Enjoy the content below and the rest of the weekend!
“Power tends to corrupt, and absolute power corrupts absolutely” - John Emerich Edward Dalberg-Acton (Lord Acton)
Translation: People with power over other people/things tend to become corrupt. This corruption tends to accelerate as power is challenged - ‘backed into a corner.’ You see it with the Fed, Madoff (ponzi scheme), aspects of Big Tech, among other areas. It’s human nature. This ties into the broader trend toward decentralization (remove absolute power), which also fits within the 4th Turning framework we’ve continued to highlight.
Recap: Buffett sold bank stocks and bought gold-related stocks. This piece delves into "why" and also ties it into the investment case for Bitcoin (digital gold).
Comment: We have had a net positive view on gold and related stocks (miners, precious metals, etc.) for nearly 2 years, with the primary reason being - a negative view on real interest rates. Specifically, a negative view on nominal growth (late cycle) and a neutral to more recently positive view on inflation (supply constraints) - net net, negative real interest rates. If you want to get gold right, you have to get real interest rates right. The recent growth in money supply (fiat printing) helps drive these underlying interest rate conditions..
Recap: Interview with one of the pioneers of DeFi - Andre Cronje. He created Yearn Finance, which essentially is a 'smart bank account that automatically allocates your assets to different low-risk investment strategies that execute on the Ethereum blockchain'
Comment: DeFi has just begun - certain aspects of it are a bubble (yield farming, etc.), but others provide real economic value and benefits. We expect this alternative financial system to flourish over the coming years. Yearn Finance launched a token (YFI) a few months ago, with a market cap below $40M - today it's over $400M and growing... If you aren’t paying attention, you’re missing out on exciting, useful, and lucrative opportunities - email us @ firstname.lastname@example.org if you want to learn more about this growing financial system
Recap: Apple helped create the 'centralized' app store - 'The app store model has been a central part of the smartphone revolution, bringing safe, trusted software to billions of people for the first time.' Now the fee structure and the system itself is under attack (Netflix, Spotify, Epic Games, etc. pulling content / demanding lower fees) - how will it play out?
Comment: We view this development as one of the many along the lines of broader decentralization. The Fed, Tech giants, The Government, etc. all have too much power. The systems - from the gold de-peg in 1971, to the creation of the Internet - started off with likely positive intent.. but have since devolved. We expect to see this decentralization trend - from deurbanization (to lower tax states) to take rate compression (app store fees moving lower) - to accelerate over the coming years.
CrowdCent Thoughts & Predictions
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Look forward to more updates soon - the future is here...