Tag Archives: bitcoin

Why Bitcoin Keeps Going Up: Analysis

The huge 2016-2017 Bitcoin rally is on a lot of people’s minds: Why does it keep going up? Didn’t all the ‘experts’ in 2011-2014 say it was a bubble? Why does it refuse to burst? Is it a bubble? Maybe not.

Correct Predictions, Part 2:

Over and over again I keep being right: Bitcoin keeps going up, now at $630 on its way to $1,200 again, and even higher. Been telling readers to buy since $100 in 2013.

It hit $1,200 last night.

In late 2015, I explained why the US government didn’t make a concerted effort to prohibit Bitcoin, and how many got it wrong:

Since 2011, Bitcoin has defied all predictions of its collapse. If I had to compile all of the failed predictions of Bitcoin’s demise, it would take days and fill dozens of pages. Here are some of them, courtesy of Google. Even Moldbug, as smart as he is, got it wrong.* One could argue it’s too soon to call Bitcoin victorious, but I think three years is long enough. If the US govt. were going to make a concerted effort shutdown Bitcoin, it would have done so already. Unless it’s overtly illegal, what has to be understood is that the government typically doesn’t like to shut things down, preferring instead to regulate and tax. In the wake of the Silkroad debacle, Bitcoin has become heavily regulated,as far as America is concerned, and people who trade bitcoins are subject to capital gains taxes, much like a stock. Same for vendors who use Bitcoin as payment. If the government can’t shutdown cigarette companies, which cause about 500,000 deaths per year in the United States alone, are they really going to make a big effort to shutdown a harmless currency**? Because people occasionally use firearms for nefarious activities, does that make guns illegal? No. But guns are heavily regulated…same for cigarettes and alcohol.

But my explanation was inadequate. There are more factors at play as to why Bitcoin keeps going up–global macroeconomic factors.

Bitcoin is surging because it’s a globally accepted store of value and means of commerce, and the fixed quantity and production prevents devaluation. Unlike gold, all transactions can be done remotely and confidentially, and there are no storage costs, eliminating all the problems that are associated with storing large quantities of gold. My prediction is all dips will continue to be bought and the price will keep rising. $4,000/coin is possible. Been long since 2013, so I am biased in that regard, but there are real fundamentals here too.

Foreign currencies have lost anywhere from 30%to 99% of their value against the US dollar since 2013. Beginning around 2002 and ending around 2011-2013, many foreign governments carelessly amassed substantial infrastructure debts that now they are struggling to pay off (due to economic weakness for these foreign economies and the surging US dollar), creating a cycle of inflation and currency depreciation, making Bitcoin more attractive to own for people and businesses in these countries.

Between 2002-2011, US hedge funds and private equity flooded foreign markets with billions of dollars in capital in the hope such countries would emulate the economic success of America, but these countries amassed large debts, such as to fund construction projects, pensions, and other initiatives. Such hopes dissipated in 2011-2013 when the foreign economy turned south, first during the 2011-2012 Euro crisis, then in 2013 when the Federal Reserve began its ‘taper’ program, and then, finally, two year later when the Fed began its rate hike cycle after an seven-year hiatus. These factors made foreign debt became much less attractive, helping to spur both a US dollar rally and and outflows out of foreign asserts and currencies, and then the commodity crash of 2014-2015 dealt a second blow to these foreign economies, particularly Russia and Brazil, both of which fell into recession. Greece, Spain, Italy, and Portugal, which squandered their 2000′s surpluses on pensions and other projects, fell into recession and needed to be bailed out.

US investments helped propel an emerging market bull market that lasted between 2002-2008, but since 2011 emerging markets have significantly lagged. Hedge funds, having been burned in 2011-2015, are not going to touch that stove again.

Bitcoin is rising because citizens and businesses have lost faith in the competence of their governments, and rightfully so. America is an exception in that it’s well-managed and strong economically and fiscally (especially relative to these foreign economies), which explains the flight to the US dollar, and also Bitcoin.

For example, in 2013, depositors at Cyrus’ largest bank lost 48% of their savings above 100,000 Euros:

NICOSIA, Cyprus (AP) — Depositors at bailed-out Cyprus’ largest bank will lose 47.5% of their savings exceeding 100,000 euros ($132,000), the government said Monday.

The figure comes four months after Cyprus agreed on a 23 billion-euro ($30.5 billion) rescue package with its euro partners and the International Monetary Fund. In exchange for a 10 billion euro loan, deposits worth more than the insured limit of 100,000 euros at the Bank of Cyprus and smaller lender Laiki were raided in a so-called bail-in to prop up the country’s teetering banking sector.

A second factor may be the rise of global authoritarianism, unrest, and unease, reducing confidence in keeping money in banks, and assets that face geopolitical risk…Bitcoin, because it’s decentralized, is immune to geopolitical risk. As long as you have your wallet, you have your wealth.

But what about the US debt clock? Doesn’t America also have a lot of debt?

The absolute debt does not matter. To put the debt in perspective, interest paid on US debt relative to GDP is at multi-decade lows, meaning that the debt burden is not significant:

The US dollar is unique because it’s the world’s benchmark of wealth. The Forbes 400 list is benchmarked in dollars, not Yen or Euros. The US dollar is not only a reserve currency, but everything (such has oil, gold, etc.) is denominated and traded in US dollars, not Euros, Francs, Pounds, or Yen. This allows the US to persistently run trade deficits without hurting its ‘wealth’, unlike other countries that would lose wealth in the form of high inflation and currency depreciation if they did the same. This makes the debt clock almost meaningless, and had someone in 2000 sold short US treasuries in anticipation of high inflation, they would have lost their shirt despite the national debt surging since then. Foreigners are buying Bitcoin to preserve their wealth against recession, currency depreciation, inflation, and crisis.

Related: Collapse Can Wait, Part 2

Peter Schiff was technically right…but he got the country and the currency wrong. The debt crisis is not in America…the evidence suggests it’s everywhere else (except Germany, Japan, and China). So the same ‘debt crisis’ argument that is often ascribed to America applies to the rest off the world instead, and that helps Bitcoin.

Correct Predictions

Predicting the future is notoriously hard, and that seems to have so far discouraged potential authors and readers alike.

Predicting is not as hard [1] as, say, understanding theoretical physics or algebraic geometry. There is a simple heuristic I use: assume past trends will continue. Stocks will keep going up, wealth inequality will keep widening, world peace and stability will continue, etc. It also helps to have fundamental understanding of the subject matter of the prediction, as well distancing yourself from personal biases and wishful thinking when making the prediction.

My predictions about finance, the stock market, the economy (both domestic and foreign), bitcoin, and web 2.0 have all come true.

When writing about web 2.0, I knew almost exactly which companies would fail or succeed, owing to my knowledge of the area. I’ve written about two-dozen articles about web 2.0 since 2011, correctly predicting that the valuations of Uber, Dropbox, Pinterest, Facebook, Snapchat, and AirBNB would continue to rise. Not only that, but I knew which companies to avoid. I never praised a company that subsequently failed.

HBD is my guiding principle of investing and predicting: smart people are the engines economic growth and technological progress, and rising real estate and stock prices reward smart people for the economic value they create.

Bay Area real estate, for example, which keeps going up despite the left’s insistence of it being a bubble or due for a crash:

Also Amazon.com, Google, and Tesla stock. In 2013, I was bullish on Tesla when it as at $40; the stock is above $200. Facebook – was bullish in 2012 in the $30′s; now above $110. Amazon – now above $700 on its way to $1,000. Google was $800 not too long ago; recently, it split into two classes of shares worth over $700 each. Nuts.

Now it’s Bitcoin, which as of May 30th, 2016, has already surged 20% in the past week on its way back to $1200:

I emphatically believe it’s going much higher, leaving all the doubters miffed and bemused.

All too often, people will see a chart for something like Bitcoin, Amazon.com stock, or Bay Area home prices and immediately think, ‘This is unsustainable!’ without considering the fundamentals underpinning the rally. Maybe it’s a bubble that will end badly, but in many instances it’s not.

The S&P 500 also gained 3% in the past week on its way to 2300-2500.

[1] A distinction should be made between hardness and tractability. The act of guessing lotto numbers is easy but getting them right is intractable. Playing chess is easy but solving the game is intractable. The act itself of predicting may be easy, but the difficulty in getting predictions correct may be attributable more to the intractability of randomness than insufficient brainpower.

The Daily View: 1/17/2016 (lots of stuff)

From Fred Reed: The Inevitability of Eugenics

I predict within 50 years America will start giving Eugenics a serious consideration as a way to tackle the growing entitlement spending problem, which by then will be much bigger than it is now if trends persist. Liberals and conservative alike need to get over this squeamishness of genetic engineering, which like masonry or computers, is a tool that can be used to improve society. A hammer can break but it can also build.

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Jim and XS have some thoughts on bitcoin.

As some may already know, I have been a Bitcoin optimist for awhile, here and here for example, as well as an investor in the cryptocurrency.

I’ll believe there’s a crisis when the price crashes and doesn’t recover; until then, ‘coin on’. One thing I’ve learned from following bitcoin over the past three years is that everyone has their ‘theory’ for why it will fail, and all have been shown wrong. Bitcoin just keeps coming back, rising like a Phoenix from every adversity thrown at it. The FBI seizure of Silk Road didn’t stop it, neither did price crashes in 2011, 2013 and 2014, or the failure of Mt. Gox in 2014. Now Bitcoin is booming because because of China. Wealthy Chinese are using Bitcoin to circumvent capital controls. As China’s economy slows and in anticipation of a falling Yuan, the wealthy are looking for anywhere to park their money.

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The internet has made defensive writers of us all

Perhaps ‘defense writing’ has become so commonplace nowadays because there is less tolerance at both the individual and societal level for mistakes than in the past. In an era where an abundance of information can be found instantly online for free, ignorance has become inexcusable. With the government spending tens of billion of dollars a year on public education, no one should be ignorant, and ignorance is seen as both a personal failure as well as an institutional or societal one. This dates back to the ‘enlightenment’ ideals of centuries ago, when we expected science and reason to explain everything, and that still carries on today. Failure or ignorance is seen as un-enlightenment. But the problem is the majority of people are simply not smart enough to benefit much from mass education, forgetting much of what is learned beyond the basics of reading and writing, rudimentary history and geography, and some math.

Also, thanks to the internet and other factors, we’re in an era of fact checking, which means writers have to be especially assiduous to buttress against all possible holes that can be poked into their thesis. Hedging means being open the possibility of being wrong, so instead having to create a thesis that is impervious to factual criticism, just use verbal disclaimers in the form of hedging language so that you’re covered.

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More American exceptionalism: Cancer survival rates higher in USA than UK

Long wait times, scarcity of drugs for NHS patients, and poor screening regimens may be to blame.

Related:

Some Thoughts on Healthcare
Universal Healthcare Not So Great
Affordable Housing, Healthcare, & Tuition: Putting Things in Perspective

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From Social Matter: Unless You’re An Atom, Principled Libertarianism Is Not For You

This invokes the slippy slope argument: what if instead of a plumber it’s a butter churn business and now technology has made churns nearly obsolete. Should the government ban automated churners to save his business too? Cheaper plumbing (and cheaper butter production) means more people can afford plumbing and butter, which boosts standards of living. 100 years ago, automobiles were a luxury item; now they are everywhere, thanks to globalization, free market capitalism, and other factors. That’s the free market argument, but it does not take into account the individual who may lose his job when technology becomes obsoleted, or his job is replaced by someone who can do it cheaper. New technologies and markets create new jobs, replacing the lost ones, although there is no guarantee the Luddite Fallacy or Lump of Labor Fallacy must remain fallacies.

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Hmm…but private investment has risen substacially over the past six years:

Dividends are worse than buybacks, due to tax issues and other inefficiencies, but no one attacks dividends. Somehow buybacks have become the scourge of the left.

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The Trouble With Fascism

Kinda, but fascism is predicated on race whereas communism is predicted on class, the later which is obviously leftist. Fascism means maybe some government control over certain industries,but it’s not leftist like Marxism, which has more control over businesses, to the point of almost total confiscation of private property.

On a somewhat related note, the problem with populism is that it tends to promote bad policy (particularly economic policy) for the sake of getting votes by exploiting the fears and ignorance of the masses (especially about economics), which is one of the fundamental flaws of democracy. In that regard, both left-populism and right-populism may be the different sides of the same coin. For example, many on the right support low taxes, but it’s less realistic promise both a smaller deficit and lower taxes, but republicans have to promise both to get elected.

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Everyday Economics: The Rise and Fall of the Chinese Economy

Am I the only one who is still on the fence about China? It’s too early to say there is actually a mess. There is evidence maybe growth is glowing, but it’s far too early to call it a catastrophe, even though the doom and gloom media has been calling it one for the past year. The debate is over 7% GDP growth vs. 5.5%.

The Rise and Fall of the Chinese Economy.

If by ‘fall’ he means 5.5% GDP growth instead of 7%. Alos, low oil prices should help China as well as other Asian economies.

Maybe a lot of this doom and gloom comes down to a a simple math misunderstanding, which is that ‘slowing growth’ is not the same as shrinkage. Slowing growth implies the second derivative is negative, but the first one is still positive, meaning the size of the economy is still expanding. An example is the function ln(1+x)

Rather, his video does a good job of explaining what could go wrong, but I’m not sold on the idea that there’s a crisis now. I would not be surprised if this blows over in a a couple months like it did in the past during past concerns over China.

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The Handicap of a High IQ (Guest Writer Matt Baldoni)

He’s probably right on all accounts, but take issue with this:


Okay, more good science, kids! There is a negative correlation between involvement in organized religion and IQ numbers. Dumb people go to church, basically. Smart people don’t.

I’ve heard this argument, but I’m not buying it, and its not like the correlation between IQ and religiosity is incontrovertible. No one really knows. This is similar to the leftist ‘knuckle dragging’ stereotype of Conservatives, which by my own empirical observations is also false. Liberals, particularly welfare liberals, are prone to reductionism and oversimplification more so than Conservatives. This is due to tribe mentality, as well well as general ignorance of complicated issues.

Maybe offline this is the case, but online some of the smartest, well-written people I’ve encountered are religious and or identify as Christian – blogs and writers like Free Northerner, Vox Day, Bruce Charlton, Nick B. Steves, Mark Citadel, Zippy, WM Briggs, and more. It’s many avowed atheists, people who watch Colbert or Daily Show, who seem dull and conformist.

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Interest Rates, Unicorns And What The Fed Means To Silicon Valley

Low interest rates helps America’s best and brightest innovate and create wealth, and is an example of pragmatic/utilitarian/consequentialist polity that helps the ‘greater good’ even if such policy is unpopular with a lot of people. TARP, QE, and ZIRP were ‘lifelines’ for America’s most productive, as a way of containing or mitigating the the damage from the weak, inept sectors (banking, housing) so that the healthier portions could thrive. It was a success, with TARP three years later returning a profit to the treasury, and the economy & stock market now in its sixth year of expansion. Although the private sector and the consumer deserve most of the credit, TARP helped too.

A common argument is that low interest rates create bubbles, but the end result is still better than if bubbles are never formed. Risk taking is necessary for an economy to grow technologically and not become stagnant.

Second, compounding this run up in asset prices is the appreciation of the dollar on the global currency markets. Because the world was anticipating an increase in U.S. interest rates, the value of the dollar has been increasing for the past two years, since the Fed started signaling that it would eventually raise rates.

This is due to the ‘flight to safety’ and the insatiable demand for safe, low yielding US debt. The dollar is so strong not only because of the flight to safety, but because foreign countries that don’t have reserve currency status are running up deficits to try to grow their economies. Other reason are given here.

Bitcoin: It Ain’t Going Away

Awhile back I made a post recommending bitcoin at $290; a month later it peaked at $550, fell to $330, and is now at $450 again:

I don’t worry about the day-to-day moves, because I know Bitcoin is here to stay. Its not going away, nor is it some some ‘flash in the pan’ but rather a permanent fixture of commerce, much like Paypal or MasterCard. Bitcoin has value because it’s fungible, convertible into tangible goods through a marketplace, and cannot be readily counterfeited. The same for precious metals and the US dollar. Even copper has this property, but you would need a lot of copper to equal a bitcoin.

As even as far back as 2013 when Bitcoin was below $100, I’ve been recommending people buy. Part of what makes Bitcoin frustrating for experts but lucrative for speculators is the absence of transparency. No one really understands what it’s worth, but obviously many entities, both businesses and individuals, use Bitcoin. If everyone understood Bitcoin, there would be no market.

Since 2011, Bitcoin has defied all predictions of its collapse. If I had to compile all of the failed predictions of Bitcoin’s demise, it would take days and fill dozens of pages. Here are some of them, courtesy of Google. Even Moldbug, as smart as he is, got it wrong.* One could argue it’s too soon to call Bitcoin victorious, but I think three years is long enough. If the US govt. were going to make a concerted effort shutdown Bitcoin, it would have done so already. Unless it’s overtly illegal, what has to be understood is that the government typically doesn’t like to shut things down, preferring instead to regulate and tax. In the wake of the Silkroad debacle, Bitcoin has become heavily regulated,as far as America is concerned, and people who trade bitcoins are subject to capital gains taxes, much like a stock. Same for vendors who use Bitcoin as payment. If the government can’t shutdown cigarette companies, which cause about 500,000 deaths per year in the United States alone, are they really going to make a big effort to shutdown a harmless currency**? Because people occasionally use firearms for nefarious activities, does that make guns illegal? No. But guns are heavily regulated…same for cigarettes and alcohol.

* here, here, and here

** Some have argued that Bitcoin could threaten the sovereignty of the Govt., hence necessitating its shutdown. However, due to slow adoption, the finite monetary base of bitcoin (only 21 million coins can be mined), and the difficulty of mining them, I don’t see Bitcoin becoming a competitor to the US dollar. The US govt. could also make a new currency to replace both bitcoin and the dollar, backed by the credit worthiness of the USA, and then circulate that, as well use it for bond payments. More likely, though, Bitcoin will just be digital version of gold or platinum, something that – while valuable – doesn’t in anyway threaten the dominance of the dollar, and has various applications and other properties that make it valuable.

Bitcoin Going Nuts Again

The left hoped bitcoin would be another fad or bubble, but you can’t keep a good thing down for long, and Bitcoin is surging again:

Bitcoin is not going away. It’s here to stay, having long graduated from the ‘fad’ or ‘novelty’ stage. Transaction volume is at multi-year highs:

As a disclosure I own Bitcoin, having made a purchase in 2013 when it was around $170. Liberal sore losers like Krugman and others said is was bubble, and is has since gained $120.

From money morning: Bitcoin Price Prediction: Why It’s Only Now Finding the True Value

First, critics typically liken the Bitcoin bubble to the infamous Dutch Tulip Bulb Mania of 1634-1637.

In that case, imported tulip bulbs went from being a somewhat pricey luxury to a wildly speculative investment. Prices soared some 1,500% within a few months. When some started to cash out, the whole thing crashed. In less than a month, prices for the once-prized bulbs fell 99%.

Bitcoin, however, is not that kind of bubble. The tulip bulbs had little practical value; they were just pretty flowers.

That’s right, Bitcoin has utility, unlike a tulip. It’s even better than gold, which is a much more saturated market.

The easiest way to make money is to do the opposite of what the left says: when the left says stocks are too high, better buy stocks, which is what I did during the dip in August.

There are about 15 million Bitcoins in existence, giving it a market cap of about $3 billion. In terms of transaction volume relative to established payment options like Paypal and Visa, there is plenty of room for growth:

I would not be surprised if Bitcoin goes to $1,000 within five to ten years. If you have a bunch of cash lying around, investing maybe 5% of it in Bitcoin may be a good move in the fortuitous event Bitcoin becomes a major competitor to Mastercard and Visa. Its much safer then most stocks, as it’s not uncommon to see individual stocks fall 50% in a month with little explanation to never recover. There is an actual underlying infrastructure/economy here, with thousands of individuals and businesses that use Bitcoin. It’s not like some crappy start-up or stock that fails and is soon forgotten. Bitcoin is now a major part of life, having carved out it own unique place in the world of commerce. Because the number of new Bitcoin grows very slowly, if transaction volume increases but Bitcoin monetary velocity falls or stays flat, prices will have to rise. Due to the scarcity of bitcoins, combined with the utility/value of bitcoin, people have an incentive to hold them.

The Daily View: Economics, Poverty, Treasuries, Geithner, Bitcoin

The discussion of economics in the context of wealth inequality has become the new American pastime, along with idling on Facebook and watching re-runs on Netflix. Even those who have never taken an economics class have an opinion. And why wouldn’t they? Economics is a social science in that it involves people and their interactions with each other and the society and world they inhabit. Everyone and anyone can take sides, lending his or her own anecdotal evidence to the discussion, while the more experienced can cite statistics and case studies. Economics is like a battle royale, pitting the educated against the provincial, the capitalist against the laborer. An economics story that gets people riled up cannot just be about minutia and complicated models, it must have a protagonist and an antagonist, like a drama. The antagonist is usually an out of touch CEO, a banker or a multinational. The ‘hero’ is the working man or the rogue economist, exposing the misdeeds, but ultimately failing to foil the villain. If you win, the drama ends and the discussion ceases. A news aggregator with a rudimentary understanding of human psychology can choose out of a pool of thousands of stories exactly which ones people will be most inclined to click and comment. After a tendentious story is chosen, the aggregator may editorialize the headline with generalities, superlatives and calls to actions such that the headline is now only tangentially related to the original story. Stuff like “What EVERY 20-Year-Old MUST Know!” or “The Inequality Chart Just Got Worse!” But often, the original headline will suffice at generating discussion if the story is readily reducible to a banal battle between the metaphorical bad guys v. good guys. In the social media era, the personal experience is as credible, if not more, than the data. Yet we also revere scientists more than ever. It’s a contradiction in the calculus of authenticity and credibility. We lionize the loquacious commentator or ‘man on the street’ and the taciturn scientist, because in a world of astroturfing, we perceive them to be unmolested by outside forces such as money, demagoguery and political interests. The personal experience of losing one’s job becomes as credible as the economist and is elevated to the forefront of the collective debate.

In Today’s America, A Rising Tide Lifts All Yachts

Donald Sterling’s troubles show that the rich are still being victimized

Living standards of the lowest of income earners have risen considerably over the past fifty years. They have access to services, technologies and welfare programs that didn’t exist decades ago. While real wages have stagnated, real entitlement spending has risen (graphs provided here) . Nominal wages, however, rebounded sharply after 2008. According to neoclassial assumptions, we would expect wealth inequality to rise as the economy grows, resulting in extreme wealth for a small percentage of the population resembling a power-law distribution. Poverty and wealth inequality isn’t as big of a deal as the media makes it out to be and will always exist no matter what anyone tries to do to remedy it.

Worst article of the day: Bitcoin is no longer the worst investment in the world

Let’s see…bitcoin was at $100 last year and is now at $700. Seems like a good investment to me. After a recent huge $300 rally, it’s only 30% from the record high, which isn’t good, but nowhere in the league of being the ‘worst investment in the world’. Twitter, for example, is off 50% from the highs. There’s hundreds or even thousands of stocks that have fallen over 15% in 2014. Just another example of shoddy journalism by someone looking for clicks instead of providing accurate reporting.

Geithner’s Dubious Accounting

Dubbed The Competent Duo, Geithner and Bernanke were the only competent people of the entire Obama administration.

Along with Bernanke, Geithner did a good job ending the 2008 banking problem. The left wanted the crisis to get worse and for stocks to fall but, to their frustration, things got better. Much better. By April 2011, the bailout money had been repaid to the treasury. Maybe those crybabies should buy stocks and real estate instead of whining about not getting enough interest in their savings accounts.

Not a mystery: Unstoppable $100 Trillion Bond Market Renders Models Useless

If the insatiable demand for bonds has upended the models you use to value them, you’re not alone.

We’ve predicted this as far backs as 2011.

BRIC surpluses are depressing yields even as economic growth remains strong and stocks rise. In any earlier decade, it wouldn’t be possible to have yields be so low with such strong gains in equities. We’re in a global liquidity boom, as we predicted in 2011. The simplest explanation is that there’s a shitload of money generated since 2009 and it has to go somewhere, so some of it will flow to treasuries and bonds even as stocks rise.

The Fly: Let me remind you that TLT is going up because of foreign money and not because we are heading toward catastrophe.

Agree 100%. The world is awash with so much liquidity that it’s pushing all asset classes higher including, but not limited to gold, stocks, gas prices, treasuries, municipal bonds, junk bonds, and oil. Going long TLT (the 20-year treasury) is a proxy for global liquidity as well as a hedge against volatility. Even the smallest hiccup overseas or the smallest downtick in the S&P 500 sends it rocketing higher. Foreigners, funds and institutions just cannot get enough of our low-yielding debt, and they will look for any excuse, however small, to buy.

From When Automation Comes for the Professional Class

Seems like the world is changing faster than we can keep up. People are getting smarter and richer than ever as stocks keep going up. So much wealth to be had. So much stuff going on. The invocation of the Luddite Fallacy has become commonplace among economic pundits since 2008. One can argue that there will always be new jobs being created that a few years ago seemed inconceivable. For example, there are people who make a living moderating Facebook brand pages by removing spam and answering question. However, another question is : will there be enough jobs for those who fail to meet a rising IQ threshold for entry level employment as technology automates the simplest of jobs? According to Tyler Cowen, we have a situation where average is over. Many young adults with degrees are doing work that just a generation ago was typically relegated to high-school dropouts. This seems to be a permanent trend in that a surging stock market and steady economic growth isn’t creating enough high paying jobs. To get a good paying job, you have to have superior credentials and or provide exceptional value. Just showing up and coasting by with a detached indifference like in Dilbert won’t cut it anymore.