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Trust

The world economy works on trust.


When you make a payment to someone, you trust that the payment provider will move that money to the required bank account to make the transaction.


When you order goods online, you trust that the goods will be delivered to your front door step.


When you borrow money, the bank trusts that you will pay the money back.


When you invest in a company, you place your trust that the manager of that company will be a good steward of your capital.


Everything relies on trust.


Trust is like liquidity, when everything is going well, trust is abundant. When the world goes into decline, trust can evaporate quickly.


Trust is currently abundant.


There are a number of newer assets that have built up trust at a rate that I have never seen before.


People are trusting an unknown person, Satoshi Nakamoto, who built a digital pyramid scheme as a source of wealth storage.


People are trusting Reddit posts as their source of information to drive loss making business to levels of dot com stupidity.


People are trusting central banks to do what ever it takes to keep the global economy flooded with liquidity without excessive inflation occurring.


The problem with trust is that is a fickle beast.


Any regulation of the rampant money laundering, sanctions violations and other illegal activities going on, could destroy trust in Bitcoin.


Any prosecution of Reddit users for market manipulation in meme stocks could seriously destroy the trust in this army of traders.


Any sniff of elevated inflation could make people lose trust in central bankers control over the economy.


We are continually surprised by the trust of people and markets over the last decade.


The list is long: 100 year Argentinean bonds, negative rate 50 year Swiss bonds, loss making meme stocks going up tens of billions, Bitcoin and other crazier crypto currencies, car companies trading at 40 times the price of other car companies, plant based food companies trading at over 60 times sales, Sydney property with less than 1% net rental yields or SAAS companies at 100 times sales. (There are countless more...)


We don't like to buy assets where trust in something that has never happened before, or trust in something not happening which repeatedly occurs is required for you to make money.


Be careful out there people. This is certainly not the bottom.






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