Apolitical Money
The price of bitcoin has crossed $40,000 for the first time since April 2022 and gold is in the midst of making new all-time highs.
To read the full report click the download link.
The price of bitcoin has crossed $40,000 for the first time since April 2022 and gold is in the midst of making new all-time highs. There are a slew of plausible explanations for this tandem of occurrences – the market’s lack of faith in the Fed’s ability to wrangle inflation, continued currency debasement, mounting national debt, an unsustainable trajectory of interest expense, increasing deficits, rising geopolitical tensions, banking system fragility, and the recognition that assets once perceived as “risk-free” possess both material price risk and counterparty risk – just to name a few.
The reality of the situation is that the recent performance of bitcoin and gold is a result of the combination of these factors, all of which share common undercurrents. Bluffs are being called. Counterparty risk is being more rigorously assessed. At a high level, individuals, institutions, corporations, nation-states, and everyone in between, are waking up to the notion that the optimal strategy for preserving value into the future is to store their economic energy in assets that cannot be debased, frozen, seized, or otherwise co-opted by forces outside of their control.
Economist Zoltan Pozsar (formerly of Credit Suisse) wrote a prescient note in early 2022 suggesting the onset of a new world monetary order (the birth of Bretton Woods III) and the shift from “inside money” to commodity-backed “outside money.” Another lens through which to view this emergent trend is as a growing aversion to assets subject to politicization, in favor of assets that are wholly apolitical. In a world where the motives & policies of authorities & institutions which influence asset valuations (directly or indirectly) appear increasingly dubious, the case for neutral, non-state assets grows stronger.
To read the full report click the download link.
