HEAR YE! HEAR YE!
If you like this type of post, which contains links to the week’s best investing/finance articles and podcasts, I no longer publish it on Substack. I now publish everything on a (free) newsletter I call The Rollup. Please subscribe over there if you want, since subscribing on Substack will no longer get you this section of the newsletter.
Cheers
What I’m thinking about
For quite some time Mike Green has been arguing that our inflation has more to do with supply chain hiccups and changes in consumer demand than monetary printing. As such, Mike believes that higher interest rates may actually prolong this shitty inflation. How’s this for a controversial take…
When I consider Mike’s position, which is at odds with all of MSM and 90% of FinTwit, I find there to be one particularly compelling piece of evidence on his side.
Japan did dump truck loads of QE for 20 years, while America and Europe did the same for ~13 years without generating any inflation. Then Covid hit, the central banks brought out QE and it was only this time around that we finally got some inflation. Well, what changed? Why did 13 years of quantitative easing give us no inflation but then 2020 happened and prices went crazy?
The stimulus payments, monetized by the Fed, definitely contributed to rising prices. However, I remain of the opinion that our bigger problem is that we’ve disrupted supply, not stimulated too much demand with money printing. In my ideal world we would be talking about how we could increase supply, rather than decrease demand, which is a code word for put people out of a job and make them poorer.
I’m going to end by sharing an excerpt from a speech that President Truman gave in 1947. At the time the US economy was just on the other side of WWII and adjusting to its own supply/demand imbalances, just like today. The inflation rate was 14%…
The crisis in the world today calls for a plan of action that will turn the tide of war into a tide of peace. We must produce and we must export. We cannot produce without expanding our facilities, and we cannot expand our facilities without capital investment.
But investment must be sound, and it must be adequate. The private enterprise system of the United States is unequalled in the world, but it cannot operate at maximum efficiency unless there is adequate investment. The government has a responsibility to see that this investment is forthcoming.
Those are the talking points I would love to hear more of today! Let’s build stuff, fix what’s broken and make it so that people can own something and be happy. A controversial statement to be sure, but one that I think would go over well with the populace.
Full disclosure: the idea to quote this speech came from MG. The quote from Mike I shared above, and the Truman reference, all came from the best podcast I listened to all week. Link to it below 👇
Worth checking out
If you’re looking for a fun weekend/beach read novel allow me to recommend Blood Sugar, which I just finished. I read a lot of books and I wouldn’t steer you down a bad path. That being said, this isn’t for everyone. Here’s a teaser quote so you can judge for yourself.
"Jake offered to buy me a drink. Instead of explaining to him that I used to do lines of cocaine off stolen side-view mirrors and then ran into the drug-addled mother of a boy I had killed, which turned me off all mind-altering substances, I said, “Okay. I’d like a glass of Champagne.”Coinbase has enabled ETH & DAI withdrawals to Arbitrum, I’m stoked! Rollups are going to be huge, you heard it here first.
Found this awesome Twitter account: Car Dealership Guy. Excellent insights and a lot of value, this is how you run an awesome Twitter feed.
What y’all are into
Last week 2 of the 3 most clicked on links were actually about investing!
Best articles
The GMI Top 5 Weekly Charts That Make You Go Hmmm...
Raoul Pal has started publishing a weekly newsletter with some interesting charts and such. Raoul has been catching a lot of flack lately and I understand why. I think the mistake he’s made is that he commingled his platform (Real Vision) with his personal investing views. It would have been better, in my opinion, if he had kept RV editorially neutral.
The state of the Russian economy and how the country is coping with the sanctions. Specifically, a look at how Russia has increased its trade with China and Turkey.
It’s too easy to look around the world and say, “I’ll be damned, how the hell do people believe such crazy stuff?” It’s far more interesting to say, why do people believe strange things? What purpose does it serve? Why can’t you convince them out of their objectively wrong beliefs? That’s what Erik covers in this excellent article about the role that wacky beliefs play in group cohesion.
Best of YouTube
Labor, Rates and Bonds with Michael Green and George Gammon
Have I got a treat for you! Mike Green comes on at the ~45 minute mark and the next hour is mind blowing. Labor markets, interest rates, consumer demand, Fed policy, it’s all there and it’s everything that’s actually happening not whatever bullshit lies/misunderstandings you hear most places. I can’t stress this enough: if you only listen to one thing all week, make it this. Excellent interviewer, too.
Jeremy Grantham‘s Disturbing Economic Prediction For 2023
This was a well-produced video. I intended to watch 3 minutes of it but ended up going all the way. While I am bearish I’m still skeptical of Grantham. He’s a mega-ultra bear and if you’ve followed his advice the last few years you’ve probably lost money. I thought this video did a good job highlighting how Grantham has been right, how he’s been wrong, and what he’s predicting for the future.
What's Priced In? Evolving Role of Media in Financial Markets
Just a couple of market participants with decades of experience, shooting the shit about markets, investor psychology, how technology has changed trading, retail investors, etc. Hell of a lot of fun to listen to.
The Power Hungry Podcast: Doomberg
In this podcast Doomberg tells us his marketing strategy and how he and his team have built the brand. For marketers and other content creators this is something of a gold mine. If you’re only interested in hearing about the current energy situation, Europe nat gas shortages, fertilizer and famine, etc. You can watch the first 20 minutes before it turns to the marketing content.
'Biggest bubble in human history' to collapse, this is how to find the market bottoms
David Hay tells us when the market will bottom: once the Fed is already cutting rates. That coincides nicely with that meme that is all over Twitter, which shows that when the Fed pivots it’s typically bad for markets! I was also surprised to learn that David would consider allocating a small part of his portfolio to Bitcoin and even possibly Ethereum. However, he is following the Doomberg investment philosophy: no allocation until Tether has blown up.
The Importance of Getting Your Wealth Out of the Dollar and Into Gold
Grant recently made an appearance at Jay Martin’s conference. I enjoyed this video because Grant takes a measured view. Yes, dollar dominance is going to decrease over time. No, the dollar empire is not ending overnight. As always, Grant recommends gold and says that many of the wealthy people he talks to are intrigued by the opportunities presented by short-term Treasuries.
NFT Momentum
I recommend two parts of this video. The first ~10 minutes is all about 0DTE options and that’s interesting because Corey and Jason are options experts. Long story short, nobody knows who is doing all the buying. A fantastic mystery! And then starting at the 51 minute mark Corey goes deep into NFT land and how new NFT marketplaces that are incentivizing buying/selling with some unique strategies. Excellent content, I learned a lot.
This week’s off topic video is…
I loved this video about how Tesla has fumbled their massive first mover advantage.
My favorite AI image this week is…
A green planet