I just moved 30% of my portfolio to CASH.
Not because I'm scared.
Because cash is about to become the highest-performing "asset" of the next 3 years.
This will sound insane until you understand deflation. 🧵
Not because I'm scared.
Because cash is about to become the highest-performing "asset" of the next 3 years.
This will sound insane until you understand deflation. 🧵
Everyone thinks cash is trash:
"Inflation is eating your purchasing power!"
"Cash is for suckers!"
"You need inflation hedges!"
This narrative works in an inflationary environment.
We're not in one. We're entering deflation.
"Inflation is eating your purchasing power!"
"Cash is for suckers!"
"You need inflation hedges!"
This narrative works in an inflationary environment.
We're not in one. We're entering deflation.
In deflation, cash is KING:
Your dollars BUY MORE as prices fall
Real purchasing power INCREASES
While everyone else's "hedges" collapse
It's the ultimate contrarian trade.
Your dollars BUY MORE as prices fall
Real purchasing power INCREASES
While everyone else's "hedges" collapse
It's the ultimate contrarian trade.
But here's the real reason to hold cash:
Deflation creates FORCED SELLING.
When asset prices fall and leverage unwinds:
Margin calls hit
Panic selling starts
Generational buying opportunities appear
Cash = dry powder for the fire sale.
Deflation creates FORCED SELLING.
When asset prices fall and leverage unwinds:
Margin calls hit
Panic selling starts
Generational buying opportunities appear
Cash = dry powder for the fire sale.
Full analysis + 3 bold predictions in my newsletter: []open.substack.com/pub/hacheimsch…
Look at what happened in 2008:
Gold peaked in March 2008 at $1,000
By Oct 2008: $700 (-30%)
Stocks? Down 50%+
Cash + Treasuries? Crushed everything.
The people with dry powder bought the next decade's returns at 50% off.
Gold peaked in March 2008 at $1,000
By Oct 2008: $700 (-30%)
Stocks? Down 50%+
Cash + Treasuries? Crushed everything.
The people with dry powder bought the next decade's returns at 50% off.
"But money markets only yield 4-5%!"
Exactly. And when deflation hits:
4-5% nominal = 7-8% REAL return (as prices fall)
Show me an inflation hedge that will beat that when gold and Bitcoin are down 40%.
Exactly. And when deflation hits:
4-5% nominal = 7-8% REAL return (as prices fall)
Show me an inflation hedge that will beat that when gold and Bitcoin are down 40%.
The opportunity cost of cash FEELS high right now.
That's how you know it's right.
When everyone thinks cash is stupid, that's when you want to hold it.
When everyone thinks stocks/crypto only go up, that's when you want cash ready.
That's how you know it's right.
When everyone thinks cash is stupid, that's when you want to hold it.
When everyone thinks stocks/crypto only go up, that's when you want cash ready.
My current allocation:
30% cash (money markets at 4.5%)
40% long-duration Treasuries
20% quality large-caps (MSFT, V, JNJ)
10% short commercial real estate
Zero gold. Zero Bitcoin. Zero TIPS.
30% cash (money markets at 4.5%)
40% long-duration Treasuries
20% quality large-caps (MSFT, V, JNJ)
10% short commercial real estate
Zero gold. Zero Bitcoin. Zero TIPS.
What % of your portfolio is in cash right now?
If it's under 15%, you're not ready for what's coming.
If it's under 15%, you're not ready for what's coming.
@threadreaderapp unroll
• • •
Missing some Tweet in this thread? You can try to
force a refresh
