Surf Report: It's Not The Spoon That Bends
Issue 43: 07.18.2021 (Free Version)
INTRODUCTION
July 18, 2021
Hi everyone—I’m so glad to have you here. What a week.
I talk a lot about Bitcoin in this letter for a bunch of reasons. It’s grown to be a bona fide macro asset at home in traditional investor portfolios, usually justified with reasons having to do with its resistance to inflationary pressures and as the best asymmetric bet going right now.
But there’s another attribute Bitcoin has that makes it particularly crucial in a world where things are increasingly making less sense: it is a true, honest signal in an otherwise distorted market.
Bitcoin is an open, decentralized value network with a fixed programmatic monetary policy and capped supply, freely traded 24/7, 365. It’s pure signal. This means we can use it as a constant against which to assess everything else.
Money and prices are about communication. Trade and exchange require a common tongue. A shared baseline. You can’t communicate with people if you’re not all speaking the same language.
(In fact, computer source code is protected as free speech under the first amendment—Bernstein v. the U.S. Department of State. The case was argued using a private key encryption program with a one-way hash function, which is exactly how bitcoin works)
“Just as language allows us to communicate general information, monetary technology allows us to communicate value. Money can be thought of as a vast value assessment and allocation network that communicates what we collectively value and how much we value it. Ultimately, it signals to the world where our energy as a civilization is incentivized to continue focusing.”1
The problem with using the dollar to communicate is that it keeps changing. 40% of US dollars in existence were printed in the last 12 months. The ruler itself is being bent and stretched.
Any gains in asset prices have to be discounted against the inflation of the underlying supply, but even those measures (Consumer Price Index, M1/M2 money supply definitions, etc.) are being manipulated and changed to appear less problematic than they are. This gives investors more confidence that they are beating inflation, encouraged to put even more capital at risk in markets.
In the end, it just means anything priced in dollars can’t really be trusted.
“Manipulating interest rates, mass creation of new monetary units, bailing out reckless or malicious entities and regulations imposed by the central planners keep free-market price signals suppressed and unable to communicate problems within the system.”2
This wasn’t always the case.
For most of history, gold was the closest thing we had to a common tongue based on its intrinsic properties, which made it the best available economic good we could find to provide the basis for a shared money. Notes and coins could then be fractionally issued and put into circulation because they were always “backed” by gold—you could always redeem the your note for a certain amount of gold if you wanted to.
Now, of course, we don’t use gold we use an unelected cartel of bankers to set and manipulate interest rates and dollar issuance in cooperation with the federal government itself. And they can’t be redeemed at all.
This is precisely the thing that America’s founding fathers tried to avoid.
“Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.”
—George Washington to J. Bowen, 1787
Bitcoin is the first asset to come along that not only matches the properties of gold in terms of its viability as a foundational economic good, but actually improves on them.
Now we have a true constant and can measure the rest of the market against it to communicate with one another about exchanging things we value.
MicroStrategy lets you see the risk-adjusted returns of currencies, indexes, metals, stocks, & bonds vs Bitcoin: Strategy.com
And here’s a new site that provides something similar: PricedInBitcoin21.com
The closer our common denominator is to something fixed the more confident we can be that any derivative values are honest, making negotiation with others more trustworthy.
Truth is that which doesn’t change. Central bankers are trying to manually bend the truth, but they can't—that’s impossible. They can only manipulate everyone’s perception of what the truth is.
Truth-seekers through the ages have always been on a quest to find an honest signal, something real. A non-fiction. This is why it features so prominently not just in scientific understanding but also belief systems and schools of philosophy.
Since truth can’t change, it requires you to change.
Until next time 🤙,
“I predict future happiness for Americans, if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.” —Thomas Jefferson
Breaking News 🌊
😬 U.S. consumer prices rose 5.4% in June from a year ago, keeping inflation at the highest annual rate in 13 years [WSJ]
👾 Tencent, the Chinese tech & gaming conglomerate, has obtained a patent for the inheritance of digital items [Eurogamer]
🤳 TikTok is the first non-Facebook app to hit 3B downloads [CNET]; TikTok Bans Influencers From Promoting Cryptocurrencies [Yahoo Finance]
🎮 Netflix is going to add video games to its streaming service next year [Bloomberg]
🎶 Peloton, the exercise bike company, is the best-paying music streaming service, beating out Spotify and Apple Music [Slate]
Bitcoin News 💱
₿ Square is creating a new business focused on building an open developer platform with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services. The primary focus is Bitcoin. [Thread]
₿ Fidelity Digital Assets is planning to increase their employee headcount by 70% as demand for bitcoin services from institutional investors remains strong [Boston Globe]
₿ The oldest bank in America, Bank of New York Mellon, will service
Grayscale’s planned bitcoin ETF [BNY Mellon]
₿ US Financial Giant Capital Group Buys 12% Stake in Bitcoin-Exposed MicroStrategy [Coindesk]
₿ At least 3 more provinces in China have ordered a halt to all bitcoin mining operations: the local governments of eastern Anhui province, Henan in central China, and northwestern Gansu [South China Morning Post]
₿ Black Rock Petroleum has announced a new bitcoin mining agreement to operate one million machines; the first 200,000 units will be hosted in Alberta Canada, powered by natural gas wells at an energy cost of three cents Canadian per KWH [GlobalNewsWire]
From The Tweetbox 🐦
“This is what happens when central banks squash the risk of corporate defaults by suppressing borrowing costs: the difference between junk and high-quality credit rates shrinks dramatically. The yield gap between the two is now near the smallest on record.” [Tweet]
“Think of anecdotal examples not as data but as where to look for data” [Tweet]
“Who you stop listening to is more important than who you start listening to” [Tweet]
“If you're having a hard time understanding how an economy works, by trying to keep up with new words and concepts to explain why your money needs to lose value, to have a productive society - you're not alone. The misinformation is the point.” [Tweet]
“Fed Chairman Powell said unemployment was at 5.9% yesterday and then he mentioned the real number was actually much higher than that.” [Tweet]
For The Pros 😎
Yannick has 15+ years of digital marketing experience and condensed everything he knows about SEO in a single thread including videos from industry experts. “When you finish this thread you can literally start your own SEO agency and start making money online.” (Link available to Pro subscribers)
How one entrepreneur acquired 30 users + $1500 without a product… within 15 hours of launch! (Link available to Pro subscribers)
From ‘How-to’ articles to $25k In 1 month (Link available to Pro subscribers)
Worth A Read 📃
What’s boring is often important and the smartest people are often the least interested in what’s boring.
The Lightning Network Is Going to Change How You Think About Bitcoin
Stark keeps the ultimate goal in mind. “I’m not spending my life so that billionaires can manipulate things, or so that rich people can get richer,” she says. “I’m spending my life so that a billion people will have access to this technology, which will drastically improve their lives and improve their world.”
She would soon sharpen this argument into what might be her defining ethos: “Bitcoin for billions, not billionaires.”
Tip ☝
Harsh truths pull readers in and stimulate discussion. Use a harsh reality to quickly capture attention.
Here’s An Idea 💡
The Job Juggle: Gen Z and millennial employees embrace the concept of ‘Polywork’
A study found that 55% of the 1,000 workers it polled, aged 21 to 40 years old, said an exciting professional life was more important than money. Just 35% said they could envision sticking with a single job for life, while nearly 64% said they already were doing more than one job or hoped to in the future.
PNGs 🖼
They told us inflation wasn’t a concern 🤔
What happens when countries try to ban bitcoin and crypto:
Pods & Schools 🐬🐠
Recent podcasts + books I highly recommend, and upcoming courses + seminars that look promising
🔊 Michael Saylor: Bitcoin is Fire or Electricity, on Natalie Brunell’s Coin Stories podcast
Don’t overestimate what you can do. I don’t regret my bad ideas, because bad ideas are obvious on inspection as bad and then you don’t pursue them. I regret my good ideas that I pursued to the detriment of my great ideas.
Tools of the Trade ⚒
Products I use to make money
Swan. I recently became an official Swan partner because I love them so much. So if you're like me and just want an easy, automated way to buy bitcoin on the regular with the lowest fees in the game, head to https://swanbitcoin.com/Mulvey to get $10 for free ✨
Fold. Earn bitcoin on everything. You can win up to 100% back on every purchase, and every swipe is a chance to win a whole bitcoin. I use my own Fold card to pay for almost literally everything. If you use this referral link you get 5,000 sats free ✨
StockCharts. I easily make back the small monthly subscription fee with the superpowers it gives me.
Carrd. I use card for all my landing page needs. Use this link or referral code 892PYX69 to start your own web empire.
Disclaimer
Nothing in this email is intended to serve as financial advice. Do your own research.
https://bitcoinmagazine.com/culture/to-know-bitcoin-is-to-love-bitcoin
https://bitcoinmagazine.com/culture/to-know-bitcoin-is-to-love-bitcoin