Are we allowed to talk about Bitcoin?

Putting this here, instead of the economy thread or that Gamestop thread, etc.

If you want one interview in which someone covers the insanity of the monetary and fiscal mess they have created and the "everything bubble" it has spawned (that includes Crypto), this is a smart interview.

It's Jeff Gundlach, whose Doubleline Asset Management, is a fixed-income investing behemoth. Something like $150 billion of assets under his management.

He covers crypto a little in the interview, but what you are seeing in these speculative vehicles is part and parcel of a much bigger picture that he's talking about.

 

An Italian Artist Auctioned Off an ‘Invisible Sculpture’ for $18,300. It’s Made Literally of Nothing | Artnet News

Putting this here, because whether people realize it or not yet, it's part and parcel of the same thing that has caused the cryptocurrency bubbles, as well as the absurd trading in the meme stocks, etc. (See AMC the last week), as well as the runaway price rises in a bunch of other things.

This one has to be the absolute extreme. Central banks have so fucked up the world with the insane amount of liquidity they have injected, creating so much misallocation of the capital that was stolen from our future. ... that an Italian just sold an INVISIBLE sculpture for $18,000. The proud buyer literally gets nothing. I thought the various NFTs that have been fetching millions of dollars took the cake, but no.

To make it even more ridiculous, the sale stipulated that the sculpture must be displayed in a private home free from any obstruction, in an area that is about 5 ft. long by 5 ft. wide. But. ... because the piece does not actually exist, there are no special lighting or climate requirements.

The toll this has taken on where the global economy could have been is the unseen cost that people won't understand. The fallout when this craziness all ends badly is going to seriously hurt the lives a lot of people, unfortunately.

 

You are an equity analyst. You are trained -- and grew up in a world -- in which even though the price of money (and interest rates) have always been under the thumb of a group of central planners who distorted the markets, their actions were usually somewhat predictable and the fundamental research you did into the prospects of the businesses you cover still impacted how their stocks would be valued.

What you never thought you'd see was them getting so out of control, that they created a debt bomb that relies on their distortions getting more and more extreme -- to the point that they have increased the money supply by more than 40 percent in one year and have totally hijacked the debt markets to make money cheaper than free, because if they don't keep going creating more and more debt (growing it exponentially), the whole scheme (along with the broader economy) is going to crash down and the years of growth we stole from the future are going to come due.

What it means is that you can't value anything based on fundamental analysis anymore, if you do that job. Prices are all a liquidity-fueled mess right now, in which money has no cost and things with no value are being bid to the roof. At least that equity analyst understands that and is being honest. This has been going on since the financial crisis when they began their bond buying to try to keep from paying the price for what they had created in the first place. For a decade, you had people like that analyst still trying to give a fundamental explanation to what was a monetary phenomenon. You still have supposedly smart, trained financial experts doing it. But you look at BBBY, AMC, GME, and it's hard to argue the inarguable anymore. I don't know how you time the crash, unfortunately, because who knows how much they can expand their balance sheet before market forces render them impotent? They have a lot of power over our markets.

I don't trade options, and I think the options market is generally a scam (unless you are selling them), because they are time-depreciating assets, and timing can be really difficult. But the put options on the Nasdaq and S&P 500 have been so cheap at times over the last 3 to 4 months, that I started accumulating them at various strike prices, with an end of the year expiration. I am praying that gives me enough time before the serious correction that is coming to happen. Unfortunately, the Fed has unlimited power over the price of money and the people running it have proven they will sell out decades of the future to avoid having to pay the price for the mess they put us in. Which means I may watch those options expire out of the money (and I will continue buying now if this goes on and the options get cheaper), even though on a fundamental basis, of course the valuations of those indexes are at the most absurd levels in history. That is essentially what that analyst was saying about BBBY.