Saturday, 24 July 2021 — Albert Park

[5 min read]

Dear Reader,

‘Anyone who has been in crypto for some time knows this:

‘What doesn’t kill you makes you stronger.

‘Stay solvent. Stay in the game.’

That’s a recent tweet from boutique blockchain advisory Spartan Group.

It’s sound advice. But tough advice to stick to lately…

The crypto world is the future. In more ways than you or I can possibly imagine.

That’s the view of several of our analysts here at Fat Tail Investment Research.

It’s the view of dyed-in-the-wool blockchain enthusiasts like Elon Musk. (‘I pump but I don’t dump,’ he told a crypto forum last Wednesday. Cryptocurrencies are a way to ‘increase the power of the individual in relation to government.’)

What proponents like Musk maintain is that we’re working towards a future world that will run on open blockchains — much like it runs on the internet now. Immense value will accrue to those projects which can carve out a place in this brave new world.

But even if cryptos are the future, they’re sure having a tough time in the present.

The price of Bitcoin [BTC] had peaked at US$64,854 on 14 April 2021.

One month later, it hit US$30,000.

Since then, the crypto world has been in wait-and-see mode. Bitcoin has been building a base between US$30k and US$35k. Last week, though, it dipped below that US$30k threshold.

But then shot back up by US$2,000 in the next 24 hours.

Such is life in the crypto realm these days.

Trading volume has been relatively low. But price lurches are just as crazy as ever.

Will we see a big break up from here?

Or down?

According to Ryan Dinse and Greg Canavan of New Money Investor, those are the wrong questions to be asking.

Regardless of where crypto goes from here…if you believe long term in the ‘new financial game thesis’ (the move to a decentralised, autonomous financial system) this juncture presents you with a window of immense opportunity.

It’s a window you may never see again.

And it may not be open for long…

As such, Ryan and Greg are releasing an urgent new resource. This resource should be through our copy edit and compliance team — and ready to deliver to all our e-letter subscribers — by the end of this coming week.

If you’re interested in crypto…its wider ramifications for the financial world…and the opportunities that have been thrown up by the recent selling…then I urge you to keep an eye out for it.

It’s called ‘How to Play the New Game: A 5-Part Guide to Exploiting the Crypto Sell-off’.

It will show you:

*** How to get in if you haven’t already. A sensible strategy for easing into this market — regardless of price levels...

*** How to get income from cryptos, the easy way. Three ways Ryan’s using his own money to generate income no matter what crypto prices are doing…

*** How to get stock exposure to the new game, while most stock investors are either worried about the market or looking at other areas. These are listed companies building the infrastructure of the new game — discounted stocks that could be household names in 10 years… 

*** How to get new-game gold, especially if you’re worried about inflation. Thanks to blockchain tech, old money’s about to intersect with new money — this guide will show you two clever ‘mine-to-token’ ways to play it.

But perhaps most importantly…

‘How to Play the New Game’ will show you how, far from being bad for the crypto thesis, the ‘new game’ actually just survived its biggest stress test and with flying colours.

If you believe we’re at an inflection point in investing. That crypto is a big part of it. And if you reckon that the white heat having left the market presents you with some contrarian opportunities to build exposure, this report will be one of the most important things you read this year.

Watch this space next week…

Regards,

James Woodburn,
Publisher, Fat Tail Investment Research

By Selva Freigedo Editor, The Rum Rebellion

Dear Reader,

You hear a screeching metallic sound as the platform moves away.

‘We are in autosequence,’ says the voice through the intercom.

You feel the floor shake as you go through the engine checks.

‘T-10, 9, 8, 7, 6…’

Flames roar out from under the rocket, the bright light blinding you momentarily. And then, there’s take off…

Did you watch New Shepard’s launch this week? In what Amazon founder Jeff Bezos dubbed as ‘the best day ever’, he, along with his brother Mark, Wally Funk, and Oliver Daemen officially become astronauts.

On Tuesday, exactly 52 years after the first astronauts landed on the Moon, New Shepard hit three times the speed of sound. The capsule then detached from the booster to go just pass the edge of space, the Karman line.

The Karman line is the border that divides the Earth’s atmosphere from outer space. It is at an altitude of approximately 100 kilometres from the Earth’s sea level, and it’s where the atmosphere becomes extremely thin. So thin, that planes can’t travel fast enough to pass through. In other words, you need a rocket.

But not everyone agrees with this border definition. NASA, for example, sees the space border at 80km from sea level. In fact, the Karman line has become a huge sore point of contention between Bezos and Virgin Galactic founder Richard Branson, who flew into space a few days earlier reaching an altitude of 86km.  

Both companies along with Elon Musk’s SpaceX are competing to make commercial space travel a reality. And they’re getting very close to it with reusable rockets. Instead of getting destroyed after one use, these rockets can land after a flight and be reused many times, which makes the whole thing much more cost-effective.  

But I digress.

We imagine Bezos had been dreaming of this moment for decades, well before he founded his space company Blue Origin in 2000.

And it’s been a long ride, testing prototypes for over 10 years along with 15 successful test flights without passengers daring to go into space.

It’s probably been an even longer journey for fellow astronaut Wally Funk, who is now the oldest person to have gone into space.

Funk was part of the Mercury 13 program, which tested women to pass the same tests as NASA’s Mercury astronauts. Yet the program never sent her into space.

If astronaut movies are anything to go by, you know that training for space is quite demanding. Astronauts needed to be in top shape, train in zero gravity, and spend hours in flying simulators training for anything that could go wrong. It took years to prepare.

While New Shepard is fully autonomous and the whole flight took only around 11 minutes, that’s not to say the most recent astronauts didn’t have to undertake training.

For 14 hours they learned everything there is to know about the capsule, and to prepare for the unexpected like fires or leaving the spacecraft in a hurry.

I’ve been thinking a lot about that this week, about what could happen next, and how to prepare.

At the moment, in financial markets there are two different narratives making the rounds: there’s the inflation versus deflation narrative.

On one hand, we’ve seen higher consumer inflation in the US and in materials like timber. The pandemic has affected supply chains, which is translating into higher costs. Here in Australia, we’ve seen inflation in asset prices with higher property prices, and more recently higher rent prices.

There’s talk that this surge in inflation is transitory.

In fact, Joe Biden spared a few minutes recently to appease any concerns:

‘The vast majority of the experts, including Wall Street, are suggesting that it’s highly unlikely that long-term inflation is going to get out of hand.’

On the other hand, we’re seeing a resurgence in cases and more restrictions because of the Delta variant, which could mean more lockdowns, less spending, and deflation. Oil prices have also fallen slightly after OPEC reached a deal and there were higher US inventories.

In my mind, the only thing that is clear is that central banks aren’t anywhere near done with stimulus, even if inflation shows.

This week, the European Central Bank said it will keep rates low until it sees inflation near its 2% target. As they said, this ‘may also imply a transitory period in which inflation is moderately above target.’

At the moment, it’s all pointing to financial repression, that is, when interest rates are kept lower than the rate of inflation to reduce debt.  

In that case, real assets like gold could do well.

But then again, there really is no telling how this will play out.

I remember in one of my first jobs, before any important meeting, my boss and I would sit down and try to think of every possible scenario that could come up during the meeting and we would plan a response. The idea was to try not to get caught off guard.

It’s an exercise I still practice often today.

The future is looking very obscure, and the economy is very distorted from all the stimulus…so plan accordingly.

Best,

Selva Freigedo,
For The Rum Rebellion

Selva is also the Editor of New Energy Investor, a newsletter that looks for opportunities in the energy transition. For information on how to subscribe, click here.