Some mental models reviewed this quarter.
0. Shifts in world power.
The race to being the most advanced economy.
1893: Diesel engine - Diesel
1897: Cathode-ray tube - Braun
1898: Aspirin - Bayer
1891: Incandescent lamp - Edison
1901: Assembly line - Ford
1903: Airplane - Wright
If only a small number of fabs can profitably exist, the question becomes whether they will be based in the United States and its partner democracies or in China."
1. Hyperinflation in an advanced economy.
It happened less than 100 years ago.
See graph: https://pbs.twimg.com/media/EbM1_N_XYAIyVB4?format=jpg&name=4096x4096
1 trillion marks or 1 dollar is not the question. The question is do you own a percentage of the companies that survive or not.
"Inflation comes like ketchup out of a glass bottle.
You keep slamming the bottle, but nothing happens.
Until more comes out than you wish for.
Your diner is then ruined."
2. The debasement of the US dollar.
Biggest transfer of wealth in our lifetime.
Pressure on USD is insane. There is no higher layer: debasement in favor of a new global reserve currency.
S&P measured in bitcoin not dollars: -90% since 2012
1 trillion dollar or 1 bitcoin is not the question. The question is do you own a percentage of the companies that survive or not.
3. The fight for ownership of assets that will survive.
First in dollar. Then in the new reserve currency.
3.1. Make private markets, quasi-public: investment platforms:
Real Estate: https://farmtogether.com/ etc (residential mkt https://twitter.com/glennkelman/status/1271529298445217792)
Small businesses: https://angel.co/ etc
Big private businesses: https://spacinsider.com/stats/ $18b YTD in SPACS ("reverse IPO"),1.3x 2019
3.2 Already liquid markets:
+ Gold as store of value:
average cost of a house in USA, in gold:
1900: 250 ounce of gold
2020: 244 ounce of gold
Current demand: https://www.tradingview.com/symbols/XAUUSD/
+ Bitcoin as a store of value
average value of a bitcoin, in gold:
2013: 0.08 ounce of gold
2020: 5.69 ounce of gold
Current demand: pgs 7 and 12 https://grayscale.co/wp-content/uploads/2020/07/Grayscale-Digital-Asset-Investment-Report-Q2-2020.pdf
5. Long America.
Land of the free, home of the brave.