YouSaid · the spoken record

Michael Nicoletos

lines on the record: 50
first: 2021-11-26
most recent: 2021-11-26
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“My feet are hurting a bit, but anyway, I think the best value trade right now, and it's really funny, is gold miners and precious metals miners. And the reason is gold has gone up, but they've lagged a lot, the numbers, the valuations are ridiculously cheap. So I think, in my view, the biggest upside to downside risk is error rate.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“So again, if that's the view and you don't see inflation coming, then I think stocks are a good trade. If inflation comes and persists, which means that input costs will start going up, you could see a rotation from growth stocks to value stocks, which we haven't seen for a lot of years. There have been a lot of people advocating for a few years, and you could see that happening. I think stocks are expensive, but as long as you don't see inflation persisting, then I think they will do much better. If you see inflation persisting and we see input prices going up, I think you'll see a correction in global stock prices everywhere. If I see a bubble, I don't know if you can call it a bubble because I don't think there are a lot of things that obviously like every market there are bubbles, specific bubbles, there are stocks which trade like a bubble. But as markets evolve, I think they're expensive.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Signs for these are clear bubbles. Now, in terms of stocks, the valuations from a historical point of view are pretty high. However, Depends if you value money or if you value stocks. And what do I mean? I mean that If you're valuing your purchasing power, Maybe stocks are not that bad.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“I see a lot of bubbles. I see bubbles also in crypto. Okay, obviously there are like 10,000 coins I read. Obviously not all 10,000 of them are legitimate technologies. Obviously the ecosystem and the technologies which it brings, there are quite a few good stories, but the others are like a bubble. Like in the dot-com bubble, the bubble burst, but Amazon, Cisco, IBM did not shut down. Okay, they corrected and then they moved on. The bubbles shut down and they went bankrupt. So I guess like every cycle and every ecosystem at some point, the crypto world will go through that as well. And the legitimate technologies will keep up and the rest will shut down. So I think there are bubbles there. I don't think there are the bubbles in the majors. I think mostly on the miners and the ideas you hear every day some story about the coin going, I don't know, a thousand percent for some reason. Obviously these are not good.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“China is trying to roll over the digital currency of the one. And why is it doing that? Because by using Alipay and WeChat and all these platforms where they accept the digital one, it's trying to make the one an international currency and make it increase in weight. Theoretically speaking, if the one was to become 60-50% of the world transactions, then suddenly my debt becomes your problem. So they haven't managed to do that yet. So the problem remains in China at this moment.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Close capital account and a free market economy and everything working at the same time. At some point these things need to adjust. So we see the first cracks. I think that China tried it to stop the real estate bubble by putting some rules. I think you'll have to soften those rules to make real estate pick up again and alleviate a bit the pressure on the banks and on the economy. So I think we're kicking the can down the road again and hoping for to see it in the future rollover. One thing here is important in my view and this is one of the things that I was looking at.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“When in the US it's around 70, but this transition from investment to consumption has not occurred at the pace they would want. So investment is a big chunk of their economy. And they've been building real estate and they've been building ghost cities, as you probably know, and all those apartments, those houses, those buildings need to be resold and resold. It's like a mechanism. Suddenly there was an abrupt stop, as you know, and there was the evergrand story, and we've seen a lot of developers defaulting, and that has caused a very big internal. Economic shock. Obviously, things have not gone really, really bad, but because China is trying to mitigate it, but you see the first cracks in the economy. And you cannot have”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“And if you look at Hong Kong, it's like 900 of GDP. Well, the US in 2008 was around 200. And we had the Lehman crisis and the real estate crisis. Iceland was, I think, around 800% when the whole crisis started from Iceland. So you see that the numbers internally, the leverage which is being used is really, really high. You need more than 80 units of debt to create one unit of GDP. This has gone from one to eight in the last 10 years, which means that you need more and more debt to create the same level of GDP. All that money went to real estate mostly because they tried to shift from an investment economy to a consumer economy and consumption in China is around 33-9%, 38%, 39%.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“China does not want it to devalue because it imports a lot of commodities and it needs to pay for them. So devaluing the currencies right now is not something they wanted to do. And if also the currency devalues, then they're going to import inflation, which is going to bring more problems to them. China has capital controls, so people, I think, cannot take out more than 50,000 dollars a year, 50,000 dollars worth of one outside China per year. So the money in China can't leave. So this is important because when they do whatever fiscal or whatever monetary expansion, it's like a balloon with air. The growth grows, grows, grows, but the air can't leave. So right now, if you look at the banking system in China, I think it's like 400 and something percent.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“I believe it's called original sin when an emerging market has a lot of debt denominated in dollars and it's their currency depreciates against the dollar so what they owe is more valuable than what they have is less valuable so you get this really negative feedback loop Michael I want to ask you about China which is currently having a huge slowdown in economic growth A lot of people are at least were preparing for a depreciation in the yuan, which they have been, or the Hong Kong dollar, which they have been bracing for many years. Of course, China, while it is in the emerging market basket, it really is in some ways more of a developed market economy. To what degree do you think the slowdown in China is a threat to either the Hong Kong dollar or the yuan?”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Problem. So the stronger the currency, the dollar goes, the lower the Turkish or whatever emerging market goes. So your cost of repayment increases. So your interest rate might be low, but the absolute amount, if you had borrowed in dollars and you were a Turkish corporate, you owe 50% more in just two years. So these things are really important when it comes to emerging markets. So developed markets tend to have the issues which we see, but they're not so profound. But emerging markets have much bigger issues than that. And you see them. And that's why when the dollar rallies really fast and not gradually, you tend to see an emerging market blow up.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Yes And the reason that this is happening is A, because they do not have enough dollars, they need dollars to buy Turkish clear, so they're spending their dollars to buy Turkish Leara to keep the currency from falling. They have negative real rates really high, so their deposit is lower than the inflation rate. So if you have money in the bank, you're getting an interest rate of, let's say, 17%, but inflation is 21%. So you're losing money, actually. This creates pressure. This is an example of one emerging market having issues. So this is a problem which when emerging markets, because emerging markets tend to borrow in foreign currency because they're local currency interest rates are very high. So a corporate in Turkey, I'm just having an example here, does not want to borrow at 20%. They want to borrow at 5%. So they try to go to the euro, to the dollar, and they try to issue bonds. But you have an FX risk there. So that's the...”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Okay, Turkey today is the currency is around, I think, 10 20 versus a dollar. It's collapsing at the speed of It has divided like 50% the last two years.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Okay, emerging marks will face a bigger problem than the euro because the euro has swap lines and it's important to see, I think, there are seven or eight countries which have swap lines with a Fed, which means they can issue dollars when there's a liquidity problem. But emerging markets do not have swap lines usually. For example, let's say Turkey. Turkey right now.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“If you look at it from a trading point, yes, if you're keeping it from a deposit point where you keep your money. Yeah. Yeah, okay. It depends how you see it.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“No apologies. Let me explain that. You're right. The euro-dollar cross is the euro dollar we all know. The euro dollar market is the dollars issued outside the US, which is, I don't know why it's called like this. There must be some reason. I have no idea. But it has nothing to do with the cross and you correctly pointed it out. So I'm talking about the dollars which banks can issue outside the US when they lend dollars versus their balance sheet. So this is a number which a lot of people have tried to estimate. It's very hard. No one really knows what the size is, but people who are really good at this and have done great analysis believe that it's equal or bigger than the actual dollar mark.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Market which is much bigger than the dollar. So there are a lot of more dollars lent which we do not register. And this, in my mind, is a problem which we will see it at some point. So I'm on the dollar bullish camp in that sense and it's a relative trade. And why do I say relative? Because if you ask me, theoretically, I wouldn't want to have any currency. I would prefer have gold, Bitcoin, or whatever scarce assets and have my money which I spend in the fiat currency which I live in. But if I had to keep money in the fiat currency, I would prefer to keep it in dollars because I think it's a currency which right now feels safer to me in terms of risk reward. So that's the way I see it.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Dollar will continue to strengthen, but obviously no one wants it to strengthen. This is very important. The more it strengthens, the bigger the problems for the world. So I think there will be some forms of trying to make it go lower, but I think the powers are for it to go stronger, not lower. So they'll try, I think central bank will do their best to keep it from rising. Obviously, the best is to keep it in a range. Say 90 to 97, whatever. That doesn't make a big difference. But if it starts getting out of, goes through, DXY goes through 100, I think we're going to see pressures which are not really good for growth. And this would be a problem. So my view was, going back to your question, that I was looking at the dollar from the euro perspective or from the external fact. And I was seeing that a lot of people are boring in dollars. And there's also the euro dollar.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Do I call? And so this comes back in who do you call when you call Europe? Who is the leader? You call the commission, you call Merkel who's living. So these things matter when you want to have leadership and you want things to move forward. I think Europe has to solve a lot of internal issues. And until it does, I think it will always be weaker than the US. Because in size, they're pretty close. It's not like the economies are not close to each other. But I think...”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“So, the biggest cross is the dollar euro. So let's start from the easy one, which in the biggest weight is the euro. Euro is facing structural issues, is facing growth issues, is facing political issues. So it was very hard for me to see how 19 countries without a clear leader because now Chancellor America is living and Macron is trying to become the leader of Europe, but we'll see because there are elections in five months what will happen there. And with negative interest rates, so you have negative interest in the US, you don't have a negative. In the Euro, you have negative increase. I could not see why one would put their savings into euro and not into dollars. Okay, I understand that you'll deficits for the dollar. I understand the fiscal situation for the dollar, but Europe isn't any better in that. And it also has the political problems which it has. And there's a famous quote by Henry Kissinger which said, when I call Europe,”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Well, look, everyone who looks at the dollar usually tends to focus on the US. I also like to look outside the US. So, you know, it doesn't mean that the dollar is appreciating. Maybe everyone else is depreciating.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Usually dollar in the gold go the opposite way. So you've seen the dollar go up and gold go up. So we haven't seen the for a long time. And now you see also cryptos going up. Okay, today they're down. But if you look at the trend, they're upward sloping. So you see the dollar, which is a funding currency for the world, actually, 87% of global transactions are done in dollar, and the striking number is that in the last two years has gone up 2% from 85 to 87. So a lot of people are saying the dollar is dying, but actually the dollar's utility is increasing. So the dollar is a funding currency for the rest of the world. When it increases, it creates a pressure to emerging markets. It creates pressure to funding outside the US. So we could see there some issues in terms of growth because of the strength of the dollar. Now, if the dollar strengthens slowly and”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Okay. Well, if you pay taxes, this is good for the government. So again, it is right now the economy in the US is doing very well compared to where it was at least. So I think you will see. Continuing this way in the US. I don't know how bad China and Europe will weigh because I think China is not in a really good situation. They try to stop the real estate bubble from going through the roof and they've created a small mess there. So we'll see how this plays out. And Europe has quite a few issues right now. Germany doesn't have a chancellor. France has elections in five months. You have a huge energy crisis in Europe going on and you have also inflationary pressures going through the roof in Europe because of the energy crisis. So Europe and China, I'm not really hot about it. US is doing a pretty much better job. And you see that also in the dollar, which the dollar has been going higher. And what is interesting, you've seen the dollar go higher, but gold not going down.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“And if we see this getting a bit broader, that could help inflation keep at higher levels. But again, if we see demand rolling over and supply increasing, I'm not sure that the wage increases will increase. I think at some point they'll pause.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“One trillion over 10 years is like 100 billion years, so yeah, it's not that big. In principle, it would be inflationary. Now, if it's brought forward, maybe it could increase inflationary pressures. But again, we need to see how the whole thing evolves. Because if you see now, China is also rolling over, so you might see commodities rolling over. And if you see commodities rolling over, then input prices will and CPI will drop or will not increase at the same rate as it did. So all of this will help inflation fears get mitigated. So again, I'm not really convinced it's one of the few times where I think the central bank might be right saying that it's transitory. Maybe it's not transitory for three months as they expected it could be transitory for six or eight months. But this is something important. If we see wage increases materialized, which we've seen a few.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Or less goods coming than the demand. So I think these two together created this shock we're seeing this year in terms of inflation. We need to see what's going to happen next year because if the supply adjusts to the demand and we have some form of price increase, which we see right now, you'll see demand going lower, supply going higher, and you'll see prices smoothing out. So I'm not that sure that inflation is here to stay. We'll need more data for that. But I think the more money you go through fiscal, you'll get more inflation. The more money you give through monetary, you see an inflation then.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“But if you're an everyday person, you need money to live and to buy another house or to buy another car, you have kids, you have things to spend. So the difference to the lower income people is huge. So I think the way we saw this, the reason we see some form of inflation here right now, it's A, because we did there was some form of fiscal, a lot of paychecks went to everyone, which was spent. If you have a million dollars and give another $20,000, you won't spend them. It won't make a difference. You're going to go to the savings. If you have $5,000 and I gave you another $5,000, it makes a whole difference to your life, to your daily life. So this is what we saw. And then again, we had the perfect combo where we had the supply shock because everyone shut down because of COVID and the economy opened up faster. You could not supply goods. So you had people with paychecks and you had no goods come.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Well, the thing is here, it's clear that it's been deflationary. Okay, we've been doing this for 10 years if it was inflation. You would have seen it earlier. But the thing is here It's not by itself inflation or deflation. You have to put it in the context of the economy. Now, if you have so much debt and the debt is rising at such a speed, the debt is very, very deflationary. So you have two opposing forces here. And the large amounts of debt are having a bigger impact than the money printing. So I think that's what people should see. And obviously, the way that the spending has come and has come through the monetary venue and not through the fiscal venue, it has gone to assets and has gone to, let's say, stock markets and bonds and everything. So if you are able to access the markets and have investments, probably these are your savings. And those savings usually you don't tend to spend them. You tend to keep them in your team, especially if you're high net worth.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Inflation of 6%. What do I do? I need to hire an asset which will give me that value while I'm losing it by doing nothing. So scarce assets right now are in a sweet spot, I would say. You need to own them. You'll get a lot of volatility. But I think in a more medium to long term horizon, you'll do pretty well.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Hyperinflation because all the money that was put into place does not have to be returned. Now, in the back of your head, you think that at some point you'll have to give it back. It's not the same thing. So I think going forward, there are going to be more money printing or let's say money issued or bonds issued, whatever way you want to put it. And I think scarce assets, which includes Bitcoin, it includes gold, it includes many more things. That's why you see art going up. I think you'll see scarce assets doing well and outperforming. That's the things, that's the way I see it. Now, if inflation comes and inflation persists, I think I'm going to get a growth scare for sure. But again, scarce assets will be, you know, after a correction, they will be the go-to investment because people will say we have inflation. Bank gives me 1% when I have inflation.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“The bonds that were issued for credit does not need to be returned. So that money, whenever you borrow money, you know that you have to give it back at some point. You have it on the back of your head. Now imagine if I come one day and you owe $100,000 and I tell you, yeah, you'll pay it in 100 years. So suddenly you don't have to pay it. So, your psychology, the way you invest, will change dramatically at that point. So, I think that there will be a point, and I think probably Japan, because ahead of everyone, will say this and say, okay, we swap what we own between us for 100 years, and suddenly the debt will fall or the imminent debt will fall dramatically. And I think that's when we're going to see”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“It's like a drug. The central bank needs to take more drugs and more drugs to keep the same thing going. They need to print, print, print, print. The balance sheets have gone through the roof. And what are you doing? You're needing more and more debt to sustain the same rate of growth, which at some point will reach a wall. I don't know what that will be. I guess we should be looking at Japan, where the Bank of Japan has most of the bonds that have been issued at some point, I guess, the finance minister will get together with the central banker and say the right pocket owes to the left pocket. Let's figure out some way of dealing with it. I don't know. Maybe they'll swap it to a 100-year perpetual bond and say this is it. At that point, the money that was...”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Let me see that Bitcoin, I think every year has a big crash. So I think it's part of the way it works. You cannot have 200% compound in yearly growth without excessible volatility. But the excessive volatility is justified by the returns you get. So if you put it in a risk adjusted model, you'll see that it might be very volatile, but it's not very volatile compared to the returns that it brings back. Well, it feels to me that right now, central banks are backed in a corner. They will try to raise interest rates, but I'm afraid that at some point they'll be forced to take them back down because already we see some retail sales rolling over. We see Europe not doing that well, China not doing that well. Only US is doing pretty well right now. But if the economy rolls over, then I think central banks will go back to what they were doing.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“And this ambiguity. Makes institutional investors more, it makes it harder for them to invest because although they have their clients saying, come on, buy me some, buy me some. On the other side, they don't know how to operate in that framework. Yeah, and if I buy it and if I do it the wrong way and if it's not what the regulator will allow me to do, will I be fined? So this gray area doesn't help anyone doesn't help the investors who want to come in through their banks, does not let the banks be part of the system because right now they don't know in which way to be obviously they're exploring it, but there's no clear framework. So I think as clarity comes, I would say regulation would bring clarity and clarity would bring growth to the system.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“First of all, you don't regulate something you're planning to ban. So by having a discussion about regulating something, you're not thinking of banning it. So the risk of, let's say, this ecosystem going back to zero reduces dramatically. So this is really, really important thing. This is what I think most people fail to understand. So yes, if you're thinking of over-regulation, you're thinking of, you know, things are going to get hard again and you won't be able to do a lot of things. But if you're thinking of regulation as a means to put down a playing field and to see how people can operate on that system, I think it's very good. And once you do that and everyone knows what the rules are exactly, because once you put on legislation and regulation, you know what the rules are. It's not A or B or C. Right now, depending on where you are, it's not exactly the same thing. It's never a clear cut. You're not sure. No one is sure.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“But I think regulation brings legitimacy and as legitimacy comes in because regulation is not only bad. We're talking about regulation because we're thinking of over-regulation. But like every new technology and everything new, there is fraud and there are things that people don't like. For someone who wants to do his business legitimately and wants to take advantage of this, if you don't have a clear pathway, it's tricky. But now as these things evolve, I think it's going to make it clearer and a lot of more money will come in because of that.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Doing it through stable coin. So let's say that I have my money, let's say in a UK bank and I want to buy Bitcoin. Now I need to buy a stable coin and then buy my Bitcoin. Now I could do it through the CBDC which would be much faster and it would be transparent because let me put it another way. Right now in order to declare your taxes in cryptos, it's a bit of a mess. It's not an easy thing. So where did you buy it? One did you buy it? How did you buy it? How did you go back and forth? Now if you have one vehicle or one pathway to get there, so you're getting through the CBDC and you're getting out through the CBDC, it's an input output and you can know what the difference is. So if you're willing, it won't attack. You get taxed. It's much easier. So, you know, I understand that a lot of people don't like this discussion.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Is a risk to it. There wouldn't be a 76 7% if there wasn't a risk for it. So you need to understand what the risk is when you're investing in these things. So my view is that the CTPTC is a central bank digital currency, which means that eventually at some point, because we see all central banks talking about it, so I think it's a matter of time before it happens, you'll see the US dollar or the euro issuing a digital euro or a digital dollar. That has some benefits and has some caveats as well. So it's not a clear path to what's going to happen in terms of Freedom of doing things because the central bank will be aware of all your transactions, I guess. If I understand correctly, but that means that if you want to buy a digital asset, you can convert it via the central bank digital currency instead.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“First of all, you just need one of the stable coins to appear to be a fraud. If you want appears to be a fraud, I think all of them will have a problem. They'll have a credibility risk, whatever that is. I think that if you're an institutional investor running money for others, now I'm not talking with your individual, because obviously if you have... Money in dollars in a bank, you get zero. If you get them in, I don't know, in a stable coin, you might be getting six, seven percent, which you could get numbers like that. So this difference.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Them as a tool to keep my money, so I don't feel that comfortable at this stage, at least. So I think that if I were running money for others, CBDC would solve that problem. So I think CBDC, once the CBDC is in place, although a lot of people are afraid of it, I think it will give a huge boost to the ecosystem because a lot of institutions will feel more comfortable coming in. So this is the way I see it.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Okay, that's a great way to see it, but why do different stablecoins have different interest rates? Obviously, there's a different counterparty risk. So I think that one of the problems for cryptos are actually the stablecoins. In what sense? I think that when you get the central bank digital coins, I don't think that the stable coins will continue to exist. I think they will cease to exist because you'll be able to transfer your money to a crypto wallet or to a crypto investment via the CBDC. So I think this will mitigate a lot of the risk that is currently in place. I'm not really comfortable with stablecoins per se because you've seen what's written and it's very hard to understand their balance sheets and if they're legitimate or not. So I use them as a tool to trade the cryptos, but I don't use...”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Actually, gives you a measure of risk of what you're doing to each other. It's not the same thing as depositing money, let's say, in Bitcoin getting an interest. I don't know if it's 1.5, 2%, and going to, let's say, Algorand, which is 10%. So I think what we used to see in the traditional banking, we see it now in the crypto world evolving. So I think this is really, really spectacular.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“By acquisition or by developing technologies within. And this thing is going to go forward. So I don't think that the banks, as is, are going to vanish, but it'll have to transform. One more thing is that in the past, you used to validate banks by their interest rate. So it was not the same interest rate if you went to Bank of America and if you went to a Greek bank, for example, the interest rate for euro or for dollar was not the same because there was a risk of your counterparty, which was the bank could default, let's say, theoretically speaking. So now with interest rates going to zero, there's no such mechanism. You cannot evaluate risk from an interest rate perspective. But what you can do now, we see that happening in cryptos. So if you see the cryptos that have different interest rates. So putting money into different ones.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“It's pretty interesting how you look at it. Now, earning yield also, it's one of these technological transformations which make a great, give a lot of value. And the way I see this is in the late 90s, when the internet came up and then you had voiceover IP for someone to call the US to Europe, they would pay like $5,000, $6 a minute. So suddenly the internet came up, voiceover IP came up, and suddenly phone calls became the cost came, it was just your internet connection for your call. So I think that cryptos are doing the same thing and DeFi is doing the same thing to financial transactions. So you're speeding up the transaction, you're doing much faster transactions. And at the much lower cost. So this, I don't think that the financial system is going to change utterly, but it's going to absorb this type of technology.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Well, let me put something. I wouldn't put stablecoins and Bitcoin the same bucket. It's quite a different thing. Now, in the argument that Bitcoin doesn't earn any yield, I will say that gold doesn't earn any yield as well. But both of them are a constant in terms versus fiat money. You know how much supply of Bitcoin you're going to have and you can pretty much estimate how much gold you have. It's not exactly the same thing, but it's a good proxy. So the argument here is you can see gold and you can touch gold, but you cannot transfer $10 million of gold going from one place to another. But you can transfer $10 million of Bitcoin, but you cannot see it. So you can see one, you cannot carry the other.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“In a deflationary world, when you had a 640 portfolio, it did well because as deflation, well, let's put deflation, let's say inflation prices did not rise, bonds did well and equities did well. So it was really good. Now that we're transitioning, first of all, to a more inflationary, although I'm not really sure we're still in inflation, it could be transitory. I'll come back to that later. But if it's an inflationary, then the 640 portfolio will not do very well in that environment. Now, adding scarce assets, and you could also argue that by adding gold, although gold has not done that well, it's done well, but it hasn't done anything spectacular. You improve the whole portfolio in terms of performance and in terms of risk. So the thing here is that you add something new to a traditional way of thinking, and I think this adds a lot of value to it. And you'll see more and more people looking at it.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Mewed to the scene, and I've only been one and a half years learning about it. So from that space, these have a utility. So you're investing their utility and in their scarcity. So it's a bit different. But I think as an institutional investor, A, if you look at the 60, 40 traditional portfolio and you add a one or two percent of Bitcoin in that portfolio, you'll see that the returns increase dramatically and the risk adjusted returns are really, really good. So from that point of view, just looking at the math, you say this makes sense. Now, if you look at it from a technological point of view, it's such an innovation which you need to look at it. You can't ignore it. So looking at it from both angles, I think it makes great sense for institutional investors to come in.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Well, let me put it this way. First of all, it's growing at such a speed, which you cannot ignore it. There are two ways of looking at crypto. One is from a macro perspective where you say that central banks have been expanding their balance sheets like crazy, so the value of money is being debased, so you need scarce assets to put in your portfolio in order to keep your purchasing power at the same level. So traditionally that would be gold, that would be silver, that would be commodities. We've seen that since 2011, we see that crypto has been Bitcoin in the beginning. Now there are more cryptos in that space. We've seen them being added in that sense of investing. So people are looking at scarce assets. They see that they could be a store of value. I don't think all cryptos are the same. So I would say that Bitcoin is most close to gold. The rest of the crypto space, from my understanding at least, because”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“Lot of things are going to change. And after like 30 years, you can see that. Things have changed a lot. So I think crypto is doing this at a super speed of what the internet did. If I'm not mistaken, it's growing at double the rate of what the internet was growing at the late 90s.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT
“My favorite talk right now was Fidelity International, where they laid out what has been going on with the custody and how do they see the CDBC central bank, CBDC, evolving. And I thought it was really, really interesting because it's a framework where you see the old macro world coming into the crypto space and how these two worlds are going to be bridged. And it's really, really fascinating. Coming from a macro world, which I've spent so much time in there and in emerging markets, I can see where the value in crypto is. And I think as the years come by and go by, you'll see it more and more and more people will understand what their value is. So I think we're transitioning from one world to another, similar like the internet in the 90s. We're in the beginning. Most people thought that, okay, there's going to be the internet, but okay, but we're not going to live.”
2021-11-26 · Forward Guidance · The Dollar Rises With Crypto And Gold - What Gives? | Michael Nicoletos at DAS: London · IDENTIFIED FROM THE TRANSCRIPT