While Bloomberg has celebrated the best decade in history for financial returns, it is not a coincidence that the wealth inequality has reached proportions not seen since the roaring´20s. And while this does not seem to concern the financial elites - who celebrated another fat end of the year - this is in reality a major concern for all the others, the 99,..%ers. This has created all sorts of distortions, not only in the economies and in financial markets but also in political systems of countries which were traditionally considered as the most democratic forms of government around the globe, such as the USA and the EU. The massive amount of wealth concentrated in few hands tends to manipulate the markets and to corrupt political systems globally, so much that today it is impossible to see a normally functioning (i.e. not manipulated) financial market or a truly democratic form of government. This "cancer" has spread fast in the USA and throughout the EU.
I love sports and I thank my dad for teaching me its precious values. I have done it all my life since I was 5 or 6 and still do it, everyday, well...almost. And to watch, there is nothing better than American sports. And this is not about the sport itself - for instance I love watching rugby which is not big in the US - but it is about the ability that Americans have to put up an outstanding show, a great entertainment. Nothing equals superb spectacles such as the Super Bowl, the NBA Playoffs or a big UFC bout.
Above all American sport has always been big business. Big money was involved well before it did anywhere else in the world. In that respect the tokenization - which can be used as an effective vehicle to raise finances - is a technological development which will impact heavily the future of fund raising also in the sport business. And I am sure we will soon see the first examples of tokenization in the Sport business.
There is clearly a combination of opportunistic reasons, greed, quest for power and cronyism as to why the bullshit economics behind the trickle down narrative - despite its historical failure and well documented criticism - was sold to the masses by liberal lobbies and special interest groups, in bed with the politicians, during the last decades.
It is a fact that from 2018, institutional money has started to flow into the crypto sector at an increasing pace. I wrote about it here and this was recently confirmed by Coinbase CEO. To remain bullish on the sector though, it is vital to understand whether this money inflow will continue in the short to medium term and what are the main reasons driving the inflow.
There are different reasons. I have analyzed in this article why bitcoin is by all means a digital version of gold and the reasons why the whole crypto sector is worth investing into. But the fact that an asset class is a good investment opportunity for any number of reasons, does not necessarily mean that that investors will buy it. There must be a catalyst to drive money into that assets class. Then we must understand why the big money, which is on the verge of what Ray Dalio defines a paradigm shift in investing, will be inevitably driven into precious metals and - my take - into the crypto sector as well.
Libra - Facebook´s digital currency project - has been a very popular talk lately. Even US President Trump tweeted about it. But few have looked at what may be the hidden implications of Facebook´s project.
Libra´s whitepaper is far from exhaustive. It is the first published version and what in the end may be left after the regulators have looked into it may be very different indeed.
All in all the whitepaper is well written and has been put together by a competent team of people, the Libra protocol describes a distributed blockchain which components are open source and can be
permissionless built. It is a very "politically correct" whitepaper with mandatory and comforting statements about "banking the unbanked" ...
Ray Dalio´s recent post on economic cycles and the coming paradigm shift is very well written. His usual capability of putting into simple terms complex concepts (if you are interested in understanding how the economic machine works have a look at his video here), coupled with his knowledge of economic and monetary history are very rare even among the most accomplished and successful macro investors. Even rarer - unfortunately - among policy makers, central bankers and politicians. Personally, when Dalio speaks, I always listen carefully and - more often than not - I agree.
But not this time, at least not entirely. Even Dalio´s flawless macro-analysis misses something. And it is something big, something very important. Possibly the biggest paradigm shift since the early ´90s and the internet.
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