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TradeSmith Daily

December 2020

Bitcoin Doesn’t Need Aircraft Carriers

December 24, 2020John Banks

Editor’s Note: In today’s “best of” lookback, we revisit why Bitcoin, as a digital store of value, has no need for aircraft carriers. Up until 10 years ago or so, sovereign currencies were associated with governments that had assets to protect and borders to defend. Store-of-value assets like gold, meanwhile, had to be locked in physical vaults, or even protected by armed guards. But now, through a mechanism of global consensus, Bitcoin establishes its own kind of sovereignty — and

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Money is a Social Protocol, Built on a Network, Enabled by Technology

December 28, 2020John Banks

Editor’s Note: What is money exactly? In today’s “best of review,” we answer that question by explaining that money is a social protocol, built on a network, and enabled by technology. Ah, but what does that mean? Read on and we’ll explain, hopefully giving you a clearer sense of what the abstract notion of “money” really means. –JCL Money is a social protocol, built on a network, with technology enabling the network. This goes for all forms of money, even

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Where Does Inflation Come From? 

December 29, 2020John Banks

Editor’s Note: When we explained the concept of money earlier this year, we immediately received a thoughtful follow-up question on inflation. That inquiry led to the next “best of” piece in our lookback series, “Where does inflation come from?” The short answer is that inflation is an emergent property, born of a complex adaptive system. For the longer answer, read on. –JCL A reader asked a great question about inflation. Here it is, slightly edited for clarity: Your article, Money

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January 2021

The Crucial Differences Between Monetary Policy and Fiscal Policy

January 1, 2021John Banks

Editor’s Note: As we finally enter 2021 — goodbye forever, 2020! —  the old Wall Street phrase “Don’t Fight the Fed” could be recast as “Don’t Fight the Fiscal.” With government spending set to dominate the investment look for years to come, the final installment of our “best of” series revisits the difference between monetary policy measures and fiscal ones. Happy New Year! –JCL October 2020 was an ugly month for the U.S. stock market. The Dow Jones Industrial Average,

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When Amazon Prints Your Nikes — Implications of a 3D-Printing Revolution

January 4, 2021John Banks

3D printing — also known as additive printing — is a transformative technology that will usher in dramatic change. The disruptive dominance of 3D printing, which is closer than most realize, will be a hallmark of the transition to mankind’s fourth great age, the information age. (The prior three were the stone age, agricultural age, and industrial age.). This might sound funny, because investor excitement around 3D printing peaked about seven years ago. You can see it in the share

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Bitcoin Will Not Replace the U.S. Dollar (It Will Do Something Better Instead)

January 13, 2021John Banks

As the institutional world starts taking Bitcoin seriously, new questions are emerging. For instance: Will Bitcoin replace the U.S. dollar? Will it push aside major fiat currency competitors? Could Bitcoin usher in a fiat-free world? In our view, the answer is “no” three times over. The destiny of Bitcoin is not to replace or dominate fiat currencies. It is to offer a global store of value, and to put a check on the governments that issue fiat currencies. One of

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Why a New Commodity Supercycle Could Now Be Underway

January 14, 2021John Banks

Goldman Sachs thinks a new commodity supercycle could be underway. We think they might be right. If they are in fact right — which is easily possible — base metals like copper, along with other commodity staples widely used in construction, vehicles, and home appliances, could be looking at price gains that stretch out over a decade, or even multiple decades. A recent Goldman Sachs research report, published in November 2020, laid out the case for a “structural bull market”

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