In this week’s episode of In Search of Green Marbles, we are going to push the boundaries of space and time. To that end, there is no doubt in our minds that the experimentation with time travel technologies led by leading research and governmental institutions is one of the most under-reported stories of the new year. Fortunately, Weiss’ Jordi has been involved in beta testing of these innovations. And while he has to be very careful as to what he can disclose, he did agree to speak to some themes he saw on his recent visit to December 2022. So this isn’t a 2022 predictions episode. This is a look back on the year that was, which hasn’t yet occurred, now that Jordi is back from the future.
Jordi risks it all and divulges some of what he has seen in 2022 as part of the leading research and beta testing of time travel. While he cannot share how he was chosen to be a part of this testing, much to G3’s dismay, he will let us in on some of the major themes he saw play out in both the markets and across the globe in 2022. Some of these themes include correlation amongst assets in the traditional 60/40 portfolio, an inflation status update, the place cryptocurrencies serve as a disruptor to the technology industry, tensions between the U.S. and China, and much more.
First things first, things remained muddy, so to speak, in 2022 from a financial market perspective even despite the previous two years of economic uncertainty. It was the most unique year on record in terms of interest rate volatility in any given time interval. The uncertainty around rates is what will lead to correlation pressure amongst asset classes. As the fed tries to play catch up to the levels of inflation, the tightening cycle will begin in 2022. In 2023 and beyond, the TINA thesis persists as bonds remain un-investable with inflation stubbornly high and pressures on wages contributing to negative real yields. As G3 jokes, we can put our “deflation-ista” hats away for another year.
Outside of bond uncertainty, what surprised investors the most in 2022 was the relationship between energy prices, the dollar, and cryptocurrencies. Normally when there is a big rise in commodities, the dollar weakens. The two typically have an inverse relationship. However, when the dollar weakens in early 2022, investors realize that crypto will remain unchanged. Bitcoin, for example, remained constant between February 2021 and January 2022 while the dollar strengthened. Even in March 2020, when the dollar weakened, Bitcoin strengthened.
This is all to say that, as a result of the dollar weakening in 2022, Bitcoin and other cryptocurrencies will end the year higher than at beginning of 2022. The blockchain will be a major disruptor to technology just as Amazon was a major disruptor to brick-and-mortar companies. As technology underperforms, crypto will actually accelerate which will lead investors to search for the growth they once received in the prior decade.
As it relates to the China/U.S. divorce, the world’s two super-powers do not try to reconcile in 2022. Not only do they not reconcile, but paranoia comes into play as the U.S. realizes the risk of China making certain technological advancements that could lead the nation to become the quantum supremacy.
Lastly, for those of you considering switching allegiance from the Knicks to the Nets due to intolerable disappointment…Jordi addresses this question with just as much conviction and energy as any of his other predictions.