Text丨Wang Lin
Edit丨Panhappy
The epidemic has just improved, and the American people have fallen into the curse of the word "rising". Beef has skyrocketed by 25%, toilet paper has skyrocketed by more than 15%, and house prices in core cities have skyrocketed by 20%. Food that can be purchased for $200 in the past now costs more than $300.
Inflation caused by the Federal Reserve's "flood irrigation" style of "anti-epidemic" continues to ferment. According to statistics, one-fifth of the U.S. dollars currently in circulation in the market come from over-issued currencies in 2020.
In a recent public interview, he once commented on the cryptocurrencydeeply expressedsecondary title
01 Dalio: Bought Bitcoin
Dalio said in a public talk recently that he already holds Bitcoin, but did not disclose the timing of the purchase and the amount held.
When talking about the reasons for holding Bitcoin, he said, "Bitcoin and other cryptocurrencies can act as a hedge against inflation, or at least will benefit from fiscal and monetary stimulus policies", "As the dollar may weaken... A neutral cryptocurrency such as Bitcoin has the potential to function like gold.”
According to Dalio, the current inflation expectations are high, and the depreciation trend of the dollar is difficult to reverse. The dollar crisis in 1971 may repeat itself. In this context, cash is like garbage. He "would rather hold Bitcoin than bonds," and "Bitcoin with gold-like properties is becoming more and more attractive as a way of storing value."
In fact, as recently as last November, Dalio was skeptical of Bitcoin. At that time, he said that he did not recognize the currency attributes of Bitcoin and pointed out that BitcoinCurrency depositThe four major issues in:
1. Bitcoin is not a good medium of exchange;
2. The value of Bitcoin fluctuates greatly, and it is not a good wealth storage medium. Holding Bitcoin cannot protect purchasing power;
3. Huge uncertainty from regulation. If Bitcoin develops to the point where it can threaten the status of legal tender, the government will restrict or even ban it;
4. Unlike gold, the third largest reserve asset of central banks in the world, it is completely unimaginable for central banks, large institutional investors, and multinational companies to use Bitcoin.
But earlier this year, Dalio began to take a noticeable change in his views on Bitcoin. He wrote in "My Views on Bitcoin" at the end of January that Bitcoin is a "hell of invention". Bitcoin and other cryptocurrencies "have the potential to meet growing demand for an alternative store of value." In his view, Bitcoin has evolved from a highly speculative idea with a potentially short-lived existence, to "a long-term option in a highly unknown future."
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02 The 1971 dollar crisis repeated?
Under Dalio's change of attitude is his hidden worry about the return of the era of runaway inflation.
Dalio said in a public speech mentioned above, "As governments around the world relentlessly increase spending to avoid economic crises, inflation expectations remain high. In the 12 months ended April, the annualized rate in the United States Inflation was high at 4.2%, well above the Fed’s long-run target of 2%, but that’s largely because in April 2020, many economies around the world were at a standstill.”
Starting from the rise and fall of the currency hegemony of the Dutch Guilder, British Pound and the US Dollar, he discussed the current debt cycle node and why he bought Bitcoin.
In Dalio's view, the hegemony of these reserve currencies has all gone through three possible concurrent cycles: the creation of debt and financial assets, and the cycle of internal cohesion conflicts (i.e. political blocs diverging from each other as the gap between rich and poor and values widens). , increased internal conflicts), and challenges to monetary hegemony.
Dalio believes that the dollar is currently in its first cycle, where "debt and credit create purchasing power." But he warned, "It's a booster in the short run, but a damper in the long run because government debt eventually has to be serviced... All financial assets (debt and credit) are There are corresponding physical objects and services. When financial assets become larger and larger, and the incentive to hold is no longer there, there will be problems.”
Dalio noted that this has happened before in the United States. In the summer of 1971, the international financial market set off a wave of selling US dollars to snap up Western European currencies such as gold and West German marks.wave。
The US dollar crisis was rooted in the soaring welfare and defense spending of the US federal government in the 1960s, which ultimately resulted in US gold reserves being less than one-fifth of its external short-term liabilities. Then President Nixon was forced to announce the New Economic Policy. Since then, the Bretton Woods system has disintegrated and the dollar has been decoupled from gold.
He warned, "The current situation is similar to 1971. The current government budget spending means that we will need more money and more debt." Need to borrow money, you have to print money, you need more money, you need more money. Taxes have to be raised, and the evolution may eventually become capital controls. In 1971, this situation led to a rise in the stock market. Same thing today, gold, bitcoin and real estate are all up because the dollar is falling. "
TogetherTogether。
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03 Bitcoin shock
Not only Dalio, but Bitcoin, which has been advancing all the way this year, has attracted the attention of investors from all walks of life, and bullish voices continue to appear in the market.
Stanley Druckenmiller, chairman of Du Kunen's family office and billionaire investor, also expressed pessimism about the dollar and said he held a bitcoin position. JPMorgan Chase predicted that the target price of Bitcoin will reach 130,000 US dollars after applying for the launch of "Bitcoin concept stocks" in March.
teslateslaAccording to a quarterly report, speculating on Bitcoin contributed $101 million of Tesla's $438 million net profit. The news that Facebook and other Silicon Valley companies are going to join the army of speculators is also endless.
The "female version of Buffett" Cathy Wood still insists on her long-term judgment that it will reach 500,000 US dollars per piece. On May 24th and 25th, her fund "contradicted the market" and purchased about 700,000 shares of Grayscale Bitcoin Trust, worth about 22.7 million US dollars.
If the bulls see Bitcoin as a weapon against inflation at the moment, regardless of the nature of its new risk assets, the shorts' distrust of Bitcoin also includes factors such as obvious unsustainability and regulation.
As Guggenheim Global Chief Investment Officer Scott Minerd said on May 26, any exponentially growing market is unsustainable. The previous surge in cryptocurrencies such as Bitcoin was essentially a bubble. Historically, the price of such assets has typically fallen by 50% to 75% from their peaks.
In fact, the recent price of Bitcoin has suffered a "waterfall". Currently, Bitcoin is in one of the most turbulent periods in its history, and it has fallen by more than 40% from its highest point. This may be related to the recent tightening of regulations.
Due to market overheating and other reasons, Bitcoin has attracted the attention of Chinese and foreign regulators.
On May 12, the U.S. Department of Justice and the Internal Revenue Service jointly launched an investigation into Binance, the world’s largest cryptocurrency trading platform. The move dragged down the stock price of Coinbase, the largest cryptocurrency trading platform in the United States, by 6.5% that day.
On May 18, the my country Mutual Finance Association and other three departments jointly announced the risks of cryptocurrency speculation, and proposed that financial institutions should not directly or indirectly provide customers with virtual currency-related services. This move was interpreted by the market as stricter regulation on cryptocurrencies.
Dalio's speech also reiterated his concern that governments may crack down on Bitcoin due to concerns that it will compete with national monetary systems. "Bitcoin's biggest risk is its success," he warned.
