SharperDingaan

Most who do this have a foreign account, tied to their foreign address. i.e: A London brokerage account tied to a UK address. Used to be that you just called the foreign broker, and had them place the trade via your foreign account. Today, you just log onto their platform and place the trade yourself, same as you would do were you in NA. Modern twist on correspondent banking, and materially cheaper. SD

Crypto currency produces network inflation, which is somehat different. As Sunrider explains. I give you 60,000 USD, you give me 1 BTC. Simplified; if you got your 1 BTC via a 40,000 USD purchase from someone else - we're just exchanging USD with no impact on inflation. You're up 20,000 USD, but there is no change in the total 60,000 USD in circulation. However there were 2 transactions, and each of them generated a small new release of BTC to pay the miners who verified them. Until BTC hits the 21M cap, there is now more spendable BTC than there was, and inflation. The more activity the bigger the cummulative release of new BTC, and the more inflation. New token release/transaction is controlled, network volume is not. Most developers will immediatly spend any USD raised on development, raising the velocity of those USD in circulation. The more endemic/popular crypto becomes, the more USD raised, the more higher velocity money in circulation, and the faster the speed (spend it as fast as you can, before it stops). Network effect. It is uncertain as to what happens around stable coin where one leg is pegged to USD, other than its a developing grey rhino. If everything works as advertised there should be no effect, if there's a bad actor ...... Replace the stable coin with a US CBDC derisks the grey rhino. Not a popular view in the US, but a largely minority one. SD

Sure ... to the dinosour without much runway left (or a short investment horizon), it's a tulip. But .... If you're going to have to live with the underlying blockchain technology - it's a little bit different. BTC has a fixed limit of 21M token, after which the cost of the processing is paid directly by the buyer/seller vs a release of new coin. There are a variety of views on just how 'hard' the 21M cap actually is ..... most expect an 'adjusted' cap at around 23-24M, re all that coin tied up in accounts where the key has been lost. When you have to pay for your transaction and the cost is in the hundreds, is a BTC likely to still be trading at USD 60K+ ??? The more BTC ETF's the greater the possibility SD

Where you can, leave your money in the pension scheme/plan. The sponsor typically covers some of the ongoing costs, and most are not going to do better elsewhere. Some folks are just naturally very good at turning a profit; but they are almost all outlyers, street smart, and have been from a very young age. And whichever side of the law, the cream rises to the top. Boiler maker or silver spoon! Folks have to find their own path; almost always it's learn to trust your decisions, think independently, and think on your feet - then it's just fun! Look around you; including yourself, maybe 5-15% would make the cut? If it is > 50%, you are keeping the wrong company! SD

People have long been convinced that if you have a few bucks, you should 'invest' it. Once past the clothes, the car, the good time, the ETF seems a good idea. Buy ANY investment vs just spend the money, and you're ahead! Fees are not a consideration, the rest is just exploitation. Most people are financially illiterate; they can instantly google, tell you what everything is, and even how to apply it! but there is ZERO context. Very little if any consideration of relative risk, value-add, or alternatives - ZERO maturity. Most people have mortgages, credit lines, credit card debt, etc. While it may be obvious to us that simply applying the ETF capital directly against debt would produce a better result, to most it is just too much of a reach. Can't see the resultant lower monthly payments, resultant diminished stress, etc. SD

The tax thing is evolving. CBDC use grows at the expense of paper bills, which cut-out ability to track the money trail. Hence, the more an economy has to use CBDC, the more visble the entire underground economy becomes, and the ability to tax it - both domestically and internationally. The recent minimum global tax of 15% as recent evidence of future magnitude and direction. The downside is greater use of tax evasion via the physical goods route, vs the digital payments route. Supply chain can 'obscure' a great many things, and physical co-mingling is very difficult to seperate. It's pretty hard to seperate the blood gold out of your 1oz wafer, and there are a great many smugglers very good at both bribing and co-mingling. SD

Couple of add-on's to this. Outside of BTC and ETH, most of the 20-35 demographic have zero confidence in crypto coin. They are primarily in it to learn how they could use this, how de-fi platforms work; which are better for what, size/type of commissions paid, what volaltility actually means, how a CBDC (eKrona) is actually used, how a stable coin works, what a crowd fund actually is, how it works, why anyone would contribute, etc.. A few hunderd bucks in 'tuition', not much different to how most people 'learnt' how to use smart 'phones when they first came out. Time/money well invested. Very much a utility view, most see ETH as the 'operating' coin that you are going to run your NFT on, and BTC as the practical store of value in 2nd-3rd world apllications. Helps being able to talk directly with peers from these countries around store of value vs volatility. Stable coin viewed primarily as a mutual fund backed by 'whatever', and not as a currency peg. Most existing apps seen as 'OK, or utter sh1te', and in need of a lot of work - same as the early smart 'phones. Stong selection bias in the sample, this is the top 5-20% of the demographic, and they come at it entirely from the business side. There are very few if any coders. All students produce a white paper from scratch; either as a 'green field', or as an assessment of someone else's whitepaper under standardized criteria. Both require a solid understanding of blockchain mechanics, strong familiarity with the tech stack, and the bones of a strong business plan. Where possible, industry management makes guest appearances, and some of the 'green fields' are expected to potentially grow up into startups post graduation, via grants/incubators. 15-25%+ of undergrads go on to do a Master in Fintech at prominent business schools across Asia, India, and South America - against competitive entry. A good portion of the Masters students go on to become involved in policy &/or impementation work at prominent Canadian institutions. SD

Every initial roll-out includes dumb errors - that's why we have sounding boards. Obviously the concept is great, but design execution just needs a little work ... Apparently these things are not co-ed? It's OK to have large amounts of unfilled rooms, simply because the gender balance is off? ... Charlie, the waste! Something against windows? Keep the crazies down and there's a lot less 'wear and tear' .... Charlie, the incremental operating costs! The man hasn't lived in a household full of women??? .... Charlie, what the hell are you thinking! SD

As with dentists,we hire architects for a very good reason. We dont expect investing brilliance from an architect, and we dont expect architectural genius from an investor! SD

Amongst other things I teach a course in 'Introductory Fintech' at both the Master and Undergraduate level The mechanics of blockchain and smart contacts, the IT vs Busines view, the business integration of the new technology. 'Wealth Management' is one of the classes, and all students are routinely surveyed on if/when they would use de-fi apps, invest in crypto EFT's, and why. Similar classes in the apllication of NFT, cash/CBDC, etc. Popular course, most are in the 20-35 demographic, student mix is roughly 50/50 domestic/international, 60/40 male/female. Baba, Tencent, etc. are routine case studies. The 'trust' thing is largely irrelevant, whether that be the de-fi platform itself or the token bought on it. Most treat future crypto investment as a given, know the hack and volatility risk, and invest only small amounts to see how it works out; the objective is experience at both the platform and investment level. De-fi platforms complement traditional wealth management, and serve the vast bulk of everyday routine need. There is a great willingness to pay up for good financial advice, but not for simply order-taking or replicating what an app could do better. Wipes out the 'value add' of a great many financial advisors! 'This time it's different', because this time it really is different. The reality is that this technology did not exist a decade ago. Almost all with knowledge of the subject, unanamously recognize that going forward - the technology will fundamentally and materially change the plumbing of how most things will be done. Older folks just hear the platitude and mock, 'been there, and done that !!!!'. Dinosaurs, with zero recognition of the widespread generational shift taking place under their feet. Sure, if you are 'old' and your clients are 'old', you can probably ignore this. But you are a dying demographic, and there are fewer of you every year. Just a different POV. SD

The systemic risk is generational shift, that older folks just do not get. Simply look around you. Most folks < 35 look to apps (ie: a Wealth Simple) for their financial and investment advice (ie: a Robin Hood) - not an investment advisor. To them, doing anything without tech is wierd, this is most of the demographic buying crypto ETF's, and most wealth apps are quite adequate for the everyday transaction. Sure, young investors can still make stupid investments, and there is risk to being on the bleeding edge - but against the remaining runway? it's just not a big deal. You and I might rant that we'd never trust an app (ie: algo), or hold a token - but we're the dinosours. As long as we see lots of other dinosours around us, we are positive that things will never change! - yet totally miss that the glacier we are standing on is rapidly melting. Every chunk of glacier breaking off, a black swan event. SD

Not for everyone - but one of the safer alernatives is the 'cross mortgage' We have a UK source funding an internal 1-Yr CAD mortgage at a fixed rate; every maturity the mortgage either rolls over, or the capital repatriates. The expectation is that over time CAD appreciates (petro currency) and the pound depreciates (brexit); resulting in a material (pound denominated) gain upon repatriation. Interest rate differences between the two countries largely a non-consideration. About once every 7-10 yrs, the CAD/USD FX rate is at parity, and most would expect that post brexit - the pound slowly drifts downward against the Euro. Comes repatriation day (whenever it eventually happens) a net 25-40% tax-free FX gain is not unrealistic. SD

Most would go fixed - if only because it is virtually certain that over the next 5 years the floating rate wll rise by > 90bp. Obviously, the sooner the rise occurrs the greater the benefit to you. Most don't realize it, but for a fee - it is also possible to issue yourself a mortgage out of your own/closely related RRSP. Pay yourself the extra 90bp, and if you can't repay for some reason - the shortfall is taxable income. Lots of possibilities SD

Direct experience in this .... The fixed rate mortgage will amortize over 25-30 years, but reset every 5 years. The property will have 5 years of appreciation and principal repayments to offset the impact of higher rates at a rate reset - most times, it's not really a problem. To reduce the monthly payment, the mortgagee can also choose to amortise over a longer period - versus the now shorter 20 years. Most mortgages will either be insured or secured against equity at well > 20-25% of the property value, and all are recourse. In the event of collapse, the banker just keeps the properties off the market, and supports inflated property valuations by choosing not to foreclose in quantity. Doesn't become an issue until short-term mortgage rates get > 10-12%, and the properties are in provinces with foreclosure laws going back to the depression era (very few). Sched-A banks are forced to hold significant reserves against exactly this possibility. Net impact? It'll screw up your day, but otherwise - no big deal. SD

No dog in this, but a few observations .... Sauble Beach: More retirees, greater ability to WFH, and just more wealth. Sell your place in Toronto for 1M++. pay 800K to buy in Georgian Bay (Sauble Beach), and you will still pocket 500K ++, plus have a materially lower cost of living. More liquidity than you and the mrs could possibly spend in your remaining lifetime. Multi-family: Much of the big city in-fill housing, and the 1M++ housing is multi-generational, 'one family'. Same idea as the MURB; but each generation with its own floor in the same house, versus a string of smaller units next to each other. While still very new, de-fi platforms have also simplified the ownership process - buildings no longer owned as thousands of little units, but as 2-4 units owned by different family members. The de-fi thing is just an automation of some traditional european ownership practices. Holiday hotels traditionally split into 20, 5% ownership units that also require the owner to be present 1 week/year. Its just not common practice in the US. SD

Bond market thing ... The fundamentals clearly point to higher nominal rates. Furthermore, Liquity Prefernce Theory (LPT) has NOT been repealed, so there should be a steep rise across the curve as well. There are only 2-ways by which the yield curve can be where it is. 1) Real returns are stongly negative; ie: simplified, the -3% real + 5% inflation = the 2% nominal we see on the curve. 2) Flooded supply at each point along the cuve; ie: simplified, the cost of money at that term lowered via increasing supply through quantitative easing (QE). Central banks are tapering; most would agree that if uniformly applied, reduced QE supply, should raise interest rates across all points on the yield curve. The only way this doesn't become a problem (as central banks seem to expect), is if the real rate of return has materially worsened; in the example, the real rate is no longer -3%, it's -5%. The 5% inflation rate is 'main street', the real rate is 'wall street'. The result is lots of press simulaneusly talking about the higher cost of lliving, and the very real risk of asset deflation. However, most would expect that long term covid impacts, ESG transition, China transition, and growing supply chain shocks are indeed worsening the real return. So what? Pick your spots - simplify, and go long only the things that matter to main street; energy, food, etc. Different POV. SD

Just to build on this... All across Europe, Canada, Asia, etc - similar 2022 increases are being quietly discussed. Most indexing annually, with the announcement in the early part of the new year. Between now and then ... rising fuel/heating costs, and rising food costs from increasingly disrupted supply lines. Add 5.9% inflation to the US treasury yield curve, and nominal discount rates are 7%+. Even if the global 'average' inflation is only half this (or 3.0%), the nominal US discount rate is close to doubling within 3-4 months. Yet there's very little - if any, discussion about any of this in the financial press? All fixed income values should drop, equiity valuations should drop - the only folks making coin should be the drug dealers, and the unhedged energy producers Hopefully somebody has a plan .... And may we all wish him/her a successful execution! SD

Over the years, our investment choice of 'X' vs 'Y' has almost always been correct. The disconnect - has been our view, vs the market as to how long it will take until 'X' has its day in the sun (ie: timing), Hence our preferance for the commodity companies, as changing commodity prices are quicker to force a valuation change. Similarly our preference for long investment horizons and averaging down until the market eventually catches up. The issue is that the disconnect can last for years, even when the evidence is as plain as the nose on your face. Lot of people have been pointing out the energy opportunity, for a very long time. Widespread availability of dirt cheap shares, but uninvestable unless you were private money, not beholden to others opinions, and could stand by your own decisions. Today, many of those investors are sitting on share counts in the six and seven digits, dividends are returning as markets normalise - and projected 25%+ cash yields are increasingly considered 'common'. Ultimately it comes down to the industry/company 'value proposition', how it is changing over time, whether the market will pay for it, and how much. Whether the company is currently profitable, is not particularly useful - heretical!. Case in point; a o/g coy produces product that we cannot do without, the quantity available is continually depleting, and the market will pay the least it can - identical to the drug pusher selling to junkies. Simply trim the relative supply ... and you have a great business! SD

The reality is that a PM has to be diversifing at the commodity level ... and NOT the country, or even industry level. Case in point; today's magnesium market. https://www.mining-technology.com/news/magnesium-curb-price/ The most effective diversification would be by energy use - options/futures + climate change arbitrage. This particular black swan is magnesium, but the reality is that the world is seeing a near simultaneous swarm of these black swans, as there are many similar very stressed sectors (cement, steel, chips, vaccines, etc). Supply chain shocks that drain the ocean everywhere , lowering all boats. Depending on model, current new car factory order 'waiting lists' are approaching 6-9 months. Auto plant production is not just slowing down, new car releases are being deferred as well. Deflation. SD

More along the lines of something additional being sent to a bonded warehouse on SP, and being released at a discount price re 'incorrect' labelling; subject to later receipt of replacement 'correct' labels. The old labels wash off in SP, the bottles do some travelling, and reappear with new labels in a povincial bonded warehouse. Needless to say, the Mrs is very good with paperwork SD

The whole premise hinges on what the USD for Coin exchange actually is, and how accounting records it. The contributor got Coin, and a statement from the issuer that the coin is backed 1:1 by USD, it is inferred that the assets are US T-Bills and Bonds. However the contribution is NOT equity, it is NOT a segregated fund for some purpose, and it is NOT a secured loan - so what exactly is it? It is nearest to a crowd-fund; accountants/auditors will look to both precedent and the substance of the transaction. Becauase the USD received are NOT encumbured segregated funds, they can be comingled with the issuers funds, and pledged to banks without restriction. Hence no issues around custodians. As the USD received are NOT equity, and the coin can be converted back into USD, it must be an issuer liability. Absent any security documentation, it is an unsecured loan (paying 8% in Geminis case). As the liability is not expected to be repaid, it can be written off and the gain booked directly to equity. Were there security documentation, the funds would be segregated, and comingling prohibited. The result would be a mutual fund, similar to a BITGOLD, SALT, etc. Ultimately the accounting method is an interpretation of the transaction. Both accountant and auditor will be looking to FASB and regulator(s) for guidance. The regulators themselves will also have different views (China, BIS, US, etc) Different set of risks. SD

It's just a different 'value' system, measured against different metrics. In their minds they are being entirely rational. Many years ago I had a great conversation with a kindred spirit who occassionaly smuggled liquor from St Pierre and Miquuelon, something of a sport on that part of the coast. He was truly gifted at it, often earning as much in 1-2 trips as he might otherwise have earned in an entire fishing season, but lived very modestly along with his Mrs and their family dog. He explained that he was in it 'for the challenge', and was so disappointed by the ineptutude of the coast guard officials, that he just gave it up! Fortunately, he agreed to have a nephew 'crew' on his boat one season, with a stop or two at St Pierre. The nephew gets sick as a dog on small boats, but suudenly came back with 1/2 the downpayment on a small house. I know, 'cause I staked him the other half! SD

Variation on this .... In Canada, most people are entitled to a Canada/Quebec Pension Plan - payable anywhere in the world, at any time. The pension could be +/- 30% of the Age 65 amount, depending upon when the person choses to retire, and is in addition to subsidized health care if in the country for > 6 months/yr. Standard 'snowbird' stuff. Except ... keep going south, and fly on to the Carribean, South America, Africa, India, etc. The CAD pension goes a lot further in the weaker currency, local costs are materially lower than they would be in Florida, and its Summer when its Winter in Canada. Rent vs buy, visit with the relatives, pick a different place every year. Retirement looks pretty good! The shorter version is the 2-3 week cruise, with 1-2 month stopovers along the way. Use the cruise ship as a water taxi, where practical share your villa rental costs with others. Obviously not for everyone, and applicable only to the 'go-go' years of retirement. SD

It is a very straight forward argument. Coin holders believe their coin is backed 1:1 by T-Bills/Bonds. Custodians/auditors confirm the T-Bills/Bonds exist - they are indeed owned by the company, they are indeed there, and they have been recorded in the books correctly. However, these are NOT segregated assets, verifiers are NOT confirming that coin holders have beneficial ownership of the T-Bills/Bonds. The coin IS backed 1:1 - but the coin holder is an UNSECURED creditor, and the coin is backed by an illiquid capitalized asset, the company's own unpledged assets, and a small amount of T-Bills/Bonds. If there are insufficient UNPLEDGED assets and T-Bills/Bonds to meet redemptions, the coin issuer has to sell the illiquid asset - and there may NOT be a market. All else equal, over time as more money is spent on development - the illiquid capitalized asset gets bigger, and the quantity of UNPLEDGED company assets and T-Bills/Bonds gets smaller. The coin issuer is becoming a progressively riskier backer of their coin. All that is required for collapse, is a sustained redemption large enough to exhaust the quantity of UNPLEDGED company assets and T-Bills/Bonds. I humbly put forward that the introduction of a US Federal Reserve backed digital USD, might trigger such a redemption. Why? The coin became obsolete as soon as the digital USD was introduced. Functionally, the coin solution still works - but it just doesn't have the acceptance, backing, or utility of a digital USD that can be used in/on everything. The coin users rational action is to to redeem the coin for USD, then exchange the USD for digital USD. Different opinions around introduction of the digital dolllar and CBDC. Look outside of the US and it is pretty clear that CBDC is coming - the only question is how long until arrival. Different opinions around the 'utility' of stable-coin - currency pegs are just one application. Simply segregate the T-Bills/Bonds, turn the coin into 1:10 units of the segregated assets, and you have the standard money market mutual fund at $10/unit. A fund that is materially cheaper to operate and distribute, and WITHOUT the myriad of intervening intermediaries. Different PoV. SD

"It would also be fairly damning of State Street, Signature Bank, and BPM who custody and audit the reserves if they're allowing Gemini to pledge money it doesn't own as collateral for loans for its own benefit". The custody banks would all be on side, as a Gemeni would be putting up unencumbered assets that it does actually own - everyday business. The generic example just used Gemini as a name example of a USD stable coin issuer. No aspersions intended. SD