A bet on gold is not a bet on the physical asset itself; it is a bet that the government will continue to spend, continue to compound the debt, and continue to fuck the United States citizens. Since August 1971, when Nixon released us from the gold standard, DCA into gold would have compounded at roughly 8.5%.
The ex-Moody's analyst reminded me of something I've been thinking.
In 2026 we're actually living in the internet revolution. We like to think the internet revolution was the 90s and the dotcom, but that was just the start, by way of analogy it was the industrial revolution, which was followed by first Technological revolution of the 1800s, which the everyday layman confuses with the industrial revolution.
If had to call it, I'd say when Rogan migrated to Spotify, it marked the start. The internet is about networks, and networks depend on nodes, and back in the 90s we had message forums, then blogs in the 00s, then social media 10s and now the infrastructure is all there, all we need is nodes, people talking. 2008 no one was talking, the infrastructure wasn't ready. Cassandra and a few others figured it out and made the bets we applaud, but there wasn't a podcast circuit back then.
And as Nemeth makes clear, right now the incentive is aligned with communicating with hard info. That's what market participants do. They trade info. It's price discovery.
Burry was the equivalent of the sovereign bond vigilantes of the early 90s (Soros). They had info, it wasn't public, they made a killing.
But right now everything is public.
2008-2020 was creative and back then, the whatever it takes (Draghi) proclamations meant something because it was conceivable to imagine fiscal discipline and monetary runway.
If you look at the UK like a canary in the coal mine, medium and HNWIs, and the PMC, are jumping ship, not so different to how rats behave. It's like 2007. They've seen this movie before. The fiscal bill is outside the gates, it's visible, and it's not so different to a Trojan horse (The UK needs the ECB backstop, but even this won't save them and if anything might sink Europe, like with the ECM in the early 90s, deja vu).
I agree with your take on China residential, but that's not what will happen because the West isn't China, too much is at stake. It'll be similar to 2008. Everyone with brains will know it's fake and use it to look for exits (and will inflate assets internationally, which will set the stage for the Renminbi). The '29 style reckoning will come after. It's a black swan, so who knows when exactly, but "they" will try whatever it takes. Weimar didn't go hyperbolic all at once, it took over a year before the market translated the shenanigans of the insiders into the real world. Because kicking the can down the road is easy and only a public crisis creates hard leaders. FDR came after the crisis, not before. It was either FDR or pitchforks.
Where does everyone get the idea that 2% inflation is good or even allowed. The law regarding the Fed (which clearly no one GAF about) says STABLE prices. That means 0%. zero point zero.
not 2% which is a halving of your money every 35 years or cutting it by 75% over your lifetime.
You know if you go with the inflation is a monetary phenomenon theory, every year for the last 6 or 7 the feds generate about 1.8 trillion dollar deficit which is about 6 to7% of the total economy. 6 to 7% that they are just printing and creating out of thin air. That means a halving of your money every 10 years. I'd says prices are about double since 2016..........wouldn't you? Doesn't it feel like 6 to 7% a year??????
Certainly closer than the bullshit 3% number they throw at us.
Inflation is exactly the increase in dollars printed by the Fed.
Prices may fluctuate without inflation, but sustained debasement of the currency is something else entirely.
It's crazy that a Soviet style cabal of central planners should control interest rates instead of the market. Even crazier that they are simply allowed to steal from everyone who owns dollars, all the time.
The Fed should be eliminated and replaced with nothing. The dollar should be replaced with a US currency defined as simply weights of pure silver, because that cannot be debased.
A Level 3 story. I met with some of their execs. I told them I thought what they were doing was tremendous. They had taken a construction company and turned it into an internet stock multiple. Apparently, they didn't see the compliment. We never spoke again. Within months of the conversation, The Gilder Report said basically the same thing. I bet the guys I spoke to rode it all the way down.
I was there (I posted my story a few weeks back). They all rode it down. I bailed when they hired a CFO that was like 30 years old. (even I was older than he was at the time) and thought "yeah this can't be good", time to go. I wondered what had happened to the 17 whole shares of stock I was left with somehow. Somewhere in there there was like a 1:10 reverse split (or more, it was a lot).
At least level 3 actually had conduit in the ground. (I always thought that was at least smart, you could just pull new fiber as the technology improved, of course turns out all the numbers were BS and there was way way way more fiber in the ground than anyone needed but no one knew that at the time)
these new AI companies, they got nothing but a program and overpriced RAM and chips that are obsolete in 18 months.
A bet on gold is not a bet on the physical asset itself; it is a bet that the government will continue to spend, continue to compound the debt, and continue to fuck the United States citizens. Since August 1971, when Nixon released us from the gold standard, DCA into gold would have compounded at roughly 8.5%.
The ex-Moody's analyst reminded me of something I've been thinking.
In 2026 we're actually living in the internet revolution. We like to think the internet revolution was the 90s and the dotcom, but that was just the start, by way of analogy it was the industrial revolution, which was followed by first Technological revolution of the 1800s, which the everyday layman confuses with the industrial revolution.
If had to call it, I'd say when Rogan migrated to Spotify, it marked the start. The internet is about networks, and networks depend on nodes, and back in the 90s we had message forums, then blogs in the 00s, then social media 10s and now the infrastructure is all there, all we need is nodes, people talking. 2008 no one was talking, the infrastructure wasn't ready. Cassandra and a few others figured it out and made the bets we applaud, but there wasn't a podcast circuit back then.
And as Nemeth makes clear, right now the incentive is aligned with communicating with hard info. That's what market participants do. They trade info. It's price discovery.
Burry was the equivalent of the sovereign bond vigilantes of the early 90s (Soros). They had info, it wasn't public, they made a killing.
But right now everything is public.
2008-2020 was creative and back then, the whatever it takes (Draghi) proclamations meant something because it was conceivable to imagine fiscal discipline and monetary runway.
If you look at the UK like a canary in the coal mine, medium and HNWIs, and the PMC, are jumping ship, not so different to how rats behave. It's like 2007. They've seen this movie before. The fiscal bill is outside the gates, it's visible, and it's not so different to a Trojan horse (The UK needs the ECB backstop, but even this won't save them and if anything might sink Europe, like with the ECM in the early 90s, deja vu).
I agree with your take on China residential, but that's not what will happen because the West isn't China, too much is at stake. It'll be similar to 2008. Everyone with brains will know it's fake and use it to look for exits (and will inflate assets internationally, which will set the stage for the Renminbi). The '29 style reckoning will come after. It's a black swan, so who knows when exactly, but "they" will try whatever it takes. Weimar didn't go hyperbolic all at once, it took over a year before the market translated the shenanigans of the insiders into the real world. Because kicking the can down the road is easy and only a public crisis creates hard leaders. FDR came after the crisis, not before. It was either FDR or pitchforks.
"Citadel-intern Ben Bernanke" lmao
Of course they did: "With her cover blown, she and her husband moved to the US and started careers in Florida real estate."
Excellent post and thank you.
What a great line that was…
reading that, I nodded and thought "makes sense."
Where does everyone get the idea that 2% inflation is good or even allowed. The law regarding the Fed (which clearly no one GAF about) says STABLE prices. That means 0%. zero point zero.
not 2% which is a halving of your money every 35 years or cutting it by 75% over your lifetime.
You know if you go with the inflation is a monetary phenomenon theory, every year for the last 6 or 7 the feds generate about 1.8 trillion dollar deficit which is about 6 to7% of the total economy. 6 to 7% that they are just printing and creating out of thin air. That means a halving of your money every 10 years. I'd says prices are about double since 2016..........wouldn't you? Doesn't it feel like 6 to 7% a year??????
Certainly closer than the bullshit 3% number they throw at us.
Inflation is exactly the increase in dollars printed by the Fed.
Prices may fluctuate without inflation, but sustained debasement of the currency is something else entirely.
It's crazy that a Soviet style cabal of central planners should control interest rates instead of the market. Even crazier that they are simply allowed to steal from everyone who owns dollars, all the time.
The Fed should be eliminated and replaced with nothing. The dollar should be replaced with a US currency defined as simply weights of pure silver, because that cannot be debased.
Their mandate is stable prices. Until Bernanke, there was no “2%” nonsense, and Yellen was the worst. See this tweet https://x.com/RudyHavenstein/status/1834750895961129351
And this one, where Powell spouts gibberish when asked “why 2%?” https://x.com/RudyHavenstein/status/1689648695669919744
A Level 3 story. I met with some of their execs. I told them I thought what they were doing was tremendous. They had taken a construction company and turned it into an internet stock multiple. Apparently, they didn't see the compliment. We never spoke again. Within months of the conversation, The Gilder Report said basically the same thing. I bet the guys I spoke to rode it all the way down.
people are funny like that. Seeing people sensitive and angry over any criticism of their story stock is usually a tell.
All, good ol’ George Gilder. A blast from the past.
I was there (I posted my story a few weeks back). They all rode it down. I bailed when they hired a CFO that was like 30 years old. (even I was older than he was at the time) and thought "yeah this can't be good", time to go. I wondered what had happened to the 17 whole shares of stock I was left with somehow. Somewhere in there there was like a 1:10 reverse split (or more, it was a lot).
I remember an investment banker saying, "You never want to be a $4 stock". I think LVLT spent some effort trying to avoid that.
I wonder how many LVLT's there are hiding in the AI woodpile?
At least level 3 actually had conduit in the ground. (I always thought that was at least smart, you could just pull new fiber as the technology improved, of course turns out all the numbers were BS and there was way way way more fiber in the ground than anyone needed but no one knew that at the time)
these new AI companies, they got nothing but a program and overpriced RAM and chips that are obsolete in 18 months.
Don't disagree at all. At least there were physical assets. However, it was kind of like owning railroad trains in 1873.
I am thinking of the companies without software, but provide the rails, figuratively speaking, for the AI companies.