Zenconomics

The Bitcoin ETF Misdirection

Yesterday we examined the history of Bitcoin’s public narrative… and I suggested that the new ETFs are a misdirection play. That is to say, there is a hidden agenda underlying the Bitcoin ETFs.

This agenda is why the Securities and Exchange Commission (SEC) was openly hostile towards Bitcoin for years… but suddenly changed its tune. The power structure behind the SEC has two primary goals here.

The first goal is simply to funnel people into the Bitcoin ETFs so that they don’t buy and self-custody any bitcoins themselves.

It’s important to understand that these Bitcoin ETFs are cash-settled. That means investors have no ownership interest in the underlying asset.

And that’s an important point.

Bitcoin is critically important as a reserve asset in and of itself. These ETFs are just vehicles that provide dollar-based price exposure to Bitcoin.

The Real Goal of the Bitcoin ETFs

The Securities and Exchange Commission (SEC) just approved 11 Bitcoin exchange-traded funds (ETFs). So let’s talk Bitcoin this week…

It’s important to note that the SEC ruthlessly rejected every Bitcoin ETF proposal that crossed its desk over the last decade.

No kidding – the Winklevoss brothers submitted the first Bitcoin ETF application back in 2013. Since then, the SEC denied over 20 separate Bitcoin ETF applications.

So we have to ask – why did the SEC suddenly change course? Why did it go from openly hostile towards Bitcoin to approving not one or two… but 11 Bitcoin ETFs?

Simply put, this is a misdirection play.

To understand why, we have to assess how the narrative around Bitcoin has changed over the years… and why.

Completing the Water Project

Today we’ll look at the last leg of the Uganda Water Project I’ve shared with you this week.

Yesterday we covered Phase Two. And that brings us to Phase Three…

As the project progressed, the contractor noted that, given the chosen well site, it would not be difficult to install a two-way pump and a pipeline system to create several additional access points throughout the village.

Fr. Joseph brought the idea to us, and we agreed that it was a great idea – if it was in budget. The contractor ran his numbers and provided us a quote in Uganda shillings for the equivalent of $4,865 dollars.

Fortunately (for this project), the US dollar strengthened materially against the Uganda shilling from the time we received the initial contract to the time of funding. In other words, our dollars were able to buy more shillings than we originally expected.

Because the contract was quoted in shillings, this effectively reduced the total cost of the project in dollars.

The Water Project – Phase Two

We’re taking a break from money and finance this week to talk about a little non-profit venture.

Yesterday we looked at Phase One of the Uganda Water Project. Today let’s cover Phase Two.

With the borehole drilled and the manual pump/spigot installed, Phase One of the project was completed in October 2023.

We wired $12,000 to Bevar Forex Bureau on December 1, 2023 to begin Phase Two. It consisted of constructing platforms and installing water tanks for storage and additional access.

This image gives us a great feel for what it looks like as you approach the site:

As you drive or walk down this road, you’ll come to one of the well’s primary access points. Here’s a shot from the second phase of construction:

Our Venture into Africa

As I mentioned yesterday, our non-profit foundation just financed a water collection and distribution system in Uganda. What follows is part one of the project’s status update…

Friends,

I’m writing today to provide you with an update on the Uganda Water Project. But first let me express my deepest thanks for your generous support.

Our mission with Foundation for Human Civilization is to create a future that consists of vibrant self-sustaining local communities. And every contribution makes a real difference in the lives of the people we seek to serve.

With that in mind, your support enabled us to completely fund the Uganda Water Project. And we were even able to finance a wonderful extension to the project that wasn’t in our initial budget. More on that in just a few minutes.

As for the logistics…

We funded the project in three phases. We felt this was important to ensure that the work was completed in full and that our team on the ground had ample opportunity to inspect and verify everything.

We partnered with the Kireku-Bugolo Mwera Development Association on the project. Fr. Joseph Ssessaazi served as the local project coordinator for the association.

Time, Energy, and Money

Something of an insight came to me recently.

Like a splinter, I don’t know exactly where it came from… and the idea isn’t fully formed in my mind. It’s just kind of there – poking at me.

So if you’ll permit me, I’d like to explore this idea with you today. But what follows may meander quite a bit more than our usual missives.

The insight is this…

We all are blessed with the energy we need to live. That energy affords us time on this Earth. They are gifts – time and energy. We can’t truly explain them.

What we choose to focus our time and energy on is what will define our values and ultimately our lives.

It’s a simple thing. But if we think about it… it’s quite profound.

The Blueprint for Financial Freedom

In our email series this past week, I laid out the reasons why:

The Age of Paper Wealth is over…
The US dollar is steadily losing market share as the world’s reserve currency…
The Fed will NOT pivot this year…
Keynesianism is dead…

Today, I’m going to do my best to lay out exactly how to benefit from the new rules of money that are taking form right now.

Look, I know there’s a lot of FUD (fear, uncertainty, and doubt) out there right now.

Everything we’ve discussed this week could be construed as bad. And there are plenty of even worse scenarios we haven’t discussed.

But I sincerely believe that we are creators in this world. That’s what being human is all about. And as creators, it’s our job to create the future we want.

What’s more, the winds of change bring with them the seeds of opportunity. Here’s what I mean…

Our approach to money and finance has been highly mechanized for the last forty years.

They’ve told us to funnel all our savings into managed funds held within retirement accounts. Even if this approach were viable going forward (it’s not)… what’s interesting about it?

Keynesianism is Dead

Perhaps nobody shaped the modern world more than John Maynard Keynes.

Those who have studied economics are surely familiar with his name. But I’d wager most of the population isn’t… which is ironic given that his theories have directly impacted all of us.

John Maynard Keynes was the preeminent British economist of his generation. He lived from 1883 to 1946.

It was his book The General Theory of Employment, Interest, and Money that made Keynes so influential. But only because government and Academia loved his general premise.

Keynes effectively flipped economics on its head. And he single-handedly undermined the great stride of progress that had flowed from the classical economists of the 18^th and 19^th centuries.

Central to Keynes’ theory was an idea so preposterous, even my 9-year old could quickly debunk it. He asserted that the government should issue debt and spend more money whenever things were slow in the economy. This is where the modern idea of “stimulus” comes from.

This is what made Keynes so popular with government officials. He gave them a green light to run up debt and launch all kinds of uneconomical spending programs.

To be fair, Keynes did say that government should reduce its spending when the economy was humming. He didn’t advocate the perpetual public debt binge that’s occurred over the last few decades.

But policy-makers conveniently ignored that part of Keynes’ theory. And it’s easy to see why. With intellectual cover to issue debt and later print money, governments became massive monoliths that now command multi-trillion dollar budgets.

This is what created the Age of Paper Wealth. It lasted from 1982 to 2022.

Why there will be no big Fed pivot in 2024… (Part 2)

We are living through a period of historic change right now. And if you don’t know where things are heading… your financial plan is in serious jeopardy.

That’s because the rules of money are changing. The conventional wisdom of the last forty years has hit a dead-end.

Because for the first time in its history…

The Fed No Longer Has A Free Hand

It all comes down to the inner workings of the US credit market.

Treasury bonds are the bedrock of the US financial system. The yield paid by Treasury bonds is considered the “risk-free” rate of return.

As such, Treasury bond yields often serves as a benchmark for other fixed income investments. Thus, Treasury bonds influence interest rates across the entire economy.

This is why Treasury bonds are seen as a reliable reserve asset across the world of global finance. In fact, American banks, financial institutions, and insurance companies own roughly $12 trillion worth of US Treasuries right now.

But here’s the thing – the US government is now running annual deficits greater than $1 trillion a year. The only way to finance those deficits is to sell more Treasury bonds.

Treasuries are a simply a loan to the US government. And in return, the government pays bondholders the stated rate of return.

Thus, US Treasuries have to provide a reasonable yield to attract buyers. And financing over $1 trillion a year requires a lot of buyers.

Why there will be no big “Fed pivot” in 2024… (Part 1)

If you care about protecting your hard-earned money for the rest of the 2020s and beyond…

This may be the most important email you read all year.

In our last few emails, I shared what’s really happening in our financial and monetary systems.

I told you why the US is facing a potential inflation nightmare as the BRICS bloc is slowly decreasing demand for US dollars…

What I didn’t show you is how the “Petrodollar” system is on the verge of a historic change that will radically accelerate these trends. And this change will decrease demand for dollars even faster… putting pressure on dollar-denominated asset prices.

Kissinger’s Legacy Is Coming Unwound

In 1973, Henry Kissinger went to Saudi Arabia to forge an alliance with the House of Saud.

Kissinger promised that the US would supply military-grade weapons and protection for the Saudi government. In return, Saudi Arabia agreed to sell oil exclusively for US dollars.

This agreement created the Petrodollar… and it ensured steady, built-in demand for the US dollar. That’s because it required every nation to pay for oil in dollars.

Here’s the part most people don’t consider…