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MY CLUBHOUSE THESIS: HYPERINFLATION IS CLOSE

Discussion in 'The Kruse Longevity Center' started by Jack Kruse, Mar 11, 2021.

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  1. Jack Kruse

    Jack Kruse Administrator

    China cuts magnesium production due to power shortage: German metal and auto industries affected. Association warns: "Europe-wide stocks exhausted by the end of November." This will affect a lot more than autos because Mg is heavily used in industry
     
  2. Jack Kruse

    Jack Kruse Administrator

    The gap btw 5- & 30-year yields shrunk to as little as 84.5 bps, raising concerns over a global growth slowdown. This spread is the lowest since 4/20 when pandemic fears brought the global economy to a near shutdown. 5-yr yields were up ~5 bps to ~1.18%, while 30-yr was little changed at 2.05%
     
    John Schumacher and JanSz like this.
  3. Jack Kruse

    Jack Kruse Administrator

    For your ignorant friends pushing you to buy real estate now over Bitcoin, cut them from your circle of six. Everyone keeps complaining about exploding real estate prices. I’m not sure what they’re talking about. Last year, the average US house cost about 39 Bitcoin. Today it’s only 6.5 Bitcoin. Next year, my guess is it will be about 2 Bitcoin. Sounds like deflation to me!
     
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  4. Jack Kruse

    Jack Kruse Administrator

    Current state of the US: 5%+ inflation 4.5%+ unemployment 11 million open jobs 37% President approval rating Bitcoin all-time high The chaos hedge is working.
     
    GavinH, caroline and John Schumacher like this.
  5. Jack Kruse

    Jack Kruse Administrator

    We have record-high inflation and bitcoin is trading at all-time highs. BTC, the asset class is doing exactly what it was built to do.

    I laugh at my ignorant friends who do not get this foundational point.
     
    GavinH and caroline like this.
  6. Jack Kruse

    Jack Kruse Administrator

  7. Jack Kruse

    Jack Kruse Administrator

    Jack Dorsey just tweeted this: "Hyperinflation is going to change everything. It’s happening."

    Seems @Jack agrees with Uncle Jack now.
     
    JanSz, ND Hauf and caroline like this.
  8. Jack Kruse

    Jack Kruse Administrator

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  9. Jack Kruse

    Jack Kruse Administrator

    It’s pretty wild that in an inflationary environment like the one we’re in you can take out a 15 year mortgage for 2.375%
     
    JanSz likes this.
  10. Jack Kruse

    Jack Kruse Administrator

  11. Jack Kruse

    Jack Kruse Administrator

    The US Govt does not want hyperinflation. The collapse of the monetary system means the government loses its stranglehold over the tax paying population. The US dollar is its control mechanism. Govt is bringing in unwanted rapid inflation through insane Keynesian fiscal policy.
     
  12. Jack Kruse

    Jack Kruse Administrator

    Jack Dorsey and Square sit on one of the most important and accurate data Bitcoin/fiat sets in the world to measure true inflation of various goods and services. They are likely materially more accurate in their measure of inflation than any data set from government organizations.
     
  13. Jack Kruse

    Jack Kruse Administrator

    How do you know things are bad in the energy sector and in supply chains? China, for the first time, is drawing down its own oil stocks. They are typically the buyer of last resort in these markets.

    Shit is about to hit the fan.
     
    JanSz likes this.
  14. Jack Kruse

    Jack Kruse Administrator

    A full dollar devaluation would mean that that the USD would depreciate against foreign currencies. Expect this to be chronic.

    Modern-day "debasement" is much, much, much more complicated than clipping a silver coin. If a monetary sovereign, like the US, wants to do debasement "right," it requires *at least* two things:

    1. High fiscal deficits (government spends more than it receives in income)

    2. Negative "real" interest rates (meaning that inflation is higher than nominal Treasury yields) is already here.

    Stagflation is firmly here already. GDP revision down is going to happen.

     
    Sean Waters and GavinH like this.
  15. Jack Kruse

    Jack Kruse Administrator

    Bonds up and the dollar is holding. Not what risk assets want to see......its getting hot in the stock market kitchen.
     
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  16. Jack Kruse

    Jack Kruse Administrator

    The Bank of Canada was more hawkish than expected, with a more urgent concern around inflation. The central bank ended its bond buying stimulus program and accelerated the potential timing of future rate hikes. Canadian 2-year yields surge the most since March 2020.
     
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  17. Jack Kruse

    Jack Kruse Administrator

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  18. Jack Kruse

    Jack Kruse Administrator

    The economy is headed for negative interest rates which will lead to debt deflation. This occurs when interest rates become zero and we will experience prices and wages falling with the price levels, but the nominal size of debts and interest payments become fixed to stablize bank risks. In this scenario, borrowers of fiat debt interest face increasing pressure on their ability to repay what they have borrowed on this asset.

    This will cause many people to lose their hard assets. Those who own BTC will be able to buy those distressed assets (land/real estate). BTC will rise quickly in a deflationary economy.
     
  19. Jack Kruse

    Jack Kruse Administrator

    A common concern with debt deflation is that it can create a positive feedback loop known as a deflationary spiral, where deflation increases defaults and the liquidation of defaulted debts leads to more deflation.

    Mortgage debt is susceptible to debt deflation because it is a large portion of the total debt outstanding overall.

    Declining property values can lead to underwater mortgages, many foreclosures, when debt deflation strikes the mortgage industry.

     
  20. Jack Kruse

    Jack Kruse Administrator

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