Rates Are Going Where!? - Feb 2024 (#5)

How we doin’ dear reader? Your dude Brent is going to do everyone a big favor and be the only friggen media you’ll consume this week that will not be mentioning a certain pop star or Saturday’s big game (GO SPORTS!!!). Your welcome. Ok let’s gooo!

Motivation

Money

One thing that financial news and media sources never get tired of talking about is where interest rates are going. As we’ve discussed, interest rates are a huge deal and affect the economy in a myriad of ways. You’ll often hear the pundits say things like ‘the bond market is telling us’ or ‘traders are predicting..’ and then they go on to say what the ‘The Market’ says interest rates are going to do.

To explain what’s happening here, just know the talking heads are commenting about what’s happening with bonds. Bonds are just a fancy word for loans. BIG loans that can be traded. The interest rate on bonds are set by buyers and sellers haggling (its electronic now, but the concept remains). The big idea is that the rates set for different length bonds will accurately determine what the future of interest rates will be.

What you never hear is how often ‘The Market’ is actually correct. And spoiler alert, the answer is NOT VERY.

So why do those media pundits keep bringing it up? Simple… it gets clicks. Their business is getting clicks and when you forecast the future, business is good. Never mind it’s often just plain WRONG, they’ve got to bring in that ad revenue!

So whats the lesson here? Headlines, more often than not, are just noise. I used to read through every major article I could get my hands on trying to get an edge for years and it taught me something… to stop, because it didn’t help a bit. I personally skim a couple different news sources a day and maybe read a couple articles tops. I also seek out new sources outside of my home country so that I get an outsiders perspective. The Economist is a favorite. Yes its expensive, but its cheaper than bad information.

The best thing you can do though is look at DATA. As an example, its easy to get nervous when you hear that Michael Burry (of The Big Short fame) just ‘Issued a Warning’ or ‘Makes Monster Bet Against Market.’ However, just take the time to look at his track record and you’ll put your mind at ease. He’s essentially said an ‘08 style or worse recession is around the corner for like 7 years! A broken clock is right twice a day right? Nobody on earth knows for sure what will happen tomorrow, nor can they.

This is part 3 of my series on crypto. You can read part 1 HERE and part 2 HERE.

To review:

A cryptoasset needs to be:

1. Fast

2. Cheap

3. Secure

Today, lets talk about Secure. Usually in crypto there are two different methods of verifying transactions. They are Proof of Work and Proof of Stake. To explain how those work would take more time than your probably willing to give, so just know each has its own strengths, but they each take time.

Here’s an area where Solana is a bit unique. Solana uses something called Proof of History. It allows the network to validate transactions with just a small piece of information, which secures the network efficiently and makes it insanely hard to hack. Long story short, it allows Solana to both be SECURE and FAST.

So there you have it. A cryptoasset must be Fast, Cheap, and Secure. Whoever strikes the best balance of all three will have an enormous advantage among its competitors. As I’ve laid out, Solana has all three in spades.

As I close this series on Solana, I’d like to draw your attention to something a little bit more concrete. Data that’s pretty darn tough to fake, and that is app downloads. The most popular Solana app is the Phantom Wallet. And it’s surpassed COINBASE (the biggest crypto exchange on the planet) in downloads!

FINAL MEMES

That’s it, that’s all! Until next time!

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The information contained on this Newsletter and any resources available for download through this newsletter are not intended as, and shall not be understood or construed as, financial advice. I am not an attorney, CPA, or financial advisor, nor am I holding myself out to be, and the information contained on this newsletter is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation. Make your own choices and don’t sue me please.


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