You are a free subscriber to Me and the Money Printer. To upgrade to paid and receive the daily Capital Wave Report - which features our Red-Green market signals, subscribe here. Fifteen Minutes With My Daughter...We talked about the Floor Money, why gold prices are shaky, and tried to discuss the ongoing debasement of our money. She sort of gets it...
Dear Fellow Traveler: “I’ll just be really disappointed…” Amelia started… As you know, I’m coaching my daughter’s Under-8 soccer team. They were 0-4 heading into this weekend. They played the other team that was 0-4. It really was their best shot for a victory this season. The problem? Amelia got strep throat… and we moved yesterday… So - she would be very disappointed if they won… and she wasn’t there to celebrate with her team. They won. I haven’t told her. She’ll find out at school tomorrow - where it won’t be a big deal… since three of the girls on her team are in her class. That was one of several conversations during the 15-minute ride to the new house… We covered more than soccer… we talked about dollar debasement (the kid’s version.) Fatherhood and SilenceWe’d moved in the morning… I must admit that tension at home was high. My daughter doesn’t understand the concept of “silence.” The importance of it… We’d been sent back to the rental unit, where a large number of items that didn’t fit in the truck remained… (I was trying to get the movers out quickly so we could focus on arrival.) Amelia and I entered the unit - she ran all around the open space, scooping up whatever was left behind, then ran out and sat in the car. For the first time - in what I perceive to be three months… I stopped in the kitchen… I just took a breath. There’s a great Louis C.K. joke about “tiny vacations” - an example being that you close your kid’s car door and walk around the car to your own door for a few seconds in silence… That’s a vacation! For 10 seconds, I was just silent - peaceful… on my own Carnival Cruise… And then… the door swung open… “Daddy! Let’s Go!!!! What are you doing?” I was in the Virgin Islands for a sweet moment… And then it was over… Where’s The Floor Money?We buckled up. We backed out… I started to drive. “Daddy,” she said… “Did you get all of our money out of the house?” I didn’t process the question. “We keep our money in the bank, and in the markets, and we bought our house…” A few seconds passed. Then… “But… Didn’t we have floor money?” I had to stop the car and start laughing. ‘Floor money’ may be a new concept to readers… but a highlight of fatherhood… Back in Florida, we had a floor safe in the master bedroom closet. In it, I kept some ammunition, 100 silver coins, and several gold coins. One day, when she was about five, Amelia saw me milling around the floor safe. “Amelia,” I said, pointing to the floor. “If anyone ever asks you, don’t tell anyone that we keep money in the house. Don’t tell anyone that we have a safe if they ask…” “Got it,” she said. “I can’t tell anyone about the floor money…” Well, the floor money has been moved… and wasn’t kept in the rental. However, I have certainly built a larger position in gold over the last 18 months since we released the Hedge of Tomorrow Report… Or as Wall Street is now calling it - The Debasement Trade… I wish I had access to a way to broadcast the Hedge of Tomorrow report last year to a few hundred thousand people… but I’m just a writer… Getting from here to there is hard. On the Way to a SandwichWe’d gotten halfway up the road to a new favorite sandwich shop that was equidistant between the new house and the old rental. She was staring at the back of the seat… and then… still thinking about the floor money… “How much is a gold coin?” she asked. “About $3,900 [per ounce],” I said. “That’s a lot of money,” she laughed… “Well… when we moved from Florida, it was only $2,400… The value keeps going up…” “Why?” she asked… Oh no… there’s that question… Why… When I tried to explain that our money was losing value, she looked confused. I attempted the textbook approach: “More money in the system drives up prices.” Blank stare. She’s seven. So I tried a different approach. The Taylor Swift Method“All right,” I said… “Imagine Taylor Swift announces a concert with only 100 tickets. There are 100 people who want to go, and each person has $50. The tickets would probably cost $50 each, right?” She nodded - this made sense. “But then imagine everyone suddenly gets $50 more from their parents. Now everyone has $100, but there are still only 100 tickets. What do you think happens to the ticket prices?” She thought for a moment but didn’t answer. I kept trying… “Gold is like those Taylor Swift tickets - there’s only so much of it, and people really want it. Dollars are like the money people have to buy tickets. When the government makes more dollars and gives them out, each dollar becomes less special. So when you hear ‘gold is expensive,’ what’s really happening is that dollars are becoming worth less in value. The gold didn’t change - we just printed more money… and people are trying to purchase the same amount of gold.” She didn’t say anything back, but I could see it clicking and then unclicking... And I hoped that she was listening… Then, I realized that I’d created a logical paradox for the poor kid… She sat up… “But Daddy… Taylor Swift tickets are WAY more than $100 today…” I can’t argue with that… I suppose we’ll need to discuss credit card debt soon… But she seemed to get it somewhat… Funny that a seven-year-old kind of gets that printing money doesn’t create wealth - it just makes everything cost more. This seven-year-old seems to grasp the concept of the Money Printer more than Janet Yellen or Jerome Powell… However, the latter two treat this as if it were rocket science. Oh well… we’re home finally… back on farmland… more adventures ahead… Stay positive, Garrett Baldwin About Me and the Money Printer Me and the Money Printer is a daily publication covering the financial markets through three critical equations. We track liquidity (money in the financial system), momentum (where money is moving in the system), and insider buying (where Smart Money at companies is moving their money). Combining these elements with a deep understanding of central banking and how the global system works has allowed us to navigate financial cycles and boost our probability of success as investors and traders. This insight is based on roughly 17 years of intensive academic work at four universities, extensive collaboration with market experts, and the joy of trial and error in research. You can take a free look at our worldview and thesis right here. Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.
|
Post a Comment
Post a Comment