This was quite possibly the most mind-opening podcast episode I’ve ever listened to.-Nic Carter, Partner, Castle Island Ventures, Cofounder, Coinmetrics.io Key points: In lieu of our usual FFTT, wanted to share our transcript of a lengthy conversation we had earlier this year, in April 2020, with Nathaniel Whittemore of “The Breakdown.”   This interview was really foundational in scope, offering important context for many of the macro topics and issues we discuss; as such we thought

“Wall Street forecasters see the ‘gradual reflation story’ lifting bond yields in 2021”(page 2) Traders are record short USDs even as it appears the Japanese bid for USDs should strengthen (page 3) China’s consumer prices fall y/y for the 1st time in 11 years, and Chinese corporate defaults rise (page 4) In our view, this may be the biggest wildcard v. consensus macro positioning for 1H21E(page 5) “Will 1% 10y UST yields force the Fed

A who’s who panel of western economic insiders conclude the US needs to run “very substantial deficits” to “achieve the goals of full employment and financial stability,” noting that interest rates remain low, suggesting plenty of fiscal space for stimulus. Incredibly, none of these economists thought the Fed’s balance sheet growing by $3.5T over the past 15 months had anything to do with said low rates.  The inference: They are effectively confirming the Biden Administration

“The US Treasury must be an institution that wakes up every morning thinking about the American people.” (page 2) A single chart that shows why Treasury’s focus is shifting from the USD to the American people under Yellen (page 4) Commercial Real Estate and Residential Rental real estate appears to remain under pressure (page 6) “The Pandemic Has Broken US Shale…” (page 8) Why has gold stopped reacting to falling US real yields & increasing

In response to the US effectively breaking the unspoken rules of managing the global reserve currency (launching QE that amounted to printing money to finance US deficits in March 2009), the world began moving toward a new system of multi-currency oil pricing and partial gold settlement in 2009.  The US’s policy response to defend the post-1971 USD system from the significant devaluation v. gold that partial gold settlement of oil trade would likely eventually entail

“US equities are trading in the 100th percentile of its historical distribution over the past 40 years.” (page 2) “As government borrowing soars…even small shocks [will require] heavy Fed intervention.” (page 4) US October fiscal deficit the biggest on record, as “true interest expense” > 100% of tax receipts again (page 5) Four different Wall Street banks call for more QE within a 72-hour time span – quite a curious coincidence(page 6) US Equities adjusted