Bowl me over

Bowl me over

Super Bowl adverts are some of the most talked about marketing slots of the year. They really took off in 1984 when Apple spent $500,000 on an ad that lasted for the whole ad break. It is an even better advert now than it was then, mostly because what it predicted wouldn't happen, happened. It's quite disturbing actually. It's here.This year was the turn of US cryptocurrency exchanges and they did not disappoint. First up, Coinbase, who paid $10 million for their slot. Although not the biggest fan of their platform I must say their advert was brilliant, simply a QR code bouncing around the screen. It didn't even mention the company. The whole of America was forced to reach for their mobiles and scan the QR code. They all did, and predictably, the website immediately crashed.Even so, it was a big win for Coinbase.

Coinbase and their annoyingly simply ad.

Next FTX, another cryptocurrency exchange. Their ad had a much higher production cost having hired Larry David to star in it, so obviously it was funny. It did hammer home an excellent point about new technology, which is almost always rejected when it starts out.

FTX employed Larry David to make the point

Finally, as I went through the Super Bowl ads of the past I have to say Volkswagen's 2011 ad was my favourite. 

Volkswagen 2011

A Turkey

In Turkey, inflation runs at around 50% per year and rising. The Turkish Lira has collapsed against most major currencies, but we shouldn't fear. The Government has a plan.The finance minister, Nureddin 'gimme ur gold' Nebati, is launching a scheme whereby Turks can deposit their gold with local banks in return for a very high interest deposit account. Turks have been hoarding gold for years mostly because they don't trust their own government or their banks. It seems very unlikely that this scheme will work, the mere suggestion of it would be enough to put most people off. The path for Turkey is now looking distinctly Lebanese, where we will ultimately see depositor haircuts and open asset seizure. Right now though, it's gentle persuasion. You give me gold and I give you these fabulous Turkish Lira that earn a massive rate of interest which you can redeem almost nowhere because nobody wants them anymore. Turkey has been a centre of international trade as far back in history as you care to look. They know a shabby deal when they see one. Expect this 'scheme' to fail and never be mentioned again. We will return to it though over the coming years, because the government will come for the gold another way.This then is your weekly reminder that gold holdings are not protected by cryptography. Invest accordingly.

The Turkish Olympic downhill skiing course

Basket case

To the surprise of almost nobody, the US inflation print for January came in at 7.5%. Less reported was the change to the calculation that has now been applied. The new weightings are based on the basket of goods most purchased during the peak of the coronavirus pandemic, apparently a 'permanent' change.It might be that this adequately reflects meaningful social change, it might also be that it is yet another tool used to suppress the true extent of price rises.  We have discussed alternative website shadowstats.com before, mostly dismissed as a bunch of crazy people. All they really do is calculate inflation in the same way it was calculated in 1980 (i.e. the same basket weightings). Their inflation figure is 15.6%, more than double the official rate. 

Happily, work is ongoing to address some of the more manufactured government statistics, including something from 1729, the brainchild of Balaji Srinivasan, the former CTO of Coinbase. 

Slowly but surely, new sources of information are being built with censorship resistant technology. I expect when the winning entry is launched it will be universally attacked by governments and statistics departments around the world and it won't matter one bit, because everyone will use it anyway. 

Last Resort

The chart is even more impressive when you consider the volume of treasuries issued in 20/21. To have the Federal reserve as the ultimate buyer is the very definition of debt monetisation. It is much more subtle in practice though; the Fed does not buy bonds at auction because that is not permitted under US law. It would be direct monetisation of debt. So, they get American banks to buy them and immediately take them off their hands via quantitative easing. The non-US element of the buying is less of an issue. Japanese bonds for example are almost entirely held in Japan. For years now the Chinese have been net sellers of US Treasuries, preferring to use their surplus dollars to buy up resources across Africa and Asia. The Americans are just monetising their geo-political influence and the pain will slowly start to show. The stress in the US bond market hasn't really started to show yet, but with the slow wind back of QE and the increasing issuance of US treasuries there will come a pinch point, which will be ugly. Joe Biden needs some sort of distraction from this impending crisis which can unite the nation. He needs a patriotic boost, like a war, perhaps with Russia over Ukraine. Surely it doesn't work like that though, does it?

Euro-Trash

It was 'ask me anything on Twitter' time at the ECB this week. The unfortunate board member chosen as victim was Isabel Schnabel. Isabel says she is looking forward to doing it again soon, imploring citizens to 'take care', presumably in case they are struck by a gigantic printing machine. 

Lots of good questions, actually. 

The Euro, of course, is "good money". Inevitably, she was also asked about bitcoin directly, but she doesn't seem to like it so much. Too volatile.

While our beleaguered board member was busy shilling the merits of the euro, the bitcoin meme team was hard at work. The winning entry from Lina Seiche, below.