Free eLetters

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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December 2020

Terms You Should Know: Financial Repression and Fiscal Dominance

December 30, 2020John Banks

Editor’s Note: When a mountain of debt builds up over the course of many decades — as we have seen over the past 40 years or so — you wind up with huge amounts of government spending to keep economies going, even as central banks conspire to inflate the debt away. In today’s “best of” series, we cover two must-know terms — financial repression and fiscal dominance — that explain how it works. –JCL There are two financial terms that explain

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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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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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In Both Investing and Poker, sometimes a Weak Hand Beats a Strong One

December 25, 2020John Banks

Editor’s Note: For Christmas day, a Christmas riddle: When does a weak hand beat a strong one? In today’s “best of” lookback, we compare investing to high stakes poker — two activities with a great deal of overlap — and explain why it is often the surrounding situation that matters most, with the shape of events sometimes making the weaker hand (or weaker company) the better play. –JCL Say you have an investment choice between two gold mining companies. They

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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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Apple is Still Serious About an Apple Car

December 23, 2020John Banks

Apple still wants to disrupt the electric vehicle (EV) industry, and it could have some form of EV in production as soon as 2024. This comes from a Reuters scoop, as told to Reuters by an inside source. No matter how you slice it, Apple getting into the EV space would be a seriously big deal. Nor would they be starting from scratch: Apple has played with the idea for years. Project Titan, the code name for the Apple car,

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The Solarwinds Hack Looks Increasingly Like an Act of War

December 22, 2020John Banks

The Solarwinds hack that broke into U.S. government agencies, along with hundreds of Fortune 500 companies, is increasingly looking like an “act of war” per various sources in the U.S. government and Congress. “It’s pretty hard to distinguish this from an act of aggression that rises to the level of an attack that qualifies as war,” Sen. Chris Coons of Delaware told reporter Andrea Mitchell. “[T]his is as destructive and broad scale an engagement with our military systems, our intelligence

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A Super-Contagious New COVID-19 Strain Overshadows Stimulus Success

December 21, 2020John Banks

Republicans and Democrats finally got their act together and came to agreement on a $900 billion stimulus effort for struggling Americans and small businesses. Congress is rushing to finalize the bill alongside a last-minute effort to fund the U.S. government for the remainder of the fiscal year. There were compromises galore, and many were disappointed with various aspects of the final result. Still, at $900 billion or so, it will be the second-largest relief effort in history (behind only the

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More on Short-Duration Tangible Assets and the 2021 Outlook

December 18, 2020John Banks

What are some solid ways to make a lot of money in 2021? Where will the major trading and investing gains be made? What will the themes be that potentially drive large profits? In answering these questions, a phrase to remember could be “short-duration tangible assets.” We’ll explain what that means in a moment. First, to quickly look back on 2020, the TradeSmith Decoder got a number of big things right. For the Decoder model portfolio — on which subscribers

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The Stars Are Aligning for Inflation’s Grand Return — and Bitcoin’s Dominance as an Inflation Hedge

December 17, 2020John Banks

The stars are aligning for the return of inflation in 2021. Not fake inflation either, but the real stuff. Inflation’s return could thus fuel a migration into tangible, short-duration assets, which would be a major shift from the dominant market configuration of the past few years. Before we get into what that means (which may actually require a follow-up piece), let us address the world’s premier inflation hedge: Bitcoin. As of this writing, Bitcoin has surged to new all-time highs

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Bitcoin is a Natural Digital Monopoly

December 16, 2020John Banks

Bitcoin is a natural digital monopoly. It doesn’t have real competition. Some people wrongly assume that it does, but it doesn’t. There is nothing else that does what Bitcoin does, in the same way it does it. The use case Bitcoin fulfills is incredibly valuable and important — and there is no other asset with the same profile. At the same time, there is no real prospect for a competitor to step up. Bitcoin is a natural digital monopoly here

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