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Good morning everyone,

Just a short newsletter this week as the cast around my broken arm is causing me quite a bit of pain and I have an appointment at the hospital later.

Let's get started.

DISCLAIMER: This newsletter is not financial advice. It does not take into account your financial situation, is general in nature, and is for educational purposes only.

Also, this newsletter contains affiliate links. This means that I may receive a commission from them. But for Crypto Down Under, I only choose products I use myself and can recommend wholeheartedly. Don’t forget to do your own research.

1. Meme mania returns

Two weeks ago I wrote about meme stock investing and meme coin investing in When the numbers don't add up, people start taking crazy risks.

This week, the meme mania returned with a vengeance.

Keith Gill, aka Roaring Kitty, the man rallying retail investors for the 2021 GameStop frenzy, posted this on Twitter on Monday after a three-year hiatus from the platform.

Roaring Kitty's followers seemed to take this post as a call to action.

GameStop's stock price jumped more than 270% between Monday and Tuesday, but has since lost momentum.

Remember, I'm NOT suggesting that you jump on the bandwagon. This is how meme investing works:

But it's fascinating to see how much power one guy can wield on the web.

And it's fascinating to see so many retail investors willing to jump on the bandwagon to make a quick buck while inflicting pain on the Wall Street hedge funds betting on GameStop's demise.

I don't think the legacy media are doing a good job by just framing meme investing as stupid and dumb as the Australian Financial Review (AFR) did in this opinion piece.

Of course, meme investing is stupid if you are a boomer trying to preserve your wealth.

What the AFR is missing here is that:

1. Meme investing is a web-based pop culture community phenomenon that many people want to be a part of.

2. Meme investing is a vehicle for expressing anger and inflicting pain on Wall Street hedge funds. Just look at the CNBC headline below.

Of course, the meme stock mania has also driven meme coin prices higher.

However, I don't expect this mania to last very long, because in 2021 people were stuck at home, bored, and cashed up with stimulus money. Financial conditions are very different now, and a lot of people are feeling the pinch of the cost of living.

But I'm watching it with a lot of interest and I'm thinking, man, somebody needs to tell those GameStop fans that the better way to take power away from Wall Street and grow your wealth at the same time is to invest in bitcoin.

Want to buy bitcoin? Go to one of Australia's most trusted crypto exchanges, CoinSpot.

Use this link and the code 83T6H2 to create an account at CoinSpot today!

2. Australia becomes addicted to overspending

This week the Australian government released its budget.

While the government managed to secure a surplus for this fiscal year, it is going on a spending spree that will drive the budget headlong into deficits for the next decade.

The government has increased net spending by more than AUD24 billion over the next four years, including rebates on electricity bills for every household and rebates for small businesses.

Of course, the government claims that the rebates will reduce inflation.

I argue that this is highly unlikely.

Pouring subsidies on an inflationary fire has a real chance of backfiring.

Even the AFR agreed with me, which is not often the case, and published a flurry of opinion pieces criticizing the budget.

AFR writer Phillip Coorey put it well when he wrote:

So, to put it bluntly, Australia has an election next year and the Labor government is essentially trying to buy votes.

But don't be fooled, budget deficits are very likely inflationary because the government has to borrow money that it will probably never pay back. So one day the debt will be monetized, which means the central bank will buy the debt with money printed out of thin air. This increases liquidity and drives up asset prices (prices of stocks, houses, crypto, etc.).

The irony is that by overspending and borrowing, governments are trying to help the little guy, while in the long run, they are pricing the little guy out of assets like stocks and houses.

While this is not great, it’s bullish for bitcoin as hard assets that can't be inflated will continue to mop up the liquidity sloshing around in the system.

Stay the course and have a great weekend everyone!

Want to store your bitcoin yourself in a cold wallet? Use the link below to purchase a Ledger Nano S Plus wallet.

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