2022 Could be a crazy year. Here’s what I think may happen.
Elon Musk announces that he is building a fleet of spaceships to start a colony on Mars. It turns out he has sold all his bitcoin to buy rocket fuel, which basically explains why the price of bitcoin has been falling and the price of gas rising.
A senior member of the UK government is forced to resign after being spotted wearing pyjama bottoms in a ZOOM interview with the BBC.
$15 trillion of bonds have a yield below 0%. even the Merrill Lynch High yield Bond Index yields only 4%. This is 3% below the official inflation rate. Investors are making negative real returns.
H&M announces it had record sales of its Pyjama products in 2021. Pyjama sales rose 63%. “The rise is inexplicable”, said Freddy Teddy, speaking on Zoom, wearing one of the company’s top-selling bedtime outfits. He took the opportunity to introduce a new product “Pyjama-Mask”. “You can’t have enough protection when in bed”, said Fred.
Burberry plc’s share price slips as the company warns of a sharp decline in the sale of men’s suits. “Whilst shirts are flat, men’s trousers have inexplicably fallen off”, said a spokesman speaking in a video conference from his bedroom. “We’ve been trying to compensate for the lost sales by selling Premium Face Masks……but people are treating them like trousers….. They just don’t want to put them on.”
60–40 “Balanced” Investment mandates were written at a time when you could make a return with bonds. Investors are asking “What’s the point of paying fees for negative returns?”
The National Statistics Office lets slip that the rate of inflation would be 14% if they were using the 1980 formula for CPI.
Facebook Inc sends out a 30 minute advance warning to all its staff to attend a meeting in the MetaVerse. It warns that anyone who fails to attend will be fired. Only 27% appear as Avatars. The rest are still in their pyjamas.
Turkey: President Erdogan replaces the Central Bank Governor for the 11th time. He orders the new governor to make Turkey’s economy more like that of America’s. Interest rates are immediately reduced to zero and inflation soars to 29%.
Risk happens fast. Argentina defaults. Stocks collapse 25%. The Dollar and Treasuries soar in a “flight to safety”. All investment managers decide to “reduce risk” after stocks have fallen.
Donald Trump changes his political affiliation for the 7th time since 1989. He announces that he is forming a new party called the “Unmasked” Party.
Elon Musk visits the UK. The Queen, having heard that Elon likes dogs, gifts him a Welsh Corgi.
Someone creates a digital token called “Corgi-Coin”, which instantly soars to a market cap of $25 billion.
The March stock market crash is followed just as swiftly by a huge rally. As stocks rally fast, investment managers have no time to pick individual stocks, so the pile into ETFs pushing leading stocks to new highs. Investment committees are dominated by those who want to cover their asses. that’s why they buy ETFs.
The neighbourhood of Hollywood in Los Angeles announces that it will re-brand itself. In future the district will be called “Metaworld”. All major streets will be renamed. For example Sunset Boulevard will be renamed “Spacex”, Rodeo Drive will become “Roblux”, Fountain Avenue will be renamed “Facebook”, Gower Street will become “Google”, Hollywood Boulevard will be known as “Amazon”, Melrose Avenue as “Apple Avenue” and the star-studded Walk of Fame will be called “Netflix Walk”
Paramount Pictures say they can’t understand why none of the roads were named after them.
Lockdowns are eased, but nobody feels like going back to work.
Hollywood Golden Globe Awards will be renamed “Hollywood Global Bitcoin awards”.
Instead of a golden statue, winners will be given a QR code, allowing them to redeem their prize as an NFT by entering a 64 digit private key in some blockchain.
Quantitative easing is monetary heroin. The Fed’s tapering plan is causing painful withdrawal problems. The politicians don’t have the stomach for that. The government is spending even more than before, and needs someone to fund it.
Jerome Powell, is nick-named “Quant King of the Fuddle Reserve”, after announcing that QT will be replaced by QE.
Covid: As new variants keep popping up, governments recommend their populations to get a 4th, then a 5th booster.
Meetings of more than 15 people are banned in the UK.
The UK minister for technology proposes to the Prime Minister that the cabinet’s summer party should be held virtually, in the MetaVerse, so as to respect Covid guidelines. The proposal is point blank refused.
The Prime Minister raises the meeting limit to 30 so the Cabinet can have its party.
The Oxford English Dictionary, removes “Store of Value” as one of the seven attributes of “money”
Tesla renames itself “AI”, short for “Artificial Intelligence”.
Vaccine companies warn that booster jabs will need to become the new norm.
The United Nations reorganises itself as a virtual DAO in the MetaVerse and 3.8 billion netizens vote for its president to be a Bored Ape NFT. The former president retires to his Yacht Club.
The IMF calls for a global debt restructuring. It says that when an economy borrows more than 77% of GDP there is no escape. Almost all major economies are well over that limit as well as hundreds of smaller ones.
Governments recommend everyone to get a 6th booster.
So far there have been almost no deaths from the recent Covid variants.
The latest version, the Epsilon variant, causes a temporary lack of perspective and an inability to think logically. Many of those affected say they experienced a loss of touch with reality, or suffered from a phenomenon known as FOMO.
Stock markets keep hitting all-time-highs. The FT and Wall Street Journal call it a bubble which is about to burst. They say Tesla is the poster child. Nobody cares. Who reads papers anyway? Especially not the ones selling FUD.
In an unusually eloquent speech, the leader of the “Unmasked” party, Mr Donald Trump, calls for tax cuts and more spending. He says that if America stops printing and spending, banks would fail, shops would be empty, and the vacuum would give rise to dictators. He calls for a Universal Basic Income (UBI) to be given to every American if he is re-elected as President in 2024.
Former Fed Chairman, Alan Greenspan repudiated Trump’s claims, saying that if money printing was the solution then Zimbabwe would be the richest country in the world.
As autumn approaches, the top vaccine companies say that it is likely we will need daily injections if we are to stay healthy.
Stock market indices are driven higher by medical stocks anticipating another Covid winter. The top 6 stocks have been dubbed the “M-PFANGS” (Moderna, Pfizer, Astrazeneca, , Novartis, Glaxo and Sanofi).
Inflation rises to 8.5%. Life get tougher for those on low incomes. Inflation punishes those with no financial assets and rewards those who are educated enough to buy them.
An NFT auction sets an all-time record of $150 million for a single piece. Sotheby’s sold a unique NFT copy of the Mona Lisa digitally signed by the Louvre museum in Paris. The bidding and purchase price were all in Ethereum. The anonymous buyer is rumoured to be a Wall Street Titan planning to set up the first MetaVerse museum on Mars.
The UK, USA and Europe announce the introduction of digital currencies, known as “Central Bank Digital Currencies”, or “CBDC”s. The CBDCs are direct liabilities of the respective central banks, and are pegged 1:1 to the respective national currencies. Anyone can instruct their bank to convert their money 1:1 into CBDCs in their digital wallet. Retail banks are now in competition with the Central banks.
Governments prepare to pass legislation to make the use of CBDCs mandatory for all new transactions after “D-Day” which will be 1/1/2025.
There’s rioting in Britain as old-age pensioners storm the streets protesting about the choice of name and the fact they are being forced to buy smart phones.
The UK government promises not to repeat the 1971 trick of reducing the number of pennies in a pound. “Don’t worry”, said prime Minister, Liz Truss, “A digital pound will still be a pound, and there will always be 100 pennies in a pound. It won’t buy any less than before”
The price of petrol hits a new record in the UK. It is close to £6 a gallon. People continued to queue outside those petrol stations which are still open.
The UK Secretary of State for Transport, (former Prime Minister Boris Johnson), denied that the shortages were caused by Brexit. “Look,” said Mr. Johnson, “It’s nothing to do with Brexit. The only reason the price is up is because we’ve run out of North Sea oil and we now have to buy our oil from abroad. The pound is down, which means that it costs more. In fact, just about everything costs more, so there’s nothing special about the price of petrol. As for the queues, there’s no actual shortage. It’s just that no one wants to work here. If we can’t get lorry drivers from abroad, there’s nobody to deliver the petrol from the refineries to the petrol stations. There’s plenty of petrol there. Everything is going to be just fine.”
The US “Blockchain for All Act” passes into law. The most important provision is one enabling corporations to issue their shares as tokens on a blockchain. Blockchain tokens must be defined as “Securities”, “Crypto-Currencies”, “Utility tokens”, “Gaming Tokens”, or “Other Tokens”. Clarity is given around responsibilities. The SEC’s role is limited to “Securities”, whilst the nation’s consumer protection agency, the FTC, is given sweeping powers to investigate all others and to prosecute scammers, cheats, rug-pulls, and businesses which don’t make good on their promises. The law contains a five-year tax break on all crypto to crypto transactions.
The bitcoin price explodes hitting another all-time-record.
“Utility tokens” out-perform bitcoin.
“Meme-coins” continue to deflate rapidly. There’s no wall of hedge-fund money waiting to to buy such crap.
Pfizer, now the world’s largest company by market capitalisation, announces an all-stock $15 trillion bid for Facebook. Pfizer denied that they were motivated by a desire to silence the anti-vaxers.
AI, (formerly known as Tesla), soars as rumours swirl that Moderna might be considering a $19 trillion bid for the car maker. Analysts reckon that Moderna could use Tesla’s Artificial Intelligence to figure out what the next variant of Covid will be, and to produce a vaccine for it before we have even given it a name.
China announces that Guangdong will become a tax-free blockchain development zone.
Several European countries, including the UK bring in provisions to incentivise blockchain development companies to set up locally.
Bitcoin continues to climb to daily records. Those lucky enough to have bought below $100'000 are being treated like lottery winners. In other words, they have to buy the next round of drinks in the pub.
None of the above represents the official view of any other sane investment professional.
None of the above should be regarded as investment advice. Do your own research.
But here is a piece of advice you can heed:
It seems like everyone around you is making a ton of money buying shit-coins with pictures of dogs. They also bought the hottest new tech stocks with p/e ratios in the hundreds which still “mooned”. But everything you touch seems to immediately go down?
My advice: (This is serious): Reduce the size of each investment to such a small amount that you don’t care if you lose it, and you don’t care if it doubles. If your next investment goes down, as usually happens, you can buy some more at the lower price. If it doubles you won’t be tempted to take your profit too early.