Postcards: Things that Go Beep in the Night (And the Week Ahead)

I started writing this at 4 am on Saturday because each time I try to sleep, there's another noise, beep, sound, and light that goes on. But 36 hours later... it's the future! Let's go Republic Speak. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: Things that Go Beep in the Night (And the Week Ahead)]( I started writing this at 4 am on Saturday because each time I try to sleep, there's another noise, beep, sound, and light that goes on. But 36 hours later... it's the future! Let's go Republic Speak. [Garrett {NAME}]( Mar 4   [READ IN APP](   Dear Fellow Expat: At about 12:30 am on Saturday, when I first tried to go to sleep, a beeping sound started from a switch on the wall. It’s an older farm-style with an electronically wired alarm system that isn’t hooked to emergency contacts anymore. But it’s in the master bedroom, and the lights flicker on and off - because the sensors are still mounted in the house. They turn on when our dogs move around the house. So, the lights will start to flicker. If you’re sensitive to any light as you sleep, like me, it’ll stir you (no, I don’t like wearing masks). Then, around 1:15 am, I heard this sound when I started drifting off. It was a long, snorting sound - and I thought it was my wife snoring. The dog was lying on her back, paws in the air, bellowing into the night. At 2 pm, I left my wife to sleep and went to the guest bedroom. The dog was still snoring, and I cut my hand on an old, broken snow globe not placed well in the dark. When I did get into bed, the thing squeaked - and in the words of Goldilocks, the bed was too soft. I gave it time… but then, lying on my side, I heard the scratching on the floor. It was the other dog, eager to get on the bed but not spry enough to do so anymore. I lifted her. She started snoring three minutes later. I moved back to the other bedroom, but the damn lights on the old alarm system started flickering again, and the first snoring dog was across the house, drinking water as if she were sucking it through a fire hose - and the recent snoring dog had gotten up and moved my daughter’s bedroom. And right before I did fall asleep - at 3:30 pm - my phone made a very loud chime. It turns out that [Bill Bonner’s Bonner Private Research]( out its weekly review at 3:41 am. Was Bill writing from France? Because my phone echoed so loud across the house, it sounded like the nation had been liberated - but this time from Emmanuel Macron. So now, I was just wide awake again. I wrote for a while… and said I’d try to go back to sleep… but I figured I’d read [Bill’s new book that he sent to me last week for a while.]( I thought I’d probably stay up until dawn now… Just one chapter… right? [Upgrade to paid]( 40 Hours Later So, I didn’t get much sleep (about three hours) that morning… and slept 12 hours from Saturday night to Sunday morning. “Welcome back to civilization,” my wife said instead of Good Morning… This must be what it feels like to get into a time machine. Today, I drove our (my wife’s?) new car to run errands. Two observations came. First… I had to give up on my discontentment with the Apple ecosystem tracking me. But if I want to play music - regardless of whether I’m using Amazon - I must turn on Apple’s Siri during my drives. This infuriates me… Norm MacDonald once joked that he wouldn’t have bought the “damn Buick in the first place” if he had known that “Tiger Woods was into the ladies” after Woods’ multiple affairs. Well, if I’d known that Apple had taken over cars… I’d have given my wife the Honda HR-V and bought a 1989 Blue Chrysler Lebaron with a Jimmy Buffett tape deck. Apple is a company that engages in a practice called “Cradle to Grave.” This popular marketing and advertising strategy in the 1980s and 1990s aimed to build brand loyalty early on. But Apple and a lot of other companies are doing something entirely different. Most conservative/libertarian and independents complain about “cradle to grave” government programs. But… what about “cradle-to-grave” companies… Or “cradle-to-grave” stocks? These companies are engaging with the government through dirigisme to do many things that the government can’t do… but wants to do. Or they are companies adopting a similar approach to integrating your entire life into their ecosystem. These are not all consumer product goods companies. There’s way more to it. Think Apple (AAPL), Amazon (AMZN), Cigna (CI), Proctor & Gamble (PG), Berkshire Hathaway (BRK.B), and Visa (V). Nefarious? Maybe? Good business practice? From a legality perspective… it’s “evil genius.” But it might be an even better investment approach for us… We’ll talk more about this soon. Chris Johnson’s Walk Down Main Street While on Money Morning LIVE!, my friend, colleague, and fellow “Steve Brule” enthusiast Chris Johnson had a favorite financial hobby. He’d walk down the main street to see what people were spending money on. He loves “The Kroger” (KR) as a barometer of things. Today, I took a similar walk… well… drive, really… while Siri spied on me… Here are my observations. - Home Depot (HD): It’s impossible not to like Home Depot. Back in the day, I spent a lot of time in Best Buy (BBY) looking at new electronics. Today, I do the same with power tools and lighting. I’m old. I had to buy some paint today, and the guy behind the desk - who wrote Cliff in marker on his HD apron - could not have liked talking to me about paint colors. He traded paint swatches with me today like a kid in the 1950s trading baseball cards. I always ask employees if they like it there, and they aren’t just being nice when they tell me about the company. They have high morale. The guys around here talk about tools for several hours and then go bowling or play nine holes. - Starbucks (SBUX): this location on Bonita Beach Road never has a line out the door or around the block for cars. It’s a Starbucks off Interstate 75. The employee at the drive-thru apologized to me, saying they were so busy. Shareholders should like to hear this. Starbucks will expand its global footprint through 2029, and the stock is doing well. Dumb Americans without money will still spend thousands of dollars here a year. The smart ones who understand it… will spend thousands of dollars here a year. It’s not hard to make coffee… even good coffee. But there’s something about convenience. Or, maybe they’re exploiting America’s pre-coffee, morning stupidity. Either way, it is a great business model. - McDonald’s (MCD): Why do they have a tip jar at McDonald’s? That should tell you everything about the divide between the capital class (investors) and the labor. Not to sound like a particular 19th-century economist, but that’s messed up. I just wanted a soda… but man. How do you not feel guilt when they put that out? - PayPal (PYPL): This company owns Venmo - which markets itself as a financial app for people who want to split bills. I’d love to see the market research on that one… as I think it’s a good point of differentiation. What did I find it helpful for? A local band played at the restaurant up the street where we had dinner. If you wanted to tip them, they had a cash bucket… or a sizable “Venmo QR code” for people (basically everyone down here) who don’t carry cash. - PayPal was a company I got wrong in 2022 - as the metrics looked like you were getting Venmo for free in the stock price. But it was a Covid-19, at-home bubble stock. It hasn’t recovered much, but if it does get down - for whatever reason - into the low $50s, I’d put it in a “long-term” bucket. It’s run well, but the problem is the debt. The other issue is that once I sign up for recurring payments with it… I have ZERO FREAKING CLUE on how to turn PayPal off. Let’s get to the week ahead. On the Markets I’ve been long Bitcoin for some time, and what’s odd about this rally is the same as the Nasdaq hitting an all-time high. I feel poorer than I did last time, even though I never sold a damn thing. It's funny what inflation can do - and how important of a hedge these assets (completely disconnected from valuation theory) can be to protect your purchasing power. Also, it’s important to note how long a bubble can go. Syz Group pointed out something brilliant over the weekend. They wrote: It's been 309 trading days since ChatGPT was released on 11/30/22, and the Nasdaq is up 46.07%. In the 309 trading days after Netscape (the first web browser) was released in December 1994, the Nasdaq was up 45.9%. Note… that was “checks notes” 1994. Funny, no mention here of inflation targeting, incentivization around stock options, greater government involvement in the economy, the rise of passive ETFs, and the other things I’ve profiled in my “1993 series.” But give credit here. AI is bullish… as it will spread to other industries over time, driving profitability and reducing overhead. With central banks easing… It will be more about protecting your money than “investing” in innovation. Don’t believe the Nasdaq 100 (QQQ) advertising during the March Madness tournament. This is all about protecting your money from central bank inflation targeting. Monday, March 4, 2023 Event: Nvidia (NVDA) presents at Morgan Stanley’s Technology, Media and Telecom Conference. Republic Speak: Did you know about Nvidia? Someone at Syz Group showed a chart on Saturday asking if NVDA is actually cheap compared to forward earnings valuations of other companies in the tech space. Good lord. This stock is now worth more than the entire S&P 500 Energy Index. Note to self: Movie idea… Mad Max 2: The Road Warrior meets the Sandra Bullock movie “The Net.” In the future, a massive semiconductor shortage will lead America into a dark wasteland. The twist is that gasoline will be abundant in this Mad Max society. Here, people are driving around and getting violent with each other because they need to find semiconductors to adjust their car headrests after the previous chip failed… You know, since you can’t do this basic thing manually anymore. Tuesday, March 5, 2023 Event: NerdWallet (NRDS) Co-Founder & CEO Tim Chen has a fireside chat Republic Speak: Nerds!!! Can we hire the Alpha Betas from the movie Revenge of the Nerds to break into this conference and start chanting “NERDS!” Wednesday, March 6, 2023 Event: Fed Chair Jerome Powell testifies before Congress Republic Speak: Jerome Powell, who understands little about inflation, goes to testify before people who know little about economics or finance. Great. This is a high-profile meeting because he should explain the Friday statement by Fed Governor Waller. He said, according to ZeroHedge. "First, I would like to see the Fed's agency MBS holdings go to zero (...) Second, I would like to see a shift in Treasury holdings toward a larger share of shorter-dated Treasury securities”. What does this mean? Well, first - he’s not worried about the housing market, which is insane. And that all goes back to my concerns that mortgage rates are probably going UP and not down. Mortgage-backed security ownership by the Fed helps reduce spreads. We might be looking at 10% mortgage rates - if the national debt keeps screaming higher. [And… so you know, I called this…]( Waller wants to do the opposite of “Operation Twist,” which would aim to cut down on short-term interest rates. And drive long-term interest rates higher. This is - to be candid - necessary from a policy perspective. The Fed can’t get rates down - costing America a fortune. So, the Fed would roll off MBS and buy a clown car amount of short-term debt. If they are serious about this… the bearish long-term bond funds will explode. As I’ve noted… the Treasury Department is run by a clown. And this clown knows that we can’t get the 10-year down anytime soon - because the sheer amount of money that the Treasury needs to finance government spending - is horrifying. We’re talking $8 trillion in short-term lending… so the Fed will buy it. This is why I’ve been arguing that the Fed balance sheet is going UP over the long term and not down. And when it does… S&P 500 at 6,000 will look cheap. In addition… What’s fascinating about this speech is that it comes at a period of incredible currency debasement around the globe. The USD remains the cleanest shirt in the laundry, and gold prices aren’t as insane here as in Japan. Syz Group via Bloomberg, Tavi Costa But… this explains A LOT about all that gold buying from central banks in the last 18 months. And it’s a good reminder that the U.S. dollar will eventually get beaten up… and that blue line at the bottom will revert higher. That could come as soon as 2025, as the blowout on national debt screams higher. We’ve said in our “Hedge of Tomorrow” report and Republic Risk that BTC has a $100,000 upside this year based on the combination of rising liquidity and increasing allocation to a “scarce resource.” Gold is counter-cyclical, so be aware that the cure for higher gold prices is typically higher. But… it is a major hedge to the shenanigans of central banks. While bitcoin was the week's star, Gold started March positively, with prices rising to a two-month high on Friday after muted economic data and hints by Fed Governor Waller of an upcoming “operation twist.” The chart below compares gold to various fiat currencies, which seem to be going through a global synchronized debasement. This is going to get bumpy soon. Follow our signals, and you’ll be fine. Thursday, March 7, 2023 Event: Kroger (KR) reports earnings Republic Speak: It’s Leap Day… but for Chris Johnson. Friday, March 8, 2023 Event: January Jobs Report Republic Speak: When wage numbers go up… people will wonder why this good news isn’t lowering the market. The liquidity and Fed “stealth” operations have kept this frenzy going. And we’re not done yet. We’ve been talking about this since early 2023. Just FYI… Michelle W. Bowman, Member of the Fed Board of Governors, recent said that she’d advocate for RATE HIKES if necessary. Buckle up… Stay positive, Garrett {NAME} Secretary of Defense Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()