Blockchain Before Negative Interest Rates?
A few months ago, it was disclosed that Morgan Creek was getting serious about the blockchain space. Mark Yusko, CIO of Morgan Creek, let it be known that parent company Morgan Creek Digital would launch a Digital Asset Index Fund. A minimum investment of $50k would get you invested into the fund. Morgan Creek seems to be a pioneer when it comes to institutional money coming into the new crypto world. Being one of the first to break an industry standard shows vision and belief. Morgan Creek is putting its money where its mouth is.
Public Pension Looking To Crypto
Early in the year, it was also revealed that David Swensen, CIO of the Yale endowment, made an allocation to Andreessen Horowitz’s crypto fund. Swensen invested $300 million into the fund, and as of now, the returns are probably moot. Swensen took the Yale endowment from $1 billion in 1985 to $22 billion today. Mark ran the endowment at the University of North Carolina, so he is clearly paying attention. A few weeks ago, it was disclosed that $40 million was secured from two Fairfax, Virginia pension funds. The Fairfax County’s Employees Retirement System and the Police Officer’s Retirement System took the plunge. These funds manage $5.33 billion and are the largest pensions to jump into in. Morgan Creek has also secured a hospital, university endowment, insurance company, and a private foundation. Some of the smartest minds are in blockchain and are continuing to believe in the maturation of the infrastructure.
I tend to believe that the smartest minds see that centralized money printing creates income inequality. Uncontrolled monetary supply run by the elite for the elite has created a wealth inequality gap like the Great Depression. Hopefully we can educate enough people about the inherent risk before it’s too late. Emerging-market countries are settling trades in Bitcoin, Russia is avoiding sanctions by buying it, and individual investors are holding crypto as a small hedge against government. As more QE and negative rates are forced on the world, more income inequality will ensue. Visionaries who saw the serfdom plan created this technology to suck up central bank fiat to change the game, and they’re the ones to thank.
To QE Infinity And Beyond
The intended consequences of this monetary experiment are scary, and the Orwellian consequences can be seen on the IMF Website, which has an article titled “Cashing In: How to Make Negative Interest Rates Work.” Headlines like that make myself and any person who understands economics cringe. What’s worse is that one of the contributors is a Ph.D. from Harvard. Do these people not realize that quantitative easing and the low interest rate environment have created this problem? People who already had money could grow it with cheap money off the little guy. Growing asset prices are essentially wealthy welfare, which is the reason why those rich people are talking about negative rates and more QE. Rich people don’t keep a ton of money in banks. Cash is a depreciating unit of debt, while real assets measured in debt appreciate because you need more of that currency to buy it.
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As we know, bond purchases and negative rates in Europe have done nothing to help the problems of the European Union. In this IMF research, negative rates could be implemented if cash is banned. That idea is nothing new, but as we move down the road towards this next crash, it makes sense to own cryptocurrencies or gold. Interestingly enough, since many countries still use cash, banning it would be very difficult. If you owned gold now before they ban cash, you would make out better than everyone else. According to the study, banks could offer a new e-currency that could float next to cash. Maybe people are actually paying attention according to #5 on Yahoo’s trending list.
If they offer that currency and implement negative rates against cash, they would dwindle demand against physical cash every year. If you have $1,000 in the bank and it turns to $997 against e-dollars after a year, why would you own it? I have a solution for these people. There already is a dual currency: gold. This exact thing is already happening. A dollar is devalued against gold and real assets. The writing is on the wall: “Fed Coin” will be here sooner than later.
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