Oddly I am back here posting. Even more oddly I am posting on the topic I am paid to address. I start by noting two things. About one year ago, many macroeconomic forecasters predicted that a recession would have started by now in the USA. I forget who placed the probability at 100%. In spite of sltightly disappointing 0.4% (1.6% if annualized) real GDP growth in the first quarter of 2024, we are not in a recesion. What went right ?The presumed cause of a recession was the sharp shift to contractionary monetary policy in a effort to fight inflation.In this post, I will focus mostly on domestic demand. Briefly, high interest rates can cause a recession by causing an appreciation of the national currency which causes a sharp decline in net exports. This may have been important in 2981-2, but it usually isn’t a huge deal for the huge USA. In any case exchange rates haven’t shifted much, nor have real exchange rates, because most US trading partners have had inflation similar to US inflation. I think that’s the explanation. The shift to contractionary monetary policy occurred at roughly the same time in many countries, so there was not much shift in interest rate differentials of exchange rates.So I mainly look at domestic demand (AKA absorption). The larges element is consumption which has continued to grow. . Wealth is high due to high house prices and the (illusory wealth) from the national debt. No surprise. Government consumption plus investment remains […]

‘s XRP trades at $0.51 as bears threaten further losses, while Bitcoin and Ethereum continue to hold above critical support levels.As investors assess the market, many are using the dip to position ahead of a potential bullish flip. Is this the outlook for XRP, and could the new token  be one of the top altcoins to buy now? What’s the latest about XRP and Ripple?XRP, the native token of the XRP Ledger, has been in downtrend since the SEC sued Ripple in December 2020.Although prices rallied higher following a court ruling that XRP is not a security, the SEC’s pursuit of a $2 billion settlement amid Ripple’s XRP sales are issues before the court. There’s also the matter of what lies ahead in terms of the court’s verdict on XRP’s use in ODL.The coming weeks could therefore be key for XRP. Negative sentiment as a result of the court’s decision could accelerate downside action. Meanwhile,  suggests a potential bullish flip. Bitbot: What’s the buzz about?Bitbot’s launch in the market will see it become the world’s first non-custodial trading app on Telegram. The trading app also features artificial intelligence (AI) and offers access to institutional-grade trading toolsAs such, Bitbot does not just ensure users remain on top of their wallets and assets’ security, it adds to its superior user-first security approach with anti-MEV and anti-rugpull protections.So you have a trading bot that lets users trade from their Telegram app, does not take control of their assets’ private keys and is the ultimate AI assistant.This is what […]

When we talk about monetary policy, people do not understand the importance of interest rates reflecting the reality of inflation and risk. Interest rates are the price of risk and manipulating them down leads to bubbles that end in financial crises, while imposing too high rates can penalize the economy. Ideally, interest rates would flow freely and there would be no central bank to fix them.A price signal as important as interest rates or the amount of money would prevent the creation of bubbles and, above all, the disproportionate accumulation of risk. The risk of fixing rates too high does not exist when central banks impose reference rates, as they will always make it easier for state borrowing—artificial currency creation—in the most convenient—what they call “no distortions”—and cheap way.Many analysts say that central banks do not impose interest rates; they only reflect what the market demands. Surprisingly, if that were the case, we wouldn’t have financial traders stuck to screens on a Thursday waiting to decipher what the rate decision is going to be. Moreover, if the central bank only responds to market demand, it is a good reason to let interest rates float freely.Citizens perceive that raising interest rates with high inflation is harmful; however, they do not seem to understand that what was really destructive was having negative real and nominal interest rates. That’s what encourages economic agents to take far more risks than we can take and to disguise excess debt with a false sense of security. At […]

 has boldly claimed that the Bitcoin top for this market cycle may already be in. He made this conclusion based on his “exponential decay” thesis, which he noted may actually be good for the . Why Bitcoin’s Price Has ToppedBrandt  that historical data suggests that Bitcoin’s price has topped. He further alluded to an “exponential decay,” which he noted could be used to describe Bitcoin. Brandt’s exponential decay thesis is based on the fact that Bitcoin’s percentage gain has significantly reduced in every subsequent bull cycle. For context, Bitcoin, according to the crypto expert, recorded a 122x increase from its market low to market high between 2015 and 2017. However, that was only 21.3% of Bitcoin’s price gain in the previous cycle (between 2011 and 2013).Source: XBrandt further noted that the same thing happened between 2018 and 2021. Despite a 22x increase from its market low to market high, Bitcoin only recorded 18% of the price increase it saw in the previous cycle. Having laid this premise, the crypto expert concluded that this market cycle shouldn’t be any different as  will likely see about 20% of the price gain recorded in the previous cycle. Taking $15,473 as the market low for this cycle, he noted that 20% of the previous cycle’s gain would mean that the market high for this cycle was supposed to be $72,723, a price level that Bitcoin already hit on its way to a  (ATH) of $73,750. Meanwhile, the crypto expert acknowledged that Bitcoin historically records its most price gains after the , which just […]

This week is part two of our conversation about alternative investments. As I pointed out last week, this space has evolved into a distinct asset class of its own. I believe investors need to understand the good, the bad, and the ugly aspects of investing in alternatives.The Strategic Investment Conference is going very well. I am thoroughly delighted with the speakers so far. The feedback has been great. I will be covering some of the highlights of the conference in future letters but can only skim the surface. Serious investors (you are one, aren’t you?) should read the transcripts or view videos when the conference is over. As we’ve done for the past few years, we will make these available to those who weren’t able to attend as it happened. And we still have next Monday and Wednesday to go, so  and start catching up.The bulk of this letter is by David Bahnsen. I have made a few edits, but anything substantial from me will be inside [brackets], plus some closing remarks at the end. This may be the best short analysis of the alternative space and its evolution I have ever read. It is worth your few minutes of time. Now let’s turn it over to David.When Absolute Returns Are Not Absolute—By David BahnsenLast week we focused on . Contrary to much of the wishful thinking that permeated alternatives at the beginning of the century, and despite the assurances of the marketing departments at many “absolute return” strategies, we do not view […]