“Josh Bailey, a 26-year-old day trader in Austin, Texas, was scrolling through a cryptocurrency group chat last month when he encountered an investment opportunity: a digital coin created in honour of a dog named Billy. The dog was cute, he thought, but more important, its name evoked something every crypto trader covets—billionaire status. “I started hearing people say ‘Billy’ to a billy,” Mr. Bailey said. “Kind of has that ring to it.” Mr. Bailey bought about $900 $BILLY on Pump.fun, a leading vendor for memecoins, volatile cryptocurrencies based on the fluctuating popularity of internet memes. When he sold his $BILLY holdings a few days later, he made a profit of more than $100,000.”
- ‘The New York Times’, 27th July 2024, as reported in ‘Grant’s Interest Rate Observer’.
Get your Free
financial review
What follows is perhaps the funniest letter ever written in the English language. It was sent by the British writer Evelyn Waugh to his wife Laura on 31st May 1942:
“Darling..
“So No. 3 Commando were very anxious to be chums with Lord Glasgow so they offered to blow up an old tree stump for him and he was very grateful and he said don’t spoil the plantation of young trees near it because that is the apple of my eye and they said no of course not, we can blow a tree down so that it falls on a sixpence; and Lord Glasgow said goodness you are clever, and he asked them all to luncheon for the great explosion. So Col. Durnford-Slater D.S.O. said to his subaltern, have you put enough explosive in the tree ? Yes sir, 75 lbs. Is that enough? Yes sir, I worked it out by mathematics, it is exactly right. Well better put a bit more. Very good sir.
“And when Col. D. Slater D.S.O. had had his port he sent for the subaltern and said subaltern better put a bit more explosive in that tree. I don’t want to disappoint Lord Glasgow. Very good sir.
“Then they all went out to see the explosion and Col. D-S D.S.O. said you will see that tree fall flat at just that angle where it will hurt no young trees and Lord Glasgow said goodness you are clever.
“So soon they lit the fuse and waited for the explosion and presently the tree, instead of falling quietly sideways, rose 50 feet into the air taking with it half an acre of soil and the whole of the young plantation.
“And the subaltern said Sir I made a mistake, it should have been 7.5 lbs not 75. “Lord Glasgow was so upset he walked in dead silence back to his castle and when they came to the turn of the drive in sight of his castle what should they find but that every pane of glass in the building was broken.
“So Lord Glasgow gave a little cry and ran to hide his emotion in the lavatory and there when he pulled the plug the entire ceiling, loosened by the explosion, fell on his head. This is quite true.”
Controlled demolitions are clearly difficult things.
Now consider the following thread, from the asset manager ‘Capitalist Exploits’ (@capitalistexp on X / Twitter), published on 6th January 2023, which we still maintain is the most important thread you will ever read:
“If you knew you were sitting at the helm of a collapse in financial markets, which would bring social unrest and likely displace your position of power, what would you have done ?
“This was the problem facing the elites in fall of 2019. Recall the repo crisis? The emergency debt crisis, which was the result of problems papered over since 08.
“Desperate attempts to save the system were enacted (Fed funding repo mkts to tune of 10-20B p/d). It was so desperate that even treasuries were being rejected as collateral.
“We hedgies, analysts, fin mkt guys/gals all knew the system was going to collapse. So did the elites. Collapse threatened them.
“The scam that cannot be named was the veil for ushering in “The great reset”. An ability to crush small biz and destroy the middle class (who represent the greatest threat to totalitarian rule), print trillions of dollars, give it to themselves while controlling the collapse.
“Collapse is necessary for them to enable and justify a techno feudal system – “build back better”. A system where all assets are owned by those at the helm of the destruction – “You’ll own nothing and be happy”. Classic Hegelian dialectic.
“Obvious at this point to all but the truly brainwashed or desperately naive is that there was no medical emergency. Only a mass MSM manufactured crisis, coupled with censorship never before seen* (necessary to enable the transfer of wealth to elites..now done)
[*Note that Meta’s Mark Zuckerberg in a letter posted to X on 26th August 2024 appeared to break ranks with his Big Tech bro’s when he acknowledged that
“In 2021, senior officials from the Biden Administration, including the White House, repeatedly pressured our teams for months to censor certain COVID-19 content.. I believe the government pressure was wrong, and I regret that we were not more outspoken about it..”
Zuckerberg has presumably concluded that Trump is now the more likely candidate to win the November US Presidential Election, and is adjusting his chess pieces, his ethics, and his recollection of the recent past accordingly.]
“Groundwork was carefully laid for biomedical security state (passport systems, psychological NLP, much greater amt of work moved to online/digital). This is where the next manufactured crisis is to come. Corralling all those in digital system into something “safe and secure”.
“A digital ID. To be tied in with CBDC’s, controlling spend (programable money), “social credit/ESG” and vax passports. – Controlled spend, – Controlled movement/travel. See 15 min cities. – Controlled health – if you don’t comply with measures you’ll be cut off from payments
“Payments being UBI. Dependancy is being established now. Post dependancy comes UBI. Soon as you’re reliant on UBI you’re a slave to the entire structure.
“If you wish to know who is behind what is the greatest organised crime syndicate ever seen and behind what is a global war where citizens are both victim and weapon begin by looking at “The 2030 Agenda for Sustainable Development”.
“Numbers don’t lie and we are already in a genocide. (excess mortality post “safe and effective”) Don’t @ me do your own analysis. Welcome to WWIII. It’s already here…but not in the way any of us ever envisaged.
“What now? Well it must be stopped. Start local. The time for fearing ridicule is long past. Be brave, speak the truth. Understand an entire bag of “emergencies” are in the wings. We must be awake to these and shut them down immediately..before we’re all enslaved. – End.”
Notwithstanding Mark Zuckerberg’s ‘Damascene conversion’ to free speech, whether you accept any or all of the ‘Capitalist Exploits’ thesis is somewhat academic; the figures relating to the global government debt load do not lie, and they are wholly untenable.
The US national debt, for example, now stands officially at over $35 trillion and is growing at the rate of $1 trillion every 100 days. Empires have collapsed over less.
In another context, three years ago, the author and financial analyst Alex Krainer wrote of the UK that
“In response to the pandemic, the government added £407 billion in expenses and £355 billion in new debt, which is on track to reaching £2.8 trillion in 2025, or about 110% of the GDP. The magnitude of these figures is easier to appreciate in per capita terms: we are talking about almost £47 thousand per man, woman and child in Britain and over £100 thousand per household. Again, many learned economists will try to convince you that debts and deficits don’t matter because the interest rates are so low that the government can simply issue gilts as required and raise unlimited debt for free..
“Today the UK could be in the early stages of the same sequence of events [as all other imperial powers in decline]: a severe crisis at home coupled with the dramatic loss of international leverage and a very costly addiction to imperial prestige. The UK will likely make all the mistakes made by other powers in that similar position through history: it will suffocate its domestic economic growth by imposing hard austerity at home while at the same time increasing military spending and foreign adventurism. Britain’s public debt will continue to outpace its GDP growth and the government’s budget deficits will be covered by Bank of England’s monetary inflation. This recipe reliably leads to stagflation and possibly to hyperinflation.”
In a recent update, Krainer wrote that
“So far, so good: three years later, it is clear that the UK has continued making all the mistakes made by other decaying empires, particularly in terms of foreign adventurism.
“A sudden deterioration, which developed during the course of this year seems to be related to the Western powers’ impending military defeat in their proxy war against Russia. Britain has been the principal cheerleader and sponsor of that conflict, and she seems to have gone “in over her head.” In addition to providing at least £7.5 billion in military aid (nearly $10 billion), Britain gave another £5 billion ($6.5 billion) to Ukraine in financial support.
“Furthermore, Britain has also guaranteed multiple tranches of World Bank loans to Ukraine and many British financial institutions have purchased billions’ worth of Ukraine’s bonds. Others made extensive direct investments there..
On Wednesday 31st July 2024, President Zelensky ‘temporarily’ suspended Ukraine’s external debt repayments.
On Thursday 1st August 2024, a debt repayments freeze took effect.
Alex Krainer, again:
“On 22 July, the same day when the agreement between the government of Ukraine and the “ad hoc committee” of her private creditors was announced, the Bank of England also announced a seminar titled “The Future Bank of England Balance Sheet – managing its transition towards a new system for supplying reserves.” The seminar took place the same day (a bit of a short notice for most people) and featured a speech by Victoria Saporta, Executive Director of the bank’s Markets Directorate. In the announcement, the BOE explained that its “balance sheet plays a key role in helping [the bank] achieve its financial stability and monetary policy objectives.”
“Saporta’s speech, titled “Let’s Get Ready to Repo!” laid out the Bank’s latest thinking on the future of its balance sheet which would transition towards a demand-driven system for supplying reserves. Saporta suggested that the bank would need to accept a “broader range of assets” as collateral to make the system “usable for the widest range of firm business models.” She added that, “The single punchline is that both we, the Bank and you, the market, need to prepare ourselves for increased usage of both our short term and long term repo operations. Or in short, let’s get ready to repo!”
“Seriously, where do they find these people?!
“Here’s how Bloomberg’s macro strategist Simon White put it: in a demand-led system, “what banks use to settle balances each day *must* be ‘shiftable’ on to the central bank’s balance sheet in a crisis. If they are not, liquidity is at risk of seizing up altogether. Thus, in a crisis, potentially no asset under this scheme will be turned away.” That could include even Ukraine’s bonds.
“What is clear from this and from the BOE’s language is that the bank is now anxious about Britain’s financial system collapsing and it has resolved to avert the collapse in the worst possible way: by loosening its credit standards and accepting junk quality collateral in exchange for cash. This is the clearest possible sign that the system came to the verge of collapsing..”
In short, the West had the option to reset its financial system in September 2008 with the collapse of Lehman Brothers. Instead of letting Adam Smith’s invisible hand work its free market magic, it blinked. The result is the insoluble global debt predicament of 2024, and ongoing monetary chaos. Our conclusions:
- Avoid government debt
- Avoid overmuch exposure to naked fiat (cash) with all its attendant inflationary and counterparty risks
- Practise genuine asset class diversification – we favour the use of defensive ‘value’ stocks and systematic trend-following funds
- Favour real assets and notably the monetary metals, gold and silver.
In one of our longstanding financial market analogies, although one cannot identify which snowflake will trigger the avalanche, one can identify when the snow mass has shifted from being in stable equilibrium to being in markedly unstable equilibrium. The global monetary system is no longer stable.
In a speech given to the Committee for Monetary Research and Education in New York in October 2011, Alasdair Macleod summarised the importance of a stable monetary system:
“I support sound money for two very good reasons. Firstly, it is a basic human right to choose to save, without our savings being debased by the tax of monetary inflation. Those who are worst affected by this inflation tax are not the rich, they benefit; but the poor and the barely well-off, which is why monetary inflation undermines society and why the right to sound money should be respected. If government gives itself a monopoly over money, it has a duty to protect the property rights vested in it. Secondly, it is a basic right for us to own our own money rather than have it owned by the banks. For them to take our money and expand credit on the back of it debases it. It is an abuse of an individual’s property rights and a banking licence is a government licence to do so. If anyone else was to do this, they would be guilty of fraud..
“Sound money guarantees a stable yet progressive economy where people are truly equal. It allows people to save properly for their retirement so that they will not become a burden on the state. It leads to democracy voting for small governments. It encourages peaceful trade and discourages war. It is the only path, after this mess, that leads us to long-lasting and peaceful prosperity. We really need everyone to understand this for the sake of our future.”
………….
As you may know, we also manage bespoke investment portfolios for private clients internationally. We would be delighted to help you too. Because of the current heightened market volatility we are offering a completely free financial review, with no strings attached, to see if our value-oriented approach might benefit your portfolio – with no obligation at all:
Get your Free
financial review
…………
Tim Price is co-manager of the VT Price Value Portfolio and author of ‘Investing through the Looking Glass: a rational guide to irrational financial markets’. You can access a full archive of these weekly investment commentaries here. You can listen to our regular ‘State of the Markets’ podcasts, with Paul Rodriguez of ThinkTrading.com, here. Email us: info@pricevaluepartners.com.
Price Value Partners manage investment portfolios for private clients. We also manage the VT Price Value Portfolio, an unconstrained global fund investing in Benjamin Graham-style value stocks.
“Josh Bailey, a 26-year-old day trader in Austin, Texas, was scrolling through a cryptocurrency group chat last month when he encountered an investment opportunity: a digital coin created in honour of a dog named Billy. The dog was cute, he thought, but more important, its name evoked something every crypto trader covets—billionaire status. “I started hearing people say ‘Billy’ to a billy,” Mr. Bailey said. “Kind of has that ring to it.” Mr. Bailey bought about $900 $BILLY on Pump.fun, a leading vendor for memecoins, volatile cryptocurrencies based on the fluctuating popularity of internet memes. When he sold his $BILLY holdings a few days later, he made a profit of more than $100,000.”
Get your Free
financial review
What follows is perhaps the funniest letter ever written in the English language. It was sent by the British writer Evelyn Waugh to his wife Laura on 31st May 1942:
“Darling..
“So No. 3 Commando were very anxious to be chums with Lord Glasgow so they offered to blow up an old tree stump for him and he was very grateful and he said don’t spoil the plantation of young trees near it because that is the apple of my eye and they said no of course not, we can blow a tree down so that it falls on a sixpence; and Lord Glasgow said goodness you are clever, and he asked them all to luncheon for the great explosion. So Col. Durnford-Slater D.S.O. said to his subaltern, have you put enough explosive in the tree ? Yes sir, 75 lbs. Is that enough? Yes sir, I worked it out by mathematics, it is exactly right. Well better put a bit more. Very good sir.
“And when Col. D. Slater D.S.O. had had his port he sent for the subaltern and said subaltern better put a bit more explosive in that tree. I don’t want to disappoint Lord Glasgow. Very good sir.
“Then they all went out to see the explosion and Col. D-S D.S.O. said you will see that tree fall flat at just that angle where it will hurt no young trees and Lord Glasgow said goodness you are clever.
“So soon they lit the fuse and waited for the explosion and presently the tree, instead of falling quietly sideways, rose 50 feet into the air taking with it half an acre of soil and the whole of the young plantation.
“And the subaltern said Sir I made a mistake, it should have been 7.5 lbs not 75. “Lord Glasgow was so upset he walked in dead silence back to his castle and when they came to the turn of the drive in sight of his castle what should they find but that every pane of glass in the building was broken.
“So Lord Glasgow gave a little cry and ran to hide his emotion in the lavatory and there when he pulled the plug the entire ceiling, loosened by the explosion, fell on his head. This is quite true.”
Controlled demolitions are clearly difficult things.
Now consider the following thread, from the asset manager ‘Capitalist Exploits’ (@capitalistexp on X / Twitter), published on 6th January 2023, which we still maintain is the most important thread you will ever read:
“If you knew you were sitting at the helm of a collapse in financial markets, which would bring social unrest and likely displace your position of power, what would you have done ?
“This was the problem facing the elites in fall of 2019. Recall the repo crisis? The emergency debt crisis, which was the result of problems papered over since 08.
“Desperate attempts to save the system were enacted (Fed funding repo mkts to tune of 10-20B p/d). It was so desperate that even treasuries were being rejected as collateral.
“We hedgies, analysts, fin mkt guys/gals all knew the system was going to collapse. So did the elites. Collapse threatened them.
“The scam that cannot be named was the veil for ushering in “The great reset”. An ability to crush small biz and destroy the middle class (who represent the greatest threat to totalitarian rule), print trillions of dollars, give it to themselves while controlling the collapse.
“Collapse is necessary for them to enable and justify a techno feudal system – “build back better”. A system where all assets are owned by those at the helm of the destruction – “You’ll own nothing and be happy”. Classic Hegelian dialectic.
“Obvious at this point to all but the truly brainwashed or desperately naive is that there was no medical emergency. Only a mass MSM manufactured crisis, coupled with censorship never before seen* (necessary to enable the transfer of wealth to elites..now done)
[*Note that Meta’s Mark Zuckerberg in a letter posted to X on 26th August 2024 appeared to break ranks with his Big Tech bro’s when he acknowledged that
“In 2021, senior officials from the Biden Administration, including the White House, repeatedly pressured our teams for months to censor certain COVID-19 content.. I believe the government pressure was wrong, and I regret that we were not more outspoken about it..”
Zuckerberg has presumably concluded that Trump is now the more likely candidate to win the November US Presidential Election, and is adjusting his chess pieces, his ethics, and his recollection of the recent past accordingly.]
“Groundwork was carefully laid for biomedical security state (passport systems, psychological NLP, much greater amt of work moved to online/digital). This is where the next manufactured crisis is to come. Corralling all those in digital system into something “safe and secure”.
“A digital ID. To be tied in with CBDC’s, controlling spend (programable money), “social credit/ESG” and vax passports. – Controlled spend, – Controlled movement/travel. See 15 min cities. – Controlled health – if you don’t comply with measures you’ll be cut off from payments
“Payments being UBI. Dependancy is being established now. Post dependancy comes UBI. Soon as you’re reliant on UBI you’re a slave to the entire structure.
“If you wish to know who is behind what is the greatest organised crime syndicate ever seen and behind what is a global war where citizens are both victim and weapon begin by looking at “The 2030 Agenda for Sustainable Development”.
“Numbers don’t lie and we are already in a genocide. (excess mortality post “safe and effective”) Don’t @ me do your own analysis. Welcome to WWIII. It’s already here…but not in the way any of us ever envisaged.
“What now? Well it must be stopped. Start local. The time for fearing ridicule is long past. Be brave, speak the truth. Understand an entire bag of “emergencies” are in the wings. We must be awake to these and shut them down immediately..before we’re all enslaved. – End.”
Notwithstanding Mark Zuckerberg’s ‘Damascene conversion’ to free speech, whether you accept any or all of the ‘Capitalist Exploits’ thesis is somewhat academic; the figures relating to the global government debt load do not lie, and they are wholly untenable.
The US national debt, for example, now stands officially at over $35 trillion and is growing at the rate of $1 trillion every 100 days. Empires have collapsed over less.
In another context, three years ago, the author and financial analyst Alex Krainer wrote of the UK that
“In response to the pandemic, the government added £407 billion in expenses and £355 billion in new debt, which is on track to reaching £2.8 trillion in 2025, or about 110% of the GDP. The magnitude of these figures is easier to appreciate in per capita terms: we are talking about almost £47 thousand per man, woman and child in Britain and over £100 thousand per household. Again, many learned economists will try to convince you that debts and deficits don’t matter because the interest rates are so low that the government can simply issue gilts as required and raise unlimited debt for free..
“Today the UK could be in the early stages of the same sequence of events [as all other imperial powers in decline]: a severe crisis at home coupled with the dramatic loss of international leverage and a very costly addiction to imperial prestige. The UK will likely make all the mistakes made by other powers in that similar position through history: it will suffocate its domestic economic growth by imposing hard austerity at home while at the same time increasing military spending and foreign adventurism. Britain’s public debt will continue to outpace its GDP growth and the government’s budget deficits will be covered by Bank of England’s monetary inflation. This recipe reliably leads to stagflation and possibly to hyperinflation.”
In a recent update, Krainer wrote that
“So far, so good: three years later, it is clear that the UK has continued making all the mistakes made by other decaying empires, particularly in terms of foreign adventurism.
“A sudden deterioration, which developed during the course of this year seems to be related to the Western powers’ impending military defeat in their proxy war against Russia. Britain has been the principal cheerleader and sponsor of that conflict, and she seems to have gone “in over her head.” In addition to providing at least £7.5 billion in military aid (nearly $10 billion), Britain gave another £5 billion ($6.5 billion) to Ukraine in financial support.
“Furthermore, Britain has also guaranteed multiple tranches of World Bank loans to Ukraine and many British financial institutions have purchased billions’ worth of Ukraine’s bonds. Others made extensive direct investments there..
On Wednesday 31st July 2024, President Zelensky ‘temporarily’ suspended Ukraine’s external debt repayments.
On Thursday 1st August 2024, a debt repayments freeze took effect.
Alex Krainer, again:
“On 22 July, the same day when the agreement between the government of Ukraine and the “ad hoc committee” of her private creditors was announced, the Bank of England also announced a seminar titled “The Future Bank of England Balance Sheet – managing its transition towards a new system for supplying reserves.” The seminar took place the same day (a bit of a short notice for most people) and featured a speech by Victoria Saporta, Executive Director of the bank’s Markets Directorate. In the announcement, the BOE explained that its “balance sheet plays a key role in helping [the bank] achieve its financial stability and monetary policy objectives.”
“Saporta’s speech, titled “Let’s Get Ready to Repo!” laid out the Bank’s latest thinking on the future of its balance sheet which would transition towards a demand-driven system for supplying reserves. Saporta suggested that the bank would need to accept a “broader range of assets” as collateral to make the system “usable for the widest range of firm business models.” She added that, “The single punchline is that both we, the Bank and you, the market, need to prepare ourselves for increased usage of both our short term and long term repo operations. Or in short, let’s get ready to repo!”
“Seriously, where do they find these people?!
“Here’s how Bloomberg’s macro strategist Simon White put it: in a demand-led system, “what banks use to settle balances each day *must* be ‘shiftable’ on to the central bank’s balance sheet in a crisis. If they are not, liquidity is at risk of seizing up altogether. Thus, in a crisis, potentially no asset under this scheme will be turned away.” That could include even Ukraine’s bonds.
“What is clear from this and from the BOE’s language is that the bank is now anxious about Britain’s financial system collapsing and it has resolved to avert the collapse in the worst possible way: by loosening its credit standards and accepting junk quality collateral in exchange for cash. This is the clearest possible sign that the system came to the verge of collapsing..”
In short, the West had the option to reset its financial system in September 2008 with the collapse of Lehman Brothers. Instead of letting Adam Smith’s invisible hand work its free market magic, it blinked. The result is the insoluble global debt predicament of 2024, and ongoing monetary chaos. Our conclusions:
In one of our longstanding financial market analogies, although one cannot identify which snowflake will trigger the avalanche, one can identify when the snow mass has shifted from being in stable equilibrium to being in markedly unstable equilibrium. The global monetary system is no longer stable.
In a speech given to the Committee for Monetary Research and Education in New York in October 2011, Alasdair Macleod summarised the importance of a stable monetary system:
“I support sound money for two very good reasons. Firstly, it is a basic human right to choose to save, without our savings being debased by the tax of monetary inflation. Those who are worst affected by this inflation tax are not the rich, they benefit; but the poor and the barely well-off, which is why monetary inflation undermines society and why the right to sound money should be respected. If government gives itself a monopoly over money, it has a duty to protect the property rights vested in it. Secondly, it is a basic right for us to own our own money rather than have it owned by the banks. For them to take our money and expand credit on the back of it debases it. It is an abuse of an individual’s property rights and a banking licence is a government licence to do so. If anyone else was to do this, they would be guilty of fraud..
“Sound money guarantees a stable yet progressive economy where people are truly equal. It allows people to save properly for their retirement so that they will not become a burden on the state. It leads to democracy voting for small governments. It encourages peaceful trade and discourages war. It is the only path, after this mess, that leads us to long-lasting and peaceful prosperity. We really need everyone to understand this for the sake of our future.”
………….
As you may know, we also manage bespoke investment portfolios for private clients internationally. We would be delighted to help you too. Because of the current heightened market volatility we are offering a completely free financial review, with no strings attached, to see if our value-oriented approach might benefit your portfolio – with no obligation at all:
Get your Free
financial review
…………
Tim Price is co-manager of the VT Price Value Portfolio and author of ‘Investing through the Looking Glass: a rational guide to irrational financial markets’. You can access a full archive of these weekly investment commentaries here. You can listen to our regular ‘State of the Markets’ podcasts, with Paul Rodriguez of ThinkTrading.com, here. Email us: info@pricevaluepartners.com.
Price Value Partners manage investment portfolios for private clients. We also manage the VT Price Value Portfolio, an unconstrained global fund investing in Benjamin Graham-style value stocks.
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