Sometimes the sunbeams in the storm are tiny angels
Boston News Update Feb-March 2022
Wars, floods and chaos as the new normal
We should probably feel upbeat, as crypto markets are starting to recover from their Lunar New Year lull, just as we predicted they would. However, there is a lot of other things going on which give us pause (paws?) for thought.
Around the world, the COVID pandemic seems to be waning, and new virus variants seem less deadly than their forebears. This is good, but it is a slow recovery and a long way to go back to “normal”; if that is even possible. Even when in a meeting with someone who is triple-vaccinated, the handshake may be absent or awkward, and the psychological scars or multiple lockdowns may be with us for years to come.
Russia is at war, the USA has applied sanctions and world supply chain issues still drag on. We anticipate higher prices on many commodities will be an issue for the next 12-24 months. The higher prices due to lack of supply are also compounded by underlying inflation: the bonfire fuelled by central banks printing trillions of dollars in paper cash as a dubious panacea for the pandemic.
Long-time readers will know that we initially forecast lower rates, cash-printing and hyperinflation back in September 2019 and October 2019; a full six months before the pandemic broke out. The puppies do not have crystal balls; we simply recognised some early indicators that the global economy was starting to get sick several months before the COVID outbreak.
Like the collapse of Lehman Brothers in 2008, the COVID outbreak was merely the straw that broke the economy’s back. The early warning signs of the Global Financial Crisis (GFC1) were felt as far back as 2006, when Michael Burry placed “The Big Short” and Jeremy Britton wrote the warnings in his 2006 best-seller.
We are now well into GFC2, with shortages of not only toilet paper, but also things like copper, gold, silver, lithium and more. If you had been following our analysis, you may have picked up some treasures along the way, and be in a good position now. If you are new to the puppy pack, do not fret: we will continue to provide you with updates (pup-dates?) from our long-range economic forecasts, so you will always be ahead of the wave.
Anarchy is not exactly chaos
There are images floating around the interwebz that show anarchy as riots in the streets, looting, violence and absolute chaos, however, this popular idea may not be true. Dictionary definitions of anarchy vary greatly, with some claiming it is a “state of disorder, lawlessness, riot, rebellion and mutiny”. Other definitions show a gentler side to anarchy, defining it as “society being freely constituted without authorities or a governing body”.
That second definition may sit well with those who seek a simpler life.
A few centuries ago, there were citizens who lived close to the palace of the King or Queen and in large cities. The in-dwellers used currency, paid taxes, went to the markets to buy and sell goods, obeyed the sometimes fickle ruler and lived a life of relative security.
Far away from the palace, the out-dwellers chopped their own wood, grew their own food and, aside from the occasional bandit, lived a life of relative security. Depending on how far you lived from the ruler, city or government, you may have been unaware of whether the King was alive or dead, and may have been unaware of the concept of fiat currency. In self-sufficient farming communities, life was simple and bartering worked most of the time.
Obviously, there are many Russian citizens who do not support their government waging war in Ukraine. There are many citizens in the rest of the world who do not support their government creating so many lockdowns, printing cash like there is no tomorrow or many other decisions that have been recently enacted.
Whilst we do not support any form of violence, riots or mutiny, there may be some value in peaceful anarchy and “opting out” of many systems.
If you are fortunate enough to be able to grow even a small percentage of your own food, then you will be less reliant on governments or the supply chain. If you have some funds allocated to crypto, gold, silver or other scarce commodities, you will be less impacted by hyperinflation or the devaluing of paper currency. The US dollar has lost over 97% of its purchasing power since it was created in 1913, but an ounce of gold is still an ounce of gold, a tin of coffee is still a tin of coffee and a Bitcoin is still a Bitcoin. That which is scarce or finite cannot be inflated away. Selah*.
Crypto: come for the returns, stay for the revolution
As we compile this month’s update, it is not only pandemic, war and supply-chain shortages that we face. Serious weather events, including a “rain bomb” and severe flooding have impacted Australia, with many houses being flooded, and many more communities left for up to a week without internet and or electricity.
As someone who is right in the thick of the torrential downpours, it is great to see little ‘rays of sunshine’ emerging during the storms and floods. These are not literal sunbeams, but human heroes who do whatever it takes to help their neighbours.
We have witnessed people with electricity running long cables out of their house to assist neighbours who have had no power for days. Those who have spare generators offer them to those in need. Friends and family have braved the storms to bring warm food, gas stoves, hot water and battery packs to those without power. Electricians and plumbers have walked the streets, knocking on doors to aid those who may have damaged homes or appliances.
Some people have offered their houses as a temporary sanctuary to those who have had to evacuate flooded homes. It is heartening to see communities rally together to help each other; with no intervention required by governments.
Imagine the peaceful community all assisting each other as best as they can in the chaos of flooding in Queensland and Northern New South Wales. It may be seen as a microcosm of the global crypto community: a community that can exist without the intervention of a ruler or a ruling class.
Elsewhere, the government in the USA has stated that it will not fight directly against Russia, but anonymous cyber hackers are trying to cripple Russian communication systems, and crypto communities from around the world have been sending cryptocurrency into Ukraine to assist Ukrainian defence efforts. It is a beautiful thing to see humanity and compassion shining bright in what can seem to be dark times.
How have we fared this month?
Despite operating without internet and electricity for up to a week, the puppy pack have managed to stay safe and dry, due largely to assistance from the local community. The Boston portfolios show signs of recovery, as we recover from the annual Lunar New Year doldrums, and increasing global uncertainty drives investors into crypto and away from the devaluing fiat currency.