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Preston Pysh

@PrestonPysh

5 Jan

As things in the economy go from manipulated to ultra-manipulated, make sure you're ready for totally extreme changes. Although only a few companies are driving the stock indexes, they are heavily dependent on policy decisions and the aggressive addition of more fiat units into..

the collective global system. COVID policies, drastic changes in spending habits, lack of earnings power for the masses, are all likely to have a shocking liquidity experience to the system in the coming year. The amount of breadth at which the impairment will occur is nearly..

impossible to predict or forecast. The first chart I posted is simply demonstrating my opinion that the system is becoming increasingly unstable and the aperture for potential outcomes is widening. As policymakers respond to growing volatility (on a global level), their...

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Preston Pysh

@PrestonPysh

2 Jan

At what point in 1923 German did it become evident that all trust in the Mark was lost?

The years leading up to 1923 were an aggressive devaluation where the paper Mark was debased 1 : 10,000 over a five year period of time. But once the debasement exceeded 10,000, it. ran.

The headlines in Germany during OCT 1922 were of particular note, according to the Frankfurter Zeitung: "German economic life is dominated by a struggle over the survival of the Mark: Is it to remain the German currency, or is it doomed to extinction? During the past few months

foreign currencies have replaced it as units of account in domestic transactions to a wholly unforeseen extent. The habit of reckoning in dollars, especially, has established itself, not only in firms internal accounting practice but above all as the method of price quotation

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Preston Pysh

@PrestonPysh

28 Nov 20

I hear a lot of people say that S2F is an invalid model because it doesn’t account for demand. Here’s what I’m thinking.

As long as hashing keeps going up over time, that means there’s a minimum threshold of demand being applied to the #Bitcoin eco-system where miners ... 1/

Are acting as agents (among other roles) for swapping electrical bills denominated in fiat for Bitcoin. In essence, the Labor Theory of Value (LToV) is....Valid...but only in this unique situation. This is a very unpopular opinion because most people believe Adam Smith’s ..2/

antiquated economic model for determining value is invalid in almost all modern instances (which I agree with). In this particular situation though, you’re measuring the work being performed at one of the most raw levels: energy expenses for computations conducted. 3/

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Preston Pysh

@PrestonPysh

13 Nov 20

But professor...

When you told me #Bitcoin was a Ponzi scheme you left out the part about the four-year halving cycle and two-week difficulty adjustment...

How does that work?

//Thread Post 1

So you've probably heard your professor or resident expert economist tell you that #Bitcoin is a scam. Well, guess what, it's not. Everyone keeps claiming it's dead, but here we are, it keeps coming back and with a vengeance. How is that happening? Easy. The code is designed

to slowly gain entrenchment into the existing financial rails and eventually take over as a global reserve settle money. If it happens too quickly or linearly, governments would attempt to shut it down. But If it happens slow enough - and volatile enough - deep entrenchment

Read 21 tweets

Preston Pysh

@PrestonPysh

16 Oct 20

Based on the extreme debasement that's been occurring and that's expected to continue, I would suggest adopting a new unit of measure. Although the world will continue to settle in dollars or other major fiat currencies, that doesn't mean you should measure your growth in... 1/

buying power with fiat units. For people that find Bitcoin to be undesirable, the most common alternative is gold. For example, look at the performance of the S&P 500 if you measure it in gold instead of the US dollar. Down 25% since peaking near the end of 2018. 2/

If measuring the S&P500 with dollars over that same period of time (since late 2018), an investor is up nominally 19% in dollar terms, but relative to gold their buying power (for retained earnings) has diminished by 50%. So, this begs an interesting question, what could be 3/

Read 14 tweets

Preston Pysh

@PrestonPysh

11 Jun 20

Some thoughts on the dollar's reserve status.

A quote from the book, Big Debt Crises, by Ray Dalio:

"Can reserve-currency countries that don't have significant foreign-currency debt have inflationary depressions? While they are much less likely to have inflationary...1/

contractions that are as severe, they CAN have inflationary DEPRESSIONS, though they emerge more slowly and later in the deleveraging process, after a sustained and repeated overuse of stimulation to reverse deflationary deleveraging. Any country, including one with a ... 2/

reserve currency, can experience some movement out of its currency, which changes the severity of the trade-off between inflation and growth described earlier. If a reserve-currency country permits much higher inflation in order to keep growth stronger by printing lots of ...3/

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