GOLD - 5 Things To Know In Investing This Week: The Halving Issue | Benzinga
This was an exciting week for Bitcoin (CRYPTO: BTC) holders and hodlers as the fourth-ever halving took place on Friday. The American consumer got back to work spending ever more on goods and services. Some of that was inflation and some was more consumption. That same consumer is a bit overstretched and some have started paying fees to use buy now, pay later services on rent. While consumers are using more credit, small businesses are finding that more difficult to source. Continuing our series on problems in commercial real estate, tech companies have continued to reduce leasing office space. Finally, DKI Intern, Andrew Brown, provides his view on where young people are having financial difficulties and offers excellent suggestions to begin addressing the problem. Let me know if you’d replace Janet Yellen with Andrew as Secretary of the Treasury.
This week, we’ll address the following topics:
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The Bitcoin halving is here! The Bitcoin halving is here!
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Good or bad economy, the American consumer continues to spend.
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Buy now, pay later…for rent?! What could go wrong?
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Consumers are using more credit. What about corporations?
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Tech companies reducing office footprint – the next problem in commercial real estate.
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Think the economy is in good shape? Think young people are just soft and entitled? Let’s hear from one of them and consider whether his opinion has merit.
Ready for a new week of twice as much information? Let’s dive in:
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The Bitcoin Halving is Here:
There will be a total of 21MM Bitcoins mined from inception through the middle of the next century. However, those coins won’t be mined on a consistent schedule. Just 17 years into Bitcoin’s existence, about 19.7MM have been mined. That’s almost 94% of the total supply. Approximately every four years, the reward for miners gets cut in half. That means that by the time you read this, daily creation of new Bitcoin will fall from about 900 per day to 450. This is happening at a time when concerns about the debasement of the dollar and other fiat currencies is increasing and when ETFs are allowing a new class of investors to start to buy Bitcoin.
A lot of people think Bitcoin will rally post-halving. What do you think?
Now harder than gold. Chart from Financial Underground.
DKI Takeaway: One reason the dollar price of gold keeps rising and is now at an all-time high is because the supply of gold only increases approximately 2% a year. In contrast, Congress and the US Treasury think nothing of overspending by trillions of dollars each year and just adding to the debt as if the US will never need to pay what it owes. By the time you read this, Bitcoin will have become "harder” than gold. That means the creation of new units compared to the total supply available is even lower for Bitcoin than gold. As for the "hardness” of the US dollar, that’s a disaster which we’re all experiencing as inflation. DKI owns both Bitcoin and gold.
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Americans Continue to Spend – A Lot:
Retail sales were up 0.7% this month. That was well above expectations of 0.3% and annualizes to 8.7%. Most of that increase was higher prices as the CPI was up 0.4% from the prior month, and DKI thinks the CPI is understated. Higher gas prices also have an impact even as Americans commute less than they did a few years ago.
It was another month of big spending following four months of weaker results.
Americans aren’t thrilled with "disinflation” because prices keep rising off of a higher base.
DKI Takeaway: While I think it’s unwise to live beyond your means, it’s easy to understand why consumers keep spending. The government exercises ...