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19th March 2023 - Some predictions.


A look at a naysayer, and two yessayers.

Market Snap

Market Wrap

We saw yesterday that the Fed has doubled down on the core problem with Basel II by lending cash against US Treasuries valued at par regardless of their market value. Now I learn that the annual stress testing for banks in the US did not consider any impairment to banks’ balance sheets due to the impact of rising rates on the market price of government bonds, another variation on the dangerous illusion that government debt is risk-free.

This is an extraordinary oversight, especially in the context of 11 TRILLION dollars of additional liquidity provided by CBs worldwide while governments (with the honourable exception of Sweden) worldwide were smashing supply chains and closing their own economies. This combination is directly responsible for the excessive inflation we are now experiencing, which was always going to be met with a rise in interest rates engineered by CBs.

This banking crisis is far from over.

Occasional Series – Oxfam’s inclusivity guide

“We recognise that this guide has its origin in English, the language of a colonising nation. We acknowledge the Anglo-supremacy of the sector as part of its coloniality.”

I am rapidly running out of charities to be the recipients of my annual donation.

Curious Cryptos’ Commentary – Gotta love the naysayers

Johan Van Overtveldt, MEP, and former Minister of Finance for Belgium, has said:

“If a government bans drugs, it should also ban cryptos.”

I am not sure where that line of thought goes.

Is it an argument to ban everything? Or is it an argument to ban nothing?

How are you left with partial bans?

Alcohol is a drug but is only banned in many middle eastern countries. Marijuana is a drug but is not banned in Amsterdam nor Madrid, much of the US, Morocco, and many other African countries to all intents and purposes. It is essentially tolerated in a legislative grey zone in most Western liberal democracies.

Perhaps Overtveldt has been smoking too much of the old weed himself and his cognitive functions are a touch under par for now.

Take a break from the ganja pipe my friend, that’s my advice.

Curious Cryptos’ Commentary – Gotta love the yessayers

Balaji Srinivasan, former CTO of Coinbase, has placed a $2mm bet that BTC will hit $1mm per BTC in the next 90 days.

Go Balaji!

Balaji explained his thinking:

‘’They all used the deposits to buy the ultimate shitcoin: long-dated US Treasuries. And they all got rekt at the same time, in the same way, because they bought the same asset from the same vendor who devalued it at the same time: the Fed.’’

There are many who might wish Balaji’s prediction to come true, but I am afraid it won’t. His conviction relies upon the emergence of hyperinflation in the US, and probably almost everywhere else at the same time. The economic damage caused by that situation is just too scary to contemplate.

However, Ryan Selkis, CEO of Messari, has a more viable view, expressed on Twitter:

“My rough prediction for the next twelve months:

1. More bank failures in the next couple of weeks.

2. Fed cuts / QE is back!

3. BTC climbs, sustained moderate inflation.

4. "Outside Money" / "Sound Money" -> $100k / BTC.

5. Institutions buy faster than Feds can shut down.”

Ah, that magical $100k prediction is back. The sheer fact that this price target is being discussed again after the gloom of 2022 is cheering me up no end.

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