Here are some things I think I am thinking about:
1) NYC is ALIVE!
I landed in NYC on Monday morning at 630 AM with a scheduled media spot on the floor of the NYSE at 10:30. I slept in an airport lounge for two hours and then hopped across the river. I’ve been to NYC enough times to know that it always takes longer to get places than you think so I left the airport at 9AM to give myself 90 minutes to get to the NYSE. I figured that was at least a 30 minute buffer. But the city is alive. Maybe more alive than I ever remember it. And I walked into NYSE at 10:30 on the dot. Just in the nick of time.
It’s crazy because just two years ago people were predicting the death of cities and especially big cities like NYC. But I’ve been non-stop since the minute I left and it feels great. The city is so alive and things really feel like they’re back to normal for the first time in a long time.
2) Let’s Talk About Bitcoin.
I recorded the What Bitcoin Did Podcast yesterday with Peter McCormack. Peter is awesome. He’s a Bitcoin Maximalist, but is incredibly open-minded about the way he approaches his maximalism. Peter has a great podcast and he’s helped me understand a lot of things about Bitcoin that I was having trouble wrapping my head around. If you go back through the history of his podcast you’ll find some educational pods that are really great. I highly recommend.
I loved talking to him. We covered a huge array of topics including:
- Good/bad arguments for Bitcoin
- Why the inflation arguments are often bad arguments for Bitcoin
- How the network effect theory of money is validated by Bitcoin
- Asset allocation using high volatility assets like Bitcoin
You’re going to like this one. I’ll post a link as soon as it’s up.
On a side note, we had a bit of fun with Peter Schiff. Schiff and I have a bit of a history disagreeing about gold as money and a central component of a portfolio. Interestingly, so do Bitcoiners because they believe, unlike Schiff, that Bitcoin is the new gold. McCormack likes to travel with a picture of Schiff so I decided to bring my own given our debate history….All in good fun.
3) Will Bond Yields Ever Rise Again?
I was having drinks with a bunch of smart people a few nights ago and Nick Maggiuli asked me “do you ever think bond yields will rise again”? I said, “gun to head, are 30 year rates more likely to go to 5% or 0% – I’d go with 0%”. It’s kind of crazy, but given the high inflation readings we’re seeing it’s amazing how much demand there is for government bonds. The safe asset shortage thing is very, very real. And so if 6% inflation doesn’t get yields soaring then you have to start wondering what will? More interestingly, you have to wonder what happens to yields if inflation starts to fall? I’ve predicted that CPI will come in at 6%+ well into 2022, but then should start to ease quite a bit back towards 3-4% by year-end. More long-term, what if the big secular inflation headwinds sink their teeth in again and inflations falls to 2-3% by 2023? Even worse, what if the whole economy slows after this huge short-term boom? Then what?
Outside of the hyperinflation scenario, which looks increasingly improbable, it’s hard to imagine a world where rates rise a lot….
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.