Wen Loong Profile picture
Apr 27 35 tweets 7 min read
1/ This is such good reading and I have to include some of my favourite excerpts. I hope the tone is not lost on you. Without further ado, let's go.
2a/ On circular economies:
"[I]n order to create circular self-sustaining pockets of economic action that use Bitcoin as the sole payment method, we must infect as many minds as possible with our memetic narrative. ...
2b/ ... Therefore, as a loyal subject of Lord Satoshi, I must do my part to evangelise the good word, and hopefully they can influence their domestic policy makers to create a fertile environment that promotes a farm-to-table Bitcoin economy."
3a/ One German efficiency predicated on cheap Russian resources:
"[I]f Germany follows the politics of the EU, which lean towards an embargo on Russian energy, then Germany will not have the same gargantuan current account surplus it enjoys now. It will sell less goods, ...
3b/ ... either because they cannot be produced due to lack of energy, or because due to higher energy input costs, these goods’ final price is not nearly as competitive vs. cheaper Chinese and Japanese goods. ...
3c/ ... Therefore, even though the EU currently has a current account surplus, that surplus will dissipate quickly if Russia’s energy is cancelled."
4a/ On king Jamie not willing to sponsor the US money printing:
"Who will buy the trillions worth of USD Treasury bonds the Federal government issues at negative real rates? ...
4b/ ... Foreigners — Nope
The Fed — Nope
Domestic Entities — Maybe … commercial banks are the most likely home for these bonds. ...
4c/ ... But, his royal highness Jamie Dimon proclaimed that JPM won’t be purchasing treasuries with its excess cash, lest they violate certain regulatory banking ratios. "
4d/ Somehow the banking ratios claim seems really convenient, imo. Then again, it's quite common sense. Who buys depreciating assets? Some benefit must be had. I guess there's no obvious one here.
4e/ (Actually, Singaporeans who buy cars buy depreciating assets but at least they get something enjoyable, I guess)
5a/ On EU not joining the US cancelling Russia:
"Europe cannot feed itself nor provide for all its fuel needs internally, so it cannot afford to cancel Russian energy. However, Europe is a client state of the US, and Brussels is dutifully toeing the line for now. ...
5b/ ... EU countries share a secular Judeo-Christian culture, but that’s about all they have in common. Most of Southern Europe would be considered developing countries if it weren’t for the financial assistance of their German, French, and Scandinavian brethren."
5c/ Presumably, since they sometimes seem so intent on forgetting their actual Judeo-Christian culture base, they risk returning to separatist and tribalist thinking at some point.
6a/ On following the green movement (possibly blindly) without thinking about economic costs:
"The EU member states also have a supreme desire to follow the energy policy recommendations of a Scandinavian high school student, and as a result, ...
6b/ ... rely even more heavily on cheap Russian natural gas to achieve their green economy utopia. Currently, the EU has not stopped buying Russian energy, but they are seriously considering following America’s lead and reducing their Russian energy imports even further. ...
6c/ ... The only way domestic governments will be able to placate hungry and cold citizens is printing money to pay for energy subsidies to keep the consumer price of food and energy at reasonable levels.
7a/ On China knowing they have been screwed over by the West. First quuoting an article from Nikkei Asia below:
7b/ "It is impossible for China to sell trillions of USD and EUR worth of assets without destroying the global financial system. That hurts both the West and China equally and bigly. ...
7c/ ... Therefore, the path of least destruction for those assets is to cease reinvesting maturing bonds back into the Western financial system."
8a/ On China's gold option to avoid being screwed (spoiler: no chance):
"The first place to source gold is internally. China could consume all internal production and completely crowd out the private sector. ...
8b/ ... The below table illustrates the degree to which internal production of gold can satisfy China’s current yearly account surplus. ...
8c/ ... 8.68% is a long way from 100%. Even your TikTok-corrupted brain can appreciate that ain’t going to work. And there is another larger structural problem with purchasing gold from Chinese miners. The goal ... is to sell USD and EUR and receive a hard asset or commodity."
9a/ On El Salvador President @nayibbukele being aware and right curve:
"According to the World Bank, El Salvador ran a $121 million current account surplus in 2020. It has one of the smallest current account surpluses. ...
9b/ ... At this minimum end of the f(x): what makes sense for El Salvador with respect to its savings policy?
The president of El Salvador is acutely aware that the current global monetary system is not geared towards supporting his country."
10a/ On why #BTC for El Salvador:
"To mitigate these real risks [repatriation aka confiscation aka theft], all flags must self-custody their gold. That makes physical trading of the metal expensive and time consuming. ...
10b/ ... For a large country like China, which likely deals in hundreds of billions of dollars’ worth of gold, the extra hassle is miniscule compared to the size of flag-to-flag trade. For a small country like El Salvador, though, these costs could become substantial. ...
10c/ ... Bitcoin’s weightlessness is the most pertinent facet of its value proposition. El Salvador can store $121 million or $121 billion for the same cost. ...
10d/ ... Payment using Bitcoin settles in 10 minutes and transaction costs are a fraction of sailing or flying from point to point."
11/ A few of my own thoughts:
@CryptoHayes ' essay is really about the extreme ends of the scale, what he calls "the f(x) : maxima and minima" which obviously have a direct correlation to the largest countries and the "small flags".
12/ El Salvador is showing great audacity in taking the step but it is also a necessary one. Any good leader would think of how to preserve its culture and to do so requires in large part preservation of wealth (of which one part/measure is certainly financial/monetary).
13/ As I often discuss with @hsinister , Singapore is never the first and we don't need to be. We cannot afford to piss the bigger countries off but now would be a good time for us to start accumulating and I hope the rumours are true that we are doing so.
14/ Custody is important and @QredoNetwork (lol sorry, couldn't resist) is already doing work with the El Salvadorian pioneers of countries buying #BTC :

qredo.com/blog/elsalvado…
15/ Exposure to #BTC is a must for various reasons including hedging and/or investing. I suppose hedging might mean a 2 to 5% exposure while investing might mean a further 5 to 10%. If you are more speculative, perhaps gain alts exposure before returning to BTC at suitable times
16/ Kitchen sink of caveats about all this being not financial advice to apply. I am simply quoting interesting thinking, good writing, and putting some random thoughts out.

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More from @wahlauwenloong

Apr 26
1/ Wow. If you want to know you're still early for $QRDO, just look at the mcap of $DESO . How is the latter 2x the former...?
2/ Just compare the developments for @QredoNetwork and @BitClout_ /@desoprotocol too and see what's happened in the last 365 days.

Don't get me wrong. Even if you're hardcore social freedom (is Deso really it?), shouldn't these at least be the same?
3/ Regardless of your leanings, in every society we need a way to safely store our assets. For the physical world, that would encompass art, gold, watches, vintage cars, etc. There are vaults for that.
Read 7 tweets

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