The Importance of Assets

So Congress feels pretty confident it can dig around the sofa cushions and come up with $908 billion to help Americans out with bills and stuff. 

Wow, thanks a-holes!!

This could’ve been done two months ago. “He of the punchable face” (Mitch McConnell) had said $1.8 trillion back in October. But “she who can’t take yes for an answer” (Nancy Pelosi) had to try and win. McConnell pulled out, let Pelosi dangle, and their employers, the American people, paid the price. 

McConnell is 78 and Pelosi is 80… acting like a couple of 8-year-olds.

I don’t know why I get so worked up about it. It’s not a surprise: This is exactly how they’ve behaved for the last decade. 

I get it: $1 trillion, $2 trillion, pretty soon it adds up to real money. And this damn pandemic has cost us plenty, both emotionally and financially. I’m just about at a Tom Hanks-in-Castaway level of isolation fatigue. “WILSOOOOON!!!”

So this might be a crazy solution, but if we had the Department of Defense start mining Bitcoin back in October, we’d all be getting fat checks right about now.

Problem solved.

Sadly, though, I don’t get consulted on policy issues. 

Bitcoin vs. Gold

I’ve had Bitcoin on my mind lately. The last time it ran higher, I wrote a pretty negative article about it. I pretty much nailed the top, too, while people were mortgaging their houses to buy in.

I even got fan mail. In June of 2018, Paul E. wrote: “I regret not listening to Briton at Xmas. I thought “what a negative old sod” as he doesn’t like cryptos but he saw the bloodbath coming. Briton, I think you’re the daddy of Angel.”

That’s right, the daddy of Angel! Funny, I couldn’t get my colleagues to call me “daddy.” Probably for the best anyway.

I have to tell you: I’ve changed my mind about Bitcoin… mainly because of utility. Back in 2017–18, Bitcoin wasn’t really useful. That’s changed. There is a lot of big money behind Bitcoin’s rally this year, and I don’t think this move is done. 

Bitcoin also seems to be giving gold a run for its money as a safe-haven asset. In fact, its’ 150% gain this year is kinda crushing the 25% you would’ve made owning the SPDR gold ETF (GLD). 

The Importance of Assets

Stocks have been running like crazy — Bitcoin too. Home prices are up, copper is at record highs, lithium for electric car batteries is doing well, platinum too… Why? Why should such a wide range of assets be doing so well? 

Glad you asked. 

What all these disparate things have in common is that they are assets. They are not currency, and they are not bonds. 

The COVID-19 pandemic has forced every government to take on huge amounts of debt. So much debt that, here in the U.S., the only significant buyer is the Fed. We can’t borrow from China, we can’t borrow from the EU, so we’re borrowing from ourselves. 

Now, I don’t think all this debt is gonna bring on the end times. The purpose of money is to make it easy for us to go about our daily lives. We’re going to keep doing that. 

But what I do think will happen is massive currency devaluations. Governments around the world are going to race to the bottom. Those less fleet of foot will suffer currency crises like the tiger economies back in 1997.

When the purchasing of a currency goes down, it takes more of that currency to buy stuff. That includes assets like stocks, copper, Bitcoin, houses, platinum. 

So if you need a New Year’s resolution (I can’t believe we’re so close to getting rid of this stupid year), make it this: Buy assets. 

Baseball cards, stamps, whatever. Just don’t own cash, and for the love of everything we hold dear, do not own bonds.

Until next time,

Briton Ryle

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A 21-year veteran of the newsletter business, Briton Ryle is the editor of The Wealth Advisory income stock newsletter, with a focus on top-quality dividend growth stocks and REITs. Briton also manages the Real Income Trader advisory service, where his readers take regular cash payouts using a low-risk covered call option strategy. He is also the managing editor of the Wealth Daily e-letter. To learn more about Briton, click here.