In yesterday’s Rum Rebellion, you received a message from Woody (our Group Publisher) saying ‘I’m initiating a STOP PRESS EVENT across all our email publications later this week.’
I just wanted to clarify…it’s happening later NEXT week.
Which is a good thing, because it gives us more time to provide context around this event.
The biggest thing happening in the financial world right now is NOT cryptos. Well, not exactly, anyway. It’s what’s happening under the surface in the world of cryptos that is truly revolutionary.
New Financial System
When you understand this, you’ll understand that a completely new financial system is under construction. The smartest minds in the world are onto it.
It used to be Wall Street sucked in all the talent. That is no longer the case. The world of crypto is where the action is. Again, I’m not talking about the price action. That is a whole different conversation. I’m talking about the architecture of a new financial system growing up around your very eyes.
The traditional financial system has failed the generation that are building this architecture. That’s why they’re rejecting Wall Street careers to be a part of something new and exciting.
What is this new and exciting thing though? You may not actually see it!
Well, that’s because the establishment either doesn’t get it or doesn’t want you to know about it. But rapid change is occurring and your knowledge of it will only be limited by your willingness to seek it out and learn about it.
People often say the only two constants in life are death and taxes. I disagree.
There is only one constant in life and that is change. If you need proof of that statement, look to evolution. Change and/or adaptation is the secret to longevity. Nature is ruthless towards those who don’t adapt. It’s the same with businesses.
Those that don’t change get eaten by a bigger competitor or eventually die out. In this day and age, with central banks doing their best to destroy the concept of ‘creative destruction’, that doesn’t happen as quickly as it used to. But it still does.
Investing is no different. If you go into the game raw, you’ll lose money. If you don’t change, you’ll continue to lose money. And if you stubbornly keep your course, the market will keep picking your pocket until you have nothing left to pick.
And then you’re out.
Change then, is a good thing. If you resist it, you’ll stagnate. And to stagnate is to go backwards, because everyone else who is willing to change/adapt/improve will overtake you.
That’s what I’m asking you to do today…think about the changes that are taking place in the world and adapt to them. But before you adapt, you must learn what it is you’re adapting to!
That’s the tricky bit.
I had a crack at explaining it in a Rum Rebellion essay a few weeks back:
‘Bitcoin isn’t just electronic money. It’s underpinned (and given value) by blockchain technology. Another word for this is distributed ledger technology. So what, you might ask?
‘Well, distributed ledger technology can do a few things.
‘It can facilitate transactions between two parties directly, no middleman required.
‘It can record those transactions (and the ownership trail) without the need for a central party to “keep the records”. The record is maintained on the blockchain. And no one can mess with it. It’s “immutable”.
‘To put it simply, this is a free-market system that has developed in response to a corrupt and broken monetary system. As I often say, that system broke in 2008. It no longer works. It needs constant stimulus to prop it up. It is simply a legacy financial system run by the elites, for the elites. Us plebs still have to use it, but all it gives us is zero interest rates and depreciating currencies.
‘The key thing to understand is that cryptocurrencies and the blockchain technology that underpins it is a genuine alternative financial system. It is decentralised, meaning there is no third party (like broker, clearinghouse, custodian, market maker, etc) to facilitate payments.’
Ethereum, for example, is a digital protocol for smart contracts. This will severely disrupt the insurance and financial industries, and many more besides. It won’t be long before derivative contracts are conducted on the blockchain, removing the need for a third party to act as a safeguard (and extract fees for doing so).
In the meantime, many people who know the system is dead and dying are waiting for the ‘endgame’ to play out. This is a term used by critics of the current system to chronicle its demise.
But what they don’t realise is that the endgame is playing out before their very eyes. It doesn’t occur with fanfare. It doesn’t occur with a collapse of the economy or the stock market. Not in nominal terms, anyway.
In fact, a collapse of the financial system is much more likely to occur with nominal prices of assets and goods soaring. This is the point that it occurs to everyone all at once that the unit of measurement — the denominator of all goods and assets — is the problem.
That Denominator is Fiat Currency
We got a taste of this in 2020 and into this year. Governments and central banks spat out the largest amount of stimulus in history. Why do you think ‘new money’ — digital currencies — have gone through the roof?
They see both what is coming (in terms of monetary debasement) and know a new system is required for society to move forward in a fairer, less corrupt manner.
Ignore this movement at your peril. We certainly won’t be.
Editor, The Rum Rebellion
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