Firstly, on the whole we are in agreement in many aspects of the impacts of the current situation.
Where we might differ is the impact on RED."It's obviously wrong to confuse "the creative destruction of capitalism" with what RED needs."One of the issues with the theory of creative destruction by Shumper? (sic) is that in the cycle he describes, I feel there are many cul-de-sacks that lead to nowhere that help to fill out this picture.
For example. Beta was a better video recorder but didn't make it into maistream - google glass failed as well due to price and privacy issues but don't doubt the tecnology is being used somewhere.
To that end if you consider a super macro position of money (not currency, most people don't understand the difference), for 5000 years gold has always been the standard we have reverted to when the proverbial has hit. Even in Roman days, the dilution of gold with copper (the fiat currency used to pay their soldiers) is the same printing of money we see today and cause - a point we agree on MIS - inflation.
In the same period, there have been (according to some estimates) around 5000 fiat currencies. How many are around today? I feel that blockchain technology will become the next world FIAT but not in its current form. They might possibly link it directly to gold like the US$ was at Bretton Woods. Something that was temporarily suspended 15 August 1971 - still waiting for that suspension to be lifted.
I feel that at some point we will need to take our medicine, some might suggest that should have happened in 2008. The tablet now will be bigger and more painful and we might all have to take it in non conventional means (hope that joke does not offend).
Many staple in the US are up over 20% at the aisle yet inflation is reported at 7%. This is because of the creative way CPI is calculated. Late last year the US started using the Dallas FED CPI. This cuts out the top 34% of inflammatory items and the bottom 20%. This is findable with some effort.
Some may be interested in a site called Shadow Stats which shows what inflation would look like if still calculated in 1990 and 1980 methodologies.
To continue, corrections and crashes in the markets by definition are made up of two things. One economic issue providing the fuel and then a trigger to ignite it. in 2008, sub prime mortgages was triggered by the so called Lehmon moment. This time, inflation and QE(XX) another failed creative destruction are the fuels, the ignition point - who knows yet. Here are some ideas:
Russia Ukraine hostilities The US Government doing whats right (good luck with that one) Interest rate rising by 50 points in March in the USA Evergrande even though Vanke is even bigger and state owned we don't seem to know anything about the "war" they are in to quote the chairman. Energy pricing in Europe
...just to name a few. It could also be something else.
What is known is that major changes come with social unrest and will happen quickly. Do we have that now?
Finally, if anyone is still reading, the price of gold. With the inclusion of the huge flag I tend to agree with your thoughts.
One thing that this generation have not seen as they continue to believe crypto is king is a catastrophe. This is why in my little pea brain I think the young continue to believe the rhetoric and pumper of crypto in its current form. Wait till the proverbial hits and lets see what they do.
My bet is that they cash up and never invest again. Some will go to Au and Ag in some form. Actually holdng the metal or ETF(s) or a company(ies) like RED. Mid last year I held NO gold, now 8 shares heavily weighted in RED and cash in an account ready to move in after the correction/crash.
For those still reading, you may note that MIS and I talk a lot about USA and their numbers. The reality is that what happens there directly impacts us here weather we like it or not. It is why I stay up late almost every night to see the pre-markets and opens in the USA.
Enjoying this conversation.
Again happy to move it elsewhere but have used it to explain why RED is a good port to be in.
PS I did not proof read this.
RED Price at posting:
29.5¢ Sentiment: Buy Disclosure: Held
(20min delay)