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Posted February 08, 2022

Sean Ring

By Sean Ring

Cycles, Decentralization, and Return on Violence

Happy Hump Day!

I hope youre having a great week.

Pam and I are getting our stuff ready for moving, and Im also teaching a two-day consumer and private banking course starting today for some graduates.

Its been busy, but I had time to have a chinwag with one of the greats in my industry.

You see, when I was wondering what I was doing with my life, I started to read Addison Wiggins Daily Reckoning.

It opened up a world for me. Though I had two finance degrees and was sitting on a trading desk, I didnt genuinely understand what was going on.

Sure, I could talk about the markets and execute trades, but I was lost as to why the markets were going up and down.

(All the b-school theory in the world doesnt teach you that.)

Through Addison, I was able to embark on a journey thats led me, well, back to him.

We had a great chat yesterday, and he asked me to read the transcript of his latest Wiggin Session.

I was excited, as I love how Addison articulates his thoughts on the market.

But his Sessions partner made it an even bigger treat.

I discovered Mark Moss on my own while flicking around YouTube.

As Im one of the few people in my industry entrusted with the education of recent graduates entering banking, Im especially critical of anyone with a whiteboard and a marker.

But I was pleasantly surprised when I watched Marks videos.

Mark has a great grasp of history, cycle theory, and investing, among other things.

And like most of us, Mark took his lumps in 2008. But hes not afraid to talk about it.

Jared Dillian, of The Daily Dirtnap, just shared this last night:

There may be only one Stan Druckenmiller, but Mark is cut from the same cloth.

In this edition of the Rude, Im going to pick out some juicy bits of Addison and Marks conversation and add my own comments.

Lets get going

On Tensions

Mark said:

Obviously, anybody that's halfway paying attention understands that tensions are high across the world. Talks in the United States about another civil war or a national divorce. We have protests happening in every country of the world. And it's not because of the pandemic. This is a key piece. Most people think around the world, they're pushing back on mandates and things like that. And they are and that's what's happening now. But before the pandemic happened, there were 10 countries with over 1 million people each in the streets protesting before the pandemic, so it was already happening. And now they're still in the streets protesting, just on a different subject. But the key piece is that the entire world is pushing back and we're going to dig more into that in a minute. And like I said, it's not just a black swan event. They were already doing this before the pandemic. Now 10 countries with a million people each, there are a lot more countries with smaller numbers.

This is a great point.

Peter Thiel claimed that 2007 was the peak of globalization. I think hes right.

And weve had simmering tensions since then.

The Crash of 87 and the Dot Com Bust of 2000 didnt have nearly the worldwide impact that the 2008 Crash had.

And the world has been suffering ever since, under the boot of money printing, increasing taxes, and now, needless lockdowns.

These protests are a continuation - after a lockdown-induced cessation - rather than anything new.

On The Great Reset

Mark said:

And then we have this Great Reset narrative. Some people think it's a conspiracy. It doesn't mean what it says. Well, Klaus Schwab, the head of the World Economic Forum, wrote a book and the title of the book is COVID-19: The Great Reset and so in that book, he outlines all of this stuff. And so I say that I take them at their word and so I listen to them. Of course, they've run these types of ads on Twitter. You'll own nothing and you'll be happy. Today they're trying to walk that back and the media's like, "Oh, they didn't really say that." Well, they did. I have a screenshot of it.

I completely agree. Weve had this problem with the media for a while now.

The politicians inadvertently tell us the truth and then the media walks it back for them.

For instance, I always get blowback from people who deny the replacement migration agenda of the UN.

I laugh at them. Heck, the UNs webpage for it is still up.

Most people dont read anything, let alone government documents. Or, more insidiously, NGO documents.

Thats why the media gets away with it.

On the Return on Violence

Concerning the massive rise of government, Mark said:

And if you wanted to make money, you had to be in the United States, and not just in the United States, you had to be in a city. In a city where the jobs were. And what happens is, because of that centralizing nature, it makes it very easy for the governments to squeeze everybody. The return on violence was very high.

Meaning just like a mob boss, if you were in New York City, I'd say, "Hey, your bakery needs to pay me for protection," and what are you going to do? You're there in my neighborhood. And the nation could do the same thing and like, "Hey, what are you going to do, move your factory? Pay me my taxes," et cetera. And so the centralizing allowed the nation-states to grow really big and allowed them because the return on violence was very high.

Return on violence should be a measure every society accounts for. This is a huge point.

But theres a silver lining

On Decentralization and Crypto

Mark said:

So now we're decentralizing the world and what's interesting is at a time when the entire world is at peak centralization and is ready to move towards decentralization, we have a technology that gives us exactly what we need, which is decentralization. And so if we look, if we're looking at Bitcoin to kind of measure this, we can see that Bitcoin had reached a 10% adoption within two years, by about 2019. So using S-curve measurements, we can see that we should be at about 90% adoption by 2029.

This is why Ive said to at least dip your toe into cryptocurrencies.

Weve still got time, but the sooner, the better.

You may not think crypto is inevitable, but Im fairly certain decentralization is.

Wrap Up

These are just a few of the important and interesting points Addison and Mark talk about during their session.

When the link becomes available, Ill send it to you immediately.

Until then, have a great one!

All the best,

Sean

 

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