Notes from Camp Kotok 2021

Brent Donnelly is a senior risk-taker and FX market maker, and has been trading foreign exchange since 1995. His latest book, Alpha Trader, was published this summer to great acclaim (by me, among others!) and can be found at your favorite bookseller. I think it’s an outstanding read, and not just for professional traders.

You can contact Brent at [email protected] and on Twitter at @donnelly_brent.

As with all of our guest contributors, Brent’s post may not represent the views of Epsilon Theory or Second Foundation Partners, and should not be construed as advice to purchase or sell any security.

In 2014, I got a phone call at work. On the other end of the line was a friendly, gravelly voice I didn’t recognize. The conversation went something like this:

“Hi, Brent. It’s David Kotok. How would you like to come fishing with a bunch of economists?”

“Oh, Hi David. … ummm… <long pause> … Well, I’ve never been fishing in my life… And… I’m not an economist… <cough>”

“Not a problem. You’re invited.”

“… OK. I’m in!”

Since that phone call, I have made the 9-hours-each-way drive to deepest Northern Maine on ten separate occasions. I have driven there seven times for Camp Kotok and three times to fish with my sons. It’s an awesome place.

This piece will cover what I found interesting at this year’s Camp Kotok, and offer a few takeaways for investors, economists, and/or traders.

What is Camp Kotok?

Camp Kotok is an invite-only gathering of prominent economists, policymakers, central bankers, traders, asset managers, and journalists that has taken place on the first Friday of every August for more than 20 years. It is part economics conference, part vigorous debate-o-rama, and part summer camp for adults who like to fish, drink wine, and play poker.

The group is composed of mostly smart, rational, curious and humble human beings and thus many conversations start with a question and go from there. Here are a few Qs and As from four days in Maine:

Why hasn’t the dollar collapsed yet?

Short answer: the premise was wrong and inflows into US assets remain relentless.

One year ago, historically loose fiscal and monetary policy in the United States looked like absolute manna from heaven for gold bugs and dollar bears. Now, gold is more than 10% lower than it was a year ago ($1960 to $1730) while the US dollar is sharply… Unchanged. Why?

The simple answer appears to be that when most major economies enact similarly large QE programs with rates at or near the zero bound, differential performance across currencies is minimal and the USD emerges unscathed. Meanwhile, standard measures of US exceptionalism (NASDAQ vs. EM equities, for example) continue to show that investors maintain a very strong appetite for USD-denominated assets.

We are in a similar FX regime to the 1998-2000 period when demand for dollars was relentless as money flowed into the Web 1.0 tech bubble. The NASDAQ peaked in 2000, but dollar strength lingered for another two years due to doubts about the stability of the newly-hatched euro. Eventually, the end of the NASDAQ inflows allowed the dollar to find a top and then reverse, big time. The USD was mostly in a serious downtrend from 2002 to 2007.

For now, the dollar remains supported by the never-ending flow of inbound cash. 

With America having unabashedly cut the cord that once connected taxation and spending, many think the dollar’s reserve status should be questioned. Thing is, the USD has no strong competition in the reserve currency game and as such its decline remains a slow, decades-long process. We have been talking about the decline of the dollar since at least 1968 and we will probably still be talking about it in 2068. See here for a timeline of dollar debasement worries as reported by mainstream magazine covers.

I don’t expect another currency to replace the dollar the way the USD replaced the GBP. Instead, I think the endgame here is one where a tripolar group of global reserve currencies (USD, EUR, CNH, plus their associated regional currencies) share the limelight with the dollar and the greenback slowly, slowly surrenders dominance. And a few central banks will likely end up holding some BTC as reserves, too.

Meanwhile, even as the dollar has been stable, concerns about fiat currency linger and total crypto market cap has gone from $350 billion to $1.9 trillion in the past 12 months. The idea of crypto purely as a speculative bubble looks less credible with each passing year.

… jpegs on the other hand… :]

What the h*ck is wrong with gold?

Short answer: It’s a barbarous relic.

In crypto circles, the “flippening” is the theoretical future point where Ethereum’s market cap rises above the market cap of bitcoin (those are the two biggest coins, by a large margin, see table for the Top 10).

But perhaps we should be talking about the macroflippening. The macroflippening is the day the market cap of crypto surpasses the market cap of gold. The current market caps are around $10T for XAU and $1.8T for crypto, but I don’t think it’s impossible to imagine gold at $1,000 and bitcoin at $100,000 in a few years. That would get us close to the macroflippening.

There is clearly a big substitution effect out of gold and into crypto going on this year. As new money floods into BTC, ETH, and NFTs, the cries of “It’s not backed by anything! It’s a Ponzi scheme!” etc. are more and more the province of the older generations. Meanwhile, young people who already own plenty of virtual goods like Fortnite skins and Roblox hats have no problem making the intellectual transition to owning virtual goods as financial assets.

The metaverse is coming. Everything will be digitized.

I think it’s important that for the first time in generations, a plurality of global citizens under 50 years old has realized, all at once, that fiat money isn’t real. Questions are being asked. Until 2010 or so, money was just money for most people. We didn’t think about it. It was the air we breathe, the water we swim in as ignorant fish.

Now impassioned talk of money and monetary systems is everywhere. Whether you believe in crypto or not, you can at least acknowledge society’s views on money have changed radically in a short time.

Behind the wild price swings and Lambo-video silliness, the massive build-out of crypto infrastructure continues and more and more skilled sales and trading experts on Wall Street are crossing over from legacy firms into fintech and defi.

Sure doesn’t feel like a fad anymore.

Who would like to join the Global Society of Rational Bayesian Crypto Agnostics?

Nuanced views are permissible in crypto: you don’t have to be a hater or a HODLer. The overall vibe at Camp Kotok was a mix of crypto-haters and crypto-agnostics with a few more aggressive bulls also in the house. There was some discussion about whether a dedollarizing central bank or two might announce that they have added BTC to foreign reserves in the next few years. I don’t see why not.

In general, I tend to find all-or-nothing opinions unpalatable (because they are usually rigid, and mostly wrong) and I am going to work hard to represent Team Crypto Agnostic going forward.

We are not going to the moon and we’re not going to zero.

I was bearish bitcoin through most of 2017/2018 because that move had every feature of a speculative bubble. I wrote a bullish piece on February 14, 2019, after the bubble burst because of the historical tendency for bubbles to deflate almost exactly 85% before stabilizing. This 85% number was true with XLF and home builders in 2008, NASDAQ in 2002, the post-bubble Nikkei, and even the 1929/1930 stock market crash. After that bullish call, I didn’t write much about bitcoin, though I recently put out a bearish note a few days before Elon went on SNL because that was the most obvious “buy the rumor sell the fact” set up in financial markets history.

Overall, I am bullish on crypto as an asset class and agnostic on the price of individual coins, including BTC. The more I read and understand, the more insanely interesting the future of crypto looks, especially DAO and ETH-type projects. My goal going forward will be to maintain flexible, open-minded thinking.

Crypto sometimes feels like a world where everyone just picks a team and cheers for it. I have chosen to be a fan of the sport, but I’m not picking a team.

Do CBDCs pose a threat to bitcoin?

Short answer: No.

Central bank digital currencies (CBDCs) are inevitable and offer a host of fascinating and possibly dystopian policy options, but they are hardly a direct competitor or substitute for mainstream crypto. CBDCs could eventually compete the stablecoins out of existence, work as a global payments and settlement tool, and possibly disintermediate the banks… But they will not challenge BTC’s role as a low-yielding, limited-supply store of value and portfolio diversifier. And they will not challenge ETH as the leader of the DApps / smart contract / blockchain ecosystem. The use cases are completely different.

On the other hand, here are some policy options that CBDCs may permit:

  • Exploding money. Digital dollars with a nearby expiry date. This can channel fiscal dollars directly into the economy by eliminating saving as an option to achieve juicier fiscal multipliers.
  • Microtargeted fiscal stimulus for specific industries or regions via currency that can only be spent at a specific type of business. For example, digital dollars that can only be spent at restaurants. Detroit dollars that cannot be spent outside Detroit, etc. If you think there is too much central planning of the US economy now… Just wait a few years.
  • Surveillance. This is a feature and a threat in all countries, not just totalitarian ones.
  • Deeply negative rates and a ban on cash. It’s not as wacky/fringe as it sounds. Former Fed Nominee Marvin Goodfriend discussed it in this 2016 paper. Here is the key quote:

The most straightforward way to unencumber interest rate policy completely at the zero bound is to abolish paper currency. In principle, abolishing paper currency would be effective, would not need new technology and would not need institutional modifications. However, the public would be deprived of the widely used bundle of services that paper currency uniquely provides—a generally accepted paper medium of exchange providing transactions services especially for low-value transactions; a readily accessible, safe liability of the central bank; a store of value; a degree of privacy in financial management; and the option to hold money outside the banking system and to withdraw deposits at par as paper currency in times of financial stress. Hence, the public is likely to resist the abolition of paper currency at least until mobile access to bank deposits becomes cheaper and more easily available, ATM charges for access to paper currency become excessive and/or electronic currency substitutes become widely available.

Why are we not catching any fish today?

This question only came up on the last day of the conference as we trolled for salmon instead of casting for smallmouth bass. One thing I learned pretty quickly after I started fishing is that the object is mostly just to hang out. Catching fish is secondary.

Unless you’re 10 years old. Then catching fish is the only thing that matters.

Here is me, happy:

Is Long COVID a threat to future US labor force productivity?

Short answer: nobody knows.

Two of the attendees at Camp Kotok were COVID experts: Andrew Racine (pictured), the Chief Medical Officer of the Montefiore Health System, and Pierce Nelson from the CDC Foundation.

On Saturday night, there was a chat out on the deck as everyone gathered to talk Long COVID and watch the shimmering, nectarine-colored sunset:

The discussion varied in intensity as some felt Long COVID could be a major disability that puts a significant part of the labor force on disability while others felt it doesn’t rank extremely high on their list of most important inputs for judging the US economy. The disagreement boils down to the fact that we don’t yet have enough information on Long COVID to know whether it might affect 3 million or 30 million people. We don’t honestly even know if that is the right range in which to make an estimate.

This is an issue that will be important to human beings and economists but that I don’t think will matter for markets. You can read more on the topic here:


CIDRAP:    Studies elucidate poorly understood Long COVID

MIT:           Longer-Run Economic Consequences of Pandemics

How will capitalism look post-COVID?

A topic of some on-the-water conversation was the emotional, economic and societal impact of COVID and how it will impact the evolution of capitalism over the next 25 years. When I was a kid, consumerism and capitalism declared victory over communism in the 1980s and the result was people driving around with bumper stickers that read: “He who dies with the most toys wins.”

This overconfident debt and consumption-driven capitalism powered on through the 1990s but hit a medium-sized speed bump after dotcom and a large-sized wall after the GFC. COVID is another hit for overall confidence in the current economic system as the already-problematic issues of late capitalism go from upward-sloping to parabolic.

Issues about inequality, winner-take-all, and externalities all seem to have been made worse by COVID. Now, we are left to wonder whether trends like rising wages, tech regulation, and ESG finally turn the tide in how we split the spoils of capitalism between capital and labor.

Every assumption we used to make about the basic structure of how our economy works (9-5 in an office, 5 days/week, hospitality workers are cheap and easily replaceable, commuting is necessary, nationalism vs. globalism, etc.) is up for reexamination.

Heavy stuff.


Those are some of the most interesting parts of my trip to Maine. Let me close with a non sequitur, a two-part question I found myself asking in the midst of a random conversation that took place as we sat around the cabin late one afternoon, waiting for dinner time.

Wet hay spontaneously combusts? What are you even talking about … ???

Sam Rines and Dave Nadig both grew up on farms and both confirmed this conversational factoid to me with 100% certainty. Wet hay spontaneously combusts. Somewhat regularly. See proof here.


Thanks for reading these thoughts and thanks to David Kotok, Jill Fornito, and everyone else who poured so much energy into the diabolically complicated logistics of the event.

Enjoy the rest of your August and I’ll talk to you in September.

Click here to buy my new book, Alpha Trader

This essay was written by me, Brent Donnelly, the individual. It represents only my personal views. It does not represent the views of my employer(s) present, past or future.


Note 1: For the record, Keynes never called gold a barbarous relic. He called the gold standard a barbarous relic, not gold itself

Note 2: Fun fact… It is the 50th anniversary of the end of the gold standard. See here for some fascinating charts that imply all sorts of spurious causation:

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  1. Great stuff Brent! As a former long time TradFi guy who fell down the crypto rabbit hole and went full time into crypto in 2017, and am now focused on DeFi, your note was very interesting. I agree with all of your points re: CBDC’s, the potential for ETH and DeFi to be completely revolutionary, etc. You gave some color that many in attendance were crypto haters, but I am curious what their arguments were against DeFi, for example. It seems to me that more and more former skeptics or haters - especially financial industry professionals who see how these products directly compete with their products - are having their ‘A-HA!’ moment when they see the actual utility and use cases of things like Compound and Aave, and realize that the narrative that crypto is just for "money launderers, drug dealers, tax evaders and terrorists’ is nonsense.

    But so many people still have not heard about DeFi, so have not had the chance yet to have their ‘A-HA’ moment. This summer I talked to family who are professional Millenials working at tech companies in Silicon Valley and who have known about and invested in Bitcoin for a few years, and NONE of them had heard anything about DeFi. This was very surprising to me, but is one data point that DeFi is still extremely niche. Of course that is potentially very bullish, as it indicates we are still far away from mainstream adoption (and its associated asset price impact). Did you change any skeptics minds over the weekend?

  2. Hey there… I think the remaining skeptics are mostly people that have very strong priors and are not Bayesian types , or people that have just never read about crypto and have a reflexive revulsion to the virtual world. To me, the “it’s not even real!” arguments are not very smart and ignore the inevitable transition from real to virtual that has been going on for years and has accelerated like mad with Fortnite and Ready Player One and Oculus etc. Seems to me most of the remaining minds are not going to be changed. It’s very particular to age with most extreme skeptics 50 years old ++

  3. Avatar for glarri glarri says:

    I see news reports of studies predicting that massive solar flares could take out the internet. I wonder how crypto currencies would react if the internet is out of action for a few months. Maybe there are scenarios where crypto wins, and scenarios where gold wins, and it would be wise to have some of each. Or maybe silver coins.

    Camp Kotok sounds like a really fun event. And DeFi is clearly something I need to learn more about.

    Thank you for the interesting article.

  4. Week 2 was pretty good, too. Bill Kenedy Co-Founder, CEO, and Chief Investment Officer of RiskBridge made his comments public, so I will share what he wrote.

    Camp Kotok
    August 19, 2021

    Camp Kotok is an invitation-only gathering of prominent economists, asset allocators, strategists, traders, bankers, scientists, policymakers, diplomats, and journalists. The event has taken place for 20 years in early August in the Downeast Lakes region of Maine near the Canadian border. It is a mash-up of an economics conference and adult summer camp with several days of fishing and fellowship.

    This year’s event was split into two separate weeks to accommodate serious COVID-19 health protocols. I missed friends who attended week one, but this year’s smaller gathering enabled lots of deep discussion and debate on many curious topics.

    Generally, each day starts with a question over breakfast, then two campers and a highly skilled guide spend five hours in a canoe chatting, solving world problems, and fishing (sometimes catching, too).

    discussions are held under Chatham House Rules, where participants are free to use the information received, but neither the identity nor the affiliation of the participant or speakers may be revealed without their express consent.

    Here are ten things I learned at this year’s Camp Kotok.

    1. What Happened to Modern Monetary Theory (MMT)?

    MMT argues that countries that issue their own currencies can never “run out of money” the way people or businesses can. MMT dominated the 2019 Camp Kotok discussion and investors’ imaginations with a view that monetary policy was transitioning from “Q.E. for the banks to Q.E. for the people.” This year it was as if the campers forgot how to spell MMT. The topic disappeared like a fish on a hot August afternoon.

    It’s unclear whether MMT has been debunked (“it’s neither modern nor a theory”) or if the MMT narrative took a back seat to the pandemic. Perhaps unprecedented monetary and fiscal stimulus in response to the Great Lockdown is MMT-in-disguise?

    Key Takeaway: We have short memories, and it is still hard to make sense of economic data post the Great Lockdown.

    1. Will the World Ever Be the Same?

    A common topic was whether rising wages, tech regulation, and ESG investing (environmental, social, and governance) turn the tide in how we split the spoils of capitalism between capital and labor.

    Prior assumptions about the workplace (9-5 office hours, 1 ½ hour one-way train commutes), the labor force (hospitality workers are replaceable, universities are producing more capitalists), and the global order (nationalism vs. globalism) are up for reexamination.

    There was debate whether the U.S. university system is the best in the world or a house built on sand (interdependencies with student debt and international student enrollment). The average size of a U.S. student loan is $38,000. Total U.S. student loan debt outstanding is $1.7 trillion.

    Most colleges and universities are seeing a steep decline in applications from students from China due to COVID-19 and U.S. visa restrictions. It is a massive enterprise risk management dilemma for schools taking a serious hit to revenue.

    Key Takeaway: Uncertainty prevails. We won’t know what the future holds until we get there.

    1. Cold War II: U.S./China

    Experts suggest Wall Street is now falling in line with Washington D.C.'s stricter stance on China. This has important implications for investing in emerging markets (E.M.). It’s unclear if the 13% decline in emerging market stocks since February has fully priced in Cold War II.

    What does a terrorist-led Afghanistan mean for China’s Belt and Road initiative? The biggest project of China’s Belt and Road Initiative is the China-Pakistan Economic Corridor (CPEC). The CPEC has come into question with growing attacks targeting Chinese workers by Pakistan and Afghanistan-based Taliban. With the U.S. military presence removed, China’s business plans in the region have plunged into uncertainty.

    Key Takeaway: Regime change is messy. We believe China has exchanged one unpredictable regime (U.S.) with another (Taliban).

    1. Transitory versus Persistent

    A majority of campers surveyed said inflation would persist, but only two said they expect the Fed to raise policy rates before year-end.

    The persistent-nistas argued that permanent shifts in global supply chains and demographics would lead to a permanent change to supply and demand curves, leading to higher inflation.

    Transitory-nados argued that the world economy “only opens up once.” Lumber, plywood, steel, used cars, hotels, and airfares account for less than 10% of the CPI basket, and recent price spikes have already fallen back to earth.

    Extreme weather is damaging the global crop supply. Watch for rising food prices.

    One creative comment was that inflation might be both transitory and persistent. If one loses their job, this is likely to induce both a transitory shock (temporary loss of earnings) and a persistent effect (a new job may come at lower wages, fewer benefits, or a requirement to relocate).

    Key Takeaway: Inflation may be both transitory and persistent.

    1. Arranging the (FOMC) Deck Chairs

    In consultation with the Treasury Department, the President has to decide whether to reappoint or replace the Fed’s FOMC chair (Powell) and two vice-chairs (Clarida and Quarles) when their terms expire. Vice Chair Quarles’s term expires in October 2021, Chair Powell’s in February 2022, and Vice Chair Clarida’s in September 2022.

    Someone quipped Chair Powell’s reign might be more transitory than inflation. There’s speculation whether he will be renominated. Personalities and politics sometimes get in the way of rational decision-making.

    It seems there can be no decision on tapering the Fed’s balance sheet purchases before a decision is made on the new FOMC chair (Sep/Oct) and until after the mid-term elections (Nov 2022).

    Key Takeaway: Taper talk has elements of Kabuki theater. Fed action requires Fed leadership. Delayed tapering or changing the FOMC guard would likely catalyze a spike in market volatility.

    1. "2 plus 2"

    An entire generation of economists, portfolio managers, and investors have only experienced 2% real U.S. GDP growth and 2% U.S. inflation (2 plus 2). This year, the configuration is expected to be 7% real U.S. GDP growth and 3% U.S. inflation or “7 plus 3”. Will the post-pandemic economy revert to “2 plus 2,” or will it have some new configuration? How will markets respond if growth is low or inflation higher?

    RiskBridge anticipates the U.S. economic glide path over the next couple of years to be something like “2.0 plus 3.5”.

    Key Takeaway: Our view is that the transition away from the unusual “7 plus 3” will be bumpy as capital market flows and valuations adjust. We are adjusting investment portfolios to prepare for below-trend growth and above-trend inflation.

    1. Second Chance Hiring

    The Second Chance Business Coalition includes 36 major U.S. companies committed to expanding employment opportunities and greater upward mobility for people with criminal records. For example, JPMorgan Chase boosted its commitment to giving people with criminal backgrounds across the U.S. a second chance by supporting their reentry into the workforce. The bank hired about 2,100 people with criminal backgrounds in 2020.

    Nearly 78 million Americans have a criminal record, and roughly 5 million have been formerly incarcerated. The unemployment rate for the formerly incarcerated cohort is 27%.

    The U.S. spends an estimated $182 billion annually to incarcerate 2.3 million people in the U.S. prison and correctional system. Of that population, 1.3 million are in state prisons, 631,000 in local jails, and 226,000 in federal prison (the rest are in other programs). Half of the $182 billion goes to paying staff.

    The average public defender handles an average of 400 cases at any one time.

    For local jails, 470,000 of the 631,000 (74%) of those locked up are held before trial or have not made bail. Pre-trial detention costs $13.6 billion annually.

    Key Takeaway: GDP growth = labor force growth + productivity growth. The U.S. labor force annual growth rate is expected to average 0.5%, a slower pace than in recent decades due to slower population growth, aging Boomers, and declining labor force participation. Second Chance hiring alone won’t solve our macro problems, but it might help. So, too, would better education (see “Will the World Ever Be the Same?”)

    1. Arctic Blast

    Earth’s climate has permanently changed naturally, but the recent rise and rate of change in global temperatures are unusual. Recent warming has reversed a slow, long-term cooling trend. The evidence rests on improved data collection methods, measured changes in the atmosphere, ocean, cryosphere, and biosphere, along with observed frequency and severity of heatwaves, droughts, wildfires, heavy rainfall, tropical cyclones, and the number of named tropical storms.

    The Gulf Stream influences weather patterns from the east coast of the U.S. to the west coast of Europe and has slowed by roughly a third since 1950, preventing storms and weather patterns from moving on and dissipating.

    In recent years, large swaths of the Arctic have become ice-free. Arctic landmass is controlled by Russia (45%), Canada (25%), and the U.S. (7%).

    The Arctic Council consists of eight Arctic states (Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden, and the U.S.). I was intrigued to learn that equatorial Singapore attends the Arctic Council. This is because the city-state is vulnerable to rising sea levels. It’s also because Singapore remains the world’s most important shipping hub.

    They’re talking about a trans-Arctic passage cutting straight across the North Pole. A future Arctic shipping route could cut weeks off maritime transportation going through the Suez Canal and days off a traditional Northern Sea Route in a world where timeliness means the difference between profit and loss.

    Key Takeaway: The changing climate impacts growth and investment portfolios.

    1. Long COVID

    A growing number of adults and children infected by the coronavirus are suffering lingering physical, mental, and neurological symptoms known as “long COVID.” Long COVID is not a condition for which there are currently accepted objective diagnostics tests or biomarkers. It is a range of symptoms that can last weeks or months that can happen to anyone who has had COVID-19. The symptoms are similar to Gulf War syndrome, chronic fatigue syndrome, Lyme disease, or Barr-Epstein (mono).

    Forecasting the impact of long COVID is challenging due to a lack of data. The estimated number of Americans suffering from long COVID ranges from 3 million to 30 million. Women are reported to be 4-times more susceptible.

    Our medical community doesn’t do ambiguous well. Patients with long COVID face a tortuous and challenging experience with a medical system designed for organ-focused specialties. “Unless we proactively develop a health, care framework and strategy based on cooperative, patient-centric, supportive principles, we will leave millions of patients in the turbulent breach.”

    Key Takeaway: Long COVID is a debilitating state impacting our youth and working-age population. There’s not enough data or analysis to know if long COVID will impact the U.S. labor force. Excellence does not start with apathy.

    1. Cryptonite

    August 15th was the 50th anniversary of President Nixon taking the U.S. off of the gold standard. It was also the last night of Camp Kotok which provided a rich, animated debate about the future of fiat currency regimes, the ability for the U.S. to maintain the dollar’s global reserve currency status, and the future of cryptocurrencies, including central bank digital currencies (CBDCs) being introduced by global monetary policy authorities.

    The cryptocurrency market capitalization has gone from $350 billion to $1.9 trillion in the last 12 months. FOMO (fear of missing out).

    As cryptocurrencies and stablecoins have become more popular, the world’s central banks have realized they need to provide an alternative or risk letting the future of money pass them by.[1]

    81 countries are exploring CBDCs, virtual money backed and issued by a central bank. Only five have been launched (the Bahamas, St Kitts/Nevis, Antigua/Barbuda, Saint Lucia, and Grenada). Of the four largest central banks (the U.S. Federal Reserve, The European Central bank, the Bank of Japan, and the Bank of England), the Fed is the furthest behind.

    In the future, cryptocurrencies might allow fiscal stimulus to be microtargeted to a specific industry, region, or neighborhood. Digital dollars can be spent at restaurants, but Seattle dollars might only be spent inside the Seattle city limits. If you think there is too much central planning of the U.S. economy now, you wait.

    Key Takeaway: The USD may share the stage with other world reserve currencies in the future, perhaps the euro or IMF special drawing rights (SDRs) or a digital currency. Such a change is unlikely to (a) include the Chinese yuan, or (b) occur before 2030 in our opinion.

    Thank you to David Kotok, Chairman and Chief Investment Officer of Cumberland Advisors, and Jill Fornito, Executive Director of the Global Interdependence Center for excellent planning and execution of this event.

    I would add that the Sunday evening porch discussion about currency was epic. A couple people commented that they thought it best discussion of the entire week.

    I would add to the currency topic:

    1. The reserve currency status of the US Dollar is an underappreciated privilege. If the US loses that status it will have profound consequences. There are forces seeking to actively undermine it. Watch what happens in the 2022 Olympics in China with regards to China’s push towards a digital yuan.
    2. Blockchain and crypto are an unstoppable force that will revolutionize how financial transactions occur globally. While Bitcoin Maxis are probably out over their skis, they are not totally wrong. Today, crypto is the Wild West and a lot like the dot com era of 2000. There will be a lot of losers and a few winners.
    3. DeFi presents possibilities for great improvements for people’s lives globally - e.g., 1.7B unbanked people in the world - and loss of great power by a few.

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