Jun 15, 2021
Bitcoin, Bonds, Credit Markets and Reserve Currencies w/ Greg Foss
- BRT S02 EP24 (71) 6-13-2021
What We Learned This Week
Guest: Greg Foss
Bitcoin as Portfolio Insurance Paper - https://bitcoinmagazine.com/markets/executive-summary-why-every-fixed-income-investor-needs-to-own-bitcoin-as-portfolio-insurance
Greg Foss is a former credit trader, who has worked in finance and the bond markets for nearly 30 years. This talk is a breakdown a paper Greg recently wrote entitled – ‘Why Every Fixed Income Investor Should Needs to Own Bitcoin as Portfolio Insurance’.
He gives an overview of the credit markets, how bonds work, interest rates and inflation and US Treasury historical rates. Greg ties this to the overall market, currencies (fiat and hard assets), stocks and the effects current Government deficits have.
Greg tells every investor to pay attention to credit markets as they are indicators of what is going on with stocks. His belief is the US Dollar is dwindling as the reserve currency, and Bitcoin (not Gold) is the better hedge vs inflation.
Greg thinks Bitcoin will one day replace the US dollar as the reserve currency of the world. He goes further to give his insights on Bitcoin, the intrinsic value and where it will be in 10 to 20 years.
Value of time, energy of work.
Bond basics and interest rates
Bitcoin basics – ‘digital energy’ – 1st low thermodynamics – energy stored.
Cash/gold as currency – Blockchain – no forgery – vs. gold (is it Tungsten?)
Bitcoin intrinsic value – 21 mil ‘hard’ cap of BC, equation
Credit default swaps market and how it applies
Devaluing a currency - ‘debasement’ print more money and existing money in market,( lower or decrease) - more dollars to buy that house.
Jeffery Gundlach – current Bond King, formerly it was Bill Gross of Pimco
All US credit and world – priced out of NY
Leverage – 10x leads to credit implosion in 2008.
Ratings Agency – S&P signs off on bad debt 2008.
Banks – levered 15-20x, fractional reserve swift system – takes days or weeks to settle.
Credit markets & CD’s - $900 Trillion Total Global Debt
Actual intrinsic value - 90 TR / 21 million = 4.5 million / BC
Energy priced in BC and reserve asset of world
Always hedge the risks – manage risk
‘Volatility is the price of return’ – Bill Miller
BC volatility similar to Amazon stock – many draw downs over 20 years.
Crypto / Blockchain Topic:
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