Update - November 24, 2020
Yellen Is Back… and That’s Great News for Our Portfolio
Our Modern Asset Portfolio got a big boost this week.
All signs point to Janet Yellen becoming the nation’s next Treasury secretary. As our portfolio hinges on low interest rates and government intervention… it’s fantastic news.
Biden is quickly filling his cabinet with a slew of familiar names.
It’s an abrupt about-face when compared with recent headlines – especially this week’s story about current Secretary Mnuchin ripping power out of the hands of the Fed.
We won’t get into the politics of either side. Just know that Yellen is sure to turn the other cheek and eagerly extend a hand to her old pals at the Fed.
That means… in the simplest of terms… more free money.
Lower for Longer!
Yellen, after all, learned her lesson the hard way. She tried to do what was right. She tried to slow the runaway ship with higher rates way back in 2016. But she got burned.
She now admits she may have made the move too soon.
And now that she’s on the political side of the job, she surely won’t push her pals at the Fed to make the same mistake twice. As the person in charge of making sure Washington has the cash it needs… she’s going to depend on those low interest rates.
Who knows… maybe her 2016 quote about not dismissing negative interest rates will come in handy.
Either way, if you’ve followed the path blazed by our Modern Asset Portfolio, you’re prepared for this “lower for longer” trend.
Digital Money Soars
Perhaps the most eye-catching move in all of this action is what’s happening in the realm of cryptocurrency.
As folks ponder the future of money, Bitcoin is hovering near record highs. And, of course, our stake in the ultra-private coin Monero (XMR) is keeping pace.
We’re now up about 40% on the play since its debut in the October issue.
I expect the gains to grow much larger from here.
I could list the same bullish reasons that so many outlets are reporting – the fact that the Fed is printing trillions of dollars, the anti-inflationary idea behind the top coins, and the notion that some of the world’s biggest and most outspoken investors are now changing their minds on crypto and jumping in.
They’re all very good ideas. But they’re all well-known.
You can read that stuff on your own time.
We don’t do what others are doing simply because others are doing it. No, we do it only if it makes good sense.
And, as a volume guy, I’ve found yet another reason to be bullish on digital money that makes great sense.
Different This Time
You see, the last time Bitcoin was at the same level it is today, daily trading volume was nearly three times higher than it currently is.
It means buyers and sellers were in a frenzy as one group jumped in headfirst and the other gladly took profits and ran.
Prices rose on a frenzy of speculation.
But this rally is starkly different. It’s much quieter.
With the exception of the last week or two, volume for many of the largest coins has hardly been above the 18-month trend.
That’s a sign that buying demand is rising… and outpacing new selling demand.
It’s quite bullish.
It tells me that the current run is sustainable. It’s not just speculators jumping in blindly.
It solidifies crypto’s role in our Modern Asset Portfolio.
As more and more “traditional” money managers understand the role of digital money and, much more importantly, more companies like PayPal (PYPL) and Square (SQ) make it an even larger part of their platforms, the speculative side of crypto will wane… making room for a sustained, fundamentally driven climb higher.
Like I’ve said all year – especially to subscribers of my fast-paced trading research advisories – it is a fantastic time to be an investor.
On one hand, Yellen’s nomination gives us a strong confirmation that the nation is not only returning to its well-worn path… but also doubling down on the ideas that got us here.
And on the other hand – this is the good part – we’re now able to load up on the market’s solutions to what ails us.
It’s an ideal time to own modern assets like crypto.
I’ll have the next addition to our Modern Asset Portfolio for you next week. It’s an exciting international play that threatens to disrupt everything we know about money and credit.
Until then… have a wonderful Thanksgiving.