The New BRICS Buck and Travels Through Absurdistan

As the BRICS nations develop closer ties, bitcoin offers an escape valve OCTOBER 23, 2024 UPDATE A GREY SWAN PUBLICATION The New BRICS Buck and Travels Through Absurdistan “Bitcoin is a tool for freeing humanity from oligarchs and tyrants, dressed up as a get-rich-quick scheme.” – Naval Ravikant --------------------------------------------------------------- [Turn Your Images On] Bitcoin offers a way to save over the long term without interference from central bankers. [Turn Your Images On] Addison Wiggin, Grey Swan Reader, October 23, 2024 – The Washington Post reports that 24 leaders of the BRICS nations are in Kazan, Russia, for the BRICS nations conference. 32 countries are actively involved in discussions, and a total of 38 countries are in attendance, not the 43 as originally reported. But even with a few guests bowing out at the last minute, what’s being discussed is a global “reorientation.” Developing nations are increasingly moving away from Western nations, and toward countries like Russia, China, and India. We forecast, with Chris Mayer, that the political “reorientation” would follow our economic forecast in the book [The World Right Side Up: Investing Across Six Continents]( (John Wiley & Sons) back in 2012 when I was his publisher. Our analysis at the time showed that, for the first time since before the Industrial Revolution, China, India and the emerging markets contributed as much to the global economy as their more well-developed Western peers. Chris’ insights were derived from boots-on-the-ground investigations we took together of Brazilian farmlands, Colombian gold fields, Chinese shopping malls, Indian hotels, South African wine country, and the boom/bust souks of Dubai, on an “around-the-world investing field trip exploring the nooks and crannies for hidden investment opportunities.” [Turn Your Images On]( The lagoon below the Burj Khalifa, the world’s tallest building, was constructed by the same firm that irrigated Lake Bellagio in Las Vegas (Source: Addison Wiggin, [click to view the short video]( For all these excursions, Chris and I traveled on what we had come to describe as “Absurdistan "—the over-the-top deluxe flight accommodations and airline lounges far exceeding those seen in the fast-food domestic variety in the U.S. and on routine flights from New York and Washington D.C. to London and Paris… and back again. While Chris's book's specific investing advice was current as of 2012 and has now aged beyond its expiry date, the overall economic and financial market premise remains firmly in place. And it’s still a good read for the adventure stories. (If you’re a long-time reader, you may even recall Chris’ excellent newsletter Capital & Crisis.) For our purposes today, with the BRICS annual summits, the political resolve is starting to take a formal shape and catch up to the economic and financial forecast we made a decade ago. In a way, it’s a developing nation version of the G20. And while the monetary talk has been light so far, Russian President Vladimir Putin reports that the countries are working on joint development opportunities. This may not sound like much. It doesn’t look like much, either: [Turn Your Images On] Putin geeking out for the camera, flanked to his immediate right and left by Xi Jinping and Narendra Mohdi, Chinese and Indian leaders respectively. (Source: BRICS News (@BRICSinfo) / X) Even if they look goofy posing for this photo op, the leaders of the BRICS developing nations represent the wealth generated by 47% of the world’s natural resources, at least according to World Bank Data. The BRICS nations have already been settling trade accounts outside the dollar exchange mechanism offered by the SWIFT banking settlement system. Sanctions following the Russian invasion of Ukraine have kicked those arrangements into high gear. The trend in our Grey Swan craniums is clear. If those resources are developed with the tools, technology, and skills of fellow developing countries, Western nations could be shut out of profitable mining and resource projects… at the very moment in history when demand for energy, natural resources and rare earth minerals is skyrocketing in the gadgets and data centers needed to power an AI revolution. A BRICS-based currency would just be a more efficient way to do so. Two years ago, when Russia invaded Ukraine, the U.S. used all its financial tools to shut out Russia from the global economy. We’ve now seen Russia’s end-run around the U.S. and Western nations. And Putin is doing a much better job. Meanwhile, while the BRICS nations met under “strongman” Putin, U.S. President Joe Biden called for Donald Trump to head to prison just two weeks before the election. Russia is far from an ideal place to live. That’s not an issue. Or even part of our argument. America itself is mired in the most absurd political election of its history. And for many of its neglected citizens, ain’t such a great place to live either. Economically, the US dollar is going to have to get used to stiffer competition than what it’s gotten used to with gold, bitcoin and the Euro. Today, we continue with another essay from Grey Swan contributor Mark Jeftovic. Specifically, how the “Bitcoin Effect” is allowing a superior savings technology to any fiat currency. Enjoy –Addison More below… CONTINUED BELOW... --------------------------------------------------------------- [Safeguard Your Wealth from Dollar Collapse]( [Turn On Your Images.]( As global de-dollarization looms, learn strategies to protect your savings and investments. Free video offers advice on preserving wealth in uncertain times. [Watch the video here now.]( --------------------------------------------------------------- CONTINUED... Understanding the “Bitcoin Effect” Mark Jeftovic, Grey Swan Investment Fraternity The “Bitcoin Effect” is what happens when individuals and corporations start to adopt bitcoin onto their balance sheets. You don’t have to go all-in. You can start with a small allocation. But over time, bitcoin’s hard-capped nature should allow it to rise indefinitely against any fiat currency. This bitcoin effect is what Michael Saylor is doing with MicroStrategy (MSTR). He's turned it into an art form. In essence, the bitcoin effect is just publicly traded companies saying, we're going to take our balance sheet cash, and we're going to hold it in bitcoin instead of cash. When companies do that, they get rewarded by the market with multiple expansion and share price boosts just by changing their allocation of their dry powder from fiat cash to bitcoin. Currently, 52 publicly traded companies now doing that. And many more privately-held ones. My company isn’t publicly traded, but we did something similar. However, we didn't just take our cash and put it in the bitcoin. We were taking bitcoin as a payment method. We were the first domain registrar to do that back in 2013, and we just kept stacking it. That's how we built our stack, and I think we're going to see more companies using bitcoin payments to build their position as well. Bitcoin Vs. Bonds: The Superior Savings Method It's the bitcoin standard at the corporate level, swapping out fiat currencies for bitcoin. If you look at the market value of bonds or the market cap of bonds versus the market cap of bitcoin, because it's a joke now that bonds were supposed to be the risk-free instrument. And now they call 'em return-free risk. It's return-free risk, and there's 300 trillion of it this return-free risk. And then, during the craziest days of the post-GFC and the pandemic, there was even $20 trillion of negative yielding bonds out there. Investors were paying governments to slowly lose money over and above the impact of inflation! I don't know how much there is today, but I think that will come back in the future. So you've got all these bonds that are just losing money either nominally, either negative interest rates or in real terms. Then you've got, roughly, $300 trillion of this stuff that you can't use for savings anymore. What's going to happen to it? I mean, it's not going to go to zero, but allocators are going to be looking at this and saying, we can't keep this. We have to get at least some of it out, and we have to get it off of this escalator treadmill going in this direction. We have to get it onto an escalator going the other direction. And that's where bitcoin comes in. That's where gold comes in. So even if they put, okay, we're going to cash out 5% of our bond allocation and we're going to put 4% of it in gold and 1% of it in bitcoin, I mean, that does amazing things for your return over time. It's insane what that does to the numbers, especially with bitcoin at a total market cap of about 1.2 trillion right now. Gold's at about $15 trillion, but half of that is jewelry, so it's like seven and a half trillion. It's just so asymmetrical that it just blows my mind. But what is interesting is to see publicly traded companies and institutional allocators wake up to this and articulate it and say, yeah, we're kind of starting to park our allocations over here. We’re just in the early stages of this “Bitcoin Effect” in action, and it’s an amazing thing to see … and any company or person can do it. The sooner you start, the sooner you’ll see a benefit, and the larger the overall benefit will be to you over time. ~~ Mark Jeftovic, Grey Swan Investment Fraternity So it goes, Addison Wiggin, Grey Swan P.S. As with yesterday’s essay, Mark’s comments were excerpted from the [Wiggin Sessions @ Grey Swan podcast we published](. Paid up members can [also read the full transcript here](. The conversation we had ranges far and wide, including analysis of the Fed’s pivot away from fighting inflation to saving the jobs market from imploding. It’s worth your time if you have it. P.P.S. While the BRICS nations were getting ready to meet last week, and as the stock price of MicroStrategy soared to over $210, a record high, the fiat system had to deal with one of its periodic failures. The First National Bank of Lindsay, Oklahoma, was closed by the Office of the Comptroller of the Currency (OCC) for having “false and deceptive” records. While not systematically important to the banking system, failure often seems to be a feature in our banking system when it should be treated as a flaw. Meanwhile, bitcoin verifies all the transactions on its blockchain every 10 minutes. Anyone running a bitcoin node can verify and audit the network. In contrast, over 110 years of existence, the Federal Reserve has had zero audits. P.P.S. Turning to member comments,[regarding yesterday’s piece The Coming Monetary Apartheid]( Daniel writes: If your dystopian view of CBDC’s come to pass, we will all have to learn again an age old truth of civilization: The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. Under a CBDC, it’s likely that the ability to purchase firearms and ammunition would be one of the first restrictions. Like gold, it’s another asset potentially worth buying now if god, guts and guns are your thing. Please send your thoughts on the dollar’s increasingly fragile status as the world reserve currency to: addison@greyswanfraternity.com How did we get here? Find out in these riveting reads: [Demise of the Dollar]( [Financial Reckoning Day]( and [Empire of Debt]( — all three books are now available in their third post-pandemic editions. You might enjoy one or all three. [Turn Your Images On]( (Or… simply pre-order [Empire of Debt: We Came, We Saw, We Borrowed]( now available at [Amazon]( and [Barnes & Noble]( or if you prefer one of these sites: [Bookshop.org]( [Books-A-Million]( or [Target]( Please send your comments, reactions, opprobrium, vitriol and praise to: addison@greyswanfraternity.com [Turn Your Images On] (c) 2024 The Wiggin Sessions @ Grey Swan, 1001 Cathedral Street, Baltimore MD 21201. 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