Myth Of Money: The Blue Wave

Welcome to this week’s edition of the Myth of Money, a weekly newsletter on all things money, economics and technology read by 10,000+ subscribers, curated by Tatiana Koffman.

Disclaimer: The following is not intended as investment advice. Do your own research.

In a historic moment, Joe Biden became the 46th president-elect of the United States of America, gathering 279 electoral votes. Democrats maintained control of Congress and currently tied for Senate majority.

The Democrat trifecta, also known as the ‘blue wave’, has been received positively by financial markets.

As investors consider the blue wave in their investment decisions, the following are some of the key investment decisions factors each investor faces.

  1. Stability - The number one reason why the Biden-Harris ticket was appealing to voters is the ability of this duo to reinstate stability for both large, small and global American businesses, a positive sign for the stock market.

  2. Inflation - The next stimulus package of $2T+ is likely to help even more businesses and families that need it. The downside is that we are getting dangerously close to issuing 50% of the American GDP in monetary and fiscal stimulus. Rising asset prices represent faith in Biden’s ability to stimulate the economy, as well as those seeking inflation shelter in equities.

  3. Taxes - Biden has been clear about his plans to increases taxes. There is strong fear of increase in income tax, capital gain and inheritance taxes. Businesses are taking steps to set up residencies in tax-free zones such as Monaco, UAE and BVI.

  4. Volatility - Although the VIX fell sharply this week, the volatility index remains a popular among investors as a hedge again the current economic status.

  5. Bitcoin - With Bitcoin gaining 30%+ over the last month, the digital asset is being accepted as a hedge against currency risk more broadly .

This Week By the Numbers

In their best week since April, stocks continued to rise this week, amid speculation of a Biden-Harris win. Bitcoin his another all time high for 2020, by quickly breaking $16k before retreating.

Top Stories

Bank of England ramps up stimulus again to tackle COVID-19 and Brexit hit

The Bank of England increased its already huge bond-buying stimulus by a larger-than-expected 150 billion pounds ($195 billion) as it braced for more economic damage from new coronavirus lockdowns and damage from Brexit, too. Britain’s economy was set to shrink by a record 11% in 2020 overall, more than the 9.5% it had forecast in March, and it cut its estimate for next year’s recovery. “The outlook for the economy remains unusually uncertain,” the BoE said, pointing to the COVID-19 crisis and the still unresolved trading relationship between Britain and its closest trading partners in the European Union after Jan. 1. Read Full Story.

US Seized More Than $1B in Silk Road–Linked Bitcoins, Seeks Forfeiture

The U.S. is suing for the forfeiture of thousands of bitcoins, totaling more than $1 billion, that it recently seized, the Department of Justice said Thursday. The seizure on Tuesday, tied to early darknet market Silk Road, is the largest the U.S. has ever conducted, the DOJ said. Court documents reveal the seized funds include over 69,370 bitcoin and nearly equivalent amounts of forked cryptos bitcoin cash (BCH), bitcoin gold (BTG) and bitcoin satoshi vision (BSV). Prosecutors say an unnamed hacker stole the trove from Silk Road and moved them to a wallet where they sat from April 2013 until the Tuesday seizure. Read Full Story.

Cannabis Shares Hit Session Highs After Cuomo Promises N.Y.

Cannabis companies rallied on Thursday, reversing a slump the day before, on renewed optimism over the lifting of restrictions on marijuana sales in five states this week. Stocks moves gathered steam in the afternoon session after New York State’s governor Andrew Cuomo told a local radio station that New York State would look to legalize recreational pot next year. Aurora Cannabis Inc., Tilray Inc. and Aphria Inc. led the advance, with double-digit gains. Read Full Story.

Thank you for reading this week’s edition of the Myth of Money.🚀

Until next week,

Tatiana Koffman

By Tatiana Koffman

Hi there and thanks for reading. If you stumble upon my newsletter, you will notice that I write about money, economics and technology. I hold a JD/MBA and spent my career in Capital Markets working across Mergers & Acquisitions, Derivatives, Venture Capital and Cryptocurrencies. I believe in empowerment through closing the financial education gap and creating equality of opportunity for the next generation. Check out my articles in Forbes here.

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