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. Break Out the Candlebox... Markets Have Another 1993 Moment...Hey, what do you know? BlackRock is at the center of another "innovation..."
Dear Fellow Traveler: 1993 might be the most important year of my lifetime in the financial markets. Clinton tax changes. Inflation targeting. Wu-Tang Clan. Robert Rubin… And the very first passive exchange-traded fund (ETF). The S&P 500 SPDR (SPY)… The SPY was supposed to be simple, a way for regular investors to get broad access to the S&P 500 without picking stocks. But it morphed into an investment practice that became a massive market distortion. Thirty-two years later, there are now more ETFs than U.S. stocks. Money managers are better off charging 0.3% to track the S&P 500 than to actually pick stocks and try to generate a slice of outperformance… And BlackRock, Vanguard, and State Street control the ETF flows. Now they want more. So here comes BlackRock’s Larry Fink with another “revolution.” This will be great… Break out your Candlebox CD… Vs. by Pearl Jam… 36 Chambers… Doggystyle… Just not In Utero by Nirvana (there are 30 albums better from that year)… Whatever gets you through… because we’re having another 1993 moment… And when we all look back in a decade, wondering why nobody owns anything anymore… remember Fink’s latest op-ed… Same Play. Different Decade.Every few years, Wall Street announces some big revolution. Usually, it’s just a shinier wrapper on the same game. It’s a new technology wrapped in the same extraction methods... Last week, Larry Fink wrote an op-ed in The Economist laying out the future of global finance. Not the marketing version... the real one. Sure, it read like a history lesson and talked about how tokenization could be as powerful as the internet (whatever that means…) In reality, he just laid out a blueprint. It’s business… He’s talking about tokenization… the idea that every asset on earth can live on a single shared digital ledger. All the stocks. All the bonds. All the real estate. All the private credit. All the currencies. Here, everything is programmable. Everything is instant. Everything is auditable. And if that sounds like paradise… pause. Whenever Wall Street promises frictionless finance, don’t ask “what could go right?” Always be skeptical. Always ask the same question: What could go wrong? “Ledgers haven’t been this exciting since the invention of double-entry bookkeeping,” Fink writes. I’m sure that line killed at Davos… but it’s actually a pretty silly one… What he should have said… is… Wall Street isn’t replacing the financial system… they’re upgrading the pipes. And tightening their grip on who gets to use them. Read Between the LinesFink doesn’t come out and say “we’re building a permission grid.” He never will… but look at what he’s asking for… “Updated regulatory frameworks”... “clear buyer protections”... “strong counterparty-risk standards”... “robust digital-identity verification systems.” Read those again. Slowly. Once you’ve Googled all these terms… Understand that he’s describing “instant settlement.” This means tokenized ownership and global digital markets. But only for people who pass the identity test. Only through regulated intermediaries. Only through rules written by the biggest incumbents. Now, some people will jump in right here and say… “What’s wrong with identity verification? You defending drug dealers?” No. That’s not the argument. This isn’t about protecting criminals. It’s about concentrating power. Identifying people in financial transactions isn’t inherently bad. But centralizing that identity layer inside the same three firms that already control index flows, custody, and settlement? That’s something very different. This isn’t about hiding drug dealers. It’s about making sure every ordinary person doesn’t need BlackRock’s permission to exist in the financial system. There’s a difference between law enforcement… And corporate gatekeeping masquerading as innovation. One protects the public. The other protects the incumbents. Besides… wasn’t the whole point of blockchain supposed to be decentralization? The technology itself could enable decentralization…. Nothing about a distributed ledger requires centralized control. But the people building this version have every incentive to design it differently. The technology isn’t the problem. The people building it are. Technology doesn’t centralize things… incentives do. And with this much money and power on the line… again… ask… What could go wrong? I’ve Seen This Movie BeforeDon’t tell me the big banks won’t end up writing these rules. I was there when JPMorgan convinced everyone they were the good guys while lobbying their fingerprints all over Dodd-Frank. The same firms that run custody, settlement, and liquidity today are the ones who’ll get seats at the table when tokenization rules get drafted. BlackRock. JPMorgan. State Street. BNY Mellon. Why? Because regulators defer to the people with the money whenever the pipes get redrawn. That’s not a prediction. That’s a pattern. And if the current trajectory holds, here’s what they’re building: Every asset digitalized. Every transaction is permissioned. Every participant is identified. Every token is tied to a custodian. Every rule is written by the people who already run the show. Here’s Fink again in his 2025 shareholder letter… “If we’re serious about building an efficient and accessible financial system, championing tokenization alone won’t suffice. We must solve digital verification, too.” Oh, thank god… Here’s what they’re saying… You can have instant settlement. You can have 24-hour markets. You can have programmable money. First, you’re going to tell them exactly who you are, what you own, and where you got it. Tokenization is being marketed as access. Same system. Faster. Cleaner. More programmable. Fewer cracks. Fewer loopholes. Fewer off-ramps. Far more visibility into who owns what… Okay… But based on who’s designing it, it’s more likely to be control… You’re telling me that the people who control $8.6 trillion in assets… started buying up houses… and have more power than anyone in the global financial system… ever… Don’t want more? Pffttt… okay… The Plumbing Never LiesThis isn’t a conspiracy. It’s just how financial infrastructure evolves. SWIFT didn’t just “democratize” banking. It standardized the messaging layer, enabling big banks to clear faster. But it also gave governments a kill switch they’ve used to sanction entire countries out of the dollar system. ETFs didn’t exactly democratize Wall Street either. Yes, ETFs gave retail investors access to diversified, low-cost exposure. You can buy SPY for a few basis points and own a slice of the 500 largest companies in America. That’s real. But access and power aren’t the same thing. You can buy SPY all day long. BlackRock votes those shares. Over time, passive investing has concentrated trillions under three asset managers. The Big Three now hold more voting power than any individual investor ever could. Indexing didn’t decentralize power either. It created one of the most successful capital-hoovering mechanisms in financial history. Your 401(k) flows into the same twenty mega-caps, whether those companies deserve the capital or not. Every innovation standardized the pipes. And concentrated control in the hands of whoever built them. Tokenization - if this pattern holds - will be the largest pipe ever built. And who will have the most control? The author of the op-ed… You don’t build the world’s biggest financial pipe unless you plan to control the flow. The Real PlayFink projects the tokenization market will grow from $2 trillion today to $13 trillion by 2030. And that’s not even the real play. The real play is the infrastructure spending. His annual letter talks about a “$68 trillion investment boom.” That’s a nod to energy, data centers, and AI. That’s the physical buildout of the next economy. Who’s going to own it? Based on who’s positioning themselves right now… the same people who own the pipes. The same people who control custody. The same people who decide which tokens are compliant and which aren’t. BlackRock is already shifting from the 60/40 portfolio to what they call “50/30/20.” 50% stocks. 30% bonds. 20% private assets. That 20% is the game. It’s private credit, real estate, and infrastructure. The stuff that’s been locked inside endowments and pension funds for decades. The stuff retail has never been able to touch. Tokenization “opens it up.” But “opens” doesn’t mean “gives away.” It means… you’ll be allowed to buy a sliver, through their platform, under their rules, with their custody. The Future They’re DescribingThis is the future… Money that’s programmable. Assets that are divisible. Settlement that’s instant. And a permission layer that’s absolute. You can trade 24 hours a day - if you’ve verified your identity through their system. You can own a piece of a skyscraper… through their tokenized fund. You can settle in seconds… on their ledger. “A bond is still a bond, even if it lives on a blockchain,” Fink writes. That’s the tell. They’re not changing what the assets are. They’re changing how it moves… who gets to see it move… and who controls the gates. I’m not saying tokenization is bad. Faster settlement is good. Lower friction is good. Broader access to private markets could be genuinely valuable. But let’s be honest about what’s happening. This isn’t a grassroots revolution. This is the largest asset manager on earth, building infrastructure that will make it even harder to exist outside the financial surveillance grid. Every transaction will be visible. Every owner will be identified. Every movement will be tracked. The machines keep getting faster. The gatekeepers keep getting fewer. And us… We are just a bunch of people owning less and less as the Money Printer rolls on… We’ll own nothing and like it… unless… they give us permission to do so… We’ve reached the part of the movie where the audience starts yelling at the screen: “This can’t end badly… right?” But history has receipts. And every time we’ve built a shinier, faster, more centralized financial pipe… We’ve discovered what could go wrong… usually the hard way. 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.
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