Plus, here are 3 charts that show the dominance of the US economy compared to the rest of the world. Universities are creating new AI-specific degrees, but is it worth it?
The Wendy’s kerfuffle shows how important it is for brand messaging to be consistent with brand promise (fast food presumably value/$) and to not just know the customer but LISTEN to their messaging from the customers’ POV! Social media means any announcements such as at shareholder meetings are marketing messages that will reach the consumer.
Fully agree with you Pam. I think the Wendy's PR kerfuffle is going to become a case-study for what not to do in the digital age when it comes to brand positioning and messaging, regardless of whether it is an earnings call or a marketing campaign. And while the management is clearing up its PR mess, I think people are still going to be wary for some time to come.
Amazing post! My observation about the Bitcoin is that it's completely about the market cycle and risk appetite.
Compare this rally with the previous rally in 2021 and you will see very similar structures: First equities recover and then they become overvalued, investors that missed equity rally and those who want to go further flaw to Bitcoin driving it to new highs and then those who missed it and those who want to go further flow to altcoins and a few months later bubble bursts.
We are now at the early innings of altcoin rally, it's getting so hot so fast.
Thanks Oguz. glad you liked it. I like how you have tied together the bull cycle in different assets with risk sentiment. It is possible that we will see this percolate into the altcoins now.
Although, I would say that as adoption of bitcoin grows, thanks to spot ETFs, we should expect to see lower volatility (compared to before). No doubt when the risk sentiment turn south, I do expect to see drawdown in bitcoin, but I believe we are at a point where there is growing recognition of the fundamental nature of the currency in a foever expanding fiat currency regime. But, short term speculation, especially as the "halving" event nears could potentially turn it into a meme in the short term.
One of the few publications - on Substack or elsewhere - where I feel smarter after reading it. Thank you for that! ☺️
As to your questions?
1) My trust of the Fed is lower than dirt right now. With that noted, I do think the divergence of the two suggests an underlying instability that has yet to rear its ugly head; I very well could be reading that wrong, however.
2) I honestly like the idea of dynamic pricing, after YOU explained it; they definitely need to work on their PR, however 😁
3) I have never understood considering BitCoin as a long-term hedge, but I am old-school about precious metals. With that noted, I actually think gold is WAY overvalued right now; I'd consider $1750 a comfortable buy-in range, while believing silver is a much-more rational choice at the moment. Humble opinion, natch.
1. No, you are right. The divergence is going to put the Fed in a tight spot when it comes to effective policy making.
2. Fully agree, the whole drama could have been avoided, if they avoided confusing and easily misunderstood words like "dynamic pricing" and instead position it as a win-win to please both investors and customers. I too like the idea of dynamic pricing, but it has to be implemented carefully.
3. That's okay with Bitcoin. With gold, I believe we are going to continue to see upward movement, as the Fed starts getting ready to cut soon and the economy weakens. So, personally speaking, I am dollar cost averaging at the moment. Fully agree with you on silver.
Thanks for the feedback, especially on #1; I'm still learning how those things play out, after all ;-)
One thing on gold which has me thinking it is currently overvalued: There are a few nations, including (and especially) China, which are on a buying frenzy with the yellow metal. I cannot help but wonder if that is contributing to artificially driving up with prices, that whole 'perception of eventually-limited supply creating inflated demand' model. I could be wrong, of course, but it's just something I have been watching.
The central bank demand for buying gold is definitely one of the reasons for the current price action in Gold, as they try to diversify away from USD. At the same time, I feel the longer interest rates remain high, the greater the risk of a prolonged slowdown in the economy, which would bode well for gold.
Another well written and curated article by Amrita. There’s so much here but my brain focused on the Windy‘s recent advertising fiasco which I was aware from new stories but I paid not much attention to the details. Most definitely Wendy’s should have rolled out their new digital pricing program to reflect the fact the company is actually offering good deals to customers through their new pricing program.
It’s rare I eat at Wendy’s, although I often went years ago for their salad bar and chili.
Thanks Charlotte. Fully agree with you. Wendy's brought this PR disaster on themselves, by using words like "dynamic pricing" in their earnings call, which the media immediately translated to "surge pricing" and all the hatred and trolling that ensued. Instead of using such confusing and easily misunderstood terms, had they simply positioned it like you suggested, this could have been avoided.
I am guilty I have never been to a Wendy's. Though salad bar and chili sounds delicious. I also didn't know until just right now (as I am typing this), that they have locations in Vancouver, I thought it was a US thing only.
Their frosties are killer if you want to splurge on calories in the summertime. But the fresh salad bar is long gone. A memory from the late 70’s and early 80’s. 🤗
the good ol' times. As for the frosties, I think I will pass. I guess feel like eating super light when it gets warm. Speaking of warm, Vancouver has gotten unusually warm for this time of the season.
This type of corrections happen all the time, more like a rule than expection.
What i meant was the results of bubble burst bursting eventually. The fundamentals are concerning, debt is beyond understanding, unemployment is growing, prices and spending is worrying, commercial Reit sector has concepts etc etc.
This is what i meant with, sorry for using more common term of correction.
Another brilliant Friday5 as always Amrita. I heard a take on a podcast last week that gold’s recent run up could partly be Chinese citizens seeking to hedge against recession risk but they have few other options outside of gold. I’ve yet to look into it but it could well be another contributing factor to gold’s latest strength. Thanks for a great post!
Thanks Dylan. You are right, central banks are rapidly adding to their gold positions, China being the highest on the list. And that is definitely a contributing factor to the current price action. But with the general macroeconomic environment, I think the a prolonged bull run in gold is just starting.
Thank you Nat, really appreciate it. On a separate note, I just read your "About" page on your substack and learnt that you are from Tbilisi. My husband and I had spent close to 2 months in Georgia in 2019 and 2020 in Tbilisi, Kazbegi and Batumi. We have the fondest memories from there, and we are planning to visit and spend some time there again this year, hopefully in the fall. Do you still live in Tbilisi?
Thanks Nat, will sure do. Hopefully we will be there sometime between September to December. It is one of my favorite places in the world and I will sure reach out to you then.
The US macro and stock outperformances are definitely the top macro/market stories in the past 2 years. There is a lot of good feedback loop for the US coming from technology/AI-led market and eventually GDP growth (due to rise in productivity) while other countries are behind in both fronts! Given US reserve currency status, its fiscal problem can continue to be kicked down the road except of course when it gets into a recession, then the fiscal problem will exaggerate/prolong the decline as how much more really can they increase the fiscal deficit??
You have brought some excellent points. It was perhaps starting early 2017/2018, when the fiscal deficit relative to GDP started growing, even when the US economy was in expansionary phase, the first time where fiscal dominance set center stage. For now though, the show can continue. At the same time, if we continue to unlock higher productivity gains from AI, that might also tame the inflationary pressures that fiscal deficits create. But like the JPow said in the most recent 60 minute interview, the current path is unsustainable.
$150K is quite a level, for 2024. But then again, I think Cathie Wood and others have been higher targets. As a bitcoin bull myself, as I like the fundamental nature of the currency, I think there is long-term upside, especially with growing adoption, thanks to the spot ETFs. Although, we are yet to see is if these inflows into bitcoin ETFs are driven by "trading" vs. "allocation" sentiment. the last time, we saw bitcoin peak and decline in 2022, it behaved like a risk/speculative asset, but I think we are starting to see early signs, where its value is growing despite higher interest rates, 10Y , etc, which plays into its thesis of finite store of value against the infinite fiat currency expansion. As for the price target, who knows what kind of speculation lies ahead of the "halving" event.
I'm bullish on both, Bitcoin and Gold.
Likewise, though my portfolio is skewed more towards gold than bitcoin, but that is primarily because of my risk tolerance.
I like Veritaseum. Reggie Middleton has patents on DeFi.
https://twitter.com/ReggieMiddleton
Don't overlook silver.
Silver's price has been too low for too long.
It is like a tightly coiled spring getting ready to violently unwind.
Agreed.
Agree with you Kenneth.
Same here ❤️
The Wendy’s kerfuffle shows how important it is for brand messaging to be consistent with brand promise (fast food presumably value/$) and to not just know the customer but LISTEN to their messaging from the customers’ POV! Social media means any announcements such as at shareholder meetings are marketing messages that will reach the consumer.
Fully agree with you Pam. I think the Wendy's PR kerfuffle is going to become a case-study for what not to do in the digital age when it comes to brand positioning and messaging, regardless of whether it is an earnings call or a marketing campaign. And while the management is clearing up its PR mess, I think people are still going to be wary for some time to come.
Gold buffalo proof coins appreciated nicely recently
Amazing post! My observation about the Bitcoin is that it's completely about the market cycle and risk appetite.
Compare this rally with the previous rally in 2021 and you will see very similar structures: First equities recover and then they become overvalued, investors that missed equity rally and those who want to go further flaw to Bitcoin driving it to new highs and then those who missed it and those who want to go further flow to altcoins and a few months later bubble bursts.
We are now at the early innings of altcoin rally, it's getting so hot so fast.
Thanks Oguz. glad you liked it. I like how you have tied together the bull cycle in different assets with risk sentiment. It is possible that we will see this percolate into the altcoins now.
Although, I would say that as adoption of bitcoin grows, thanks to spot ETFs, we should expect to see lower volatility (compared to before). No doubt when the risk sentiment turn south, I do expect to see drawdown in bitcoin, but I believe we are at a point where there is growing recognition of the fundamental nature of the currency in a foever expanding fiat currency regime. But, short term speculation, especially as the "halving" event nears could potentially turn it into a meme in the short term.
One of the few publications - on Substack or elsewhere - where I feel smarter after reading it. Thank you for that! ☺️
As to your questions?
1) My trust of the Fed is lower than dirt right now. With that noted, I do think the divergence of the two suggests an underlying instability that has yet to rear its ugly head; I very well could be reading that wrong, however.
2) I honestly like the idea of dynamic pricing, after YOU explained it; they definitely need to work on their PR, however 😁
3) I have never understood considering BitCoin as a long-term hedge, but I am old-school about precious metals. With that noted, I actually think gold is WAY overvalued right now; I'd consider $1750 a comfortable buy-in range, while believing silver is a much-more rational choice at the moment. Humble opinion, natch.
Again... thank you for all you do!
Thank you Stone.
1. No, you are right. The divergence is going to put the Fed in a tight spot when it comes to effective policy making.
2. Fully agree, the whole drama could have been avoided, if they avoided confusing and easily misunderstood words like "dynamic pricing" and instead position it as a win-win to please both investors and customers. I too like the idea of dynamic pricing, but it has to be implemented carefully.
3. That's okay with Bitcoin. With gold, I believe we are going to continue to see upward movement, as the Fed starts getting ready to cut soon and the economy weakens. So, personally speaking, I am dollar cost averaging at the moment. Fully agree with you on silver.
Thanks for the feedback, especially on #1; I'm still learning how those things play out, after all ;-)
One thing on gold which has me thinking it is currently overvalued: There are a few nations, including (and especially) China, which are on a buying frenzy with the yellow metal. I cannot help but wonder if that is contributing to artificially driving up with prices, that whole 'perception of eventually-limited supply creating inflated demand' model. I could be wrong, of course, but it's just something I have been watching.
Thanks again, for all you do!
The central bank demand for buying gold is definitely one of the reasons for the current price action in Gold, as they try to diversify away from USD. At the same time, I feel the longer interest rates remain high, the greater the risk of a prolonged slowdown in the economy, which would bode well for gold.
Another well written and curated article by Amrita. There’s so much here but my brain focused on the Windy‘s recent advertising fiasco which I was aware from new stories but I paid not much attention to the details. Most definitely Wendy’s should have rolled out their new digital pricing program to reflect the fact the company is actually offering good deals to customers through their new pricing program.
It’s rare I eat at Wendy’s, although I often went years ago for their salad bar and chili.
Thanks Charlotte. Fully agree with you. Wendy's brought this PR disaster on themselves, by using words like "dynamic pricing" in their earnings call, which the media immediately translated to "surge pricing" and all the hatred and trolling that ensued. Instead of using such confusing and easily misunderstood terms, had they simply positioned it like you suggested, this could have been avoided.
I am guilty I have never been to a Wendy's. Though salad bar and chili sounds delicious. I also didn't know until just right now (as I am typing this), that they have locations in Vancouver, I thought it was a US thing only.
Their frosties are killer if you want to splurge on calories in the summertime. But the fresh salad bar is long gone. A memory from the late 70’s and early 80’s. 🤗
the good ol' times. As for the frosties, I think I will pass. I guess feel like eating super light when it gets warm. Speaking of warm, Vancouver has gotten unusually warm for this time of the season.
I hear ya! When summer comes I am only in the mood for salad and cold meat! L O L!
The Frosty’s give you instant brain freeze. 🧠 🥶
I’m on the west coast so going back to bed for a while. I’ll be back!
Correction will be fast and ugly 🤫
Well...the rate at which the markets are going up, I assume we will see some correction within the next 100-200 points?? we shall see.
This type of corrections happen all the time, more like a rule than expection.
What i meant was the results of bubble burst bursting eventually. The fundamentals are concerning, debt is beyond understanding, unemployment is growing, prices and spending is worrying, commercial Reit sector has concepts etc etc.
This is what i meant with, sorry for using more common term of correction.
Neither one is correct because they are both extremely lagged and especially plagued by the Shelter/Housing component.
For any1 interested in learning more about CPI, here is my latest thread on X:
https://x.com/MBjegovic/status/1767634776171626998?s=20
If you're interested in Feb PCE forecast go here:
https://open.substack.com/pub/arkominaresearch/p/feb-2024-pce-estimate?r=1r1n6n&utm_campaign=post&utm_medium=web
Thanks Marko, fully agree with you. Thanks for the links.
You're welcome. Glad to see. Thank you for the comment!
Totally agreed
Thanks Roland.
Another brilliant Friday5 as always Amrita. I heard a take on a podcast last week that gold’s recent run up could partly be Chinese citizens seeking to hedge against recession risk but they have few other options outside of gold. I’ve yet to look into it but it could well be another contributing factor to gold’s latest strength. Thanks for a great post!
Thanks Dylan. You are right, central banks are rapidly adding to their gold positions, China being the highest on the list. And that is definitely a contributing factor to the current price action. But with the general macroeconomic environment, I think the a prolonged bull run in gold is just starting.
Not an expert in this field but I admire your dedication. Fantastic report.
Thank you Nat, really appreciate it. On a separate note, I just read your "About" page on your substack and learnt that you are from Tbilisi. My husband and I had spent close to 2 months in Georgia in 2019 and 2020 in Tbilisi, Kazbegi and Batumi. We have the fondest memories from there, and we are planning to visit and spend some time there again this year, hopefully in the fall. Do you still live in Tbilisi?
Wow, that's amazing! Tbilisi is a beautiful city and yes, I live here. Feel free to reach out and I'm sure we can arrange a meeting :)
Thanks Nat, will sure do. Hopefully we will be there sometime between September to December. It is one of my favorite places in the world and I will sure reach out to you then.
The US macro and stock outperformances are definitely the top macro/market stories in the past 2 years. There is a lot of good feedback loop for the US coming from technology/AI-led market and eventually GDP growth (due to rise in productivity) while other countries are behind in both fronts! Given US reserve currency status, its fiscal problem can continue to be kicked down the road except of course when it gets into a recession, then the fiscal problem will exaggerate/prolong the decline as how much more really can they increase the fiscal deficit??
You have brought some excellent points. It was perhaps starting early 2017/2018, when the fiscal deficit relative to GDP started growing, even when the US economy was in expansionary phase, the first time where fiscal dominance set center stage. For now though, the show can continue. At the same time, if we continue to unlock higher productivity gains from AI, that might also tame the inflationary pressures that fiscal deficits create. But like the JPow said in the most recent 60 minute interview, the current path is unsustainable.
Standard Chartered just predicted BTC at $150,000 by year end. Mental. I can't see it myself but BTC will keep doing BTC things.
$150K is quite a level, for 2024. But then again, I think Cathie Wood and others have been higher targets. As a bitcoin bull myself, as I like the fundamental nature of the currency, I think there is long-term upside, especially with growing adoption, thanks to the spot ETFs. Although, we are yet to see is if these inflows into bitcoin ETFs are driven by "trading" vs. "allocation" sentiment. the last time, we saw bitcoin peak and decline in 2022, it behaved like a risk/speculative asset, but I think we are starting to see early signs, where its value is growing despite higher interest rates, 10Y , etc, which plays into its thesis of finite store of value against the infinite fiat currency expansion. As for the price target, who knows what kind of speculation lies ahead of the "halving" event.
Not a fan of the Austrian Economics definition that inflation is an increase in the money supply?
There is much more gold available than silver. Silver is consumed, gold sits in vaults.