Combining 25% Bitcoin and 75% gold in a portfolio creates a building block similar to an equity mandate, allowing for rebalancing and options writing to capitalize on Bitcoin’s high volatility.
Writing call options on Bitcoin at 40% exposure and put options at 10% underperformance generates cash flow from volatility, enabling investors to collect premiums while maintaining strategic allocation.
The traditional 60/40 portfolio should be rebalanced to 60% productive assets (stocks and bonds) and 40% hard assets (gold, Bitcoin, commodities), with 10% in performance gold and 5% in Bitcoin.
The Austrian School of Economics, founded by Carl Menger in Vienna around 150 years ago, emphasizes individual actions and human behavior as the basis for economic thought processes.
Bitcoin ETFs have a more significant impact on market prices than gold ETFs, with 1 million coins in the first year compared to 3,000 tons of gold, relating to over 5 percentage points of Bitcoin’s stock.
Bitcoin’s monetary status and lack of industrial uses make it more volatile than gold, which has industrial and jewelry uses, with 30% of gold stock being illiquid compared to 20% of Bitcoin in ETFs.
Adding silver to a 40% gold portfolio can enhance returns by 10-20% without significantly increasing risk, while Bitcoin provides the most diversification due to its low correlation with gold and silver.
Gold performs better in debt deflation and severe deflation, while Bitcoin excels in smooth deflation due to innovation, highlighting their different responses to inflation and deflation risks.
The world is moving towards a multi-polar world order with regionalization of trade and currency agreements, as countries like Japan, Australia, and European nations form their own blocs.
China has secretly been buying 10 times more gold than publicly stated, with an estimated 25,000 tons owned by citizens or the government, while Russia has been buying gold since US sanctions.
The US is at 120% debt-to-GDP, the highest in history, and the dollar’s resilience is ending as dollarization falls below 50% in Swift transactions for the first time since becoming the world reserve currency.
The US government is using Bitcoin to support the dollar and treasury market, a desperate move that is unsustainable long-term, while choosing CBDCs over gold to maintain power and continue printing money.
The expat industry has exploded, offering packages for visas, passports, residency, bank accounts, and property in countries like Ecuador, Chile, Australia, New Zealand, and Europe to help individuals avoid US taxes and asset seizures.
The US government is quietly preparing for a wartime environment, especially in the defense industry, extending this preparation to other industries as well.
Gold’s 50-year chart shows the fastest and most concentrated price increase in history, but may trade sideways in a $1-200 range for 3-4 months before a big move up, barring major banking, war, or economic crises.
The BRICS are building their own trade networks, militaries, and gold markets to challenge dollar dominance, preparing to back their currencies with gold and silver, potentially replacing the LBMA and COMEX markets.
Russia operates as a defensive realist power, balancing against dominant US influence by forming alliances to diminish American power, as explained in Sumantra Maitra’s book “The Sources of Russian Aggression”.
Russia’s behavior over the past 30 years can be understood through structural realism and balancing theory, where powerful countries like Russia counteract the dominance of strong world powers like the US and NATO.
The 2008 Georgia conflict was Russia’s first significant military operation against a neighboring country in recent history, with Georgia initiating the war and Russia ultimately controlling South Ossetia and Abkhazia.
Russia’s 2014 invasion of eastern Ukraine was not an imperialist conquest but an effort to secure interests, prevent Ukraine’s NATO membership, and preserve access to the strategically important Sea of Azov and Donbas region.
Crimea holds critical geostrategic value for Russia, allowing power projection into the Black Sea, and its loss would severely impact Russia’s security and defensive capabilities.
Ukraine’s central location and economic importance to Russia explain the different response to NATO involvement compared to Finland or the Baltics.
NATO’s expansion into Eastern Europe, despite initial promises of non-provocation, repeatedly threatened Russia’s security and led to increased defensiveness.
In the 1990s, a weakened post-Soviet Russia allowed NATO expansion, but under Putin in the 2000s, Russia regained strength and began actively countering perceived threats near its borders.
Fund managers’ lowest cash positions and highest equity allocations in history, coupled with a 10:1 ratio of leveraged long ETFs vs short ETFs, signal extreme bullish sentiment and potential for a violent correction.
40+ Hindenburg Omen signals in 12 months and deteriorating breadth indicators suggest the market uptrend is running out of steam, with NASDAQ experiencing its worst breadth in decades.
The corporate insiders’ sell-to-buy ratio, exceeding 25 times since late spring 2021, serves as a strong economic predictor, indicating potential weakness in sectors like home builders and materials.
Rising unemployment typically correlates with declining corporate profits, potentially leading to cost-cutting measures and weakened earnings growth in the near future.
Ruchir Sharma, chair of Rockefeller International, believes the US stock market is overvalued and overhyped to an unprecedented degree, suggesting potential for significant market correction.
Tail risk hedging through purchasing cheap, far out-of-the-money put options on the S&P 500 is recommended as a strategy to protect equity portfolios in the current market environment.
Demographic shifts, particularly the shrinking workforce relative to population, are expected to exert upward pressure on wages in the long term, potentially impacting corporate profitability.
While AI and automation may favor corporations, companies heavily investing in AI have paradoxically needed to hire more people for implementation, challenging assumptions about AI’s impact on labor markets.
Equities are wildly overvalued, with corporate insiders selling at record rates and Warren Buffett holding his largest cash position ever, signaling an impending market correction.
The 10-year treasury yield has jumped to 4.5% while home prices are at record highs and Bitcoin is at $100K, creating a setup for a potentially serious bear market.
Escalating global tensions, particularly the Ukraine war, could lead to catastrophic consequences including nuclear risk and further economic instability.
The US is heading towards hyperinflation with a 120% debt-to-GDP ratio and unsustainable interest costs, potentially leading to a financial crisis and currency reset.
To prepare for potential crises, shift capital from financial assets dependent on the dollar’s value to real assets like gold, silver, energy stocks, farmland, and uranium mining stocks.
When the Fed stops rate cut cycles, volatility and sell-offs in markets increase, as evidenced by events in 1995 and 2019.
Despite minor rate cuts, markets can still experience significant gains, as seen in 1995 when the S&P rose 50% after a 100 basis point cut.
The Warren Buffett indicator, comparing market capitalization to GDP, is at an all-time high of 200%, suggesting extreme market overvaluation.
The $40 trillion national debt with a 1.4% average interest rate could lead to a snowball effect of increasing deficits and interest rates.
The Fed may need to cut short-term rates to 3% over the next couple of years to manage debt and increase inflation, according to Federal Reserve Chairman Jerome Powell.
Short-term T-bills, not the FED, set interest rates, with short rates rising during economic booms and falling during busts, challenging conventional wisdom about FED’s role in rate-setting.
The FED is expected to drain liquidity in 2025, potentially causing a market panic, while T-bill rates have peaked and are now in a downtrend, forcing the FED to follow suit.
Gold Juniors experienced a 25% increase in 2024, following a pattern where seniors lead, followed by mid-tier companies, and finally juniors in a gold bull market.
China’s deepening real estate slump is spreading globally, with outer markets becoming frothy and attracting aggressive traders, potentially causing problems to reverberate back to senior markets.
In recent market movements, Bitcoin declined the most, while gold and US Treasuries also fell, suggesting a broader downturn across multiple asset classes.
Speaker Johnson added $200 billion in fresh “crony spending” to a continuing resolution, breaking promises and including $8 billion for foreign wars and $31 billion for redundant research.
The bill includes a 50% pay hike for Congress to $243,000 per year, with an exemption from Obamacare, potentially driving up inflation.
The legislation ties RFK’s hands on vaccine immunity and exempts the Department of Commerce from public disclosure of sweetheart loans for big business.
The bill grants duty-free access to US markets for Haiti and delays implementation of a money laundering database.
The bill is described as a “horror show” and a “war” between the “unip party sewer” and the people, with Speaker Johnson allegedly trying to “goose step small government Republicans” into voting for it.
The 2020 election was allegedly a scripted event designed to divide the masses and manufacture complacency, with the Q movement targeting disaffected groups while Trump received a mandate to implement policies.
Both political parties have been compromised by sexual blackmail operations involving children, with the Reagan-Bush era being particularly implicated according to a 1,000-page book on the history of these operations.
The uni-party system manipulates both parties to serve the same masters, with complacency and lack of accountability enabling politicians to abuse power and freedom.
Trump’s presidency may face a US debt crisis due to BlackRock’s fiscal response implemented before the pandemic, resulting in one of the biggest wealth transfers and most money printed in US history.
The IMF is referred to by the US military as a financial weapon of the United States government, used to impose financial warfare and debt slavery on other countries with unstable local currencies.
Stablecoins and digital currencies have potential for surveillance and control, with agencies like the CIA openly discussing their use to ensure dollar hegemony and track individual transactions.
The early development of PayPal and Bitcoin involved connections to the intelligence community, with figures like Peter Thiel and Elon Musk having relationships with agencies such as the CIA.
Carbon markets and ESG initiatives could be used for control and manipulation, potentially stealing wealth from the public and forcing behavioral changes on corporations.
Trump’s deregulation of biotech and pharma industries could lead to untested medicines and health threats, as evidenced by GMO crops causing farmer debt slavery in India.
The Bitcoin standard could help reduce government power in the long run, but stablecoins on Bitcoin, like Tether, could bring the US dollar under regulatory control, affecting Bitcoin users.
Lightning Labs’ dollar instruments on Bitcoin nodes could put users under US regulatory purview, potentially compromising the decentralized nature of cryptocurrency.
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