
Only time will tell...
https://www.youtube.com/watch?v=7nFbKzt-uwE
submitted by financeoptimum to economy [link] [comments]

The Fed's Losing Battle with Technological Deflation

PART 1/4 - FREE MARKET?
First off, let's set the scene.
The stock market is telling you nothing about the real economy anymore.
Economic fundamentals have never mattered as little for the stock market as has been the case during this 11-year bull market.
The correlation between gross-domestic-product growth and the direction of the S&P 500 Index has only been 7% in this cycle - historically it has been 30% to 70%.
Why?
Well, it is the Central Banks, led by the Fed, who printed their way out of the Recession in '08.
In doing so, they have papered over the cracks, and we have seen the longest economic expansion in US history.
However, this is not a particularly meritocratic process: money creation itself increases inequality via the Cantillon Effect, as money printing leads to asset price inflation, which disproportionately benefits the rich and hurts the poor.
Former Federal Reserve Chairman Paul Volcker told the New York Times in 2018:
“The central issue is we’re developing into a plutocracy. We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive."
The reality of course is that this is largely not the case - it is because the game is rigged in their favour.
Now, it is important to emphasise the fact that the path we have taken has resulted in the highest living standards we have seen in human history.
However, the issue, particularly since the US completely abandoned the gold standard in 1971, is that debt has exploded to obscene levels.
We are not operating in a free market if it takes $185 trillion of debt over the last 20 years to create 'growth'.
In fact, the global debt to GDP ratio hit an all-time high of 322% in the third quarter of 2019.
Inflation means that your dollar loses value and thus your purchasing power goes down.
Deflation means that the value of your dollar goes up and your purchasing power goes up.
That's a good thing right? You get more goods and services for less.
Well, no.
If you have deflation, debt explodes in real terms and you can never pay it back.
As the economy is based on debt, if you allow deflation, then you have to reset the debt.
This is why central banks fear deflation so much.
However, the major force driving the human race is technological progress - and this stops for no mortal...
PART 2/4 - TECHNOLOGICAL DEFLATION:
The increased abundance created by technology will result in massive job losses.
Throughout history, doom porn enthusiasts have screamed that the machines are coming for jobs. This is not a new phenomenon.
All technological revolutions are deflationary - since they create "supply side shocks", meaning that they allow for more intensive use of resources and thus higher production. With more goods being produced, all other things being equal, the price of those goods will fall.
In the last 20 years or so, software has disrupted and replaced many established goods and services.
It is in the next 20 years that another disruptive technology is set to take the stage: AI
According to Steve Schwarzman, the co-founder and CEO of The Blackstone Group who has a net worth of $17.6BN:
"This is going to touch everyone's life....you're not going to be able to get away from this technology"
Moreover, this virus will only accelerate this trend towards tech. Zoom is a fantastic example of exactly this.
Old legacy economic systems were not built for this tech deflation, and the thing about exponential growth is that we humans do not intuitively understand it.
As an example, if you folded a piece of paper 51 times, of course you can only fold it seven times, but if you could fold it 51 times, it would reach the Sun!
PART 3/4 - IMPLICATIONS FOR SOCIETY:
The question is: how does this play out?
In the long term, it is the fundamental structure of the economic system that has a significant impact on people's lives, not who is President for 4 to 8 years.
In reality, politicians have limited power and are effectively all puppets. We have seen what happens when a President doesn't stay in their lane...
One could argue that the two main mechanisms of control are:
  1. Divide and Conquer and
  2. Order from Chaos
As we have seen many times in the past, herd psychology is worryingly easy to manipulate...
Speaking of the censorship, in his book Antifragile, Nassim Taleb discusses the anti fragility of information.
Information feeds more on attempts to harm it than it does on efforts to promote it.
A fantastic example of this process is what has happened with London Real: they were banned on LinkedIn and David Icke's interview was censored. Now, regardless of what you think of this particular channel or your thoughts on David Icke and the theories provided, censoring information in this way actually spreads it more virally.
It's fascinating to observe how many views the videos regarding the bans and censorship have relative to the others. And the impact this has had on subscribers.
It is always easier to blame a bigger enemy (or create a new one) rather than to admit it's a structural problem.
Therefore, you avoid short term pain...whatever the cost.
The real question is if and when this situation will lead to social unrest...
PART 4/4 - INTELLECTUAL CAPITALISM:
The depth and width of jobs impacted by AI will continue to increase in the future.
Now this will not necessarily happen straight away.
However, our transition from commodity capitalism to intellectual capitalism is inevitable and the people and nations who fight against this trend will be on the wrong side of history.
From a practical investment perspective, and disclaimer this is not investment advice, network effects are a crucial aspect to consider moving forwards.
Essentially, this means that the value of the network increases with each additional user - all of the tech monopolies have exhibited this property.
An asset which could in time demonstrate very strong network effects is Bitcoin.
Looking at the market cap relative to other asset classes, Bitcoin provides an asymmetric investment opportunity.
Only time will tell...
https://www.youtube.com/watch?v=7nFbKzt-uwE
submitted by financeoptimum to Capitalism [link] [comments]

The Fed's Losing Battle with Technological Deflation

PART 1/4 - FREE MARKET?
First off, let's set the scene.
The stock market is telling you nothing about the real economy anymore.
Economic fundamentals have never mattered as little for the stock market as has been the case during this 11-year bull market.
The correlation between gross-domestic-product growth and the direction of the S&P 500 Index has only been 7% in this cycle - historically it has been 30% to 70%.
Why?
Well, it is the Central Banks, led by the Fed, who printed their way out of the Recession in '08.
In doing so, they have papered over the cracks, and we have seen the longest economic expansion in US history.
However, this is not a particularly meritocratic process: money creation itself increases inequality via the Cantillon Effect, as money printing leads to asset price inflation, which disproportionately benefits the rich and hurts the poor.
Former Federal Reserve Chairman Paul Volcker told the New York Times in 2018:
“The central issue is we’re developing into a plutocracy. We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive."
The reality of course is that this is largely not the case - it is because the game is rigged in their favour.
Now, it is important to emphasise the fact that the path we have taken has resulted in the highest living standards we have seen in human history.
However, the issue, particularly since the US completely abandoned the gold standard in 1971, is that debt has exploded to obscene levels.
We are not operating in a free market if it takes $185 trillion of debt over the last 20 years to create 'growth'.
In fact, the global debt to GDP ratio hit an all-time high of 322% in the third quarter of 2019.
Inflation means that your dollar loses value and thus your purchasing power goes down.
Deflation means that the value of your dollar goes up and your purchasing power goes up.
That's a good thing right? You get more goods and services for less.
Well, no.
If you have deflation, debt explodes in real terms and you can never pay it back.
As the economy is based on debt, if you allow deflation, then you have to reset the debt.
This is why central banks fear deflation so much.
However, the major force driving the human race is technological progress - and this stops for no mortal...
PART 2/4 - TECHNOLOGICAL DEFLATION:
The increased abundance created by technology will result in massive job losses.
Throughout history, doom porn enthusiasts have screamed that the machines are coming for jobs. This is not a new phenomenon.
All technological revolutions are deflationary - since they create "supply side shocks", meaning that they allow for more intensive use of resources and thus higher production. With more goods being produced, all other things being equal, the price of those goods will fall.
In the last 20 years or so, software has disrupted and replaced many established goods and services.
It is in the next 20 years that another disruptive technology is set to take the stage: AI
According to Steve Schwarzman, the co-founder and CEO of The Blackstone Group who has a net worth of $17.6BN:
"This is going to touch everyone's life....you're not going to be able to get away from this technology"
Moreover, this virus will only accelerate this trend towards tech. Zoom is a fantastic example of exactly this.
Old legacy economic systems were not built for this tech deflation, and the thing about exponential growth is that we humans do not intuitively understand it.
As an example, if you folded a piece of paper 51 times, of course you can only fold it seven times, but if you could fold it 51 times, it would reach the Sun!
PART 3/4 - IMPLICATIONS FOR SOCIETY:
The question is: how does this play out?
In the long term, it is the fundamental structure of the economic system that has a significant impact on people's lives, not who is President for 4 to 8 years.
In reality, politicians have limited power and are effectively all puppets. We have seen what happens when a President doesn't stay in their lane...
One could argue that the two main mechanisms of control are:
  1. Divide and Conquer and
  2. Order from Chaos
As we have seen many times in the past, herd psychology is worryingly easy to manipulate...
Speaking of the censorship, in his book Antifragile, Nassim Taleb discusses the anti fragility of information.
Information feeds more on attempts to harm it than it does on efforts to promote it.
A fantastic example of this process is what has happened with London Real: they were banned on LinkedIn and David Icke's interview was censored. Now, regardless of what you think of this particular channel or your thoughts on David Icke and the theories provided, censoring information in this way actually spreads it more virally.
It's fascinating to observe how many views the videos regarding the bans and censorship have relative to the others. And the impact this has had on subscribers.
It is always easier to blame a bigger enemy (or create a new one) rather than to admit it's a structural problem.
Therefore, you avoid short term pain...whatever the cost.
The real question is if and when this situation will lead to social unrest...
PART 4/4 - INTELLECTUAL CAPITALISM:
The depth and width of jobs impacted by AI will continue to increase in the future.
Now this will not necessarily happen straight away.
However, our transition from commodity capitalism to intellectual capitalism is inevitable and the people and nations who fight against this trend will be on the wrong side of history.
From a practical investment perspective, and disclaimer this is not investment advice, network effects are a crucial aspect to consider moving forwards.
Essentially, this means that the value of the network increases with each additional user - all of the tech monopolies have exhibited this property.
An asset which could in time demonstrate very strong network effects is Bitcoin.
Looking at the market cap relative to other asset classes, Bitcoin provides an asymmetric investment opportunity.
Only time will tell...
https://www.youtube.com/watch?v=7nFbKzt-uwE
submitted by financeoptimum to Money [link] [comments]

The Fed's Losing Battle with Technological Deflation

PART 1/4 - FREE MARKET?
First off, let's set the scene.
The stock market is telling you nothing about the real economy anymore.
Economic fundamentals have never mattered as little for the stock market as has been the case during this 11-year bull market.
The correlation between gross-domestic-product growth and the direction of the S&P 500 Index has only been 7% in this cycle - historically it has been 30% to 70%.
Why?
Well, it is the Central Banks, led by the Fed, who printed their way out of the Recession in '08.
In doing so, they have papered over the cracks, and we have seen the longest economic expansion in US history.
However, this is not a particularly meritocratic process: money creation itself increases inequality via the Cantillon Effect, as money printing leads to asset price inflation, which disproportionately benefits the rich and hurts the poor.
Former Federal Reserve Chairman Paul Volcker told the New York Times in 2018:
“The central issue is we’re developing into a plutocracy. We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive."
The reality of course is that this is largely not the case - it is because the game is rigged in their favour.
Now, it is important to emphasise the fact that the path we have taken has resulted in the highest living standards we have seen in human history.
However, the issue, particularly since the US completely abandoned the gold standard in 1971, is that debt has exploded to obscene levels.
We are not operating in a free market if it takes $185 trillion of debt over the last 20 years to create 'growth'.
In fact, the global debt to GDP ratio hit an all-time high of 322% in the third quarter of 2019.
Inflation means that your dollar loses value and thus your purchasing power goes down.
Deflation means that the value of your dollar goes up and your purchasing power goes up.
That's a good thing right? You get more goods and services for less.
Well, no.
If you have deflation, debt explodes in real terms and you can never pay it back.
As the economy is based on debt, if you allow deflation, then you have to reset the debt.
This is why central banks fear deflation so much.
However, the major force driving the human race is technological progress - and this stops for no mortal...
PART 2/4 - TECHNOLOGICAL DEFLATION:
The increased abundance created by technology will result in massive job losses.
Throughout history, doom porn enthusiasts have screamed that the machines are coming for jobs. This is not a new phenomenon.
All technological revolutions are deflationary - since they create "supply side shocks", meaning that they allow for more intensive use of resources and thus higher production. With more goods being produced, all other things being equal, the price of those goods will fall.
In the last 20 years or so, software has disrupted and replaced many established goods and services.
It is in the next 20 years that another disruptive technology is set to take the stage: AI
According to Steve Schwarzman, the co-founder and CEO of The Blackstone Group who has a net worth of $17.6BN:
"This is going to touch everyone's life....you're not going to be able to get away from this technology"
Moreover, this virus will only accelerate this trend towards tech. Zoom is a fantastic example of exactly this.
Old legacy economic systems were not built for this tech deflation, and the thing about exponential growth is that we humans do not intuitively understand it.
As an example, if you folded a piece of paper 51 times, of course you can only fold it seven times, but if you could fold it 51 times, it would reach the Sun!
PART 3/4 - IMPLICATIONS FOR SOCIETY:
The question is: how does this play out?
In the long term, it is the fundamental structure of the economic system that has a significant impact on people's lives, not who is President for 4 to 8 years.
In reality, politicians have limited power and are effectively all puppets. We have seen what happens when a President doesn't stay in their lane...
One could argue that the two main mechanisms of control are:
  1. Divide and Conquer and
  2. Order from Chaos
As we have seen many times in the past, herd psychology is worryingly easy to manipulate...
Speaking of the censorship, in his book Antifragile, Nassim Taleb discusses the anti fragility of information.
Information feeds more on attempts to harm it than it does on efforts to promote it.
A fantastic example of this process is what has happened with London Real: they were banned on LinkedIn and David Icke's interview was censored. Now, regardless of what you think of this particular channel or your thoughts on David Icke and the theories provided, censoring information in this way actually spreads it more virally.
It's fascinating to observe how many views the videos regarding the bans and censorship have relative to the others. And the impact this has had on subscribers.
It is always easier to blame a bigger enemy (or create a new one) rather than to admit it's a structural problem.
Therefore, you avoid short term pain...whatever the cost.
The real question is if and when this situation will lead to social unrest...
PART 4/4 - INTELLECTUAL CAPITALISM:
The depth and width of jobs impacted by AI will continue to increase in the future.
Now this will not necessarily happen straight away.
However, our transition from commodity capitalism to intellectual capitalism is inevitable and the people and nations who fight against this trend will be on the wrong side of history.
From a practical investment perspective, and disclaimer this is not investment advice, network effects are a crucial aspect to consider moving forwards.
Essentially, this means that the value of the network increases with each additional user - all of the tech monopolies have exhibited this property.
An asset which could in time demonstrate very strong network effects is Bitcoin.
Looking at the market cap relative to other asset classes, Bitcoin provides an asymmetric investment opportunity.
Only time will tell...
https://www.youtube.com/watch?v=7nFbKzt-uwE
submitted by financeoptimum to ConcentrationOfWealth [link] [comments]

ALOKEX News Flash

Us Senate candidate: Bitcoin is a viable alternative to the value of the dollar.
According to Bitcoin News, U.S. Senate candidate Cynthia Lummis has suggested that Bitcoin could be a viable alternative to the dollar's value. Lummis explained that with only 21 million bitcoins, it became an attractive repository of value. I have long been concerned about the Fed's quantitative easing program and the amount of debt the US economy depends on for the future, adding that the US has added $3 trillion of debt since March. Moreover, Lummis quotes economist Nassim Taleb as saying: "The most undervalued risk in financial markets today is that the dollar is no longer a reserve currency." 'This is something we should all worry about,' she said.
submitted by fhcredits to ALOKEX [link] [comments]

The White Dragon : A Canadian Dragon Portfolio

Alright guys, Ive been working on this for a while and a post on here by a guy describing his portfolio here was the final kick in the ass for me to put this together. I started writing this to summarize what Im doing for my friends who are beginners, and also for me to make some sense of it for myself
Hopefully parts of it are useful to you, and also ideally you guys can point out errors or have a suggestion or two. I'm posting this here as opposed to investing or canadianinvestor (blech) because they're just gonna tell me to buy an index fund.
This first section is a preamble describing the Canadian tax situation and why Im doing things the way that I am. Feel free to skip it if you dont care about that. Also, there might be mistake regarding what the laws are here so dont take my word for it and verify it for yourself please.
So here in Canada we have two types of registered accounts (theres actually more but whatver). There is the TFSA "Tax Free Savings Account", and RRSP "Registered Retirement Savings Account"
For the sake of simplicity, from the time you turn 18 you are allowed to deposit 5k (it changes year to year based on inflation etc)in each of them. That "room" accumulates retroactively, so if you haventdone anything and are starting today and you are 30 you have around 60k you can put in each of them. The prevailing wisdom is that you should max out the TFSA first and you'll see why in a minute.

TFSA is post tax deposits, with no capital gains or other taxes applied to selling your securities, dividends or anything else. You can withdraw your gains at any time, and the amount that you withdraw is added to the "room" you have for the next year. So lets say I maxed out my TFSA contributions and I take out 20k today, on January of next year I can put back in 20k plus the 5 or whatever they allow for that year. You can see how powerful this is. Theres a few limitations on what is eligable to be held in the TFSA such as bitcoin/bitcoin ETFs, overseas stocks that arent listed on NYSE, TSX, london and a few others. You can Buy to Open and Sell to Close call and put options as well as write Covered Calls.

The RRSP is pre-tax deposits and is a tax deferred scheme. You deposit to lower your income tax burden (and hopefully drop below a bracket) but once you retire you will be taxed on anything you pull out. Withdrawing early has huge penalties and isnt recommended. You are however allowed to borrow against it for a down payment as a first time home buyer. The strategy with these is that a youngperson entering the workforce is likely to be in a fairly low tax bracket and (hopefully) earns more money as they get older and more skilled so the RRSP has more value the greater your pre-taxincome is. You can also do this Self Directed. Its not relevant to this strategy but I included it for the sake of context.
Non registered accounts ( or any other situation, such as selling commercial real estate etc) is subject to a capital gains tax. In so far as I understand it, you add all your gains and losses up at the end of the year. If its a positive number, you cut that number IN HALF and add it to your regular pre-tax income. So if I made 60k from the dayjob and 20k on my margin account that adds up to 70k that I get taxed on. if its a loss, you carry that forward into the next year. Theres no distinction between long term and short term. Also physical PMs are treated differently and I'll fill that part in later once I have the details down.
The reason why all that babble is important is that my broker Questrade, which isnt as good as IB (the only real other option up here as far as Im aware) has one amazing feature that no other broker has: "Margin Power"
If you have a TFSA and a Margin account with them, you can link them together and have your securities in the TFSA collateralise your Margin account. Essentially, when it comes to the Maintenance Excess of the Margin Account QT doesnt care if its in the TFSA *or* the Margin!
You can see how powerful this is.
------------------------------------------------------------------------------------------------------------------------------------------------
So as you can tell by the title, a lot of this is heavily inspired by Chris Cole's paper "The Allegory of the Hawk and the Serpent". You can read it here: https://www.artemiscm.com/welcome#research
Between it, his interviews and my mediocre options skills at the time my mind was blown. Unfortunately I didnt know how to do the Long Volatility part until after the crash in March but I've since then had nothing but time to scour the internet and learn as much as I could.
The way I interpret this isnt necessarily "what you should have right now", but what abstracted model they were able to backtest that gave them the best performance over the 90 years. Also, a lot of my portfolio I already had before I started trying to build this.
As such my allocations dont match the proportions he gave. Not saying my allocations are better, just showing where they are at this time.
I'm going to describe how I do Long Volatility at the end rather than the beginning since the way *I* do it wont make sense until you see the rest of the portflio.

Physical PMs 22%
I'm not sure wether he intended this to be straight up physical gold or include miners and royalty streaming companies so I will just keep this as physical.
I consider Silver to be a non-expiring call option on gold, so that can live here too. I am actually *very* overweight silver and my strategy is to convert a large portion of it to gold (mostly my bars) to gold as the ratio tightens up.
If youre into crypto, you can arguably say that has a place in this section.
If an ETF makes sense for part of your portfolio, I suggest the Sprott ones such as PHYS. Sprott is an honest business and they actually have the metal they say they have. If you have enough, you can redeem your shares from the Royal Canadian Mint. The only downside is that they dont have an options chain, so you cant sell covered calls etc. Simple enough I suppose.
One thing to bear in mind, there is a double edged sword with this class of assets. They're out of the system, theyre nobody's business but your own and theres no counter party. That unfortunately means that you cant lever against it for margin or sell covered calls etc. You can still buy puts though (more on that later)

Commodity Trend (CTA) 10%
https://youtu.be/tac8sWPZW0w
Patrick Ceresna gave a good presentation on what this strategy is. Until I watched this video I just thought it meant "buy commodities". A real CTA does this with futures also so aside from the way he showed, there are two other ETFs that are worth looking at.
COM - This is an explicit trend following ETF that follows a LONG/FLAT strategy instead of LONG/SHORT on a pile of commodity futures. So if they get a "sell" signal for oil or soybeans they sell what they have and go to cash.
COMT- Holds an assortment of different month futures in different commodities, as well as a *lot* of various related shares in producers. Its almost a one stop shop commodities portfolio. Pays a respectable dividend in December
If you want to break the "rules" of CTA, and include equities theres a few others that are also worth looking at
KOL- This is a coal ETF. The problems with it are that a lot of the holdings dont have much to do with coal. One of them is a tractor company. A lot of the companies are Chinese so theres a bit of a red flag.
Obviously Thermal Coal, the kind used for heating and powerplants isnt in vogue and wont be moving forward...but coking coal is used for steel manufacturing and that ain't going anywhere. The dividend is huge, pays out in December. A very very small position might be worth the risk.
Uranium- I'm in URA because thats the only way for me to get exposure to Kazatoprom (#1 producer), which is 20% of the holdings. The other 20% is Cameco (#2 producer)and then its random stuff.
Other than that I have shares in Denison which seems like its a good business with some interesting projects underway. I'm still studying the uranium space so I dont really have much to say about it of any value.
RSX- Russia large caps. If you dont want to pick between the myriad of undervalued, high dividend paying commodity companies that Russia has then just grab this. It only pays in December but it has a liquid options chain so you can do Covered Calls in the meantime if you want.
NTR- Nutrien, canadian company that was formed when two others merged. They are now the worlds largest potash producer. Pretty good dividend. They have some financial difficulties and the stocks been in a downtrend forever. I feel its a good candidate to watch or sell some puts on.
I'm trying to come up with a way to play agriculture since this new phase we're going to be entering is likely to cause huge food shortages.

EURN and NAT- I got in fairly early on the Tanker hype before it was even hype as a way to short oil but I got greedy and lost a lot of my gains. I pared down my position and I'm staying for the dividend.
If you get an oil sell signal, this might be a way to play that still.

Fixed Income/Bonds 10%

Now, I am not a bond expert but unless youre doing some wacky spreads with futures or whatever... I dont see much reason to buy government debt any more. If you are, youre basically betting that they take rates negative. Raoul Pal of Real Vision is pretty firm in his conviction that this will happen. I know better than to argue with him but I dont see risk/reward as being of much value.
HOWEVER, I found two interesting ETFs that seem to bring something to this portfolio
IVOL- This is run by Nancy Davis, and is comprised of TIPS bonds which are nominally inflation protected (doubt its real inflation but whatever) overlayed with some OTC options that are designed to pay off big if the Fed loses control of the long end of the yield curve, which is what might happen during a real inflation situation. Pays out a decent yield monthly
TAIL- This is a simpler portfolio of 10yr treasuries with ladder of puts on the SPX. Pays quarterly.

Equities 58% (shared with options/volatility below)
This is where it gets interesting, obviously most of this is in mining shares but before I get to those I found some interesting stuff that I'm intending to build up as I pare down my miners when the time comes to start doing that.
VIRT- I cant remember where I saw this, but people were talking about this as a volatility play. Its not perfect, but look at the chart compared to SPY. Its a HFT/market making operation, the wackier things get the more pennies they can scalp. A 4% dividend isnt shabby either.
FUND- This is an interesting closed end fund run by Whitney George, one of the principals at Sprott. He took it with him when he joined the company. Ive read his reports and interviews and I really like his approach to value and investing. He's kind of like if Warren Buffett was a gold bug. Theres 120 holdings in there, mostly small caps and very diverse...chicken factories, ball bearings all kinds of boring ass shit that nobody knows exists. Whats crucial is that most of it "needs to exist". Between him, his family and other people at Sprott they control 40% or so of the shares, so they definitely have skin in the game. Generous dividend.
ZIG- This is a "deep value" strategy fund, run by Tobias Carlisle. He has a fairly simple valuation formula called the Acquirer's Multiple that when he backtested it, is supposed to perform very well. He did an interview with Chris Cole on real Vision where he discusses how Value and Deep Value havent done well recently, but over the last 100 years have proven to be very viable strategies. If we feel that theres a new cycle brewing, then this strategy may work again moving forward.

I want to pause and point out something here, Chris Cole, Nassim Taleb and the guys at Mutiny Fund spend a lot of effort explaining that building a portfolio is a lot like putting together a good basketall team. They need to work together, and pick up each others slack
A lot of the ETFs I'm listing here are in many ways portfolios in and of themselves and are *actively managed*. I specifically chose them because they follow a methodology that I respect but I can't do myself because I dont have the skill, temperament or access to.
The next one is a hidden gem and ties into this. I'm not sure how much more upside there is in this one but man was I surprised.
SII- Sprott Inc. I *never* see people listing this stock in their PMs portfolios. A newsletter I'm subscribed to described this stock as the safest way to play junior miners. Their industry presence, intellectual capital and connections means that they get *the best* private placement deals in the best opportunities. I cant compete with a staff like theirs and I'm not going to try. I bought this at 2.50, and I liked the dividend. Since then they did a reverse split to get on the NYSE and like the day after the stock soared.
When it comes to mining ETFS I like GOAU and SILJ the best. None of their major holdings are dead weight companies that are only there because of market cap. I dont want Barrick in my portfolio etc.
SGDJ is a neat version of GDXJ.
Aside from that my individual miners/royalty companies are (no particular order)
MMX
SAND
PAAS
PGM
AUM
AG
MUX
RIO- Rio2 on the tsx, not rio tinto
KTN
KL
Options/Volatility: varies
So this is where we get to the part about options, Volatility and how I do it. I started out in the options space with The Wheel strategy and the Tastytrade approach of selling premium. The spreads and puts I sell, are on shares listed above, in fact some of those I dont hold anymore.
Theres tons of stuff on this in thetagang and options so I wont go into a whole bunch (and you shouldnt be learning the mechanics from me anyway) but theres one thing I want to go over before it gets wild.
If I sell a Cash Secured Put, from a risk management perspective its identical to just buying 100 shares of the underlying security. You are equally "Short Vol" as well, it just that with options
its a little more explicit with the Greeks and everything. But if I use my margin that I was talking about earlier, then I can still collect the premium and the interest doesnt kick in unless Im actually assigned the shares.
But if I sell too many puts on KL or AG, and something happens where the miners get cut down (and lets be real, they all move together) my margin goes down and then I get assigned and kaboom...my account gets blown up
So what I need to do, is balance out the huge Short Vol situation in my portfolio, be net Long Vol and directly hedge my positions. Since the overwhelming majority of my equities are all tied to bullion this is actually a very easy thing to do.

Backspreads
https://youtu.be/pvX5_rkm5x0
https://youtu.be/-jTvWOGVsK8
https://youtu.be/muYjjm934iY

So I set this up so the vast majority of my margin is tied up in these 1-2 or even 1-3 ratio put spreads that *I actually put on for a small credit*, and roll them every once in a while. I run them on SLV, and GDX.
I keep enough room on my margin so I can withstand a 10% drawdown before it sets off the long end of the spreads and then I can ride it out until it turns around and we keep the PM bull market going.
Theres another cool spread I've been using, which is a modified Jade Lizard; if already hold shares, I'll sell a put, sell a covered call, and use some of the premium to buy a longer dated call. Ive been running this on AG mostly.
I have a few more spreads I can show you but Im tired now so it'll have to wait for later.
As I said multiple times, I do intend to trim these miners later but now isnt the time for that IMO. I'm also monitoring this almost full time since I have an injury and have nothing better to do until I heal :p
submitted by ChudBuntsman to pmstocks [link] [comments]

The Fed's Losing Battle with Technological Deflation

PART 1/4 - FREE MARKET?
First off, let's set the scene.
The stock market is telling you nothing about the real economy anymore.
Economic fundamentals have never mattered as little for the stock market as has been the case during this 11-year bull market.
The correlation between gross-domestic-product growth and the direction of the S&P 500 Index has only been 7% in this cycle - historically it has been 30% to 70%.
Why?
Well, it is the Central Banks, led by the Fed, who printed their way out of the Recession in '08.
In doing so, they have papered over the cracks, and we have seen the longest economic expansion is US history.
However, this is not a particularly meritocratic process: money creation itself increases inequality via the Cantillon Effect, as money printing leads to asset price inflation, which disproportionately benefits the rich and hurts the poor.
Former Federal Reserve Chairman Paul Volcker told the New York Times in 2018:
“The central issue is we’re developing into a plutocracy. We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive."
The reality of course is that this is largely not the case - it is because the game is rigged in their favour.
Now, it is important to emphasise the fact that the path we have taken has resulted in the highest living standards we have seen in human history.
However, the issue, particularly since the US completely abandoned the gold standard in 1971, is that debt has exploded to obscene levels.
We are not operating in a free market if it takes $185 trillion of debt over the last 20 years to create 'growth'.
In fact, the global debt to GDP ratio hit an all-time high of 322% in the third quarter of 2019.
Inflation means that your dollar loses value and thus your purchasing power goes down.
Deflation means that the value of your dollar goes up and your purchasing power goes up.
That's a good thing right? You get more goods and services for less.
Well, no.
If you have deflation, debt explodes in real terms and you can never pay it back.
As the economy is based on debt, if you allow deflation, then you have to reset the debt.
This is why central banks fear deflation so much.
However, the major force driving the human race is technological progress - and this stops for no mortal...

PART 2/4 - TECHNOLOGICAL DEFLATION:
The increased abundance created by technology will result in massive job losses.
Throughout history, doom porn enthusiasts have screamed that the machines are coming for jobs. This is not a new phenomenon.
All technological revolutions are deflationary - since they create "supply side shocks", meaning that they allow for more intensive use of resources and thus higher production. With more goods being produced, all other things being equal, the price of those goods will fall.
In the last 20 years or so, software has disrupted and replaced many established goods and services.
It is in the next 20 years that another disruptive technology is set to take the stage: AI
According to Steve Schwarzman, the co-founder and CEO of The Blackstone Group who has a net worth of $17.6BN, "This is going to touch everyone's life....you're not going to be able to get away from this technology"
Moreover, this virus will only accelerate this trend towards tech. Zoom is a fantastic example of exactly this.
Old legacy economic systems were not built for this tech deflation, and the thing about exponential growth is that we humans do not intuitively understand it.
As an example, if you folded a piece of paper 50 times, of course you can only fold it seven times, but if you could fold it 50 times, it would reach the Sun!

PART 3/4 - IMPLICATIONS FOR SOCIETY:
The question is: how does this play out?
In the long term, it is the fundamental structure of the economic system that has a significant impact on people's lives, not who is President for 4 to 8 years.
In reality, politicians have limited power and are effectively all puppets. We have seen what happens when a President doesn't stay in their lane...
One could argue that the two main mechanisms of control are:
  1. Divide and Conquer and
  2. Order from Chaos
As we have seen many times in the past, herd psychology is worryingly easy to manipulate...
Speaking of the censorship, in his book Antifragile, Nassim Taleb discusses the anti fragility of information.
Information feeds more on attempts to harm it than it does on efforts to promote it.
A fantastic example of this process is what has happened in the last week with London Real: they were banned on LinkedIn and David Icke's interview was censored. Now, regardless of what you think of this particular channel or your thoughts on David Icke and the theories provided, censoring information in this way actually spreads it more virally.
It's fascinating to observe how many views the videos regarding the bans and censorship have relative to the others. And the impact this has had on subscribers.
It is always easier to blame a bigger enemy (or create a new one) rather than to admit it's a structural problem.
Therefore, you avoid short term pain...whatever the cost.
The real question is if and when this situation will lead to social unrest...

PART 4/4 - INTELLECTUAL CAPITALISM:
The depth and width of jobs impacted by AI will continue to increase in the future, now this will not necessarily happen straight away.
However, our transition from commodity capitalism to intellectual capitalism in inevitable and the people and nations who fight against this trend will be on the wrong side of history.
From a practical investment perspective, and disclaimer this is not investment advice, network effects are a crucial aspect to consider moving forwards.
Essentially, this means that the value of the network increases with each additional user - all of the tech monopolies have exhibited this property.
An asset which could in time demonstrate very strong network effects is Bitcoin.
Looking at the market cap relative to other asset classes, Bitcoin provides an asymmetric investment opportunity.
Only time will tell...
https://www.youtube.com/watch?v=7nFbKzt-uwE
submitted by financeoptimum to Bitcoin [link] [comments]

The Fed's Losing Battle with Technological Deflation


PART 1/4 - FREE MARKET?
First off, let's set the scene.
The stock market is telling you nothing about the real economy anymore.
Economic fundamentals have never mattered as little for the stock market as has been the case during this 11-year bull market.
The correlation between gross-domestic-product growth and the direction of the S&P 500 Index has only been 7% in this cycle - historically it has been 30% to 70%.
Why?
Well, it is the Central Banks, led by the Fed, who printed their way out of the Recession in '08.
In doing so, they have papered over the cracks, and we have seen the longest economic expansion is US history.
However, this is not a particularly meritocratic process: money creation itself increases inequality via the Cantillon Effect, as money printing leads to asset price inflation, which disproportionately benefits the rich and hurts the poor.
Former Federal Reserve Chairman Paul Volcker told the New York Times in 2018:
“The central issue is we’re developing into a plutocracy. We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive."
The reality of course is that this is largely not the case - it is because the game is rigged in their favour.
Now, it is important to emphasise the fact that the path we have taken has resulted in the highest living standards we have seen in human history.
However, the issue, particularly since the US completely abandoned the gold standard in 1971, is that debt has exploded to obscene levels.
We are not operating in a free market if it takes $185 trillion of debt over the last 20 years to create 'growth'.
In fact, the global debt to GDP ratio hit an all-time high of 322% in the third quarter of 2019.
Inflation means that your dollar loses value and thus your purchasing power goes down.
Deflation means that the value of your dollar goes up and your purchasing power goes up.
That's a good thing right? You get more goods and services for less.
Well, no.
If you have deflation, debt explodes in real terms and you can never pay it back.
As the economy is based on debt, if you allow deflation, then you have to reset the debt.
This is why central banks fear deflation so much.
However, the major force driving the human race is technological progress - and this stops for no mortal...

PART 2/4 - TECHNOLOGICAL DEFLATION:
The increased abundance created by technology will result in massive job losses.
Throughout history, doom porn enthusiasts have screamed that the machines are coming for jobs. This is not a new phenomenon.
All technological revolutions are deflationary - since they create "supply side shocks", meaning that they allow for more intensive use of resources and thus higher production. With more goods being produced, all other things being equal, the price of those goods will fall.
In the last 20 years or so, software has disrupted and replaced many established goods and services.
It is in the next 20 years that another disruptive technology is set to take the stage: AI
According to Steve Schwarzman, the co-founder and CEO of The Blackstone Group who has a net worth of $17.6BN, "This is going to touch everyone's life....you're not going to be able to get away from this technology"
Moreover, this virus will only accelerate this trend towards tech. Zoom is a fantastic example of exactly this.
Old legacy economic systems were not built for this tech deflation, and the thing about exponential growth is that we humans do not intuitively understand it.
As an example, if you folded a piece of paper 50 times, of course you can only fold it seven times, but if you could fold it 50 times, it would reach the Sun!

PART 3/4 - IMPLICATIONS FOR SOCIETY:
The question is: how does this play out?
In the long term, it is the fundamental structure of the economic system that has a significant impact on people's lives, not who is President for 4 to 8 years.
In reality, politicians have limited power and are effectively all puppets. We have seen what happens when a President doesn't stay in their lane...
One could argue that the two main mechanisms of control are:
  1. Divide and Conquer and
  2. Order from Chaos
As we have seen many times in the past, herd psychology is worryingly easy to manipulate...
Speaking of the censorship, in his book Antifragile, Nassim Taleb discusses the anti fragility of information.
Information feeds more on attempts to harm it than it does on efforts to promote it.
A fantastic example of this process is what has happened in the last week with London Real: they were banned on LinkedIn and David Icke's interview was censored. Now, regardless of what you think of this particular channel or your thoughts on David Icke and the theories provided, censoring information in this way actually spreads it more virally.
It's fascinating to observe how many views the videos regarding the bans and censorship have relative to the others. And the impact this has had on subscribers.
It is always easier to blame a bigger enemy (or create a new one) rather than to admit it's a structural problem.
Therefore, you avoid short term pain...whatever the cost.
The real question is if and when this situation will lead to social unrest...

PART 4/4 - INTELLECTUAL CAPITALISM:
The depth and width of jobs impacted by AI will continue to increase in the future, now this will not necessarily happen straight away.
However, our transition from commodity capitalism to intellectual capitalism in inevitable and the people and nations who fight against this trend will be on the wrong side of history.
From a practical investment perspective, and disclaimer this is not investment advice, network effects are a crucial aspect to consider moving forwards.
Essentially, this means that the value of the network increases with each additional user - all of the tech monopolies have exhibited this property.
An asset which could in time demonstrate very strong network effects is Bitcoin.
Looking at the market cap relative to other asset classes, Bitcoin provides an asymmetric investment opportunity.
Only time will tell...

https://www.youtube.com/watch?v=7nFbKzt-uwE
submitted by financeoptimum to StockMarket [link] [comments]

How the problems of 2020 demonstrated to the world the “anti-fragility” of the crypto industry

How the problems of 2020 demonstrated to the world the “anti-fragility” of the crypto industry
How the problems of 2020 demonstrated to the world the “anti-fragility” of the crypto industry
2020 will be remembered for a long time: the threat of the third world war, the coronavirus pandemic, the global economic crisis and riots. And this is only six months. It is noteworthy, but while the global economy is in decline, the crypto industry, on the contrary, is accelerating the pace of development. Bitcoin has become for many a safe haven during the crisis, and the entire industry — the hope of salvation. Crypto companies have confirmed the growth in demand for goods and services related to digital assets, and it seems that the cryptosphere is fully consistent with the term “anti-fragility”, introduced by Nassim Taleb (author of the Black Swan economic bestseller) to identify systems that can benefit from unpredictable and stressful situations in the world. At least, the head of ScopeLift Ben DiFrancesco is sure of this.

What is anti-fragility

To begin with, we will deal with the concept of anti-fragility. This term was introduced by the famous professor, economist and trader Nassim Nicholas Taleb, who first voiced it in 2012 — in a book dedicated to the term “Anti-Fragility. How to capitalize on chaos.” Prior to this, Taleb gained special popularity and authority thanks to the introduction of the term “Black Swan”, which turned the perception of the economy over by many minds.
By anti-fragility, a professor refers to the ability of a system to capitalize on negative trends. Anti-fragile systems become better after a “collision with chaos”, which can mean various world disasters, stressful situations, shocking events, information noises, failures, attacks, malfunctions, and so on.
Many mistakenly confuse the concepts of anti-fragility and invulnerability, but there is a fundamental difference between them:
• Invulnerability is the ability to withstand stressful situations. World cataclysm will not affect invulnerable systems, but will not make them better.
• Anti-fragility is the ability to benefit from stressful situations. Anti-fragile systems are not just immune to disasters. In difficult conditions, they “harden” and become better.
Ben DiFrancesco, the founder of ScopeLift (a crypto project software development consulting company) and concurrently the author of the Buil Blockchain Tech portal, considers the crypto market an ideal example of anti-fragility.
Against the backdrop of all the negative shocks and tremendous changes in society that occurred in the first half of 2020, the crypto industry began to develop even faster. Blockchain technology more and more fits into our world as a solution to many problems, which were especially acute at the beginning of this year. Among them are the endless press of unsecured money, worsening international relations and increasing censorship on the Internet. Let’s go in an order.

Crypto-market versus money printing machine

The coronavirus pandemic caused an economic crisis around the planet. Both developed and developing countries faced massive unemployment, falling markets, and declining population returns. One way or another, the virus has affected everyone.
The states rushed to solve these problems by the old and “tested” method — by printing new money. China and the USA were especially distinguished in this field — the former introduced an injection of about $250 billion in the stock market in February, and the second poured into the economy a record for the planet $ 2.3 trillion (2.5 times more than during the 2008 crisis).
Alas, as a rule, when the state creates new money, the population pays for it. A sharp release to the market of unsecured money at the direction of management is fraught with serious consequences. The main one is the risk of mass inflation and the collapse of national currencies. Many complain about the Fed, which began in 2020 to print non-stop US dollars.

The number of dollars in circulation rose sharply in 2020. Source.
However, even such a sharp release to the market of new dollars is not the worst. It is much more dangerous that the Fed follows central banks of other countries, which also massively print unsecured national currencies in attempts to support the economy. If the dollar is somehow protected by the strong US position in the international arena, reduced credit and increased demand for American currency around the world, then most other countries cannot boast of such flexibility.
States that print money with a heap of economic problems run the risk of hyperinflation and fall victim to their own decisions. The scale of the problem is aggravated by the fact that during the crisis in such countries, the demand for dollars among the population is growing, so the thread on which the sword of Damocles hangs hanging over national currencies is very thin today.
Realizing the seriousness of the situation, many countries, such as Argentina, limit the ability of people and companies to buy dollars by introducing limits and various requirements. As a result, citizens begin to look for an alternative on the black market, buying dollars at a double rate, and also increasingly turn their attention to dollar stablecoins, which no one can forbid and for which you do not have to overpay. In the conditions of the crisis, the demand for stable coins began to grow at an accelerated pace, which is one of the brightest signs of the anti-fragility of the crypto industry, which has begun to squeeze benefits out of the negative situation in the world.
The demand for traditional cryptocurrencies, especially for bitcoin, is also growing. One of the main reasons is the protection against inflation, provided by limited emissions, strictly following clearly established rules. No one at the direction of the government or anyone else can “print” more bitcoins than is laid down in the code of his protocol. Many people saw in the cryptocurrency market a real alternative to national currencies, which fell under significant risks in 2020.

Protection against ethnic issues

The coronacrisis brought with it many other global problems. In particular, it undermined the confidence of the population and governments of many states in the so-called “new world order)”. Unhappy with the way the world is coping with the pandemic, people intend to end globalization, so anti-globalist ideas began to spread en masse. There is every reason to believe that such movements will receive political support in many regions.
Naturally, this carries enormous risks. But one cannot say that these moods arise without reason. Recent months have clearly demonstrated the extreme fragility of global supply chains. Nearly all countries in the world, including the United States, fought to import critical materials needed to fight the pandemic. Many people have a logical question in their heads: should countries with incompatible value systems be interconnected, especially if they have to suffer from this interconnectedness themselves, constantly giving way to richer states?
On this basis, interethnic relations between peoples and leaderships of countries have worsened. If the trend continues in the coming years, then humanity will have no choice but to resort to massively using cryptocurrencies and blockchain technology.
If people cannot rely on reliable institutions as an intermediary for cross-border cooperation, the value of decentralized networks will significantly increase as an alternative that does not require trust. Each decision by world states aimed at weakening alliances with other countries, including reducing the flow of people or physical goods across borders, accelerates the development of the limitless digital economy of the Internet.
Digital assets combined with smart contracts can play a key role in ensuring the transition of the world to new international relations. They are able to serve as a guarantor that does not require trust in the other side and even once again contact it.

Fighting Internet Censorship

In the past few years, social media giants such as Facebook and Twitter have gained tremendous opportunities to shape the flow of information in the modern world. With their help, information is distributed faster than any media, and the conclusions that people make on social networks often become decisive. This gives the giants in this field enormous power, which for many years has not been controlled (and by anyone) in any way. This issue has been ignored for a long time, but the situation has changed over the past two years.
Previously, large corporations themselves determined censored content. Companies could mark posts as “unacceptable” if they, in their opinion, do not comply with any laws, call for aggression, contradict moral principles, and so on. However, at the end of May, the US President Donald Trump decided to significantly narrow the powers of the media giants and issued an appropriate order, citing user complaints for blocking allegedly non-violating messages. By the way, Trump’s own tweet, where he called particularly active protesters “thugs,” and threatened: “When looting begins, shootings begin,” was not complete.
Perhaps an additional reason for the desire to narrow the powers of media giants was the fact that on the eve of the election, the president wanted to become “closer to the people”, appealing that everyone is free to express their opinion. Be that as it may, the invariable fact is that in this way he inserted the sticks into the wheels of Big Tech corporations. Moreover, based on Trump’s message, only governments should determine what can and cannot be blocked.
In fact, any form of concentrated power in social networks can be dangerous for both private and legal entities. If media companies become almost monopolies, they can control the opinion of the population and block any content that is objectionable to them. But power over social media in the hands of states is no less dangerous because the government can do the same. After all, it is not known who and what decides to block tomorrow. Suddenly it will be cryptocontent, especially since the prerequisites have already arisen repeatedly, or the statements of people dissatisfied with social injustice.
Social media executives want to be able to censor and edit the content that their users generate, while remaining protected from liability for it. The state wants to be able to apply its own standards of “neutrality” on these platforms, without specifying that such powers may end with even greater inequality and censorship.
The war for censorship generates the interest of ordinary citizens in decentralized social networks and media platforms. More and more people are expressing a desire to get a decent alternative, where no one will be able to control their opinion and will not forbid them to express it. Due to the anti-fragility of the crypto industry, the chances of success of blockchain platforms are significantly increasing. Yes, they have not yet become mainstream, but interesting experiments, for example, with the Hive platform or decentralized twitter, show their great potential. With each censored post, they are one step closer to widespread use.

What will the anti-fragility of the crypto industry lead to?

Ben DiFrancesco is far from the first to notice the anti-fragility of the crypto industry. Talk about this has been going on for several years. Experts have repeatedly recorded various moments when the industry managed to squeeze the positive out of one or another negative situation in the world. Just now, against the background of the extremely difficult first half of 2020, this has become especially noticeable.
Bitcoin has been “buried” already 380 times, but it, like the whole industry, continues to develop rapidly step by step, despite external world instability and internal cryptozymes. And if the assumptions about antifragility are true, the industry will become even stronger with each new world cataclysm.
Humanity is tired of the problems caused by the current world system. People want freedom and openness.
They get tired of concentrated power, unfair economic relations and censorship. The crypto industry offers an alternative and has every chance to solve these problems. To become, if not a panacea, then at least “the power of good,” as DiFrancesco claims. There are no guarantees, but there is faith and hope. And they are capable of anything.
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submitted by Smart_Smell to Robopay [link] [comments]

The Fed's Losing Battle with Technological Deflation

PART 1/4 - FREE MARKET?
First off, let's set the scene.
The stock market is telling you nothing about the real economy anymore.
Economic fundamentals have never mattered as little for the stock market as has been the case during this 11-year bull market.
The correlation between gross-domestic-product growth and the direction of the S&P 500 Index has only been 7% in this cycle - historically it has been 30% to 70%.
Why?
Well, it is the Central Banks, led by the Fed, who printed their way out of the Recession in '08.
In doing so, they have papered over the cracks, and we have seen the longest economic expansion is US history.
However, this is not a particularly meritocratic process: money creation itself increases inequality via the Cantillon Effect, as money printing leads to asset price inflation, which disproportionately benefits the rich and hurts the poor.
Former Federal Reserve Chairman Paul Volcker told the New York Times in 2018:
“The central issue is we’re developing into a plutocracy. We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive."
The reality of course is that this is largely not the case - it is because the game is rigged in their favour.
Now, it is important to emphasise the fact that the path we have taken has resulted in the highest living standards we have seen in human history.
However, the issue, particularly since the US completely abandoned the gold standard in 1971, is that debt has exploded to obscene levels.
We are not operating in a free market if it takes $185 trillion of debt over the last 20 years to create 'growth'.
In fact, the global debt to GDP ratio hit an all-time high of 322% in the third quarter of 2019.
Inflation means that your dollar loses value and thus your purchasing power goes down.
Deflation means that the value of your dollar goes up and your purchasing power goes up.
That's a good thing right? You get more goods and services for less.
Well, no.
If you have deflation, debt explodes in real terms and you can never pay it back.
As the economy is based on debt, if you allow deflation, then you have to reset the debt.
This is why central banks fear deflation so much.
However, the major force driving the human race is technological progress - and this stops for no mortal...
PART 2/4 - TECHNOLOGICAL DEFLATION:
The increased abundance created by technology will result in massive job losses.
Throughout history, doom porn enthusiasts have screamed that the machines are coming for jobs. This is not a new phenomenon.
All technological revolutions are deflationary - since they create "supply side shocks", meaning that they allow for more intensive use of resources and thus higher production. With more goods being produced, all other things being equal, the price of those goods will fall.
In the last 20 years or so, software has disrupted and replaced many established goods and services.
It is in the next 20 years that another disruptive technology is set to take the stage: AI
According to Steve Schwarzman, the co-founder and CEO of The Blackstone Group who has a net worth of $17.6BN, "This is going to touch everyone's life....you're not going to be able to get away from this technology"
Moreover, this virus will only accelerate this trend towards tech. Zoom is a fantastic example of exactly this.
Old legacy economic systems were not built for this tech deflation, and the thing about exponential growth is that we humans do not intuitively understand it.
As an example, if you folded a piece of paper 50 times, of course you can only fold it seven times, but if you could fold it 50 times, it would reach the Sun!
PART 3/4 - IMPLICATIONS FOR SOCIETY:
The question is: how does this play out?
In the long term, it is the fundamental structure of the economic system that has a significant impact on people's lives, not who is President for 4 to 8 years.
In reality, politicians have limited power and are effectively all puppets. We have seen what happens when a President doesn't stay in their lane...
One could argue that the two main mechanisms of control are:
  1. Divide and Conquer and
  2. Order from Chaos
As we have seen many times in the past, herd psychology is worryingly easy to manipulate...
Speaking of the censorship, in his book Antifragile, Nassim Taleb discusses the anti fragility of information.
Information feeds more on attempts to harm it than it does on efforts to promote it.
A fantastic example of this process is what has happened in the last week with London Real: they were banned on LinkedIn and David Icke's interview was censored. Now, regardless of what you think of this particular channel or your thoughts on David Icke and the theories provided, censoring information in this way actually spreads it more virally.
It's fascinating to observe how many views the videos regarding the bans and censorship have relative to the others. And the impact this has had on subscribers.
It is always easier to blame a bigger enemy (or create a new one) rather than to admit it's a structural problem.
Therefore, you avoid short term pain...whatever the cost.
The real question is if and when this situation will lead to social unrest...
PART 4/4 - INTELLECTUAL CAPITALISM:
The depth and width of jobs impacted by AI will continue to increase in the future, now this will not necessarily happen straight away.
However, our transition from commodity capitalism to intellectual capitalism in inevitable and the people and nations who fight against this trend will be on the wrong side of history.
From a practical investment perspective, and disclaimer this is not investment advice, network effects are a crucial aspect to consider moving forwards.
Essentially, this means that the value of the network increases with each additional user - all of the tech monopolies have exhibited this property.
An asset which could in time demonstrate very strong network effects is Bitcoin.
Looking at the market cap relative to other asset classes, Bitcoin provides an asymmetric investment opportunity.
Only time will tell...
https://www.youtube.com/watch?v=7nFbKzt-uwE
submitted by financeoptimum to ReserveProtocol [link] [comments]

Pragmatists, Romantics, Analysts, and Fundamentalists: a fun heuristic for classifying personalities

What are you favourite ways of categorising personality types?
Joke: Big 5
Broke: MBTI
Woke: Zodiac Sign
Bespoke: Which Veggietales Character Are You?
In all seriousness, I love finding interesting new ways of categorising personalities. I've taken MBTIs, Big 5s, Personality Disorder tests, and Hogwarts House quizzes more times than I can count. Even if a given schema isn't scientifically robust, it can serve as a useful shorthand among a knowing audience - you can communicate a lot by saying things like "he's a typical fucking Aries" or "he thinks he's an Aragorn but he's actually a Boromir".
I'd love to hear what schemata others have come up with, but one useful little framework I've devised and found surprisingly adaptable is to carve up people into Pragmatists, Romantics, Analysts, and Fundamentalists. Pragmatists are relatively unreflective and just want to get on with life. Romantics are driven by emotion and beauty. Analysts are self-conscious optimisers who value truth and knowledge. And fundamentalists operate on the basis of axiomatic principles that structure everything else they do. Pragmatists think the other types are out to lunch. Romantics think the other types are boring and cold. Analysts think the other types are stupid and unreflective. And fundamentalists - insofar as they understand the other types at all - think of them as benighted and deprived of some basic insight.
I don't think this framework is particularly useful in classifying people tout court, but it's quite intuitive to apply to particular domains. Consider Christianity, for example. A Pragmatist Christian goes to Church because that's what they've always done and the Minister gives funny sermons and it's a good opportunity to chat about what's happening in the community. A Romantic Christian is a William Blake type - they're moved to tears every time they listen to Allegri's Misere, and love Kierkegaard. They've probably been to Taizé. Analyst Christians are impressed by the Cosmological Argument, have a signed copy of the Summa Theologica, and privately worry a lot about the problem of evil. Finally, a Fundamentalist Christian cleaves to a few basic principles - maybe that's biblical literalism, but it could equally be a single moment of personal revelation they had that they've subsequently built their life around.
Science is another nice example. The Pragmatic Scientist would like to finish the paper they're working on, get a publication in Nature, and secure a juicy grant. The Romantic Scientist gazes at the stars at night feeling a mix of terror and wonder. They think about the Fermi paradox ten times a day. They probably love Carl Sagan. The Analyst Scientist likes metanalyses, worries about the replication crisis, and complains about the statistical incompetence of their peers. The Fundamentalist Scientist is in a ten year back-and-forth publication battle with a rival at Stanford who they consider to be a fucking idiot who doesn't grasp the obvious truth of Modified Newtonian Dynamics. They are possibly a fan of Richard Dawkins.
I also see a nice mix of these personality types in the Rationalist community. Probably the Pragmatists Rationalists are the least well represented, but they're around. They started reading Less Wrong after they started working for an algorithmic trading fund and it was recommended to them by a coworker. They're always on the lookout for inadequate equilibria they can exploit. They bought BitCoin early and used the money to fund their EVE Online Corp. They frequently makes comments like "Well if you really believe that, you could make a bunch of money on PredictIt right now." They use Modafinil three times a week and can't understand everyone doesn't do the same. Naturally, they're one-boxers. The Romantic Rationalists, by contrast, probably came into the movement after reading Kurzweil and Bostrom. They worry a lot about consciousness and frequently flirt with panpsychism. They love Scott Alexander and CS Lewis and have read Harry Potter and The Methods of Rationality seven times. They sometimes worry that they've given themselves HPPD from microdosing but aren't sure if things always looked that way (or maybe it's just their new polyphasic sleep schedule?). The Analyst Rationalists got into Rationalism via reading u/gwern or maybe listening to Rationally Speaking. They find Newcomb's problem deeply disturbing but find One Boxers to be baffling and annoying. They try not to think about Roko's Basilisk (sorry for mentioning it). They take 2mg of melatonin to sleep at night but worry that they're becoming dependent. They see the obvious appeal of Mealsquares. They use unnecessary formalism at every opportunity. They actually read the fucking article you just posted. Finally, Fundamentalist Rationalists probably came across Less Wrong at a delicate age and were immediately convinced by the obvious and irrefutable truth of Timeless Decision Theory, HBD, antinatalism, or Bayesianism. They are up to 20g of Phenibut a day but have no intention of tapering. They either love or despise Nicholas Nassim Taleb. They once broke up with their girlfriend because she was a Frequentist. They have probably been banned from the Culture War Thread at least once.
submitted by Doglatine to slatestarcodex [link] [comments]

Fed Losing Battle with Technological Deflation?

PART 1/4 - FREE MARKET?
First off, let's set the scene.
The stock market is telling you nothing about the real economy anymore.
Economic fundamentals have never mattered as little for the stock market as has been the case during this 11-year bull market.
The correlation between gross-domestic-product growth and the direction of the S&P 500 Index has only been 7% in this cycle - historically it has been 30% to 70%.
Why?
Well, it is the Central Banks, led by the Fed, who printed their way out of the Recession in '08.
In doing so, they have papered over the cracks, and we have seen the longest economic expansion is US history.
However, this is not a particularly meritocratic process: money creation itself increases inequality via the Cantillon Effect, as money printing leads to asset price inflation, which disproportionately benefits the rich and hurts the poor.
Former Federal Reserve Chairman Paul Volcker told the New York Times in 2018:
“The central issue is we’re developing into a plutocracy. We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive."
The reality of course is that this is largely not the case - it is because the game is rigged in their favour.
Now, it is important to emphasise the fact that the path we have taken has resulted in the highest living standards we have seen in human history.
However, the issue, particularly since the US completely abandoned the gold standard in 1971, is that debt has exploded to obscene levels.
We are not operating in a free market if it takes $185 trillion of debt over the last 20 years to create 'growth'.
In fact, the global debt to GDP ratio hit an all-time high of 322% in the third quarter of 2019.
Inflation means that your dollar loses value and thus your purchasing power goes down.
Deflation means that the value of your dollar goes up and your purchasing power goes up.
That's a good thing right? You get more goods and services for less.
Well, no.
If you have deflation, debt explodes in real terms and you can never pay it back.
As the economy is based on debt, if you allow deflation, then you have to reset the debt.
This is why central banks fear deflation so much.
However, the major force driving the human race is technological progress - and this stops for no mortal...
PART 2/4 - TECHNOLOGICAL DEFLATION:
The increased abundance created by technology will result in massive job losses.
Throughout history, doom porn enthusiasts have screamed that the machines are coming for jobs. This is not a new phenomenon.
All technological revolutions are deflationary - since they create "supply side shocks", meaning that they allow for more intensive use of resources and thus higher production. With more goods being produced, all other things being equal, the price of those goods will fall.
In the last 20 years or so, software has disrupted and replaced many established goods and services.
It is in the next 20 years that another disruptive technology is set to take the stage: AI
According to Steve Schwarzman, the co-founder and CEO of The Blackstone Group who has a net worth of $17.6BN, "This is going to touch everyone's life....you're not going to be able to get away from this technology"
Moreover, this virus will only accelerate this trend towards tech. Zoom is a fantastic example of exactly this.
Old legacy economic systems were not built for this tech deflation, and the thing about exponential growth is that we humans do not intuitively understand it.
As an example, if you folded a piece of paper 50 times, of course you can only fold it seven times, but if you could fold it 50 times, it would reach the Sun!
PART 3/4 - IMPLICATIONS FOR SOCIETY:
The question is: how does this play out?
In the long term, it is the fundamental structure of the economic system that has a significant impact on people's lives, not who is President for 4 to 8 years.
In reality, politicians have limited power and are effectively all puppets. We have seen what happens when a President doesn't stay in their lane...
One could argue that the two main mechanisms of control are:
  1. Divide and Conquer and
  2. Order from Chaos
As we have seen many times in the past, herd psychology is worryingly easy to manipulate...
Speaking of the censorship, in his book Antifragile, Nassim Taleb discusses the anti fragility of information.
Information feeds more on attempts to harm it than it does on efforts to promote it.
A fantastic example of this process is what has happened in the last week with London Real: they were banned on LinkedIn and David Icke's interview was censored. Now, regardless of what you think of this particular channel or your thoughts on David Icke and the theories provided, censoring information in this way actually spreads it more virally.
It's fascinating to observe how many views the videos regarding the bans and censorship have relative to the others. And the impact this has had on subscribers.
It is always easier to blame a bigger enemy (or create a new one) rather than to admit it's a structural problem.
Therefore, you avoid short term pain...whatever the cost.
The real question is if and when this situation will lead to social unrest...
PART 4/4 - INTELLECTUAL CAPITALISM:
The depth and width of jobs impacted by AI will continue to increase in the future, now this will not necessarily happen straight away.
However, our transition from commodity capitalism to intellectual capitalism in inevitable and the people and nations who fight against this trend will be on the wrong side of history.
From a practical investment perspective, and disclaimer this is not investment advice, network effects are a crucial aspect to consider moving forwards.
Essentially, this means that the value of the network increases with each additional user - all of the tech monopolies have exhibited this property.
An asset which could in time demonstrate very strong network effects is Bitcoin.
Looking at the market cap relative to other asset classes, Bitcoin provides an asymmetric investment opportunity.
Only time will tell...
https://www.youtube.com/watch?v=7nFbKzt-uwE
submitted by financeoptimum to Silverbugs [link] [comments]

Nassim Nicholas Taleb advisories on hedging against a fiat system implosion

Universa Investments, advised by Nassim Nicholas Taleb, recently made a fortune shorting the financial markets and their long-standing penchant for underestimating fat-tail risk. Universa Investments is owned by Mark Spitznagel who is notorious for declaring the following:
I spend all my time thinking about looming disaster.
These profits are still made in dollars. But then again, what if the fiat currencies themselves end up imploding? In fact, Nassim has already advised on the matter in his December 2019 interview with the indiatimes.com:
I only have an idea of what to avoid. Avoid owning treasury bonds, avoid owning some classes of assets; at this point I would avoid stocks simply because they could collapse any time.
Hence, Nassim resolutely advocates against owning any assets in the financial markets, because these markets are going to fall apart. In fact, we already knew about this advice. We also knew that Universe Investment was actively shorting the financial markets.
In the same interview, Nassim advises the following about fiat currencies. When a country (in this example, Lebanon) introduces currency controls, Taleb strongly advocates abandoning the fiat banking system and to use cryptocurrencies instead:
I am realising Lebanon is in a situation where there is an implied currency control but the government cannot control bitcoin which is a good thing because people have no trust and the ability of the central bank which really causes the ponzi style collapse and the bitcoin does not have that.
Gold has its problems. Gold may not be entirely suitable for international trade and associated payments. Nonetheless, Taleb still wants to own gold as a store of value:
Do I like gold? No. But I own that because I am confused and it feels good. If I do not have enough gold, I do not sleep well. If I have enough gold, even if prices collapse, I sleep well. So, may be may body is telling me something about how the environment is moving away from central bank domination.
In a very recent tweet response (16 April 2020) to the deteriorating financial situation in Lebanon, Taleb strongly insists:
Use cryptocurrencies!
Of course, I remain on the outlook for new comments and advisories by Nassim Taleb on a possible fiat system implosion. I am quite confident that the above is not the last thing he will be saying on the matter.
submitted by mimblezimble to nassimtaleb [link] [comments]

The Fed's Losing Battle with Technological Deflation

PART 1/4 - FREE MARKET?
First off, let's set the scene.
The stock market is telling you nothing about the real economy anymore.
Economic fundamentals have never mattered as little for the stock market as has been the case during this 11-year bull market.
The correlation between gross-domestic-product growth and the direction of the S&P 500 Index has only been 7% in this cycle - historically it has been 30% to 70%.
Why?
Well, it is the Central Banks, led by the Fed, who printed their way out of the Recession in '08.
In doing so, they have papered over the cracks, and we have seen the longest economic expansion is US history.
However, this is not a particularly meritocratic process: money creation itself increases inequality via the Cantillon Effect, as money printing leads to asset price inflation, which disproportionately benefits the rich and hurts the poor.
Former Federal Reserve Chairman Paul Volcker told the New York Times in 2018:
“The central issue is we’re developing into a plutocracy. We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive."
The reality of course is that this is largely not the case - it is because the game is rigged in their favour.
Now, it is important to emphasise the fact that the path we have taken has resulted in the highest living standards we have seen in human history.
However, the issue, particularly since the US completely abandoned the gold standard in 1971, is that debt has exploded to obscene levels.
We are not operating in a free market if it takes $185 trillion of debt over the last 20 years to create 'growth'.
In fact, the global debt to GDP ratio hit an all-time high of 322% in the third quarter of 2019.
Inflation means that your dollar loses value and thus your purchasing power goes down.
Deflation means that the value of your dollar goes up and your purchasing power goes up.
That's a good thing right? You get more goods and services for less.
Well, no.
If you have deflation, debt explodes in real terms and you can never pay it back.
As the economy is based on debt, if you allow deflation, then you have to reset the debt.
This is why central banks fear deflation so much.
However, the major force driving the human race is technological progress - and this stops for no mortal...

PART 2/4 - TECHNOLOGICAL DEFLATION:
The increased abundance created by technology will result in massive job losses.
Throughout history, doom porn enthusiasts have screamed that the machines are coming for jobs. This is not a new phenomenon.
All technological revolutions are deflationary - since they create "supply side shocks", meaning that they allow for more intensive use of resources and thus higher production. With more goods being produced, all other things being equal, the price of those goods will fall.
In the last 20 years or so, software has disrupted and replaced many established goods and services.
It is in the next 20 years that another disruptive technology is set to take the stage: AI
According to Steve Schwarzman, the co-founder and CEO of The Blackstone Group who has a net worth of $17.6BN, "This is going to touch everyone's life....you're not going to be able to get away from this technology"
Moreover, this virus will only accelerate this trend towards tech. Zoom is a fantastic example of exactly this.
Old legacy economic systems were not built for this tech deflation, and the thing about exponential growth is that we humans do not intuitively understand it.
As an example, if you folded a piece of paper 50 times, of course you can only fold it seven times, but if you could fold it 50 times, it would reach the Sun!

PART 3/4 - IMPLICATIONS FOR SOCIETY:
The question is: how does this play out?
In the long term, it is the fundamental structure of the economic system that has a significant impact on people's lives, not who is President for 4 to 8 years.
In reality, politicians have limited power and are effectively all puppets. We have seen what happens when a President doesn't stay in their lane...
One could argue that the two main mechanisms of control are:
  1. Divide and Conquer and
  2. Order from Chaos
As we have seen many times in the past, herd psychology is worryingly easy to manipulate...
Speaking of the censorship, in his book Antifragile, Nassim Taleb discusses the anti fragility of information.
Information feeds more on attempts to harm it than it does on efforts to promote it.
A fantastic example of this process is what has happened in the last week with London Real: they were banned on LinkedIn and David Icke's interview was censored. Now, regardless of what you think of this particular channel or your thoughts on David Icke and the theories provided, censoring information in this way actually spreads it more virally.
It's fascinating to observe how many views the videos regarding the bans and censorship have relative to the others. And the impact this has had on subscribers.
It is always easier to blame a bigger enemy (or create a new one) rather than to admit it's a structural problem.
Therefore, you avoid short term pain...whatever the cost.
The real question is if and when this situation will lead to social unrest...

PART 4/4 - INTELLECTUAL CAPITALISM:
The depth and width of jobs impacted by AI will continue to increase in the future, now this will not necessarily happen straight away.
However, our transition from commodity capitalism to intellectual capitalism in inevitable and the people and nations who fight against this trend will be on the wrong side of history.
From a practical investment perspective, and disclaimer this is not investment advice, network effects are a crucial aspect to consider moving forwards.
Essentially, this means that the value of the network increases with each additional user - all of the tech monopolies have exhibited this property.
An asset which could in time demonstrate very strong network effects is Bitcoin.
Looking at the market cap relative to other asset classes, Bitcoin provides an asymmetric investment opportunity.
Only time will tell...
https://www.youtube.com/watch?v=7nFbKzt-uwE
submitted by financeoptimum to Capitalism [link] [comments]

The Fed's Losing Battle with Technological Deflation

PART 1/4 - FREE MARKET?
First off, let's set the scene.
The stock market is telling you nothing about the real economy anymore.
Economic fundamentals have never mattered as little for the stock market as has been the case during this 11-year bull market.
The correlation between gross-domestic-product growth and the direction of the S&P 500 Index has only been 7% in this cycle - historically it has been 30% to 70%.
Why?
Well, it is the Central Banks, led by the Fed, who printed their way out of the Recession in '08.
In doing so, they have papered over the cracks, and we have seen the longest economic expansion is US history.
However, this is not a particularly meritocratic process: money creation itself increases inequality via the Cantillon Effect, as money printing leads to asset price inflation, which disproportionately benefits the rich and hurts the poor.
Former Federal Reserve Chairman Paul Volcker told the New York Times in 2018:
“The central issue is we’re developing into a plutocracy. We’ve got an enormous number of enormously rich people that have convinced themselves that they’re rich because they’re smart and constructive."
The reality of course is that this is largely not the case - it is because the game is rigged in their favour.
Now, it is important to emphasise the fact that the path we have taken has resulted in the highest living standards we have seen in human history.
However, the issue, particularly since the US completely abandoned the gold standard in 1971, is that debt has exploded to obscene levels.
We are not operating in a free market if it takes $185 trillion of debt over the last 20 years to create 'growth'.
In fact, the global debt to GDP ratio hit an all-time high of 322% in the third quarter of 2019.
Inflation means that your dollar loses value and thus your purchasing power goes down.
Deflation means that the value of your dollar goes up and your purchasing power goes up.
That's a good thing right? You get more goods and services for less.
Well, no.
If you have deflation, debt explodes in real terms and you can never pay it back.
As the economy is based on debt, if you allow deflation, then you have to reset the debt.
This is why central banks fear deflation so much.
However, the major force driving the human race is technological progress - and this stops for no mortal...

PART 2/4 - TECHNOLOGICAL DEFLATION:
The increased abundance created by technology will result in massive job losses.
Throughout history, doom porn enthusiasts have screamed that the machines are coming for jobs. This is not a new phenomenon.
All technological revolutions are deflationary - since they create "supply side shocks", meaning that they allow for more intensive use of resources and thus higher production. With more goods being produced, all other things being equal, the price of those goods will fall.
In the last 20 years or so, software has disrupted and replaced many established goods and services.
It is in the next 20 years that another disruptive technology is set to take the stage: AI
According to Steve Schwarzman, the co-founder and CEO of The Blackstone Group who has a net worth of $17.6BN, "This is going to touch everyone's life....you're not going to be able to get away from this technology"
Moreover, this virus will only accelerate this trend towards tech. Zoom is a fantastic example of exactly this.
Old legacy economic systems were not built for this tech deflation, and the thing about exponential growth is that we humans do not intuitively understand it.
As an example, if you folded a piece of paper 50 times, of course you can only fold it seven times, but if you could fold it 50 times, it would reach the Sun!

PART 3/4 - IMPLICATIONS FOR SOCIETY:
The question is: how does this play out?
In the long term, it is the fundamental structure of the economic system that has a significant impact on people's lives, not who is President for 4 to 8 years.
In reality, politicians have limited power and are effectively all puppets. We have seen what happens when a President doesn't stay in their lane...
One could argue that the two main mechanisms of control are:
  1. Divide and Conquer and
  2. Order from Chaos
As we have seen many times in the past, herd psychology is worryingly easy to manipulate...
Speaking of the censorship, in his book Antifragile, Nassim Taleb discusses the anti fragility of information.
Information feeds more on attempts to harm it than it does on efforts to promote it.
A fantastic example of this process is what has happened in the last week with London Real: they were banned on LinkedIn and David Icke's interview was censored. Now, regardless of what you think of this particular channel or your thoughts on David Icke and the theories provided, censoring information in this way actually spreads it more virally.
It's fascinating to observe how many views the videos regarding the bans and censorship have relative to the others. And the impact this has had on subscribers.
It is always easier to blame a bigger enemy (or create a new one) rather than to admit it's a structural problem.
Therefore, you avoid short term pain...whatever the cost.
The real question is if and when this situation will lead to social unrest...

PART 4/4 - INTELLECTUAL CAPITALISM:
The depth and width of jobs impacted by AI will continue to increase in the future, now this will not necessarily happen straight away.
However, our transition from commodity capitalism to intellectual capitalism in inevitable and the people and nations who fight against this trend will be on the wrong side of history.
From a practical investment perspective, and disclaimer this is not investment advice, network effects are a crucial aspect to consider moving forwards.
Essentially, this means that the value of the network increases with each additional user - all of the tech monopolies have exhibited this property.
An asset which could in time demonstrate very strong network effects is Bitcoin.
Looking at the market cap relative to other asset classes, Bitcoin provides an asymmetric investment opportunity.
Only time will tell...
https://www.youtube.com/watch?v=7nFbKzt-uwE
submitted by financeoptimum to conspiracy [link] [comments]

Upon the Fortune of this Present Year | Monthly FIRE Portfolio Update - November 2019

My ventures are not in one bottom trusted, Nor to one place; nor is my whole estate Upon the fortune of this present year Therefore my merchandise makes me not sad
Shakespeare, The Merchant of Venice (1596)
This is my thirty-sixth portfolio update. I complete this update monthly to check my progress against my goals.
Portfolio goals
My objectives are to reach a portfolio of:
Both of these are based on an expected average real return of 4.19 per cent, or a nominal return of 7.19 per cent, and are expressed in 2018 dollars.
Portfolio summary
Vanguard Lifestrategy High Growth Fund – $797 618 Vanguard Lifestrategy Growth Fund – $45 218 Vanguard Lifestrategy Balanced Fund – $81 294 Vanguard Diversified Bonds Fund – $109 367 Vanguard Australian Shares ETF (VAS) – $158 769 Vanguard International Shares ETF (VGS) – $28 471 Betashares Australia 200 ETF (A200) – $268 114 Telstra shares (TLS) – $2 057 Insurance Australia Group shares (IAG) – $9 996 NIB Holdings shares (NHF) – $8 100 Gold ETF (GOLD.ASX) – $98 376 Secured physical gold – $15 868 Ratesetter (P2P lending) – $16 915 Bitcoin – $128 630 Raiz app (Aggressive portfolio) – $17 535 Spaceship Voyager app (Index portfolio) – $2 377 BrickX (P2P rental real estate) – $4 418
Total portfolio value: $1 793 753 (+$33 713)
Asset allocation
Australian shares – 43.2% (1.8% under) Global shares – 22.9% Emerging markets shares – 2.4% International small companies – 3.2% Total international shares – 28.4% (1.6% under) Total shares – 71.6% (3.4% under) Total property securities – 0.2% (0.2% over) Australian bonds – 4.8% International bonds – 9.8% Total bonds – 14.6% (0.4% under) Gold – 6.4% Bitcoin – 7.2% Gold and alternatives – 13.5% (3.5% over)
Presented visually, below is a high-level view of the current asset allocation of the portfolio.
[Chart]
Comments
This month the value of the portfolio increased again by around $33 000 in total, building on the previous two months of growth.
[Chart]
The equity part of the portfolio has grown by around $50 000 to now reach over $1.25 million for the first time. This increase includes new contributions and the last part of the previous June distributions being 'averaged into' equity markets. The equity component of the portfolio has increased by around 40 per cent this calendar year.
The only other major movement in the monthly value of the portfolio has been a sharp downward movement in the price of Bitcoin, and a small increase in the value of bond holdings.
[Chart]
The contributions this month went entirely into the Vanguard Australian shares ETF (VAS.ASX), to reduce the gap to both the overall target equity allocation, and to achieve the target split between Australian and global shares. From this month onwards I expect more regular variations in whether new contributions go to either Australian or global shares, based on keeping this target allocation constant.
Charting errors and wrong bearings - the nature of long-term returns
Over the last month, as the end destination starts to appear a little clearer in the distance, the issue of the nature of long-term returns has been front of mind.
There is a strong literature and body of academic work around long-term equity return expectations. Much of this has informed my thinking, and has over time found its way into the corners of financial independence movement through the avenues of the so-called Trinity and Bengen '4 per cent' studies (pdf), and a range of calculators that use historical data to help guide investors expectations around feasible future returns.
Yet, as I have noted before, future states of the world are not drawn from the same distribution as the past - or as the British writer G K Chesterton evocatively put it - 'wildness lies in wait'. Most often this issue is glided over neatly (including by myself) with assured sounding phrases such as 'based on history'.
The works of Nassim Taleb, most particularly Fooled by Randomness, and The Black Swan, provide a fuller perspective on these issues. Recently though, reading a 2017 paper Stock Market Charts You Never Saw provided a unique and arresting view of their application to long-term return projections.
The paper is long and detailed, but makes some fundamental points for consideration. It provides a challenging perspective on investment returns that falls almost completely out of mainstream discussions of the topic in the financial independence arena.
To summarise, the paper highlights that:
As the paper notes:
"When investment advisors counsel that stocks are the best bet for a long investment horizon, they should append the acknowledgement: “if my market timing is good.” When advisors argue for stocks over bonds, they should append the caveat “as long as you are not French, or Italian, or Japanese, or Swiss, and provided that the 20th century is a better guide to the future than the 19th century.” For real investors with their limited time horizons, who may reside anywhere in the world, there have been times when both stock recommendations were bad."
The issue of the primacy of total returns, compared to income returns is also bracingly challenged with reference to the drawdown phase:
Once portfolio accumulation ceases with retirement, portfolio income must be spent to live. Under those circumstances real price return, over short periods lasting two or three decades, becomes an important metric. By that measure, an investment in stocks has been dicey indeed.
Usefully, the paper sets out (at the end) both conventional charts, and alternative representations of the same returns data, aimed at illustrating the hidden biases and properties of standard charts of market returns.
In short, the paper poses challenges to many conventional investment tenets assumed to be true and widely repeated within financial independence discussions. Often these tenets are promoted with the sound and well-meaning goal of reducing new or existing investors caution or level of worry around possible falls in equity markets. The question this work implicitly poses is, in the process, are distorted expectations unintentionally being promoted?
Drawing out the lessons - understanding and responding to risks
What are the practical implications of this? The most obvious is to look closely at how data is presented and to think carefully about how the assumptions implicit in that presentation line up against ones own situation.
Some other implications include:
In other words - to paraphrase Shakespeare's Antonio - not trusting ones ventures to one ship, place, or a fortune upon the present year.
Progress
Progress against the objectives, and the additional measures I have reached is set out below.
Measure Portfolio All Assets Objective #1 – $1 598 000 (or $67 000 pa) 112.2% 153.0% Objective #2 – $1 980 000 (or $83 000 pa) 90.6% 123.5% Credit card purchases - $73 000 pa 103.0% 140.4% Total expenses - $89 000 pa 84.5% 115.1%
Summary
As the year begins to draw to a close, a restlessness to see its final outcomes, in dividends and portfolio growth presses itself forward. It is in fact a small echo of one of the strong temptations of the middle of the FI journey - a desire to wish away time itself.
Some potential upcoming changes and uncertainties in work situation have added force to this temptation, forcing some thoughts about different potential balances between work and other elements of daily life could be.
By distance, the intended journey is around ninety per cent over. At times this introduces both an elegiac quality to, and a premature desire to mark, possible 'lasts' along the journey.
Yet the extraordinary current state of financial markets gives pause. Policy makers and advisors casually discuss negative rates and their implications, even as Australian and US equity markets hit new highs. In a sense, it feels a more psychologically testing time to be closer to my higher target allocation for equities than any time before.
The diversification in the portfolio can be thought of as a series of small hedges against different potential futures playing out. By far, the largest probability (or potential future) at 75 per cent, is that the historical dominance of equity as a generator of real returns continues to function.
The remainder of the portfolio can be seen in some ways as a offsetting hedge against large equity market falls, or some other disturbance in financial markets with negative implications for equity. At base, however, I remain comfortable with the 'balance of probabilities' implied in the target asset allocation.
This month saw a new (v)blogger Mx Lauren join the Australian FI scene, as well as the suggestion by Money Magazine of a new 'simplified' retirement rule of thumb to consider.
A further piece of fascinating reading was this piece by Ben Carlson in Fortune Magazine, explaining the key role of earnings growth in recent US market return. It posits that the recent strong performance of US equities is attributable to fundamental earnings growth, rather than simply an unjustified expansion in the price investors are willing to pay for that growth.
This - in addition to Shakespeare's pre-modern enjoinment to diversify - is potentially another reason to not confine considerations to one market, and one place, as December distributions slowly drift into sight.
The post, links and full charts can be seen here.
submitted by thefiexpl to fiaustralia [link] [comments]

CVM  Nassim Taleb on Bitcoin Peter Warren om Nassim Taleb, Ray Dalio, Bitcoin, Nicolai Tangen og USA  Christopher Vonheim  BYNN Why Nassim Taleb is still betting on crypto - YouTube Nassim Nicholas Taleb vs David Birch on The Bitcoin Standard - Bitcoin News Nassim Taleb Almost All Bitcoiners Are ‘Total Idiots’

Noted economist Nassim Taleb recently commented on Bitcoin, and why he thinks it is a good alternative asset to fiat currency. The world's financial system looks strained, and in Lebanon, people are struggling to get access to their bank deposits. Taleb was born in Lebanon, and knows the problems that the established financial system is facing on a first-hand basis. Taleb said: “I am ... Scholar, statistician and prolific essayist, Nassim Nicholas Taleb has made his viewpoint on Bitcoin crystal clear this week. His latest blog post, simply titled “Bitcoin”, offers his official stamp of approval, summarizing that the cryptocurrency is an “insurance policy against an Orwellian future”.. This article will look at the overlap between Taleb’s own fields of study and the ... Nassim Taleb, a prominent author and educationist, has raised a new controversy over Bitcoin investors and their ability to understand the asset's nuances. — Nassim Nicholas Taleb, Bitcoin. Bitcoin is still relatively new and with its popularity comes a lot of criticism. A single person buying massive amounts on an exchange or an abrupt press ... – Nassim Taleb, Antifragile. Bitcoin is an adaptive and evolving system; it is not static. No one controls the network and there are no leaders capable of forcing changes onto the network. It is decentralized at every layer, and as a result, it has shown to be immune to any type of attack.

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CVM Nassim Taleb on Bitcoin

Nassim Taleb on Bitcoin, Stocks, Portfolio and The Crash 🧠Enroll with Crypto University Courses Now: https://cryptouniversity.co.za Subscribe To My Channel:h... Peter Warren er en pionèr innenfor finanssektoren i Norge og har over 30 års erfaring som trader innenfor råvarer, metaller, valuta, aksjer og renter. Han startet det norske markedet for ... (May 27, 2010) Nassim Taleb is saying what no one wants to hear: Forecasters, Risk Managers, Policy Makers, and Government Officials have all failed us and w... Naseem Nicholas Taleb, one of the world's most famous philosophers who predicted the economic downturn of the year 2008, said the value of Cryptocurrency Bitcoin could reach $ 100 million, or ... The term "Lindy Effect" was let's say coined by Albert Goldman in the sixties but heavily popularized by Nassim Taleb through his "Incerto" books. What is th...

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