Yesterday the March Deficit numbers were reported. The 100 million $1,400 stimulus charts blew out the deficit.

As this chart shows, the last 12-months the deficit was a hard to understand $4+ trillion. As a % of GDP it was an equally hard to understand 19%

How big is this deficit?

The next chart shows the surplus/deficit as a percentage of GDP for more than 225 years. The current deficit is now the second-highest in history. Only World War II produced a larger deficit.

March 2020 hit a milestone of sorts. Only 46% of the rolling 12-month deficit is now financed by taxes (bottom panel).

How did this happen? See the top panel. Spending (blue) has gone vertical and tax receipts (orange) have actually fallen.

It is rare in American history that taxes cover less than 50% of federal spending. Only WW II (1943), the Great Depression (1932), WW I (1919), the Civil War (1862), and the War of 1812 (1814) were more extreme than the current pandemic period.

So, “what is the point of taxes?”

The charts above suggest they are NOT necessary to finance the government. They now account for less than 50% of government spending for the first time in 75+ years.

At this point the only reason to raise taxes is to punish success.


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More from @biancoresearch

14 Apr
The broader service sector has an impediment that herd immunity/reopening might not solve.

This chart shows the Kastle Indices of the percentage of major metropolitan office usage. It is still at just 25%.

(1/4) Image
Why do we need to return to an office? How much a week? What is better served commuting in an office everyday versus the way we have it's been done the last year?

This is a nice way to say that comm real estate is in trouble and herd immunity might not fix it.
Airline travel is about 2/3s back to pre-pandemic levels. Leisure travel is near 100% back.

But, if we do not return to the office 8 hrs/5 days business travel is not returning to pre-pandemic levels anytime soon, unless leisure is about to soar to new highs.

(3/4) Image
Read 4 tweets
6 Apr
A sort of milestone was reached today.

The total value of all cryptos surpassed the value of the US banking system.

Why is this measure relevant? It is an admittedly imperfect attempt to measure the size of the current CeFi system versus the coming DeFi system.

So sticking with this idea, what's next?

Another double and cryptos becomes larger than US Financial Companies (Banks + brokers, insurance, exch, fin cos, asset managers, etc.)

4x rise and Cryptos surpass the value of all global financial companies.

What has driven cryptos to surpass the value of banks? It has been an altcoin rally this year, and especially the last few weeks (bottom panel)

As this chart shows, altcoins are near a two year high as a percent of the total universe.

Read 4 tweets
29 Mar
Powell and Yellen are dismissive of cryptos/DeFi. Dalio thinks it could be banned. Singer/Buffett think it's dangerous.

I fear all of this could lead to the US "sitting this out" as the rest of the world designs a new financial system. This would be a huge mistake ...

3B+ people in Asia, Africa, the Middle East, and Latin America that would happily embrace a DeFi as the world standard.

But can they?

The number of mobile phone subscriptions in these countries is more than 1 per person, similar to the US/Europe.

They have the tool.

And they have no problem accessing services on these phones.

Americans have little idea how much better service is in the rest of the world, including much of the 3rd world.

The US is 27th in mobile download speeds, 95th in upload speeds

Read 8 tweets
25 Mar
By their nature, cryptocurrencies and decentralized finance (DeFi) are decentralized and permissionless. We are not sure how they would be ‘outlawed’, as Dalio describes in this story.

His example of gold being banned was only possible because of the government’s centralized system. Governments could ban the exchange of fiat for cryptocurrencies, but the DeFi system is being built to work on its own merit, with no ties to fiat.

Furthermore, countries that attempt to outlaw cryptocurrencies would risk their seat at the table. As the chart below shows, crypto adoption is highest among impoverished nations, lowest in the developed world.

Read 6 tweets
12 Mar
Some COVID charts

The US continues to plunge from its January 8 peak.

Vaccinations, % of population (as of Mar 11)
First dose, 19%
Fully vaccinated, 10.2%

Worldwide, cases might be bottoming

Vaccinations, % of population (as of Mar 11)
First dose, Less than 1%
Fully vaccinated, 0.2%

Israel leads the world with 44% fully vaccinated, and its case counts continues to plunge

Read 4 tweets
28 Feb
Tell me what is right/wrong here:

The US Crypto exchanges allow USD trading so they also have to adhere to AML and KYC rules.

So, this prevents US crypto accounts from seeing or understand DeFi's potential. US can access it via a wallet (metamask), but this is hard!

Coinbase … no ADA, BNB, USDT (NY), and XRP. No DeFi, limited farming, margin trading just started (in 12 states, no NY), no perpetual futures. etc.

I'm not endorsing doing any of this. But blocking prevents the US from "getting it."

So US thinks "Crypto" means gambling on BTC and shitcoins (DOGE) and constantly ask what is the potential/use case. This comes from being in the dark.

1 day (years from now) we are going to wake it and realized we have been passed by. Regs are putting us at a disadvantage.
Read 4 tweets

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