Buying 2020

Twenty-twenty has certainly been fascinating.

As of this post, nationwide quarantines have been in operation (with few exceptions) for more than eight months and there’s no significant sign of this changing until next year.

How we are not experiencing more acute pain economically is baffling, although perhaps that is around the corner. (Closing the world has consequences.)

And then there’s the election that’s more important than ever. Who will be our wartime president? Vaccines via tanks or federally-mandated PPE theater, take your pick.

Despite the fact that Donald Trump has already become Bernie Sanders, expect additional government spending with the Forty-Sixth Administration. And that means more printing under QE-infinity.

This said, look for assets that are limited/fixed in number/non-inflationary. Two asset classes come to mind: precious metals and cryptocurrencies.

Gold started it’s bull run in January 2015 and has been steadily rising. The big-fat-ugly-bubble-turned-MAGA-economy has been very good for gold and silver. They will both, I believe, continue to rise significantly. Get ready for a stampede.

The crypto winter — remember that? — ended January 2019, and Bitcoin has continued to climb. Despite its brief return to $4kish territory in spring of this year, the world’s reserve crypto is sitting at $12,958 at this very moment. That’s a 300% move up.

Precious metals and Bitcoin will only appreciate in our inflationary environment because they are relatively fixed (or precisely fixed in the case of Bitcoin). This is simple economics. An increasing amount of currency units chasing a fixed supply of X will cause X to rise. Granted, groceries get more expensive in an inflationary environment too.

So with QE-forever, what we want is to maintain purchasing power. This is accomplished by holding assets other than dollars. While precious metals and Bitcoin aren’t the only ways to do this — maybe you want to get into art or collectible cars? — they are pretty sure bets.

Like all of my posts, these are just remarks and observations. I don’t give advice.

Sites worth viewing:

Coinbase or Gemini (buy crypto)

Celsius (earn interest on cryptocurrencies)

American Precious Metals Exchange (excellent precious metals dealer)

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