The Nasdaq is printing 1999 valuation metrics. The S&P is printing 2000 valuation metrics. Cisco hit $80 a share in March of 2000 and then spent the next eight years getting back to a third of that. The chart that has every macro account talking this week is the same chart, 26 years later.
Mises wrote this story before anyone alive on this app was born. Easy credit pushes capital into the riskiest end of the risk curve. The riskiest end gets bid past any cash-flow story the underlying asset can support. The cash-flow story eventually arrives. The bid does not survive it.
Bitcoin is on the same chart as Cisco was in 2000 in one sense, and on the exact opposite chart in another. Both go up when the dollar weakens. Only one has a supply that cannot expand to meet the buying.
The supply of stocks went up forever. The supply of Bitcoin will not.
When the Nasdaq corrected from 5,000 to 1,100, the Federal Reserve printed its way out of the hole. There is no Federal Reserve for the Bitcoin supply schedule.
Some assets get bailed out. Some are the bailout.
Mises wrote this story before anyone alive on this app was born. Easy credit pushes capital into the riskiest end of the risk curve. The riskiest end gets bid past any cash-flow story the underlying asset can support. The cash-flow story eventually arrives. The bid does not survive it.
Bitcoin is on the same chart as Cisco was in 2000 in one sense, and on the exact opposite chart in another. Both go up when the dollar weakens. Only one has a supply that cannot expand to meet the buying.
The supply of stocks went up forever. The supply of Bitcoin will not.
When the Nasdaq corrected from 5,000 to 1,100, the Federal Reserve printed its way out of the hole. There is no Federal Reserve for the Bitcoin supply schedule.
Some assets get bailed out. Some are the bailout.
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