Inflation

Editor’s Note: We decided to hand the reins over to a guest columnist, Lawrence James, who lives in Sub-Saharan Africa and has become a fan of Metacoin. We asked him to take another look at Dave’s conversation with Jim Rogers, and see what his thoughts were after the fact.

A year ago, in a conversation Dave held with Jim Rogers about the crypto and economic worlds at large, the pair happened to exchange a couple of points. Jim is a long-time investor, hedge fund manager, and co-founder of the Quantum Fund. Most importantly, he’s a self-made multi-millionaire who knows a thing or two about markets.

Biden Backing Up the Money Truck

Dave posed a question on the issue of Joe Biden giving out cash to people who elected him, which put the country in debt, and how it would be paid for. Jim said, “ You’re wondering but Joe Biden is not wondering,“ and later explained that politicians like Biden were driven by a mentality that insinuated that they spend if it’s there, and if it were not there, they would borrow it and still spend it. This came to pass when Biden awarded $1.9 trillion as part of the American rescue plan, which was geared towards bailing out citizens, and giving out $1400 stimulus checks, a move that further put the country in debt. 

Also, concerning the Biden issue, Dave asked for Jim’s view on whether the Biden administration was using that as an opportunity to continue an economic overreach and if such an event would ever unfold again. He said that that would happen again since the governments had guns while referring to power, and they knew what was good for the community. He claimed that maybe their approach was what was going to save everyone.

I think, true to this thinking, Biden’s approach, bordering on “overreach,” ended up working, but the discovery of vaccines greatly aided the administration.

BREAK TIME: HERE’S A SPONSORED LINK to BINANCE. SIGN UP HERE AND WE BOTH GET SOME CRYPTO. Now back to Lawrence’s article.

What About Short Squeezes?

Dave later questioned the issue of GameStop. It had gone up 85% from its usual high then. Jim termed that a short squeeze, for that was not the first time he had seen that, but what amazed him was how they could create such a vast short, which, according to him, was a legitimate and historical kind of event. He also says it can happen again, but he suspects it cannot happen in the Silver markets. However, this came to pass in another market when Nickel faced the risks of another short squeeze as of 31st March 2022.

What About Crypto?

Dave asked specifically if Bitcoin was a worthy trading vehicle, given the fact that, if it were made a publicly traded company, it would rank as the sixth largest in the world (at 963 billion dollars at the time of the interview). Jim termed crypto a worthy investment vehicle; he even added that if he had the chance earlier, he would have bought some for himself.

In line with that, he added that nations without internet access could not use crypto; hence in such a nation, one with crypto can be termed as one only “money rich” but can’t spend their money. He also pointed out blackout cases as another flaw to wanting to access crypto whenever in need readily. He mentioned that many nations had already raged war on crypto use on their borders. And if it were to succeed in becoming money,  the governments would outlaw it if it meant using guns. This has, however, not been the case yet, as El Salvador became the first country to adopt Bitcoin as legal currency as of September 2022. 

Market Bubbles Abound…Still?

Next, Dave brought up an interview Jim did with Kitco, where Jim said we weren’t in a bubble in stocks. Jim agreed, but said that bonds were in a bubble, and at that time, bonds were at the most expensive they had ever been, and that was a bubble. He claims on the stock market, some stocks might have registered bubbles, but some stocks, Like Apple, Tencent, and Google, make profits every day and have never been in a bubble; hence the stock market, according to him, was not experiencing a full bubble just yet. He said that the many “SPAC“s coming, which he believed came after a bull market, would bring a bubble burst and an end to the bull market.

An economic bubble popped later in the year. Despite their impressiveness, the 20–30% corrections experienced in the first half of 2022—the most significant first-half decline in more than 50 years—had not yet warmed up. Instead, they had come from high starting positions after a period of the fast price increase. As a result, two problems needed to be addressed: first, were the beginning positions of these corrections so high that markets had inflated? Second, had the markets deflated as much as they usually do when a bubble bursts if they were in bubble mode? Knowing where we came from may help us determine where we were going.

In conclusion, I would say that Mr. Rogers is a man of his word as most of what he said came to pass. Crypto has been termed the future of money, and its use has been on the rise, with many countries even accepting it as legal tender. However, some people are still skeptical about its use, with Jim Rogers being one of them. Nevertheless, he is still a great investor, and his predictions are always worth listening to; however, as he stated earlier, one’s choice of investing should be characterized by their understanding of the investment.