Thanks for the long, slow decline, and the coming, sudden, final calamity.
Ever been to an off-strip casino, one that hasn’t been renovated since the 1970’s? The broken-down old hookers prowling the exits are a dead giveaway.
They keep the lights on to service the debt and sit on the real estate.
Like all casinos, it’s a giant skimming operation, and like most real estate plays, they’re leveraging cheap debt to play the Fed’s inflation game.
Thought experiment: You have a magic wand that creates money. What do you do?
Easy: If you can print money, you print money. You might think you’ll use your magic to end poverty and save the whales (or maybe not), but either way, you’re printing money by the truckload.
Welcome to America, circa 1971-2021. It’s not the one our Founding Fathers designed, or the one your grandfathers or great grandfathers fought for in 1944.
As much as we love Old Glory and Apple Pie, this version of America is a 3rd tier casino.
If you’re middle class and haven’t figured out how to use the debt-based system to your advantage, you’re fast becoming the aging hooker. At least it’s an honest living.
Pop quiz: Why is BlackRock buying whole neighborhoods, pricing families out of the market?
They have access to (nearly) free money, and young families don’t. They borrow for next to nothing, buy up the homes, rent them back to all those families to service their debt while the Fed inflates it away.
Home prices rise, rents rise, prices rise, but the debt payments don’t.
A gallon of milk goes for $10, the loan gets paid off with inflated dollars, and they own everything. Voila. That’s the fiat money game. It’s a crooked, crony system. If you get it (and we do), you use it (and we do).
Unlike BlackRock, Warren Buffet, or the clowns in Washington, at least we call bulls—.
If you look closely at history (beyond lectures from an academia largely controlled by the powerful), periods of massive progress and prosperity are always characterized by sound money.
That meant gold or silver, not the Fed’s magic wand. Today, there’s a new and compelling case for Bitcoin to be among them, a beautiful awakening, perhaps a new renaissance.
At the tail end of these periods of progress – the Roman Empire, the Renaissance – as the money was debased by governments, the fabric of society was shredded.
Slowly, then suddenly.
We’re in one of those periods now (the shredding part). Money and prices are how complexity – i.e., prosperity – is arranged by economic actors (us). It’s how the future is planned.
Not centrally, but individually, with reliable pricing as our guiding light.
Without sound money that doesn’t flow from the wizard’s wand, all signals are lost. They’re confused, distorted, and unreliable. The planning fails. We live for today, and plan for the wrong tomorrow.
What do you get from lost signals?
Turn on cable news: You get kabuki theatre at best, and total calamity at worst.
On this day, August 15th, 1971, America went off the gold standard, losing our True North. That’s when the great unraveling began, the hollowing of American values with debt.
Completely and utterly predictable from the only viable playbook (the pages of history), that it took so long has unfortunately lulled us to sleep. We slowly accepted it all as normal.
It’s not normal, and it’s time to wake up.
Go ahead and sing “Happy Birthday” to the old fiat lady in waiting, and have a slice of cake before the sun sets. You’ve got time for one more roll of the dice.
Then, put on your hardhat, and brace for impact.
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