11th April 2024 > > A wise man & QE.

tl;dr

The devastating reincarnation of QE reinforces the need to own BTC.

Market Snap

Market Wrap

Occasional Series – A wise man once said

“I think we will never see a 5-handle again and, within a year, we will never see less than 3 figures again.”

Source – I don’t know who could that be, some bloke on some social media platform, I guess. Best to ignore him is my advice.

Curious Cryptos’ Commentary – QE

I know a lot of people laugh when I say that it is highly probable that QE, designed to make the rich richer and the poor poorer, is heading back our way.

This ridicule of me is ok

Being made fun of is part of the natural landscape of contrarian thinking – a mindset that is a tremendously difficult challenge compared to passively accepting the consensus view. Trust me, people having a laugh at my expense is not a new experience. It has largely defined my life.

Over the long-term having a contrarian outlook is more rewarding, financially and emotionally.

…

If you wouldn’t mind stopping giggling at me for just a short while, please take a look at this graph.

You will immediately notice that food prices in the UK – which have been a key driver of inflation due to the COVID-related disruption of supply chains – are now a deflationary force:

Oh boy. This is just the start.

If I am right, long-dated corporate and government bonds (the longer the better) will be very juicy in the next two to three years relative to normal TradFi investment returns.

If you are UK based, all capital gains from buying sub-par gilts originally issued with coupons below current market-rates are entirely free of tax, turbo charging those returns. When yields fall to less than 100bps in the long end (or 200bps if you are less aggressive than I in your investing philosophy), get out, and pat yourself on the back for making easy money.

I do expect that owning long-term corporate and government debt for the next couple of years will be a very nice trade. It is in my investment portfolio.

Meanwhile, BTC will continue to outperform, and then some.