“Every dog has his day.” — Anonymous
“Money is never neutral.” — Ludwig von Mises
There are over 4,000 varieties of digital currencies, a sign of an easy-money tulipomania if there ever was one. Soon, there is going to be a falling out, and it will even hurt Bitcoin, the top dog.
Today, the new dog in town is Dogecoin. Dogecoin was created about eight years ago by programmers Jackson Palmer and Billy Markus “as a joke,” using a popular meme created by a Shiba Inu dog owner in Japan.
Now, the cryptocurrency is valued at more than $40 billion and is all the rage on Wall Street.
Its meteoric rise has been fueled by tweets from Elon Musk, who called Dogecoin “the people’s crypto” and said it was heading to the moon. It’s also been endorsed by “Shark Tank” investor Mark Cuban and celebrity chef Guy Fieri, both of whom should know better.
Not surprisingly, the “Geek Crowd” at Reddit is all in and helping to drive Dogecoin far beyond its intrinsic value — zero.
Mike Novogratz, CEO of Galaxy Digital, is worried.
“This is very much like GameStop (NYSE:GME) where these meme coins tap into something in the young, new investor base and it becomes fun. It builds on momentum and they want to go after the shorts.”
Blame It on the Fed
Novogratz rightly points out that Fed Chairman Jay Powell and the Fed are ultimately responsible for this irresponsible action on Wall Street.
“This is a retail phenomenon being driven by the fact that [Federal Reserve] Chairman Jay Powell is giving money to everybody. There is too much money in the system,” Novogratz said on Yahoo Finance TV.
Indeed, the Fed increased the money supply (M2) by 26% in 2020. That new money has to go somewhere, and right now, it’s fueling a bubble on Wall Street. As Ludwig von Mises, the great Austrian economist, said: “Who gets the money first?” The answer: Wall Street!
We at Forecasts & Strategies are fully taking advantage, but also putting in our stop orders to protect us on the downside when the music stops.
Will Dogecoin Bite Bitcoin?
How will this tulipomania affect Bitcoin? Novogratz separates the two.
“It’s very wrong to compare Doge to Bitcoin or the other coins. The amount of Capex and Opex that goes into keeping the Bitcoin network decentralized and up and running each year is immense,” he said.
“I don’t think it is going to have legs because it is all retail and all of a sudden — there is nobody behind it. No institutions coming in. No strategic buyers. Nobody is working on how to make Doge part of your portfolio,” he added.
He concludes, “Doge is a dog, no pun intended.”
This Letter Made My Day!
On a personal note, last week, I received an unsolicited letter from a fan, Orrin Woodward, a New York Times bestselling author and a top expert in business leadership.
He wrote, “I am a big fan of your work. Your book, The Making of Modern Economics, is the best introductory history of economic ideas on the market today.
I am reading your book for the third time and enjoying it thoroughly. Instead of writing a boring tome, you have made economics come alive through the competing/cooperating personalities and their ideas [Adam Smith, Marx, Keynes, Friedman, et al.]
I intend to lead a book study with entrepreneurs to share your learning. Keep up the great writing!”
Thank you, Orrin.
Click here to read more about my book, and why it’s been a bestseller for 20 years.
Special Offer on Patriot’s Day!
Last Monday was a special day: It not only was Patriot’s Day (April 19, 1775, officially marking the beginning of the American Revolution with the “shot heard around the world” at Lexington and Concord), but it was also my wedding anniversary. My wife, Jo Ann, and I were married on April 19, 1973.
Jo Ann and I pose at Chapman University.
In two years, we will be celebrating our 50th (golden) anniversary. I credit my success to Jo Ann’s 48-year partnership in my life.
To celebrate, I’m offering a special deal:
First, if you order any of my books today at www.skousenbooks.com, I’ll personally autograph each book and date them “April 19, 2021” for you.
These include my bestsellers: The 10th-anniversary edition of “The Maxims of Wall Street;” my popular textbook, “Economic Logic;” my favorite financial book, “A Viennese Waltz Down Wall Street: Austrian Economics for Investors” as well as “The Making of Modern Economics.”
And my wife will autograph her book “Matriarchs of the Messiah,” about the women who were direct descendants of Jesus Christ. Steve Forbes writes, “Believers and nonbelievers alike will be fascinated and inspired by the women whose stories are skillfully told here by Jo Ann Skousen. Their trials, triumphs, strengths and shortcomings will speak to both women and men today. Skousen’s knowledge of the times in which they lived is particularly impressive.”
To order, go to www.skousenbooks.com.
Good investing, AEIOU,
You Blew It!
California Democrats Abdicate: Homeless Take Over L.A. and Venice Beach
Often, when I visited California, I tried to get to the famous Venice Beach, a festive oceanfront town that offered a variety of activities — sports, biking, sunbathing, retail stores, entertainment and restaurants. They even had a quaint bookstore.
I visited there last year when the lockdown began and noticed that all the stores were boarded up except for the marijuana dispensaries, which were considered “essential” businesses by the “progressive” Los Angeles politicians. Otherwise, the famed Venice Beach boardwalk was deserted.
Now, a year later, Venice Beach is cluttered with homeless shelters, and the homeless population grew 57% in 2020. Click here to watch a video on the issue.
While real estate prices are rising in Orange County and other parts of Southern California, housing prices in Venice Beach actually declined 6% last year, and more homes are appearing on the market. Residents are fed up and moving away.
On March 17, 2020, the Los Angeles City Council approved a measure suspending the enforcement of laws that prohibited people from leaving tents assembled during the day, thus legalizing encampments that have sprouted throughout Venice and other parts of Los Angeles.
Not surprisingly, homelessness and crime rose sharply.
I guess I won’t be going to Venice Beach anytime soon. It looks like a third-world country.