The value of global assets

Discussion in 'Business, Investing & Finance' started by BMF, Sep 6, 2021.

  1. BMF

    BMF Bad Mother....
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    Saw this posted on another board, interesting (this is from Global Trading Dispatch):

    The value of global assets:

    $1 quadrillion – the value of all assets in the world, both financial and physical

    $100 trillion – Global money supply

    $150 trillion – the value of all global bonds and fixed income securities

    $100 trillion – the value of global stock markets

    $47 trillion – US stock market capitalization

    $30 trillion – the value of global real estate

    $28.7 trillion – US National debt

    $22.7 trillion – US GDP and end Q2

    $20.5 trillion – US M2 money supply

    $20 trillion – total value of US real estate

    $14.4 trillion – GDP of China

    $10 trillion – the value of global physical gold holdings

    $10 trillion – 2021 US corporate profits

    $8.3 trillion – US Federal Reserve balance sheet

    $4.174 trillion – FY 2022 US Budget (click here for details)

    $3.1 trillion – 2021 US Budget deficit

    $4 trillion – GDP of Germany

    $2 trillion – the value of all issued cryptocurrencies

    $1.4 Trillion – GDP of Australia

    Looking at this impressive list of numbers, there is one that leaps right out at you. That is the second to the last one, the value of cryptocurrencies, which is only $2 trillion, two-thirds of which is Bitcoin.

    That is 0.2% of the value of all assets in the world, 2% of the global money supply, 4.2% of US stock market capitalization. In other words, Bitcoin accounts for only a tiny share of global assets.

    Which leads one to an obvious conclusion. The next big movement in money will be out of the largest asset classes into the smallest ones. The most obvious target here is the $150 trillion in the value of all bonds and fixed income securities, most of which have negative yields, or yields close to zero.

    Move even a small portion out of bonds into Bitcoin and its value has to double, triple, move up ten times, or even 100 times.

    There are other screaming conclusions to be found in these numbers. The bond market (TLT) is toast and can only really go down from here. The same is true for the US dollar (UUP). Oh yes, and you want to buy the Australian dollar (FXA).

    It gets better.

    The US money supply is currently worth $20.5 trillion and is growing at a 30% rate. So, in a year, it will be worth $26.65 trillion and in two years it will be worth $34.65 trillion.

    The biggest factor expanding the money supply today is NOT the government, but the explosive growth of US corporate profits, at $10 trillion in 2021, which is essentially a bet on the future of everything.

    Even if the Federal Reserve ends its quantitative easing program as is currently being discussed (the “taper”), that would only take $120 billion a month, or $480 billion a year out of the growth of liquidity, only 4.8% of corporate profits, a pittance really.

    And US corporate earnings could continue growing at this ballistic rate for another decade or more.

    That means not only will global liquidity continue to increase, but it will also do so at an exponential rate. My bet is that a decent chunk of this ends up in cryptocurrencies and Bitcoin specifically.

    Better strap on those Bitcoin positions now. If I am right, this is going to happen fast.
     
    • Concrete Helmet

      Concrete Helmet Hook, Line, and Sinker
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      Substitute all of this for Gold and your on the right track.....Smaller central banks are buying every dip on gold over the last few months so as to not skyrocket the price. This will only last so long before one of them gets greedy and dives in head first....then it's on like Donkey Kong....commodities will be the "new bonds" or as some say "pristine collateral"(think electrification here....silver, copper, aluminum and battery metals ...then you will see smaller countries peg their currency(crypto) to gold.....and as the use of petroleum dwindles over the next 2 decades the US dollar(otherwise known around the world as the petrol dollar since going off the gold standard) will have no choice but to go back to gold backing as a digital currency...
       
      #2 Concrete Helmet, Sep 6, 2021
      Last edited: Sep 6, 2021
    • The Lateral Move

      The Lateral Move Well-Known Member

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      Porque no los dos?
       
    • UFHealthGator

      UFHealthGator Well-Known Member
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      This is the rationale behind stock-to-flow model X cross assets.

      https://stats.buybitcoinworldwide.com/s2fx/

      Gold will forever remain centralized, subject to storage risk, and if Gold prices shoot through the roof, supply of gold will magically increase exponentially overnight, because mining companies will be willing to spend more to extract harder to get gold. Also, we already hold 75% of all world Gold reserves.

      Bitcoin is mathematically finite, with constantly decreasing newly minted supply, immediately transmissible and is not subject to centralized storage.
       
    • Concrete Helmet

      Concrete Helmet Hook, Line, and Sinker
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      Centralized makes it easier to trade between countries if both use it to back their currency. It's price is universally agreed upon international and rarely fluctuates to the extreme of BC....And BC isn't without it's storage issues either...it would be a lot easier to hack than carrying off hundreds of pounds of gold bars from a secured and trusted storage site along with smaller amounts kept in home, business and digital coins..
      Seems to be more and more stories about people losing wallets or being hacked.

      Someone Just Lost $16M in Bitcoin by Using a Malicious Install of the Electrum Wallet - CoinDesk
       
    • UFHealthGator

      UFHealthGator Well-Known Member
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      To be clear, Bitcoin protocol has never been hacked. You hold private keys that control your public wallet. How secure those private keys are is what matters. It is literally impossible to hack my hardware wallet for example unless someone gets physical access to it and knows my private pin number.

      Now anytime you expose your private keys to the internet, be it by typing them on your PC and there is a key logger, or if you take a picture of it, or if you record an audio of it, you expose yourself to attacks.

      In fact you don't even have to store your private keys anywhere. You can just memorize them in order, destroy your hardware wallet and any paper records of it, and it would be stored only in your brain. Then anytime you want access to them, you can input them in a new hardware wallet and transact now or in 10 years.

      There is nothing more tradable than bitcoin. Send to an exchange 24/7, sell it. Or exchange it any time in minutes. Near immediate finality.
       
      • Concrete Helmet

        Concrete Helmet Hook, Line, and Sinker
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        Is your BC insured? At what cost and what value?
         
      • UFHealthGator

        UFHealthGator Well-Known Member
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        Bitcoin in my custody is not insured. I don't think it is possible to insure self custody because it is impossible to verify if you lost your keys, but I could be wrong. Institutional insurance on the other hand is available and utilized by major exchanges and custodians.
         
      • The Lateral Move

        The Lateral Move Well-Known Member

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        I just bought a hardware wallet the other day but I'm not sure how I'm going to use it yet.

        I like getting interest on some of the exchanges. Using Voyager and BlockFi. Do you have all of your BTC in your hardware wallet?
         
      • UFHealthGator

        UFHealthGator Well-Known Member
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        When you send stuff to a hardware wallet first time, always start with very small test transactions to make sure you get the hang of it. Also make sure you always send the right coin to the right address and verify multiple times before executing the transaction. Make a copy of your private keys on a card with a pen and secure that away from any cells or cams.

        Until recently I had half my bitcoin on a HW wallet and half on exchanges. I got a little bit antsy after it went up in value so I de-risked a little bit and now I have 2/3 of my bitcoin on HW wallet. I have all my ADA on the HW wallet though because it earns interest in my wallet through staking.

        I have a lot of stable coin though spread around on Gemini, Blockfi and Voyager. Each one is a different stable coin too. (GUSD, Pax, USDC) all earning any where between 8-10%.

        Just remember these exchanges have significant counter party risk and don't put all your eggs in one basket.
         
        #10 UFHealthGator, Sep 8, 2021
        Last edited: Sep 8, 2021
        • The Lateral Move

          The Lateral Move Well-Known Member

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          What HW wallet gives you ADA interest?
           
        • UFHealthGator

          UFHealthGator Well-Known Member
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          I have a ledger Nano X. You can connect it with Daedalus and stake it. You can do the same thing with Solana and Solflare.

          Just to clarify, "Staking" means that you have indicated to the network that you delegated your tokens to a validator pool. The "pool" does not hold your ADA, you do. The worst thing a pool can do to you if it fails is not give you your interest rewards for a cycle (5 days). Here is a video tutorial:

           
          • Detroitgator

            Detroitgator Well-Known Member
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            Has anyone mentioned the derivates attached to those "assets"?
             
          • The Lateral Move

            The Lateral Move Well-Known Member

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            Awesome thanks man. I have the Nano S and didn't even know you could do that.
             
            • UFHealthGator

              UFHealthGator Well-Known Member
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              Just to be clear this only works for proof of stake blockchains like Cardano ADA and Solana, and in the future, with Ethereum 2.0. It does not work for things like Bitcoin or Ethereum that are proof of work blockchains.
               
              • Bernardo de la Paz

                Bernardo de la Paz If you aren't a gator you are gator bait
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                Corporate profits do not change the money supply
                 

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