Tag: hasu

Last few months crypto lull
Growth tech stocks doing poorly
General washout

Now back to idiosyncratic crypto world
Equities bounced off lows
Are we entering stagflation? Or road bump to secular deflation?

Tech is long duration, story about future
Bonds and fiat are locking in huge losses

Investors realize they have to own growth, can’t sit in fiat or bonds, commodities prices will correct

Regardless of recession / stagflation, world can’t turn away from tech
Longer term, people will allocate fixed % to crypto, and this % will grow

Rare that stocks and bonds go down at same time – happened in 2008
Only natural bond buyer is pensions – fixed annuity
Otherwise it’s just Central Bank – Europe, Japan, US – scary long term because it means government is lending to itself
Only works in secular deflation environment
Technology is wage dis-inflationary

Inflationary spike becomes dis-inflationary because it forces businesses to change, adapt more technology, reduce labor – eg, like ordering food from tablets instead of waiters
This will only accelerate as boomers retire – some think this will be wage inflationary (labor reduces) – but it will be opposite because tech Overton window will open, bring more tech to increase automation / reduce need for labor
We will see this in every industry

If people wanted, they can live very cheap lives – like in Japan
Demographics are also deflationary (slowing population growth, birth rates)

Inflation will top Q2 (2022)
Govs want deflation now, by crushing demand, scaring everyone
They don’t think we’ll still have inflation in 3 years – they know it’s transitory

Stagflation = economy slows, recession, but there’s still wage and price growth
1970s similar environment – oil + commodity spike
Stagflation is dangerous – lots of mortgages + job destruction + rates cycle

Today’s different – less labor entering workforce
Many commodities can be substituted – eg, if gas prices high, people don’t go to movie theaters, etc
Media likes to talk about inflation, good for engagement / clicks – but secular deflation is harder to understand (even though reality in Japan for 30 years)

We won’t enter recession unless Fed forces it
Also will be massive easing in Japan and China

China has massive deflation problem coming – inflated house prices, shrinking demographics, no immigration – must print a lot of money to prop it up
Only question – can they handle rising food prices?
Given reliance on fertilizer which Russia controls

Crypto is entering big leagues now
But still too small for macro to really matter

Ukraine-Russia – no one can argue how speculative crypto is now
Net good – Ukraine using it, people can save wealth and escape
Most people view world as what “should happen” and what “shouldn’t happen” – should Putin have invaded? Etc
Better to focus not on “should”, but on what WILL happen next – and clearly crypto is out of bag

Also crypto in Middle East – parallel system of finance
Benefits of credibly neutral systems
Geopolitical moves – instead of what should happen (“should crypto be adopted and used”), it’s a rational response to what is actually happening in world, and expected outcomes

We sanction people because we can’t arrest them – eg, Russian oligarchs
Suspension of rule of law in pursuit of higher purpose
What are the lines we can’t cross? Eg, we can’t kill dictators’ children
These depend on norms
Crypto can be used for sanctions too – there’s no tech that’s useful for people that ISN’T useful for criminals
Precarious subject since governments are actively writing crypto rules and regs right now
Each society will answer differently based on priorities
For example, India still buying Russian oil bc it’s a life or death necessity, and believe America is hypocritical because even America doesn’t follow its own sanctions (eg, still buying Russian oil too)

Short term, America / Ukraine will win
Long term, other countries will move away from dependence on existing financial systems, embrace alternate systems / credibly neutral

West will continue to adopt crypto as freedom of values, speech
Governments outside west will also adopt – credibly neutral money + platform

“Crypto will become all the things”
Mega-political force – peer to peer encryption – not ban-able similar to how printing press isn’t ban-able
500 year epochs enabled by tech transitions
Printing press attacked power of Church, Church tried to ban it but ultimately failed

Hasu – “Printing press as disintermediating technology”

Now we’re seeing this with p2p internet encryption
US military said it’s military grade tech, we should ban it

Sovereign Individual – as we enter information society, work and value will be increasingly on internet, and nation state monopoly on violence / control will weaken
Where you’re born will have less claim on your productivity
Very disruptive to large governments

Hasu – Nation state is one of great innovations in world history – but today, would be great to have more competition / experimentation

People will move to places advantageous to self (eg, low tax), or with others they met online, setup their own communities

Generational gap never been bigger – older generations are shocked you can form these strong bonds online
Some older guys think internet is actually net-bad
But for young, all their social moments happen online
This pluralism will blow peoples’ minds

Hasu – need one country with free land to allow establish charter cities

In Japan, average age of farmer is 67, you can get free land if you move there and develop the land

China supporting more relaxation, less testing, less stress among young
See the troubles if stress / pressure on youth continue

Dubai – their biz model is sell land to foreigners – almost like metaverse – zero tax on everything, but I want you to buy land here – like a token gated community
Compelling flywheel – freedoms of a liberal monarchy
Monarchy which has business model to attract talent and capital

Liberal democracy promise is everyone gets a voice – but then majority tyranny over minority (eg, poor over rich, dominant ethnicity over ethnic minorities)
Nordic models seem to work

Peru – Fushimori abolished Parliament, very popular move with people who thought Parliament was corrupt and ineffective – transitioning democracy back to authoritarian / monarchy

Ethno-states will be on rise – only way people willing to sacrifice for nation

Crypto abstracts away idea that you must save in your native fiat – but instead save in common with global like-minded individuals

If huge institutions were buying and staking crypto, would almost be anachronism – individuals have been buying these dips, pushing crypto forward
Interesting end game – what are people doing to transact with each other, secure their own wealth? How will governments react to people doing this?

“Back to first principles”