SharperDingaan

The 1st world just doesn't 'get' that the intent behind legalizing BTC is NOT to replace the domestic currency (Colon, Real, etc.), it is to COMPLEMENT it. and AVOID using USD. BTC used as a store of value, not something to buy your groceries with. BTC preferred over USD as a state 'work around' the use of USD as reserve currency. BTC to make your wealth both portable, and inflation resistant. BTC to make remittances easier SD

One of the key implementation issues with blockchain is 'reliance upon the code'. Operational managers have long mocked this 'reliance', citing coding culture, and the reliable regularity of coding logic failures Coders code! get out of my way and let me code! - it's not my problem if you don't continually test the algorithm logic! Sure .... As long as developers/start-ups drive the bus (current state), expect more of this. The default position is to shut down crypto entirely (China), and a phased-in use, subject to layered and robust ongoing testing (China). Of course, the technology will roll out - but most would expect that it'll be atop a pile of developer skulls. Ideally, you don't contribute your skull! SD

Nothing new here, but if you were hoping for great things from WeChat or Alipay, you might want to think again. You also might want to rethink stable coin entirely, and recognize that the US is not driving the bus. It's hard to find a trustworthy platform that can convert stable coin into digital yuan, and without digital yuan you're excluding the 2nd largest market in the world. SD https://oilprice.com/Finance/the-Markets/Is-Chinas-Digital-Yuan-The-Death-Knell-For-Crypto.html The crypto ban comes at the same time as the Chinese government’s roll-out of the Digital Yuan, its sovereign digital currency now either years in development. The digital yuan was envisioned back in 2014 and already has distributed some $30 million in digital currency. It’s a clear rival to unregulated cryptocurrencies. It also is the government’s way of challenging WeChat and Alipay, the two private giants dominating the mobile payments market.

The flip side of China is that when the place gets into trouble ..... they implement solutions on a scale that few others can match, or tolerate. https://oilprice.com/Energy/Energy-General/Oil-Prices-Soar-As-Beijing-Orders-Energy-Suppliers-To-Stock-Up-For-Winter.html Bloomberg: government officials "ordered the country’s top state-owned energy companies to secure supplies for this winter at all costs." There are few things as powerful as a junkie on the edge, pushing hard for their next fix. The why you invest in the commodities a China uses, and not China itself. SD

The market is in denial over inflation, same as it was at the start of the housing collapse that brought on the GFC. Most folks shouldn't be in the market and probably know it, but have become market junkies addicted to the rush. Most dealers have become addicted to the endless stream of junkies. So ,,,,, everybody wins, as long as the band keeps on playing. Of course we all know there will be a time of reckoning, the crowds loss will be the disruptors gain, and that some folks are going to get very, very rich. How rich being largely a function of street smarts, ability to think independently, and ability to think on your feet. Not very many people. Of course there are no guarantees, and predictions are just informed opinions. Nobody knows the future. All you can do is attempt to know your limitations, and play within them. SD

We would add that ESI very likely made a profit in Q32021, and that their low share count is another plus. Most are also expecting them to take out a significant competitor via a stock swap, before any real dividends start. Should it occurr, FFH could expect a material unrealized gain, a variable dividend, and to be < the 10% reporting barq1. We own shares in both drilling companies. SD

Agreed there are lots of ways, but what gets done where - will depend primarily upon the cost of feedstock less the recovery from by-product (CO2) sales. It will also take a mminimum 2-3 years to build the required plant and distribution facilities. SD

China's actions just makes BTC stronger. Technically, all that really happens is that the hash calculation gets easier as Chinese processing power is withdrawn. While banning BTC just temporarily reduces immediate demand, until it displaces elsewhere - and further proves the use case. SD

NG has indeed done very well but you might want to temper expectations a bit. Prices are already high ... Higher prices require both a colder winter, ongoing supply restrictions in Europe, ongoing diminishing wind, and growing fears of shortage as UK fuel rationing progressively broadens. However, global warming produces warmer winters, there is definately no shortage of deliverable NG in the ME, winds generally blow stronger in the winter, and UK fuel rationing is only temporary. This is a time when the smarter producers would hedge, and many are/have. Lots of widely popularized UK gas supplier faIures, primarily because they sold at fixed rate, bought at spot, and refused to cap their maximum cost (costs $ to hedge). The good news is that the more failures, the more reinforcement that NG spot prices are going higher still, 'cause they already have Lot of enthusiasm around hydrogen fuel cells to power EV vehicles, but few realize that most of it comes from the breakdown of NG and that CO2 is the waste product. While the food industry is a major user of CO2, scaling is not really practical until there is widespread and reliable CO2 sequesture, and that is still some time away. SD

The reality is that every libertarian has to live in the 'real' world, and every year he/she gets older. When you have nothing to lose, and the energy of youth, libertarianism is easy. However, once our libertarian has something to lose, and is tired - he/she has to make a bed, and live in it. Gretting old sucks! Ultimately he/she picks a location, then plays within the local rules/regs to their advantage. Sure, he/she might not like all the individual rules/regs - but usually it is not enough to cause a permanent move to another country with different rules/regs. In NA, individuals are generally free to choose what they will/will not do .... in most other locations, that just isn't true. SD

Keep in mind that if the withdrawal is to fund a charity, there will be a reduced tax bite Put an animal shelter on the side of your barn, have the charity pay for it, and hire your kids to do some of the work (nothing says you cannot be a main beneficiary). Even have the charity pay to send one to veterinary school, conditional of concurrent care of the animals in your shelter .... Lots of possibilities - but if you want a luxury vessel to document coral destruction in the carribean, expect some 'resistance'. You'll need to have at least 1-2 researchers on your boat, at least every 6 months or so - but the rest of the time, she's yours! SD

We find it usefull to think in different timeframes - all else equal; 1-2 yrs out as reasonably predictable, 3-5 yrs out ... not so much. It is pretty clear that we will have aggressive wage inflation over the next 1-2 yrs. Health care, education, public service labour contracts etc. are all up for renewal, and a 1-2%/yr increase just isn't going to cut it; there will be lots of drama, but wages are going to go up. To minimize the annual wage inflation impact, most would expect 1% wage increases and an upfront sign-on bonus for the rest - indirectly funded via the central bank. Supply chains are going to take at least a transitory 1-2 yrs to 'normalise; fading bull whip price spikes partially being offset by re-location. 3-5 yrs out, todays decisions on onshoring new PPE and related labour (EV factories, ESG, drugs/vaccines, robotics, etc) dominating the picture. Successful implementation of CBDC's setting up the displacement of USD as the globes reserve currency. Relative inflation and trade flows materially impacting FX rates. China isn't going away, but most would expect a global de-coupling - our own view is CBDC/Reserve Currency, and a domestic baby boom. There is still demand for commodities, but domestic markets largely remain closed to the international market. Obviously, how/if it plays out, is the wild card. Lots of opportunities, but learn to make disruption your friend. SD

The enterprising lad would simply remove Dhandhro at an "in kind" valuation of zero, and argue that there is NO market for them. As the IRA is a deferred tax account, the resultant decline in the value of the IRA account - will also reduce tax paid when the funds are withdrawn. Get paid to take the junk out of your account SD

Most would expect the state to assume the entire housing inventory for the value of its loans, and let everything else crash. Thereafter the inventory is finished off, and the apartments rented out as social housing. Housing affordability is a global problem, and even Germany (Berlin) is actively thinking of nationalizing the housing stock. https://www.theglobeandmail.com/business/article-berlins-bold-proposal-for-surging-rents-evict-the-landlords/ SD

While China both remains the 'workshop of the world' and continues with its build, there are jobs for young people. Going forward, most would expect both these to taper off, unemployment to rise, and young women to bear the brunt of the lay offs. However the unemployment rate will NOT rise - if those young women are permanently leaving the workforce to raise kids! The CPC could easily 'break wings' to make that happen. The resultant pent-up baby boom both supporting the domestic economy for a good 3-4 generations, and diminishing Chinas reliance on ongoing 'western' demand for Chinese goods. Make property in the ghost cities affordable, available, and move industry there - or be disappeared/nationalized with minimal compensation. You live in China, not the west. Ultimately, it's just a different approach, measured by different metrics. SD

Re demographics: Rampant 996 culture ensures that no one is making babies when they finally get home! Most would expect that the CPC is expecting fewer jobs in the future, and preparing the ground for younger women to leave the workforce and have babies. Creating a baby boom, would be a very smart policy move that also solves a number of problems. SD

Effective 12/31.2021, the Canadian federal minimum wage is $15/hr. Each Canadian province is different, but the Ontario minimum wage will shortly be $14.35/hr - following a 10c/hr increase. https://www.blg.com/en/insights/2021/07/the-15-dollar-question-how-to-prepare-for-the-new-federal-minimum-wage https://www.ontario.ca/document/your-guide-employment-standards-act-0/minimum-wage Provinces argue that raising minimum wage both costs the poor jobs, and closes small businesses. It's better to permit exploitation, than pay a living wage. Most in the G-7 recognize that like it or not, guaranteed minimum income is coming, and that it will set the floor minimum wage/hr (annual income/50 wks x 37.5 hr/wk). The objections are because this will materially increase the minimum wage/hr, close many small businesses, and clash with workaholic 996 culture. Essentially, the same arguments that were made by US plantation owners ahead of the abolishment of slavery. Covid has changed everything. As supports fall away, a great many small businesses will become statistics, with minimal impact on employment stats (no workers). Following which those former business owners will be clamouring for the guaranteed minimum income. You and I will be paying more for what we buy, and buying less because we dont have the money. Provinces &/or states either get with the program, or suffer new leadership. Disruptive change. Not a bad thing, but essentially another Roosevelt type 'new deal'. End of a way-of-life for many. SD

The market solution is that prices throughout the supply chain rise, and the volumes decline - as the end product becomes unaffordable. Accelerating economic contraction as end users progressively collapse, and suppliers successively exit the chain. Not a happy place to be. SD

Similar frustrations as in the US. Big difference is that we now have vaccine passports to prove double vaccination, allow restaurants to refuse entry to those without proof, and permit up to 100% capacity (critical as it gets colder, and the outdoor patios close). Permits better economics and a better work environment, but in both Quebec and Ontario - the rollouts are < a month old. Most expect restaurants to share a bouncer, cracking the skulls of those who refuse to follow the rules. The numbers are 'near-actuals' and come from students working in the GTA west. In the smaller university towns surrounding the GTA there typically aren't many fast food franchises - it's mostly independents serving plain and basic to the student market, in a variety of home cuisines. Typically very good, and all family affairs. Drilling companies are having difficulties staffing rigs, comps are up materially, and day rates have risen 20-30% to compensate. Lot of experienced junior crew choosing to go back to school and study for another career, similar thing with the truckers moving equipment and field supplies. Folks are seeing the writing on the wall and going into more stable industries instead. The good news is that if you can drill hard/heavy (camps, 12 hrs on, 12 hours off, 7 days/week) over late December through earlyJanuary, you WILL have additional crew. You'll just be paying double/triple time, during prime drilling time. SD

Forgiveness is great, but when the probability is very unknown, or close to zero - not really a viable option. Working part time also allows he/she to spend the money on whatever they want, whereas loans give you a lot less 'flexibility'. Assume the average waiter would wait 4 tables/hr, 3 people/table @ $40/plate, 75% of the time; table turn every 2 hours, average 10% tip. The average tip will be around $18/hr (4 x 3 x40 x .50 x .75 x .10). Restaurant pay of $35.73/hr+ (18.00+17.73), versus just $17.73/hr for the fast food job. Were the waiter/waitress to raise the average tip to 15% vs 10%? an extra $9/hr, were they to raise the average plate to $45 vs $40? an extra $2.25/hr. In a university/college town - the fast food franchise just isn't competitive. The little desirable labour that you might get .... is also mostly the same labour that a family owned restaurant would use. You have it only until the family starts its own restaurant, selling better quality and healthier fare - without the franchise fee rake, off of gross sales. There is a reason why service in a fast food franchise is often so sh1te. Hence, if you are a good enough manager to still make a fast food franchise work, despite the disadvantages - why on earth stay with it? Just about any chain will pay you very well for your expertise, and you will ALSO be free of the daily financial risk of the fast food franchise failing. There is a reason why managers are leaving in droves. Different POV. SD

A university/college student has a number of options. They could work part-time in a bar/restaurant earning salary + tips, in fast food earning salary only, work in the university/college itself as a tutorial assistant, in a hospital as an assistant of some type, or simply choose NOT to work - and just finance their school. A semester of foregone part time earnings is not a lot of money. If you can guarantee a student a minimum 10 hrs/wk for 13 weeks @ $15/hr, you have created a very attractive option. At 20% deductions/taxes, a reliable takehome of $120/week + tips + potentially more hours, or a minimum $1,560 + tips + upside over a semester. Owners should be pretty good at forecasting their labour needs up to 2-weeks out. At worst, maybe 15% (20 hrs) of the 130 hours (10 hs/wk x 13 weeks x 15%) end up as paid time off - total cost of $300 (20hrs x $15/hr). Over the 110 hours actually worked (130-20), this is the same as a raise of $2.73/hr (300/110) to 17.73/hr - which most bars/restaurants would be willing to pay in return for stable labour. The problem isn't lack of labour - it is primarily poor ownership/bad management. The industries very high 1st year failure rate, exists for a reason. Labour votes with its feet, everytime it enters your doors. If they are NOT walking in your door, it is because your work proposition doesn't cut it. SD

For most service sector workers, it is less the money, and more the number of hours scheduled, their reliability, and ability to plan. The 5-hour shift that habitually suddenly shrinks to 3 (despite guarantees of a minimum 4 hours) because there is no business. You screw up, you wear it - the worker is NOT there as a business partner, to share YOUR business risk. To be competitive, offer ability to plan. Reliably guarantee X hours/week for Y weeks, and deliver on your promises. In oil/gas, drill crew workers are routinely turning DOWN temporary, but high paying jobs, in favour of lesser paying but more reliable ones. Jobs being refused, that would pay more in 2 weeks, than you might in an entire semester. Claiming ‘it’s just the terms of the gig’ has long been the management cop out. Managements have now been called on it, and have deservedly come up short. Most other parts of the world do this quite differently, and have far less of a problem. Management’s failure to recognize that they are in a people business – at BOTH the customer AND worker level. The full employment thing is also a misnomer, as a worker is counted as 'employed' - if they work as little as one hour. If that same person then works 3 separate jobs of a few hours each, he/she will be counted 3x. SD

When the investor buys their stake, he/she selects their relative risk. Apple vs Ten Cent is just the business proposition, then ADD forecast f/x change, PLUS risk of government action (nationalization, regulation, inflation, dictatorship/revolution, etc). A local 30% ROE, produces SQUAT - if the local currency also devalued 30%. The investor HOLDS based on forecast - business &/or environment getting better/worse. In an Asia, or Russia; very good visibility into the 'underground' elements that 'run' the country (language, 'connections', 'fixers', etc). To 'monetize' on the forecast, access/visibility into local/foreign markets, etc. A 'great' investment that CANNOT be easily monetized, is worth SQUAT. Hence, is it better to 'own' the business, or to 'own' the commodities the business either uses? or produces? When there is low visibility, or forecast disruption, it's almost always better to own the commodity - simply because ongoing bribes cannot be paid, if the commodities cannot be sold. Maintaining power, is an expensive business. In a NA; everything is about 'today', and maximizing the 'paper value' of todays ticket - as long as you can promptly liquidate, you don't give a sh1te. Until one day there is suddenly no liquidity, and you make me an offer that I cannot refuse Just a different way of playing, SD

The Asian FANGs of Baba, Ten Cent, etc are being brought to heel. The west attempted to use regulation and failed, the east breaks wings; the bird still lays golden eggs, but as a puppet on a string. It is just a different approach - but users recognize they are doing business with the CPC and NOT the FANG. Hence the ban on Huawei tech in the 5G networks, and the need to question China tech valuations. The good news is that China remains the 2nd largest economy in the world (depending on the day), and like all economies - it consumes resources that it doesn't have. Invest in China via the boom/bust pressure it puts on commodity markets, and make volatilty your friend. SD

China's current approach is not sustainable, and most would look at the lessons learnt from Japan when they tried this - and where Japan is today.... The old Styx song 'Domo Arigato, Mr Roboto' personifies it. https://www.youtube.com/watch?v=uc6f_2nPSX8 The 996 work thing is a well-known Asian cultural characteristic, not unique to either China or Japan. Attempting to clamp down on it is akin to telling Americans that you are going to take some of their freedoms away; could be done, but not sustainable, or realistic - even for a CPC. What is new is 'tang ping', and it scares the hell out of everybody - especially when you are communist country, benchmarking against 'social harmony'. https://www.theweek.in/news/world/2021/07/01/100-years-of-burnout-chinas-youth-are-fighting-back-against-overwork-culture.html https://www.cnn.com/2021/08/27/tech/china-supreme-court-996-intl-hnk/index.html Wings are being broken, and there is no need for a foreigner to take the risk. If anything, most would prefer a long term short. Share price is NOT the metric, long term political survival is - and the CPC is very, very good at it. Different POV. SD