"They're Not Going To Be Able To Lie Anymore"

When the masses wake up to the ruse, the next phase may happen faster than most are prepared for.

This morning we were blessed with some fresh labor numbers. Yet another super low 3.5% print. While the stonk market has absolutely wet the bed today because of it down over 2% as I publish, sentiment on FinTwit is probably what you’d expect; there’s quite a bit of people who flat out don’t believe it. Twitter is a time incinerator. I should have never gone back on it. I say this largely in jest. But I’ll walk you through part of my afternoon today and highlight what I mean. I came across this during lunch:

Rudy Havenstein, Troglodyte Value Manager. @RudyHavenstein

Another thing I learned - I'm just a caveman, but just because someone has a PhD or is on CNBC every 5 minutes does NOT mean they are "street smarter" than you. Many extremely intelligent guys like Bernanke are functional idiots and wouldn't last 5 minutes in the real world.

It reminded me of a quote from Roy Sebag’s appearance on Hedgeye from 2018. Sebag described how he has actually spent time with Bernanke in person and described the man in this way:

completely useless as a thinker

That’s a direct quote. I know this, because I went back to the video just to make sure I didn’t misquote Sebag. And as fate would have it, I ended up watching the entire thing again because it was and remains such a fascinating discussion. It’s where the quote in this headline came from.

They’re not going to be able to lie anymore

I’d argue we’re just about there. This conversation between Sebag and Hedgeye’s Keith McCullough is one of my all-time favorite YouTube videos. At just 42.5k views, it is criminaly under-watched. Watching it back, it has very clearly helped frame my philosophical thinking over the last few years but even I was surprised by how much of what Roy described roughly four years ago we’re now literally living through:

• 70’s style inflation

• The dogma echo chamber of academic elites

• Debt jubilee (think student Loan forgiveness)

• Fracturing of the labor force

• The different financial position of America vs Russia, China, and India

• The “experts” losing the ability to abstract away natural truth

On that last point, I believe two good examples would be a growing distrust of government statistics and a greater number of people buying crypto over the last two years since this interview happened:

The replay value of this discussion is honestly breathtaking with the benefit of hindsight. There is a really incredible chart about 20 minutes into the discussion that I think provides insight into why some of the US workforce said “eff it” rather than come back to work after lockdowns.

If you have one hour to spare over the weekend, I highly recommend watching this video. I can’t stress it enough. Because a lot of what Roy described in late 2018 has begun to come true. And the next phase from here is not pretty from a purchasing power perspective.

Remember, the only assets that will help feed you when you’re hungry are pre-stocked shelf-stable foods or consumable product-yielding properties like land or livestock. I’d personally prioritize those over any traditional investment vehicle to fight hyperinflation if you’re starting from scratch. And any debt jubilee that comes with the caveat of sacrificing control over your autonomy should be rejected.

I hope you all have a great weekend.

Disclaimer: I’m not an expert in anything except losing money in pot stonks.