It was one of the most unsettling experiences I’ve had… and the most unsettling financial experience – by far.
You see, between 2006 and 2010, I lived in Buenos Aires, Argentina.
I was working as an analyst at a startup publishing venture run by Legacy Research cofounder Bill Bonner’s eldest son, Will.
At the start of my time there, you couldn’t get change for a 100-peso note. Waiters in the city’s famous steakhouses would look at you with pleading eyes if you dared produce one at the end of a meal.
A hundred pesos was worth about $32 at the time. It was money to flash around. It bought a lot of stuff.
With 100 pesos in your wallet, you could buy a blowout meal for two in one of the city’s best restaurants…
But as the years rolled by… and inflation crept up… 100 pesos didn’t seem like a lot of cash anymore. Waiters now accepted these notes without batting an eyelid. And the amount of change you’d get back after a meal shrank.
During my time there, the value of the peso fell 20% against the dollar.
I was getting poorer by the day. Instead of getting wealthier over time as I saved, I was going backward.
I loved Argentina. I still do. But I’ll never go back there to live. It’s hard to feel secure when your savings in the bank are losing value.
After four years… I set up camp in Berlin, Germany. The weather sucked. But at least I no longer had the seasick feeling of seeing my savings slip through my fingers.
I’m glad I did…
Today, 100 Argentine pesos is worth just $1.26, according to the government’s phony official rate. Going by the more accurate black market rate, it’s closer to 66 cents. So you’re lucky if you can buy a bottle of water with 100 pesos now.
Had I stayed in Buenos Aires… earning Argentine currency… I’d be ruined.
I’m starting today’s dispatch with my experience in Argentina because I want to make something clear to you…
Inflations happen… and you don’t want to face one unprepared.
And as colleague Teeka Tiwari has been arguing… the shifting political landscape in Washington points to higher inflation ahead…
It’s a good bet a Democrat-led administration will push for massive deficit spending to help the economy recover from the pandemic.
The first stimulus bill, under Trump, pumped nearly $3 trillion into the U.S. economy. A second bill under Biden (or Trump before he leaves office) will likely be much more.
Now, I’m not saying stimulus money will create runaway inflation in America. But I am saying that the Federal Reserve, America’s central bank, will dilute the value of the U.S. dollar to reduce the country’s debt burden.
This will send investors flocking to bitcoin. Since there can only ever be 21 million bitcoin, it’s a great hedge against a weakening U.S. dollar.
A hedge is like a vaccine – it stops something bad from happening. That’s why, in today’s dispatch, I’ll continue my long-running campaign to spur you into action to buy some bitcoin.
And I’ll show you why that’s what some of the world’s greatest living investors are doing.
At 8 p.m. ET, he’ll be lifting the lid on a recent discovery he and his research team have made in crypto.
The event is called The Crypto Catch-Up: Your Last Chance to Get the Life You Want. It has to do with what Teeka calls a “quirky” catalyst buried in the code of a handful of cryptos.
He believes it’s your best shot at making life-changing wealth… without having to take on outsized risk.
It’s possibly the world’s best “asymmetric bet” right now. The last time this catalyst occurred, crypto coins with this “quirk” went on to make gains as high as 5,837%… 21,267%… 48,371%… 68,141%… even 538,868%.
That’s why I say it’s an opportunity to make life-changing gains. That last coin would have turned a $500 grubstake into $2.7 million.
Now, Teeka has found six coins he believes have similar potential. I want to be clear… he isn’t guaranteeing these cryptos will shoot that high this time around. But the “quirk” they all share means these types of gains are possible.
And he’ll be giving everyone who attends tonight the name of one of these coins. The average peak gain of the free picks Teeka has given away at this type of event over the past five years is 844%. That’s more than the returns most folks see in the advisories they pay to subscribe to.
So even if you think crypto is too “out-there” for you… and you’ve never shown up to one of these events before… tonight’s big reveal alone will make it worth your while.
You can secure your place for free here. Then clear some time in your schedule at 8 p.m. ET to learn all about the opportunity Teeka has unearthed.
Now, back to how bitcoin inflation-proofs your wealth…
That’s a reference to the hard cap of 21 million coins that’s coded into the bitcoin software.
Unlike government-issued fiat currencies, which have theoretically infinite supplies, there can never be any more than 21 million bitcoins.
And they aren’t issued willy-nilly, either, on the whim of governments and central banks.
As I covered in more detail here, the bitcoin money supply is governed by code. It runs on an entirely predictable schedule. And it tapers off over time.
Take a look…
That’s why Nick Giambruno, editor of The Casey Report, calls bitcoin the “world’s hardest asset.”
Hard assets are assets that are difficult to produce relative to existing supply. Traditionally, they included gold, silver, and other commodities.
I know that’s controversial to some. After all, bitcoin is just computer code.
But here’s Nick with more on why it’s nevertheless true…
As prices for commodities rise, it incentivizes more production. Increased production creates more supply, which eventually puts downward pressure on prices.
Suppose the prices of gold and copper double. It will incentivize producers to mine for more copper and gold. But gold is a “harder” asset than copper. So the resulting increase in gold supply will be less dilutive to the price than the increase in copper supply.
This is a primary reason humans have used gold as money for over 5,000 years. It’s an excellent store of value because it is relatively hard to produce more of it.
That’s not the case with bitcoin. Nick again…
Now, include bitcoin in the gold and copper example… where the rise in price incentivizes more production, which creates more supply, and eventually, downward pressure on prices.
Bitcoin’s supply is perfectly inflexible and is entirely resistant to this process. No matter how high the bitcoin price goes, it can’t induce the production of more bitcoins. There is no other asset in existence like this. This is why bitcoin is the hardest asset the world has ever known.
And this idea is starting to catch on among some of the world’s most successful investors.
His Duquesne Capital Management fund posted an average annual return of 30% from 1981 up until his retirement in 2010.
He and George Soros famously “broke the Bank of England” when they shorted the British pound in 1992. That trade reportedly paid out $1 billion.
And on CNBC Monday, Druckenmiller was yet another insanely successful, high-profile investor to say he owns bitcoin, along with gold, to hedge against inflation.
He said his gold position was “many, many more times” larger than his bitcoin allocation. But he predicted his bitcoin would outperform gold. As he put it…
Frankly, if the gold bet works, the bitcoin bet will probably work better because it’s thinner and more illiquid and has a lot more beta to it.
[It] has a lot of attraction as a store of value to both millennials and the new West Coast money and, as you know, they have a lot of it.
That means higher bitcoin prices ahead.
Like Druckenmiller, he’s one of the greatest living investors.
When he managed the Legg Mason value equity strategy, he outperformed the S&P 500 for 15 straight years (1991-2005).
That was the longest streak of all time. The next longest streak on record is 11 years.
And last year, his hedge fund returned 120%.
For Miller, higher bitcoin prices are baked in. As he told CNBC last Friday…
The bitcoin story is very easy – it’s supply and demand. Bitcoin’s supply is growing at around 2.5% a year, and the demand is growing faster than that.
[Bitcoin has] been very volatile. But I think right now its staying power gets better every day. I think the risks of bitcoin going to zero are much, much lower than they’ve ever been before.
That’s why Miller “strongly” recommends bitcoin at the current price.
Last year, Fairfax County Retirement Systems in Virginia invested in Morgan Creek Blockchain Opportunities Fund.
It’s a crypto fund led by Anthony Pompliano.
And according to a survey this year by Fidelity, as a group, 27% of family offices, investment advisers, pension funds, and hedge funds own crypto assets. That’s up 22% from last year.
Meanwhile, corporate treasurers are putting some of the cash they manage into bitcoin.
Take MicroStrategy (MSTR). It’s a Nasdaq-listed business software and cloud computing company. And in two separate purchases in August and September, it bought $425 million worth of bitcoin.
That stash is worth more than $604 million today.
Another example is payments processor Square (SQ).
In October, it plowed $50 million into bitcoin… a stash now worth nearly $74 million.
These pioneering bitcoin purchases show other companies how powerful an asymmetric bet on bitcoin can be.
MicroStrategy and Square each put less than 1% of their cash reserves into bitcoin. So their downside was strictly limited. And so far, the payoff has been huge.
Teeka and Nick have been banging the drum on this for years.
And some of the world’s smartest investors are getting on board.
So what’s stopping you?
To find out more about how to buy your first bitcoin, check out our free special report.
And remember to clear your schedule at 8 p.m. ET tonight for Teeka’s Crypto Catch-Up event. It’s a chance to learn a ton about smaller, more speculative cryptos that have the potential to crush even the gains bitcoin is delivering.
Here’s the link again to secure your spot.
Regards,
Chris Lowe
November 11, 2020
Bray, Ireland