In my previous email, I went over some of the key concepts I learned at the 20th Annual Investor Summit. Today, I’ll be discussing the actionable insights I gathered from the presentations and speakers.
At the Summit, we had a lot of data shown to us about the state of the economy in 2022.
Here are some interesting data points:
Consumer behavior was also discussed at a financial conference I attended the week prior to being in Belize. This presentation by a major commercial bank showed meta data on activities and levels in individuals’ bank accounts.
Checking accounts that receive regular consistent deposits (i.e., people with jobs) are staying level. Checking accounts that do not receive regular deposits (i.e., people that don’t work) have been decreasing fast. Is this anecdotal evidence that all the people that have chosen to not go back to work are running out of money?
What’s refreshing about the speakers at the Investor Summit is that they are not from your mainstream media— nor are they bankers or politicians. They are people that have developed their knowledge independently of conventional practices.
One surprise guest speaker not listed was Danielle DiMartino Booth, the author of Fed Up: An Insider’s Take on Why the Federal Reserve is Bad for America. She worked inside the Federal Reserve for 9 years and continues to study the actions of the Federal Reserve.
It was interesting to note the fact that the Federal Reserve was holding one of their eight regularly scheduled meetings in the same week she was in Belize with us, sharing knowledge of what they are doing was amazing.
Hydrocarbon Energy is in short supply.
Hydrocarbon energy is still a critical piece of maintaining the standard of living worldwide that humans have achieved. If we use less energy, per capita wealth will decrease. This is also in critically short supply. The problem is going to take years of significant investment to correct and there isn’t any sign that the necessary additional investment will start to occur anytime soon.
The recession is here and now.
Even if demand decreases due to high prices and we possibly experience a recession, low supplies will keep worldwide prices of energy high. All fiat currencies are losing real value all the time and the only way to maintain your wealth is to own real assets.
Due to the interest rate markets, multiples (or cap rates; the inverse) used to value assets will have to adjust to decrease (increase for cap rates). This means good real estate deals are going to be hard to find without some adjustments in the marketplace.
To put it shortly: We are likely already in a recession. Q1 experienced negative growth. Consumers appear to be running out of disposable money. Inflation is still high.
As you may know by now, my preferred investments are ownership of real assets— not paper assets like those controlled by the financial industry and the financial system.
I plan to continue investing in CO2 Scrubbing equipment. The short supplies of hydrocarbon energy plus the need to remove CO2 from the gas stream as it comes out of the well should provide great tailwinds for the demand side for this equipment for many years to come.
I will refrain from real estate investing. Based on my takeaways, I am continuing to look for good opportunities to invest in the production of oil and natural gas but I am not actively looking for real estate deals right now.
I would also consider investments in non-energy commodities for the rest of this decade as well. Based on the continued devaluation of the USD, I believe that the Bitcoin network has all the characteristics to make it a valuable alternative currency and asset.
While I do believe this about the Bitcoin network, I am not saying that a conversion from USD to BTC as a reserve currency or Gold to BTC as a store of value will happen overnight. This is a long-term process and I believe this is the long-term trend.
Therefore, I am working on investments into bitcoin mining equipment which is necessary to maintain the security of the Bitcoin network. My preference would be to own equipment that mine these crypto currencies and are awarded with coins, but we would then immediately sell those coins and return USD to investors monthly.
I don’t want to combine two purposes into one investment, that is:
If you also believe, like I do, that:
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