30th October 2021 > > SQUID coin.

tl;dr

SQUID coin is a scam, much like quantitative easing (QE).

Market Snap

Market Wrap

If anyone is tempted by the 75,000% return (yes, seventy-five thousand percent) on the new SQUID token derived from the Netflix series Squid Games in the last week, just don’t.

You can buy for wrapped BNB on DeFi platform Pancake Swap, but it’s a scam. Anyone can set up their own token on any DeFi platform. Their website does look professional, but that isn’t hard to do these days.

There will be no bid, and any theoretical profits you make will remain just that – theoretical.

Curious Cryptos’ Commentary – Quantitative Easing (QE) – bit of a weekend essay to read in bed

Regular readers already know that QE is designed solely to transfer wealth away from those without hard assets (i.e. the poor) to those with hard assets (i.e. the rich).

When QE was first implemented a decade or so ago in the West (but more than 25 years ago in Japan, though admittedly on a mostly sterilised basis) there were fears that it would lead to immediate inflation. This fear was based on the experience of closed economies that embarked on massive money printing campaigns (Yugoslavia, Venezuela, Zimbabwe, Weimar Republic and so on).

Being the contrarian I am, I didn’t subscribe to this point of view. Not because I am smarter than anyone else, but it usually pays to ignore the ill-informed and easy assumptions and conclusions that a lot of commentators jump to.

I based my contrarian opinion on one key fact, which all these ill-informed commentators completely ignored.

Money printing had never been tried in open economies before.

This observation was for me the game-changer that the doom-mongers were missing.

…

A decade on, the key fear over the intervening period has been deflation not inflation, so I do feel I have been rather vindicated in my unfashionable take on the impact of QE on inflation in open economies.

That isn’t to say that inflation in the last decade has not existed.

Absolutely it has – but in hard assets (houses, stocks, precious metals and yes, cryptos) not in consumables, which is the everyday definition of inflation.

This is why QE is such an abhorrent policy.

QE guarantees the rich get richer and the poor get poorer because of policies entirely out of anyone’s control, regardless of their own personal actions and responsibilities.

…

But when the world changes, it might be time to change one’s view about inflation.

The pandemic has highlighted underlying supply chain issues that had not been seriously considered before.

I.P. theft by China is finally getting the recognition it deserves.

The cyber threat from Russia, Iran, and China is increasingly getting the attention it deserves.

Energy costs – fossil fuels or otherwise – are only going to increase for the next decade or two.

Health and social care demands (however they are funded – the CCC is always apolitical so let’s not go there) are on an unchangeable upward trend, requiring ever more of the output from the productive, wealth generating part of the economy.

…

In June this year alone the UK government spent £8.7bn servicing the UK’s outstanding debt.

In the 2021/2022 tax year, it is predicted the UK government will spend £44bn simply paying interest on that debt pile, plus the additional demands of debt falling due.

To help put that in context, in the 2021/2022 tax year, health and social costs will be £170bn.

Debt costs – at interest rates close to zero – are a quarter of the largest chunk of government expense.

If interest rates were to rise to normal levels – anywhere between say 2% and 5% - the interest payments alone would dwarf all other items of government expenditure.

This is the second key criticism of QE – it has hidden the true cost of taking on gargantuan amounts of debt.

…

The UK isn’t alone in this fiscal and monetary trap – all Western liberal democracies have fallen for the siren voices supporting QE.

But the UK is uniquely positioned to suffer spectacularly if interest rates were to rise.

The UK debt maturity profile is around 2 years rather than the 5 or more seen elsewhere (Swiss 100-year government bonds at sub 1% anyone? Now that was a trade for the seller).

But it isn’t just the UK. No government of a Western liberal democracy can afford to pay the cost of interest rate rises.

And we do know that - despite claims to the contrary - independent Central Banks are not actually, you know, independent.

…

These thoughts have been weighing on my mind.

But now I am getting ever more convinced that the inflation of consumables seen in the last few months - as a direct result of supply chain issues - is here to stay.

This growing conviction of mine is reinforced as Treasury Secretary Janet Yellen and Convicted Criminal Christine Lagarde, head of the ECB, have been prominently shouting this week that inflation is only transitory.

Well, it is only transitory until it isn’t.

Central Banks are there to prevent inflation morphing from a temporary phenomenon into a rather more permanent and painful feature of life.

If the Bank of England fails to raise by even 25bps next week, then Central Bank manipulation of interest rates to support governments unable to handle fiscal and monetary demands is laid bare.

If the baby inflationary dragon is not slayed today, this decade will not be a joyful repeat of last century’s roaring twenties.

Curious Cryptos’ Commentary - What does this all mean for cryptos?

If anyone has got this far today, it honestly isn’t all doom and gloom.

The revolution in cryptos, blockchain technology and A.I. will come to our rescue.

What does it mean for us?

Keep buying is my mantra (NOT investment advice).