Currency Debasement

Hello fellow investors,

Ever had that moment when your predictions almost all come true? That’s been me lately—my 2024 calls on PLTR, Trump, Bitcoin, and Small Caps have hit the mark, and let’s just say my portfolio is loving it. Looking back at my December 2023 predictions (link here) has been a fun little victory lap, but the real excitement? Logging into my account and seeing those calls pay off. There’s nothing quite like the validation of getting it right in the markets.

That said, I’m not here to flex or drop a “told you so.” Realistically—when the market’s in bull mode, everyone suddenly seems like a genius. 

I'm starting to get worried about the world economy, and naturally I want to protect all my hard earned money and the freedom that comes from my investments. I've gone down a bit of a rabbit hole recently and I wanted to lay my thoughts out here regarding CURRENCY DEBASEMENT, which I am expecting to be a financial market buzzword in 2025.

So what is currency debasement?

Currency debasement is the erosion of a currency’s value due to excessive money printing. While often confused with inflation, the two are distinct. Inflation refers to the rising prices of goods and services, typically driven by increased demand or supply shortages. Currency debasement, on the other hand, is a deliberate devaluation of a currency, often caused by governments printing money to finance spending or pay off debts.

Think of it like this: inflation impacts the cost of living, while currency debasement diminishes the purchasing power of your savings. When central banks flood the economy with money, each dollar, euro, or zloty becomes less valuable, which in turn can lead to inflation—but not always at the same rate or in the same sectors.

How much did an apartment cost in your area back in 2010 compared to today? Chances are, it’s significantly more expensive now. While increased demand plays a role, a big part of the story is the declining value of your money. And it’s not just housing—have you noticed how nearly everything has gotten pricier? New cars, watches, eggs, butter—you name it. On average, most things are at least 30% more expensive than they were just a decade ago. 

That's currency debasement in a nutshell. 

Why exactly am I thinking about this debasement so much now?

To sum it up.... the global debt burden. 

Governments around the world are drowning in debt, with many countries experiencing debt levels that exceed their GDP. In the United States, the national debt now surpasses 120% of GDP—a staggering figure. Globally, the situation is similar, with many nations struggling under the weight of their borrowing.

What’s even more alarming is how governments allocate their revenue. In the U.S., a significant portion of federal income is now being used solely to pay interest on the national debt. 

To make this relatable, imagine someone with a credit card balance so high that their entire paycheck goes toward paying just the interest—not even touching the principal. This person can never escape their financial hole, and any unexpected expense would force them to borrow even more. Governments are in a similar position, and as economic growth slows, the gap between revenue and debt servicing costs widens.

The Inevitable Path: More Money Printing

Let me start by saying this—I have little faith in modern governments. Too often, they’re short-sighted, making promises they can’t keep just to win elections. Once in power, they inevitably disappoint (Biden in the U.S. and Tusk in Poland are perfect examples of this).

And don’t even get me started on the EU. Its politicians have stifled economic progress and innovation with endless bureaucracy, effectively shooting Europe’s potential in the foot. Meanwhile, in the U.S., it doesn’t matter if politicians lean left, right, or somewhere in the middle—they all seem to fall back on the same playbook: print more money whenever economic troubles arise.

The pattern is undeniable: even conservative, right-leaning governments resort to increasing the money supply, offering handouts in exchange for votes (PiS in Poland or Fidesz in Hungary). It’s a global trend that keeps repeating itself, and the consequences are becoming harder to ignore. 

Faced with this unsustainable debt burden that we currently have, I predict governments will increasingly resort to printing more money as a solution. This approach, while politically expedient, will only exacerbate the problem of currency debasement. 

The logic is simple: printing money is easier than cutting spending, raising taxes, or attempting structural reforms. However, this will accelerate the decline in purchasing power and create long-term instability in fiat currencies like the dollar or euro.

As prices continue to rise, the money sitting in your bank account will steadily lose its purchasing power. This makes investing in assets more important than ever—it’s the only way to safeguard and grow your wealth in a world of inflation and ongoing currency debasement.

What am I going to do to protect myself and fight Currency Debasement?

Bitcoin. Yes, I know.... bitcoin. 

I used to be skeptical of Bitcoin (mostly because of the online crypto community), but the more I’ve researched, the more I’ve come to see it as one of the most effective hedges against inflation and currency debasement.

Unlike fiat currencies, Bitcoin has a fixed supply of 21 million coins, making it immune to the unpredictable policies of central banks. As the demand for sound money continues to grow, Bitcoin's value proposition as "digital gold" becomes even more compelling. Unlike gold, which can still be discovered in new mines, no additional Bitcoin will ever be created. Its finite nature ensures scarcity, and those who hold it are poised to be among the wealthiest in the future.

Here’s my wild 8-year Bitcoin price prediction. I know it might sound crazy now, but let’s put things into perspective. Back in July 2010, Bitcoin was trading for around $0.05 per coin. At the time, even the idea of it hitting $1,000 seemed absolutely ridiculous. Fast forward a few years, and it blew past that milestone with ease. The two biggest factors driving my prediction are scarcity and institutional involvement. 

Year	BTC High
2024	$70,000
2025	$100,000
2026	$140,000
2027	$210,000
2028	$300,000
2029	$420,000
2030	$600,000
2031	$800,000
2032	$1,000,000

Scarcity

Bitcoin's capped supply of 21 million coins is a cornerstone of its value proposition. As demand continues to grow and the production of new Bitcoin (via mining) slows due to halvings, its inherent scarcity pushes prices higher. Historically, the supply shocks triggered by halvings—occurring roughly every four years—have often preceded significant price surges. For instance, this year alone, Bitcoin’s price skyrocketed from $40k to over $100k. Looking ahead, the next halving in 2028 will further reduce the influx of newly mined coins, likely intensifying scarcity and setting the stage for even higher prices.

Institutional Involvement

The growing participation of institutional investors is another key driver of Bitcoin’s value. As Bitcoin solidifies its place as a legitimate asset class, institutions are increasingly allocating capital to it, amplifying demand. Major banks are already onboard, and by 2025, we could see an influx of S&P 500 companies adding Bitcoin to their balance sheets, accelerating adoption and price growth. 

It’s important to remember that Bitcoin is highly volatile, capable of swinging 30% up or down within days, as history has shown. For example, in a year like 2028—when I anticipate Bitcoin could hit $300k—it wouldn’t surprise me to see it temporarily dip to $200k before climbing back. To succeed in Bitcoin investing, you need to embrace its volatility and keep a long-term perspective. The price swings are part of the journey, but so is the potential for extraordinary rewards. That’s why I believe buying during pullbacks—rather than chasing all-time highs—can be a smart strategy for maximizing its upside.

Buying Bitcoin

I get it—many people are hesitant to buy Bitcoin because they don’t trust the brokerages that sell it. Setting up profiles on platforms like Coinbase, Binance, or Kraken and transferring money there can feel risky, especially after what happened with FTX.

The good news? There’s a simpler, safer workaround. You can gain Bitcoin exposure through your trusted broker without directly owning Bitcoin. Bitcoin ETFs like IBIT or ARKB offer an easy entry point, as do publicly traded companies like MicroStrategy (MSTR), which has transitioned from a software firm to essentially a Bitcoin Treasury. It’s a great way to secure your financial future without diving into the complexities of crypto exchanges.

Personally, I am investing in MSTR and ARKB because I prefer to do everything thru my trusted, stable broker. 

How much to allocate to Bitcoin exposure?

Like many others, I didn’t buy enough Bitcoin early on, and I want to make up for it. But I started catching up late last year and want to expand. That’s why I’ve decided to ensure that 25% of my entire portfolio is allocated to Bitcoin. While I generally believe in diversification, I’m not a fan of over-diversifying to the point where it dilutes returns. But I also wouldn't YOLO everything into Bitcoin... or anything else for that matter. 

To stick to this plan, every month in 2025, I’ll make sure that 25% of my new investments go toward Bitcoin exposure— specifically to MicroStrategy (MSTR), or the ARK Innovation ETF (ARKB). The remaining 75% will go to my tried-and-true picks, ensuring I maintain a balanced yet focused portfolio.

What else can I do other than Bitcoin to fight Currency Debasement?

If you're still hesitant to invest in Bitcoin, Bitcoin ETFs, or publicly traded firms associated with Bitcoin, then the next best move is clear: Technology.

Tech companies, especially those leading innovation in artificial intelligence, cloud computing, and renewable energy, are at the forefront of the ongoing digital transformation across industries. These businesses have the potential to grow their revenues and profits at rates far exceeding inflation, making them an excellent hedge against the devaluation of fiat currencies.

Some of my top picks for tech companies that I believe will continue to rise in value include PLTR, TSLA, NVDA, and AMZN. Alternatively, if you prefer a more diversified approach, investing in QQQ is a simple way to gain exposure to all these tech giants and more. 

Final Thoughts

The economic challenges we face today—currency debasement, unsustainable debt, and the burden of rising interest payments—are undeniably daunting. Yet, within these challenges lie opportunities for those who plan and position themselves wisely. By investing in assets resilient to devaluation and poised for growth, such as Bitcoin and innovative technology stocks, we can chart a course through the uncertainty and build a stronger financial future.

I once heard that unhappiness often comes from a disconnect between your vision of your future self and your current reality. That idea resonates deeply. It’s a reminder that the choices we make today, especially in how we invest, are crucial for closing that gap. Investing isn’t just about growing wealth; it’s about creating freedom—financial freedom, geographic freedom, and the ability to live life on your terms. Take the steps now to secure the future you envision and truly deserve.

AAPL and AMD Updates

This last week was eventful as a lot of big firms announced their Q1 results. Here's a summary of AAPL and AMD. 

The big news is that Apple announced a significant move to repurchase $110 billion worth of its own shares, marking a 22% increase from the previous year's authorization and setting a record as the largest buyback in history. 

This overshadowed the 4% decrease in overall sales and a 10% decline in iPhone sales compared to the previous year. The stock is currently up on this news of the huge buyback.

Good news is that CEO Tim Apple emphasized the company's enthusiasm for its forthcoming generative AI offerings, underscoring substantial investments in the technology and expressing confidence in its potential. Expect the new Siri to have some type of ChatGPT functionality likely. 

Alright, so Apple reported poor sales and their stock is up... AMD reported a sales beat and... their stock is down. 

Even though AMD had a sales beat, Wall Street analysts noted that the outlook for AI growth within AMD might not be as robust as some had hoped. AMD bulls might've been disappointed in the company's forecast for MI300 chips in 2024, which came in at $4 billion. While an increase from the prior guide of $3 billion, it felt short of more overly optimistic outlooks for a range of $5 billion to $6 billion. The stock is down in the 140's and I am 100% loading up on shares here. Demand for their chips is super high and they are struggling to make them fast enough. In my opinion this is a buy the dip moment. 

PLTR Boot-camps

Last week I posted why I like Palantir so much, well seems like I am not the only one.

Bloomberg just a released a piece about the effectiveness of Palantir's boot-camps and how they are a serious driver for growth. The article is behind a pay-wall so you will need a subscription to read the full article. But of course time is money, so I am summarizing the main points of the article below.

Practical Demonstrations: Palantir's boot-camps are effective because they allow potential clients to see and use the software in real-time with their own data and operational context. This hands-on approach helps demonstrate the immediate practical value of Palantir's solutions, distinguishing it from theoretical use cases.

Speeding Up Adoption: The boot-camp model helps bypass traditional, lengthy procurement processes. By facilitating direct engagement and quick integration into client workflows, the model accelerates adoption and builds trust, which is essential for forming long-term customer relationships.

Network Effect: Bootcamps create a community of users and advocates well-versed in Palantir's platforms, enhancing the software's value as more clients use and recommend it. This community can organically expand the user base as boot-camp alumni host their events, further driving adoption through word-of-mouth.

Exponential Demand: Critics, like who doubts the scalability of the boot-camp strategy without a traditional sales force, are answered by Palantir’s executives who explain that the exponential demand for their AI solutions makes traditional sales approaches ineffective. Instead, boot-camps are the preferred method because they meet the demand more dynamically and effectively.

Broader Impact and Validation: The strategy not only simplifies the client acquisition process but also contributes to a robust ecosystem where each client’s success feeds back into the system, enhancing the software's capabilities and appeal. This approach aligns with modern purchasing preferences that favor trial before purchase and has gained significant recognition.

Conclusion:

Firms off all shapes and sizes will continue to buy PLTR's software to analyze their operations, meaning these guys will just continue to grow and keep making money. 

Buy PLTR. 

You will thank me in the future. 

Why I love Palantir

So by this point we know how important Artificial Intelligence is... if you watch any financial news they keeping telling you we are living in the AI Gold Rush. And since its a gold rush.. we all want to make money off this by investing in firms that will grow with this AI, right? 

Well, in my professional opinion, the best firm that will capitalize on the data behind AI revolution is Palantir. 

The next PLTR quarterly report (for Q1 2024) is scheduled for May 6 and it's going to be huge. 

However, prior to this, I wanted to highlight exactly why I am so bullish on this company, and why this firm will become the next Microsoft. 

1. Innovative Technology:

Palantir's Artificial Intelligence Platform (AIP) is a sophisticated tool designed to help organizations analyze large amounts of data to find patterns, make predictions, and make decisions. Think of it like a very advanced set of tools that can take a lot of information—from things like financial records to social media data—and use it to help people see connections or trends they might not notice on their own. This can be particularly useful for businesses or governments that need to solve complex problems or plan their strategies based on data-driven insights.

Here are ten real-world examples where Palantir's technology has been applied in various fields at different organizations. 

1. Merck KGaA: Palantir helped streamline supply chain and production processes, enabling more efficient drug manufacturing and inventory management. 

2. Ferrari: The company used Palantir for real-time data analysis during Formula 1 races to make quick strategic decisions and enhance car performance.   

3. Airbus: By employing Palantir's technology, Airbus was able to better manage its global supply chain and manufacturing operations, reducing production times. 

4. U.S. Government (Defense and Intelligence): Palantir's software assisted in analyzing military data to predict insurgent attacks and optimize logistics, improving safety and operational efficiency.  

5. BP: Palantir's tools helped integrate and analyze drilling data, leading to improved maintenance predictions and higher productivity in oil exploration.  

6. JP Morgan Chase: The bank used Palantir's software to detect fraudulent activities by analyzing transaction patterns, which helped prevent potential financial losses.  

7. Los Angeles Police Department (LAPD): Palantir technology was used to analyze crime data, which assisted the LAPD in predicting crime hotspots and allocating resources more effectively.  

8. Credit Suisse: Palantir helped analyze financial risks and client data, aiding Credit Suisse in better understanding market trends and client needs   

9. Scuderia AlphaTauri (Formula One Team): The team implemented Palantir's technology to optimize race strategies and car setups by analyzing performance data. 

10. Pandemic Response (Various Governments): During the COVID-19 pandemic, Palantir's platform was used by governments for outbreak tracking, resource allocation, and managing public health data to coordinate response efforts effectively.

These examples illustrate how Palantir's software can be applied across various industries to solve specific problems by making sense of complex data sets.

2. Diversification Thru Strategic Government and Commercial Contracts:

A significant part of the excitement stems from Palantir's growing list of high-profile customers, which includes government agencies like the Department of Defense and large corporations like Airbus. During times of geopolitical tension or economic instability, secure and efficient data processing becomes even more critical, potentially increasing the dependency of such organizations on Palantir’s software. The long-term contracts with these entities not only provide a stable revenue stream but also a stamp of credibility and reliability that attracts other customers. Diversification! 

3. Growth Potential:

The application of AI and big data analytics is expected to permeate all levels of business operations and national infrastructure. Palantir’s ability to scale its operations and adapt its offerings to a variety of industries—from healthcare to automotive—positions it well to capitalize on this expanding market. Its involvement in AI and public safety projects, like predicting crime hot spots or optimizing supply chains, showcases its integral role in future technological deployments.

Palantir's recent growth has been driven by its AI platform (AIP), which utilizes generative AI to provide businesses with essential insights quickly. Moving away from the slower traditional pilot methods, Palantir has adopted a "boot camp" approach. These boot camps are designed to identify valuable AI applications for clients within just 5 days, allowing Palantir to implement real workflows using actual customer data much faster than the usual one to three-month timeline of traditional pilots. 

A few recent highlights from these boot camps have been Lowe's and GM. Lowe's claims they save $40k a day since implementing Palantir's AIP Customer Service Engine. GM saves something similar after deploying the AIP Supply Chain engine. Big firms love saving money and PLTR is helping them do just that. 

These boot camps are highly in demand and will lead to explosive growth for the company. 

4. Financial Performance:

Palantir has achieved profitability in four consecutive quarters, qualifying it for potential inclusion in the S&P 500 index. This is crucial because when a stock is added to the S&P500, funds that follow the index start buying the stock, driving its price up. The company also reported that its private sector revenue increased by 70% year-over-year in Q4 2023. Additionally, Palantir now serves 221 commercial customers, marking a 55% increase from 2022. And according to internal leaks, that number of commercial customers has increased dramatically already in Q1.

So in short.. the numbers are looking good and May's earning call should confirm this. 

Conclusion:

Firms off all shapes and sizes will continue to buy PLTR's software to analyze their operations, meaning these guys will just continue to grow and keep making money. 

Buy PLTR. 

You will thank me in the future. 

The Ecstasy of Gold

As the prices of gold reaches all time highs (see chart below), I wanted to share this pretty simple image that explains it all. As the whole world complains about inflation, its nice to remembers there are some assets that are true hedges against currency devaluation.

So, should you invest in some gold? Probably. Here's some history...

Over the last 50 years, the perception and role of gold as an investment have evolved significantly. Traditionally, gold has been a favored asset for its dual ability to act as both a hedge against inflation and a "safe haven" during periods of economic uncertainty. In the 1970s, as inflation spiked due to various global economic crises, gold prices skyrocketed, peaking dramatically in 1980. This era solidified gold's reputation as a protective asset against inflationary pressures. However, the following decades saw periods of both boom and bust for gold as global economic conditions changed, with prices dipping in the late 90s and early 2000s, then surging again during the financial crisis of 2008. The advent of gold-based financial products, such as ETFs, has also made gold investment more accessible and attractive, integrating it more deeply into the global financial system.

Addressing the comparison between home prices and gold, it's a fascinating illustration of gold’s purchasing power stability. Roughly 50 years ago, the average price of a home in the U.S. could have been around $25,000, which at the time would equate to about 10 bars of gold, given that an ounce of gold was approximately $35 and each bar could be around 400 ounces. Fast forward to today, although the price of homes and gold in dollar terms has increased, the relative value in terms of gold bars has intriguingly remained comparable; this outlines gold's strength in maintaining its purchasing power over long periods. This characteristic is why gold is considered a hedge against currency devaluation. As currencies lose value due to inflation or other economic factors, gold prices often increase, which helps preserve the wealth of those who hold gold in their portfolios. Thus, investing in gold can be a strategic move to protect against fiscal erosion in the face of unstable economic climates.

Now... if you don't want to invest in gold, you can flock to BTC as many investors call it the "digital gold", however just remember that both gold and bitcoin are currently selling at or near ATHs.