CrowdCent Curation - No. 4
Capital vs. Labor, Decentralized Marketplaces, Time to Build the Future
Enjoy the content below & feel free to share - this post, in particular, helps provide some backdrop for the ongoing tensions around the world.
Just because the media is now recognizing something, does NOT mean it hasn’t been going on underneath the surface for a long time. We encourage people to look at the breakdown between the share of capital vs. share of labor (as % of GDP) over the past 50 years (highlighted in an article below) - this helps explain the underlying tensions in the US and around the world. The protests are a symptom of a much larger underlying issue that has been brewing for decades. We’ll be discussing this further in an upcoming Taboo post...
“In times of war, politicians call on innocent people to fight on their behalf… In times of pandemics, billionaires call on innocent people to return to work…” - Dr. Dena Grayson & Pedro Da Costa
Translation: What is going on isn’t new, it’s classic power structure - those with money/power tell those without money/power what to do. Always understand incentives... those in power want to preserve it.
Recap: Starting in the ’80s, the rise of finance set forces in motion that have reshaped the economy
Comment: This article highlights our above point on the capital vs. labor breakdown, and the underlying issue on why people around the world are upset - they are protesting, they know there is injustice, they know they are getting screwed… this helps explain the roots.
Recap: Article highlights the traction and success of Numerai and Erasure, providing confidence in the future of decentralized ecosystems
Comment: In line with our above plans for tracking/staking/accountability/skin-in-the-game, this provides further evidence that the trend is real and growing… quick historical background explaining the setup in simpler terms
IT’S TIME TO BUILD [Article]
Recap: Useful article that highlights how our current system is broken and backward-looking - everyone in power is just trying to preserve the old system vs. build something new
Comment: Enough complaining; do something about it. Our broader public system (education, infrastructure, healthcare, etc.) is broken, so start taking things into your own hands and help build the future. Simply complaining about the past doesn't get you anywhere. Think about what we need in the future and start allocating your time to suggestions and solutions.
CrowdCent Thoughts & Predictions
Appreciate all of the great feedback from the community on the new section. In the spirit of our vision and mission statement, we are adding tracking of our predictions to hold us accountable. This will be automated and live tracked, and eventually built on blockchain with staking (putting money behind it / skin in the game). Each week you will be able to click in and see how the predictions are tracking.
You can’t just say shit with no repercussions - no tracking, no accountability, no skin in the game, no incentive alignment. There are enough Jim Cramers in the world. The legacy media system is BROKEN. Let’s build something real and mutually beneficial.
We are near the end of a ~40 year US Treasury bull market: 16% 10yr UST rate in 1980 to ~0.50% today. Wouldn’t be surprised to see negative rates before inflation takes hold. Not bearish, just not much to play for.
Tracker: USGG10YR Index (US 10-year Government Yield)
Simplified Bet: US interest rates (10yr+) are going higher over the coming years
Related to the above, we are in the 8th or 9th inning of a ~40 year private equity boom - primarily trading assets back & forth and benefiting from lower rates, not creating value
Tracker: Working on tracker; potentially a basket of private equity company stocks as % of the market (PSP US Equity / SPY US Equity)
Simplified Bet: Private equity growth, as an asset class, will start to slow down as interest rates hit the lower bound
As the yield curve in the US continues to compress, expect to see a blow off top in growth assets in the near term (not our characterization, but referring to the assets with significant value in the terminal value)
Tracker: QQQ US Equity (Nasdaq 100 ETF)
Simplified Bet: Growth stocks will rise near term
After decades of no inflation, we will start to see real world inflation (not just financial asset inflation, which central banks have driven for 20+ years) in 2021+ driven by localization + government printing + commodities
Tracker: USGGBE05 Index (US 5-year inflation expectations)
Simplified Bet: Real world inflation is going to go up over the coming years
The Federal Reserve likely then moves to yield curve control
Tracker: Binary qualitative bet (either happens or doesn’t)
Simplified Bet: Expect the Fed to lock short term rates (2yr and less) to 0 or lower, and medium term rates (5yr+) to specific pegs
The eventual steepening of the curve drives a reversal in the traditionally labeled value vs. growth buckets
Tracker: BNKKRYMH Index (10year UST - 3mo bill) and RU1VGT Index (Russell 1000 Value/Growth)
Simplified Bet: Yield curve steepening benefits stocks with less value in the terminal value, and more value in the visible (nearer term) cash flow stream
2021+ will see a 5+ year bull market in emerging markets, particularly SE Asia (India, Indonesia, Vietnam, etc.). Driven by weaker USD, positive demographics, and supply chain localization
Tracker: EEM US Equity (Emerging Markets ETF), ASEA US Equity or FSEAX US Equity (Southeast Asia ETFs)
Simplified Bet: Emerging markets, particularly SE Asia, should provide outsized returns over the coming years
Expect to see general de-globalization - for example, localization of critical/sensitive supply chains (Vietnam/SE Asia big beneficiaries), along with an acceleration in industrial automation + robotics
Tracker: TBD; working on industrial automation/robotics baskets
Simplified Bet: Expect supply chain localization and rising automation
In the next 5 years, we will see the USD replaced by something else as the world reserve currency (best guess: digital basket). Likely after a world war of sorts; Cold War 2.0 (over Technology, 5G, Semiconductors, etc.) - wouldn't be surprised to see multiple competing world reserve currencies
Tracker: Short UUP US Equity (US Dollar - bullish) or Long UDN US Equity (US Dollar - bearish)... and then binary qualitative bet on digital currency basket
Simplified Bet: the US dollar will lose its world reserve currency status in the coming years
Bitcoin and Ethereum double over the next 2 years
Tracker: XBTUSD Curncy (Bitcoin) and XETUSD Curncy (Ethereum)
Simplified Bet: Positive on digital currencies / blockchain over the coming years
The rise in populism has been brewing for years, partially due to the structure of the financial system (useful and timely article) - expect this leads to an acceleration of the decentralization of authority … Neil Howe’s 4th Turning prediction is amazingly accurate thus far
Tracker: Qualitative at this point; working on trackable index
Simplified Bet: Decentralized finance is at a positive inflection point
Feedback: Feel free to send feedback on the above, suggestions for trackers that are more appropriate (and investable), thoughts on custom basket creation, and predictions of your own…. The next 10 years will not look like that last 10.
Enjoy the weekend.
Jason & Ryan