Um and what happened is assets went down for a month and then rocketed higher, which kind of left many people by surprise, because the pain was real. The main street pain was real, the insolvencies were real, the job losses were real, but that wasnt reflected in anything and what that was a function of was really the fact that the central banks obviously and the government took unprecedented measures, which was unprecedented monetary printing, along With unprecedented stimulus, direct payments, these are all really new things essentially, and the net effect of that was the assets went up, but wages didnt go up and a whole bunch of other stuff didnt go up. So what was that all about? That was actually about something. You alluded to a minute ago was: actually the value of fiat currency fell, so the denominator for assets fell because those things are relatively fixed. So if you look at anything with a relatively fixed supply, whether its equities, fixed inc, um, sorry equities, um, real estate, gold crypto, it all exploded higher anything with variable inputs, such as corporate earnings over time or wages, didnt really go anywhere, and that was really interesting And its its to do with this, this kind of denominator effect that i call it so many people watching this will be familiar with the charts of the venezuelan stock market going vert and once you adjust it from bolivars into us dollars, the actual market went down And thats the same thing when you look at asset prices over this period, they basically went down and went back up into the middle of the range versus the fed balance sheet or the central bank balance sheet.

So i think thats a key function of this market. So now were in recovery, phase post crisis. Normally this phase would be the 18 month bottoming process in markets, but because of this denominator, effect markets have gone higher anyway. So now weve got supply side back bottlenecks that are creating huge rises in some commodities, such as agricultural commodities and oil markets. So thats an interesting point. Other markets, like copper, are seeing an entire demand shift thats coming from um ev and the kind of drive towards green energy, which is another trend. Well, talk about in a bit, so weve got what seems to be inflationary pressures and everybodys freaking out the bomb markets going to collapse and guess what the bond markets went inside. Really it kind of it backed up a bit went sideways, could it move could yield? Go up a little bit more yes, but what weve got something interesting is: if yields went up a lot, i inflation was sticky and massive. Well, then, the fed were going to intervene with yield curve control. What yield curve control would do would be more printing of money and therefore more of these assets go up. So weve got this weird cycle. If the economy slows down – which i think it will do in the second part of this year and inflation will will surprise to the downside i its not going to be strong as people expect well, the likelihood is knowing every single recession.

The fed have generally ended up, cutting or stimulating at least 18 months after it, so the odds on chance are that they do it again so again that drives up assets, which is a weird world that assets almost cant go down in price. I know that sounds ridiculous right, but this is the kind of world weve got into so thats. The the other global macro, just the last global macro get is the dollar. There is a generalized consensus. In fact, 100 of wall street analysts suggest the dollar is going lower this year. I know its the bottom end of the range, as were speaking now. My guess is, itll probably be in the middle of the range by the end of the year, and people will have got that one wrong too uh its pretty consistent uh that people get those kind of bets wrong, particularly when theres such consensus around. You know the dollars gon na collapse, right um, i dont think thats the case. I think the market is a peak inflation of fear um, but the bond markets giving you a signal. I always call it. The kind of the the bond market speaks the truth right. It because the bond markets are basically government bond markets in the u.s government. Bond markets particularly, are basically gdp, growth and inflation. Those are the two things: inflation expectations. Those are the two things that drive it, so everybody involved in the bond markets. Job is to massively analyze the economy, not corporate earnings, not sentiment.

Just these two things and the bond market stopped going up in yields, as i said, could it go up a bit further, maybe but its telling you that peak inflation sentiment is there, so i find that interesting. I also think you know. Inflation looks hot now because the year and year comparisons because the world was shut this time last year and the world is reopening, so inflation will look pretty hot and heavy for a while, but is it meaningful? Are we seeing? Are we going to see a massive ongoing change in lets, say the structure of wages, not not in a world of technology, globalization, aging populations where youve got two of the largest demographic bulges in history, both in the labor force, at the same time, its almost impossible? So if wages arent going up whats going to drive prices higher now people say the fed balance sheet, that doesnt drive the price of corn and stuff like that higher. You know food stuff that has been in a downtrend inflation, adjusted or outright for basically decades now. So go back one step, so weve ascertained that the fed balance sheet is is actually falsely goosing the price of assets right because the denominator has changed its not from liquidity of the fed of printing money and people are buying the stock market, because stock market volumes Have been falling for years so its not that its actually to do with this denominator effect and the central banks are basically printing on average about 15 a year.

So for you to make actual wealth, you need to beat 15 because 15 of the stock market return is just the denominator. Okay. So how the hell do you make 15 in this world? Well, we all kind of know, crypto and weve all understood it and we start to understand and ive been a big driver behind it. People, understanding network effects, exponential trends and how that plays out, but in thinking about this whole denominator effect, i started to think about. Okay, where can i get 15 well that rules out pretty much most of the you know major equity indices. It might it probably rules out the bond market rules out the credit market. It rules out fx markets, theres pretty much nowhere to do it until you start thinking. Maybe i can apply what ive learned in crypto and i started thinking about things like amazon and apple and google and facebook and realizing all of us macro guys got all of those wrong every one of them. I put my hand up. I got it wrong. Its a bubble, amazon, should not be trading. A p of 600. amazon is worth more than every other bookseller in the world. Remember this sounds like tesla right, its worth more than every other bookseller in the world. This is ridiculous, its worth more than all the books ever printed. This is ridiculous, because amazon was never a book company, it was a network and once you understand that you understand its valuation, which means it trends logarithmically thinking about that.

It then dawned on me when i was looking at my door in cayman ive been i put on a trade with regards to karma carbon credits in eu um and realizing in researching that that investment. I realized that the eu and everybody else was extremely serious about those timelines of what theyre going to do to create a green revolution. And then i looked at the door and came, and i thought every one of these cars is gone in 10 years. Theyre kind of everybodys going to buy new cars and were seeing the explosive rise of ev and the governments are going to incentivize that and then theyre invented incentivizing investment in green technology, so weve got evs green technology and on the top of it, why is tesla Worth more than all the other car companies well because theyre in with a potential chance, not a certainty, but the option of cracking autonomous vehicles or other uses of their car data network at the same time were rolling out 5g globally and in places that dont get 5G, maybe where you are in rural pennsylvania or where i am in cayman, i dont have it right now, but starlink is coming and not only a starling coming, which is another elon musk thing not only starling coming, but theres, three or four others coming across the World spreading satellite wi fi to everybody so were about to give the rest of the world, which is probably two billion people that dont have access to high speed data high speed data at extremely low cost.

Then weve built a system of money thats based on this digital technology, which is all the crypto markets, then were adding in autonomous vehicles that will be using this 5g technology to navigate. Then youve got um the rise of abuse of distributed computing power so in the world of moores law, wheres the power kind of come from the semiconductors, well, its not its going to come from the network itself, so you can drive more computing power. So what does that mean? It means things like this. Human genome project gets cracked super quick because youve got massive computing power. Youve got massive access to data, and now you can apply another exponential trend ai to it so were now doing things at exponential rates. So weve got exponential adoption of exponential um technologies that all interact into a larger network of the digital world, all at the same time within 10 years, because every one of these is not now a pipe dream that they were 10 years ago. Where we all started. Talking about them, theyre all a reality and theres a lot more. Behind that weve got robotics as well. Weve got wearable devices the internet of things i mean the list is kind of endless, so the world that we know today is going to be as different as the world was probably more. So i think this would be the largest change in history, so more than the world we saw in 2000 and from 2000 to 2010.

The change from 2020 to 30 is going to be absolutely ridiculous. And for me, as a macro guy, i made my money. Basically, trading the downside, you you collect a bit of coupons on the upside and you make a killing when the concentrated returns came in downside, because you could use options and leverage. But now weve got an opportunity, as macro investors, to invest in the upside, which most of us in crypto got used to its that infinite call option in an exponential trend where you dont mind the volatility, because it gets more than compensated in the return so thats.

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