Part 5: Investing in the Parallel Economy, What I am doing in 2023

Alright, Secret BTC Agents

So we are almost at the end, now that we are all set with ideas and plans to create wealth in the parallel economy, what will we do with this wealth in 2023 and beyond?

Part 5: Investing in the Parallel Economy, What I am doing in 2023

The old adage that comes from the legend of Joseph Kennedy, who was the father of the late US President JFK, was living in NYC in 1928 and stopped to get his shoes shined.

As the boy was shining Joe's shoes, he gave him some stock tips, and Joe decided right there it was time to get out of the market, he sold off his entire portfolio immediately, and the crash came soon after, leaving him with his wealth intact, at a time when so many others had lost theirs.

The lesson to be learned from this story is that if everyone is bullish, so bullish even the shoeshine boy is telling you about stocks, it's time to sell. But…

Is this really a lesson to heed today? Or have things changed?

In 1929, hardly anyone invested in stocks, because they didn't really need to. The Federal Reserve had just been created 15 years before and people were used to gold being money and their money holding or even increasing in purchasing power, not losing it.

Fast forward to today, over 100 years after the Fed started to debase the dollar, where we are seeing the money supply increasing by 40% over the last 3 years people are forced to invest to protect their savings.

Add in the change in technology, you know… the internet, and now everyone is connected to the world, all the time, so information moves instantly and freely, millions of accounts across social giving investing information…

So going off of a market sentiment legend from 1929,
just doesn't make sense any longer.

Not to spend too much time on this point, but… things change, and we must change, our investing must change.

Another example is for the last 70 years, having a 60/40 - Stock/Bond portfolio has been a great strategy, you get the cash flow from the bonds and the equity growth from the stocks.

When the market goes up, your capital base grows and when the market goes down, you are hedged with the bonds and you receive cash flow. The entire financial advisor industry has been built around index investing and 60/40 split portfolios, and…

It worked great until it didn't

2022 saw the death of the 60/40 split as stocks and bonds crashed at the same time, and we saw the worst financial markets in 50 years.

Don't Get Caught By This…

Humans are horrible investors for several reasons…

Normalcy Bias makes us think that whatever has been normal will continue.

Examples:
The 60/40 worked for as long as I can remember so it will always continue to work.
Stocks always go up, over the long term
The Fed will always be able to and want to push up the market

Recency Bias makes us think whatever has been happening recently will continue, ignoring historical lessons.

A big problem with this is most of us only live to about 80, and are really only paying attention for about 50 of it if we are paying attention at all.

So most people are focused on the last 50-60 years of history, but…

If you zoom out and look at the long lens of history, thousands of years of history, it's easy to see that the last 60-80 years have been an anomaly, not the normal, and…

How is the world changing fast?

The era of peace is ending:
Over the last 80 years, we have had a relative era of peace and global cooperation. Sure we had the cold war, and the rise and fall of communism in Russia and China, but except for a few small skirmishes, Korea, Vietnam, Iraq, etc, the world has been pretty peaceful.

This is important because this era of global peace and cooperation allowed for globalism to spread, allowed for almost every country to participate in the global markets, and supply chains connected the entire world, increasing goods, and lowering costs.

The era of debt is ending:
This was all accelerated with the USD being the global reserve currency, fairly stable (compared to other currencies) well trusted, and a payment network that could settle money around the world.

This allowed for money and debt creation on levels never even imagined. Central Banks around the world have created almost $50 Trillion from thin air. Banks have bet over $1 Quadrillion dollars in derivatives, and all of this fake counterfeit money had a massive positive effect.

But this is all changing, will continue to change, and has changed…

Global debt levels of Sovereigns are past the point of no return. Per Hirshman capital, since 1800, 51 out of 52 countries with gross government debt greater than 130% have defaulted. Japan is the only one avoiding default, but it's coming…

The era of global trade is ending:
Of course, you are aware of the war between Russia/Ukraine/US, and the one on the bring between China/Taiwan/US, we also have one growing in the middle east between Israel/Iran and maybe the US.

I regularly cover this extensively in my videos so I won't go on here, but the era of global peace and cooperation is over. Now it's trade wars, sanctions, and boycotts. Instead of global supply chains and just-in-time manufacturing, it's now, just in case, better order it now, or manufacture it here!

As is the case today, the United States is re-onshoring everything, mining, energy, and even microchips.

The era of deflation is ending:

As global supply chains developed and cheap labor from other countries came online, prices of goods and services plummeted, and the world saw purchasing power and standards of living increase.

This was great for us consumers, our goods and services got cheaper, but it wasn't so great for central bankers that depend on debt.

For most of the 2010s, the Fed was fighting deflation, trying to get the inflation they so desperately need, to inflate their debt away. Headlines in 2015, 16, 17, 18, and like this one from 2019 show the fed just doing anything they could to get inflation.

"The economy of imaginary wealth is being inevitably replaced by the economy of real and hard assets"
- Vladimir Putin

Is Putin a diabolical maniac as mainstream media makes him out to be? Or a brilliant economist and strategist that sees the financial system house of cards for what it really is?

As the era of cheap debt is ending, and the era of inflation is rising, what he has been stating is coming true.

It's easy to see this evidence by looking at the FANG tech stock darlings or just looking at Cathie Woods Ark Innovation fund which is a basket of these stocks and a good representative. It's down over 80% since the Fed started raising rates.

This is the new paradigm

While I am bullish on technology and love seeing what OpenAI is doing with Dall-E and ChatGPT. I believe we will continue to see these new technologies advance and flourish, most of it was fed by easy access to cheap money, and that's gone, for now.

As Putin said: "real and hard assets"

So what are those?

They are things that cannot be created from thin air, like fiat currency, and tech stocks that are mostly an idea, and far from seeing any profits.

They are commodities, like wheat, gold, uranium, oil, gas, etc. No amount of central bank printing can create more of them, they are "hard"

So I expect the demand to stay strong for those assets, while the supply will continue to dwindle both because of the supply chain issues we already covered as well as the globalist attacks and food and energy causing global shortages, on purpose.

What am I expecting in 2023 and what am I doing?

2023 has much uncertainty around it. Jerome Powell and the Fed have been very clear, as Powell has said many times…

He will "stick with it" until "the job is done"

Stick with what?

Raising rates and tightening monetary policy to crush demand, to attempt to lower inflation. He said his policies won't be welcomed by the public, and why should they be?

He is attempting to "crush demand" by making us broke. His goal is to crush your retirement account, and your home's value, and even raise unemployment and lower wages.

Hmm… doesn't sound like something we would want?

Until the job is done?

What job? Getting inflation back down close to their stated goal of 2%?

Most economists and I agree that it's not very probable, without doing lots of damage over a very prolonged period of time

But, that's his stated goal, I believe he is serious, and I believe he believes it. He even said he would rather overdo it and break something because "they have the tools to fix it"

So I expect more pain. But… what about the Fed pivot?

Well, Powell told us, to break it, then fix it, so don't expect a pivot until something breaks. And what is that? And when will it happen?

What breaks means is the financial markets freeze up, the liquidity dries, banks run out of funding, and maybe the mortgage market (which is at a standstill) or the corporate bond market dries up. But…

I don't see that being imminent, the Feds RRP has a record $2.5 Trillion of liquidity sitting there, it's going to be a while before that draws down, but I will be watching it closely.

So what do I expect?

I think around Q2 - Q3 of 2023, we will have more clarity on what comes next. While the Fed is trying to pull off a miraculous soft landing, the economic data coming out is horrendous, it's terrible, its worse than can be imagined and the course we are on will see an epic crash by the middle of next year, if… we stay the course, if… the Fed doesn't intervene first.

So for me, it's somewhat of a "wait and sees" for me. I have no problem being patient for 6 months because I have my hands full (more on that below)

As I mentioned above and have been making videos for the last year, I have been loving commodities, specifically gold and silver miners. I have done at least a dozen videos talking about them, mentioning names, etc.

My precious metals portfolio has been crushing it for the last 2 months, many positions are up 100%, and I continue to invest and stay invested in this sector.

I am also still holding several energy plays, natural gas, and oil, specifically the companies that service that sector, and I will continue to hold them. They have come down a little, but long term, I like this sector and continue to invest and hold in this sector.

Remember, real hard things…

I also love Bitcoin, you already know that! Bitcoin has caught a bid, it's up over 20% and publicly traded bitcoin miners are up over 100% in the same period.

But, I expect more volatility for this year, so be careful on the more speculative plays, but I do believe in the hard assets, and I am holding them.

Hedges.
As the markets crashed in 2022, I shorted many indexes and some individual names and did great making money while most people were sitting in their positions and watching them lose money. Their financial advisors were telling them to "hold, time in the market they say"

I see no reason to hold losing money on big drawdowns, I would rather make money on the way down, and then buy back in at lower prices, I am not a trader and do not believe I or anyone can time the market, but…

I am a surfer and I know how to ride waves, and I ride the trend, the momentum, the waves in the markets. I still have some shorts open as I think the trend for this is volatility with a downward trend, at least until mid-year as I said above.

What about cash?
I am keeping my "gun powder dry" as they say because my base case is still that the markets will crash, the Feds will then overreact, and blow these markets sky high again, and I am going to make the trade of my life, so I am holding cash.

My multiple businesses have been continuing to grow and throw off profits and I have built my cash positions to over 50% of my portfolio. I am holding the cash in Money Market accounts and CDs earning over 4%, so pretty happy there.

Making Lists
I have lists of assets I want to buy, world dominator stocks, real estate, and other assets I want to buy if and when they go on sale. If we see another 2020-style crash and rebound or even a 2008-style crash and rebound, I want to be ready. You need to be ready because the opportunities don't last long, especially with hungry sharks like me in the water ready to pounce.

Now back to my hands being full…

Bear Markets Are For Building!

I am old enough now to have gone through several boom and bust cycles.

I got my start investing when I was 18, and I started with buying bank-owned repossessed homes, coming out of the real estate crash in CA from 89-92. The banks were sitting on so many homes they were almost giving them away. I started in 1995 and building an investment portfolio and fixing and flipping was a great strategy for that time.

I also invested through the dot com boom and bust and built a huge eCommerce business in 2001, in the bear market.

I got hammered on real estate in 2007-2008, but built up new businesses in 2009 and beyond.

2020 when the economy shut down, I doubled down on business and made another huge leap forward and I am doing it again right now.

I didn't invest my way to wealth, not in the stock market anyway. I invested my way to wealth by investing in myself, my education, and my businesses.

Investments as we have discussed above are for my wealth "after" I created it in the businesses.

My good friend and mentor Robert Kiyosaki, who will be speaking at my upcoming event "Parallel Protocol" is known for his cashflow quadrant.

We want to invest in the B - Business quadrant and put that money, and the profits into the I - Investment quadrant, this has been my strategy for 25 years and it's served me well.

Now… what about the B, the businesses

This is where you get the greatest leverage, this is where you make the biggest profits, and this is where I and you should spend the majority of our time, focus, and energy.

I BELIEVE 2023 WILL BE ONE OF THE BEST YEARS TO BUILD A BUSINESS!

You can grow your existing business, start a side hustle, start a brand new business, or buy a business, but whatever you do, you need to be building

And the best place to build a business, the biggest opportunity I see for the rest of the decade is in the new Parallel Economy. It's a blue ocean, full of opportunity, and wealth and you can succeed easily while helping to change the world.

It's why I am hosting a live virtual event with Robert Kiyosaki and other experts to discuss what it is, how big of an opportunity it is, and how you can take advantage of it, and change the world.

The brand new Parallel Economy will be the biggest opportunity for you to create wealth this decade, come learn how to build and invest during this transition and period.