The Dawn of ‘A New Game’
Friday, 30 April 2021
By James Woodburn
[7 min read]
Two weeks ago I said you face a simple choice…
‘You can sit back and watch this great step-change take place as a dispassionate observer. With no skin in the game. With everything to lose and nothing to gain.
‘You can explore ways to better position yourself to emerge from this transition on the right side of the ledger.’
Well today, you can discover exactly what I mean by ‘the great step-change’ taking place…and learn how to position yourself for it.
In a moment I’m going to hand you over to Ryan Dinse, the man whose unique foresight is at the heart of this very special project.
But first, let me get straight to the point, because we’ve been building up to this moment in the background since the end of last year. And, in fact, the financial world has been building to this moment for over a decade.
Next Wednesday we are hosting a high production event called ‘A New Game: Ideas, Strategies and Hacks for a New Money World’.
It’s an info-packed webinar event to try and explain where we believe the financial world is headed. How the very concept of earning an income from your investments is changing. How a new set of rules are being drawn up for real estate…for your stocks. And how the very idea of money itself is transforming, almost on a daily basis.
Yes, it involves crypto.
But it actually goes far deeper than that.
What we’re talking about is a whole new ecosystem for wealth creation.
It’s about the original value proposition that crypto represents seeping into all walks of our lives…
Purging the middlemen…
Take the central premise of bitcoin: it’s all about removing the multitude of middlemen parasites that plague our financial life.
At face value that means a world without the need for banks, brokers, registries, auditors, clearing houses, etc.
But at a deeper level it means removing political interference from money.
Today, you are about to get a taste of what we think is coming your way thanks to this one single idea.
In fact, it’s not coming your way; it’s actually already here!
Watch the trailer below and see for yourself. It’ll give you a great idea of what to expect later next week.
Now, over to the man of the hour, Ryan Dinse…
And hi, it’s Ryan here.
To explain where I think we are headed over the coming 20 years…I want to start with a story 20 years back in time…
When I was growing up there were some simple, time-honoured truths you could rely on.
‘Work hard, spend less than you earned and save for your future’ was a big one.
My grandad was a bank manager in the highlands of Scotland — back in a time when bank managers were a central part of the communities they lived in.
Through him I inherited all sorts of piggy banks, full to the brim of old coins, many of which weren’t legal tender anymore.
Half pennies, crowns, farthings, florins…money put aside for a rainy day that never eventuated.
I remember one memorable Christmas when me and my kid brother Marc (who was about nine at the time) decided to see if we could sell these old — and surely valuable — coins.
Unbeknownst to me, while I was looking up their values on the internet, Marc got out the bleach and scrubbed the ‘dirt’ off our collection.
You can imagine my face when I came through to see all these shiny ‘new’ coins I was hoping to sell as antiques!
Luckily — or unluckily — the coins didn’t have the grand values we thought they’d have. And they’re back in their piggy banks gathering dust once more.
But my point is this…
These days, does the old advice still make sense?
Should I tell my own kids to ‘work hard and save their pennies?’
The strange truth is I probably shouldn’t.
This headline from Domain.com is the new reality:
Frugal saving it seems is a fool’s errand.
Accumulation of debt is the new norm.
And us Aussies are world-beaters at it, as you can see here:
Source: Macro Business
This debt pile-on is happening at every level, not just in households.
Companies and governments are borrowing their way to ‘prosperity’ too.
The debt load is already out of control but the powers that be can’t let it stop otherwise we’ll see an almighty collapse, as decades of leveraged trades unwind.
So, the money printing continues, interest rates will turn negative and the debt pile will grow.
This process advantages those with assets like property and shares — assets propelled along on never ending waves of debt — and disadvantages those with a basic wage or cash savings — no debt.
It’s why I said before; saving today is a mug’s game.
As Ray Dalio recently put it, ‘cash is trash’ and it will continue to be until the eventual day of reckoning.
And there will be one. A debt-based system is untenable, it can’t grow forever and it will collapse.
That’s the trickier part to work out.
The good thing is, you don’t need to know when. You just need to understand the new system that’s rapidly growing and working in tandem with the old system.
Given this, what should you advise the kids of today to do?
And what can you do yourself when faced with such a manipulated and dangerous legacy system?
The first thing I invite you to do is UNDERSTAND the new system…‘The New Game’…and you can do that here:
When Dr Michael Burry — one of the misfit investors featured in the film The Big Short — shorted the US financial system prior to the GFC in 2007/08, he had to get Goldman Sachs and Deutsche Bank to actually create a new product for him.
He persuaded them to create something called Credit Default Swaps (CDS).
It basically allowed him to bet $60 million on the housing market going down. An act unthinkable to the establishment of the time.
They thought he was crazy and happily took the other side of the trade. What a mug they thought!
And it certainly looked bleak for him for a while.
His fund initially bled money — he started in 2005 and was early — and his nervous investors started to ask for their money back.
But he couldn’t give it to them as the money was locked in.
There’s a famous scene in the film where two of these investors confront the good Dr in his office.
They angrily tell him:
INVESTOR: ‘So Mike Burry of San Jose, a guy who gets his hair cut at Supercuts and doesn’t wear shoes, knows more than Alan Greenspan and Hank Paulson.
MICHAEL BURRY: ‘Doctor. Mike Burry, yes, he does. (CHUCKLES).’
It’s my favourite scene in the film as it reminds me that investing isn’t a game of who has the fanciest title. But of those who can connect the dots best.
And luckily for Dr Michael Burry’s investors, they were locked in whether they liked it or not!
The rest is history.
The GFC hit and his fund made a motza…
And all because Dr Burry understood what was really going on before the vast majority.
Your best investment for today: Understanding The New Game
Now, back to our current conundrum…
There are a few options people talk about when they think markets will crash.
But like Mike Burry, you’ve got to make sure you’re in the right one.
You could stay in cash and await the inevitable.
But in my opinion that could be a very stressful move if the debt-fuelled boom goes on for a few more years yet.
And what if cash never comes back and instead morphs into new forms of money?
You could try and ride the debt-fuelled stock market and time your exit. That’s very hard to do, even for experienced traders, as a ‘rigged’ market is a very volatile beast to trade.
Load up on solid ‘bricks and mortar’ investments.
But remember, property, especially here in Australia, is very vulnerable to any eventual deleveraging process.
And as a pretty illiquid asset, you mightn’t be able to sell if everyone else wants to too!
You could buy some gold, probably not a bad idea in some ways.
However, the paper market for gold is very much part of the existing financial system. So, unless you’ve got physical gold, systemic risk remains high.
In fact, all these assets suffer from the fact they’re tied intrinsically to the debt-fuelled money system we operate under.
No, if you want to succeed in the new game the very first thing you must do is simple…
You need to know THE RULES of The New Game
As you may know, I’m a long-time advocate and investor in cryptocurrencies.
I believe they have a massive part to play in the next stage of the evolution of money.
They have several key characteristics that keep them outside the legacy financial system:
- Bitcoin and cryptocurrencies aren’t backed by debt. They’re sovereign to themselves.
- You don’t need to use the existing financial system infrastructure to transact or store them.
- You can custody your crypto assets; you don’t need a broker or bank to store them on your behalf.
What this all means is that, if the current financial system falls apart under the weight of its own debt, cryptocurrencies are the only asset class likely to be immune from the fallout!
Simon Dixon, CEO of Bank to the Future, explains it like this:
‘Personally, I believe that we’re locked into the Great Depression of 2020. I think that’s an inevitability, we’re here. I think we’re going to see a big monetary renegotiation, which no one knows where that’s going to go. Initially, they’re going to get through the social unrest, they’re going to get through this health crisis, and then next is the financial crisis. We’re going to see a ginormous monetary renegotiation like we’ve seen in previous years.’
He then concludes:
‘If you believe the traditional markets, that governments will always figure out a way, and I do believe that they will figure out a way, then you can have 80% of your money in traditional markets and a small percentage of your money in an alternative.
‘But I believe that everyone needs a plan for what if the traditional financial system doesn’t get repaired in a way that we’re used to. So, to me, that’s where a Bitcoin-based portfolio comes into play.’
Like Simon, I’m certainly not advocating anyone to go ‘all in’ on crypto.
While understanding the role of cryptos is part of ‘The New Game’, it’s not the be all and end all.
What I AM saying is that as an investor looking to manage your risk, then thinking about systemic risk is important.
And the biggest risk in my view is being closed minded about the clear and massive transition happening today.
It’s time to take action
We’ve talked about a lot today.
But the thread through it all, is a slow shift in the fundamentals of money.
This shift has taken place in the background of my life.
For most of the time, I didn’t even recognise this was going on. And I’d bet 99% of people still don’t.
But it’s now clearer to me more than ever that some big changes are coming to money. And in my opinion, cryptocurrencies are an essential component of any rational investor’s portfolio.
In a way, it’s a ‘short’ on the current system.
But it’s actually a bullish bet on the future too. A bet on technology and innovation.
And that’s what makes ‘The New Game’ such an important and exciting development to learn about.