Written by Bryan Lutz, Editor at Dollarcollapse.com:
Every Sunday morning I send out three thoughts.
Sometimes these thoughts are on the economy, life, or hard assets.
If they’re helpful or hopeful to you, that’s great… Sometimes it just comes down to reality. That’s what I’m interested in…
So, here we go.
Here are three Sunday morning thoughts for you:
1. Will an economy based on the production of real things win over an information economy? There’s one thing that makes the difference.
Generally, the production of real things beats the production of information over time.
Yet, whoever has the better information, and can then use that information will profit more than others.
So what’s the difference?
I think it is the value of a nation’s currency.
For example, the difference between the United States and China.
You can see the perceived value of each currency below.
US and China have shared a declining yield curve since the Great Financial Crisis in 2007-2008.
But since the start of 2023, the United States’ 10-Year Treasury yield has increased while China’s continues on the decline.
And that means, China’s debt is more valuable.
Debt from the US Treasury is less valuable.
Now, here’s why…
As the American economy moved away from manufacturing, China doubled down.
Below are the number of US manufacturing employees since 1990.
Here’s China’s global takeover of manufacturing.
While China has been producing real things, and the US has been producing new forms of information technology…
Here’s what the US has been more interested in distributing:
Debt.
This is the amount of US debt held by foreign institutions since 1990.
You get the idea…
Whether it’s manufacturing, or information tech, the amount of debt a nation must issue or hold makes the difference, but…
In the end, it may turn out that a strong manufacturing takes precedence when investors want to know what currency they should use to invest.
I’m not saying China doesn’t have it’s own debt problems, I’m saying… take a look at treasury bond yields and tell me what you see.
2. Palantir, MicroStrategy, and Axon Entreprises are scheduled to join the NASDAQ 100 on Dec.23, 2024 because of BTC’s price surge. Bitcoin has been correlated with the NASDAQ since 2020. Is this when Bitcoin takes over future price action?
Over the last year and a half, the NASDAQ has boomed.
Mostly, on the unprecedented amount capital inflows from foreigners and every institutional investor in the US that has nothing better to put their clients money into…
So they put their money into the “Next Big Thing.”
AI…
Data Centers…
Even the next SaaS…
Meanwhile, the number of Bitcoin holders has not dramatically increased.
Yet, since mid-2020 Bitcoin has correlated it’s movement with the NASDAQ.
Now, is Bitcoin about to pair or even take the leading role?
Three of the US tech world’s biggest holders of Bitcoin are becoming part of the NASDAQ 100, which makes the correlation much closer.
It’s even more interesting when you look at BTC’s correlation to the S&P 500…
3. Zoom out to a one year time-frame, and gold’s slow and steady rise continues to set up for January.
Since the US election, gold’s ups and downs have been dramatic.
I think many people expected gold to rising faster.
It didn’t.
Instead, gold went sideways.
Now it’s touched the 100-Day Moving Average.
And that means, we’re possibly looking at a slow and steady rise back up, which would be even more conclusive if the S&P 500 continues its recent decline.
