Pro Perspectives 11/17/20

November 17, 2020

Stocks traded lower today, but remain near record highs.  The VIX, a reflection of the market's perception of risk, is near the lowest levels since the onset of the health and economic crisis.   

With an election that the media wants us to believe is 100% done and delivered, it seems like the market is underpricing the risk of more chaos. 

A place that might be sending a signal, is Bitcoin. 

Sure, we've talked about the pressure that new lockdowns will put on the Senate to relent on a massive stimulus relief package.  That would be very inflationary.  And with that, we would expect to see asset prices running wild.  Stocks might fit that description.  But commodities aren't running quite as hot.  And gold (the market's favored inflation hedge) has traded lower, not higher, in the past week. 

So, what is Bitcoin telling us?  Is it displacing the role of gold as the favored inflation hedge?  Probably not.  

What we do know about Bitcoin:  In its short history, it has a record of being a tool of corruption and money laundering. 
Does the rise in Bitcoin reflect corruption in the recent election? At the very least, it may reflect the rising perception of corruption (domestically and globally).