Mike Krieger On The "High End" Bubble

Bubbles, Bubbles Everywhere…

Without the ability to identify bubbles I’d pretty much be useless in this business.  I live, breathe and eat macro news and trends.  It is what I am inherently good at and I leverage that talent to the best of my ability.  On the other hand put me in front of a financial model and I want to blow my brains out within 20 minutes.  I am not exaggerating.  I worked in equity research for five years.  I learned a lot actually and I am very lucky to have had the experience but it was like taking a fish out of the water, tossing it in the air and telling it to fly.  It just wasn’t natural.  I have always said that people screw up when they don’t figure out what they are naturally good at and then stick to that, but rather attempt to be a jack of all trades.  I make a living off of people that don’t get that.  I love it when people engage in my world when they have no business doing so, but the best types, the types that make people like me salivate are those that are ignorant of the macro world but also suffer from the deadly (to them) combination of large bank accounts and equally large egos.

So I haven’t written about many “bubbles” since 2008.  Back then I was at Bernstein and I was hardly capable of writing a word without  saying commodities were a bubble ready to crater.  I also hammered home the point of the “fert.coms,” which included POT and MOS.  The main reason I haven’t written about similar bubbles is because I have been 100% focused on what is likely the biggest bubble in the history of mankind.  The fiat U.S. dollar and all income streams related to it.  Of course, the inverse to this monumental bubble are gold and silver and the commodities necessary to everyday life (food and energy) and as such I have been wildly bullish on those particular items.  This is the most amazingly easy trade I have ever stumbled upon because it takes some serious macro thinking and a grasp of financial history to understand the precious metals markets.  These are two things Wall Street is not very good at.  Even better, Wall Street is full of ego maniacs with lots of money.  So all a lot of these clowns do is look at the price charts of gold and silver and the childish thought “bubble” pops into their clouded heads.  Of course it’s very tempting to just look at the charts and think this if you don’t understand what is really driving their ascent.  The popping of the largest bubble in human history.  The fiat, counterfeit, and immoral U.S. dollar standard. 

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