We are watching a 21st Century Moment moving from Horse & Carriage to Racecars but it's really hard to discount. Here is a framework that works in the current backdrop: Investors have always had the choice of where to put their fiat money. They can either invest in productive assets, sit in cash or sit in stores of value. The simple equation of how to invest- Start with a basket of goods for $100. If productivity per year is 2% that basket of goods at the end of the year should cost $98 if you are invested in productive equity or business. If inflation is 3% then that basket of goods at the end of the year would be $103 if you just sat in cash. The difference between inflation & productivity is tax you pay to the issuer of the sovereign currency if you sit in cash. In this case you are paying 5% tax to sit in fiat cash. Now where this gets really wonky is if you have productivity that is completely outside of any norm in history. @leopoldasch Describes this productivity boom in his Situational Awareness treatise. @RaoulGMI @LynAldenContact @SantiagoAuFund @Globalflows @jvisserlabs @fejau_inc @qthomp @GavinSBaker

If productivity gains are in the 100%+ then the choice to keep your money in Fiat Currency becomes obsolete. The concept of inflation & currency becomes negligible next to the productivity gains. I think this is why bitcoin is falling- bitcoin at the end of the day is a software. Software as we know it with high P/E ratios gets decimated just like the news industry got decimated by podcasts & Substack. As access costs drop to zero and productivity boom starts in overdrive there are winners & losers. My guess is this chart does not mean revert this time unless there is some sort of credit event (Possible- we are starting to see stress, but the gov't has backstopped AI with the Genesis Plan) There is no other choice but to invest in the AI supply chain if this productivity boom is real.

This is the Citigroup Basket of AI Supply Bottlenecks vs. AI at risk companies. It seems to be saying the same thing.

Private equity doesn't make as much sense anymore in an AI world.... PSP the private equity ETF may be discounting the fact there will be no exit liquidity. The question is what happens to the credit. Does it become a systemic risk?? I think that's what Gold is telling us.

Gold is saying there's going to be massive winners and losers and people are scared. I don't see what changes this- if productivity is growing at double digits or more, where do you put your money when central banking is easing because of disinflationary pressures? Monetary policy doesn't work in a world where productivity booms like this. The bottom line is I think you are either invested in productivity or you are invested in some sort of store of value that will retain its value in an era of the social contract ripping apart. Be forewarned...Markets will adjust with productivity & inflation expectations, but I think this is the foreseeable future. I'm not sure crypto survives this.....Please give me contra reasons....