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Bitcoin and SPACs Give 2021 an Early Retro Flavor

The problem is that a turn in the calendar doesn’t itself change anything else. The view from my window is the same as it was last year. And certain “2020” issues remain virulent. Here, as I reacquaint myself with a lot of charts and numbers on the terminal, is my best attempt to sum up where we stand before the 2021 markets get started.

The Reflation Narrative Dominates

As I recorded several times toward the end of last year, the consensus in favor of reflation in the next few years is overwhelming. Ten-year inflation expectations for the U.S. are their closest to exceeding 2% since late 2018 (when the Federal Reserve was still expected to cut back its balance sheet on “auto-pilot”). Intriguingly, 5-year 5-year expectations, covering expected inflation between 2025 and 2030, are slightly lower, suggesting a belief in relatively imminent inflation that subsequently comes under control.


There is a growing argument over whether we are living through a repeat of the dot-com bubble of 1999 and 2000. Purely subjectively, I don’t think we’re there yet. That bubble happened before 9/11, before Putin came to power in Russia, and before China was admitted to the World Trade Organization. There was a level of confidence and happiness in the West that hasn’t existed since; and that’s before we even mention this once-in-a-century pandemic.

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