VPU Performance v.006

Months Elapsed: 6
Total Growth: 4.67%
Annualized Growth Rate: 9.56%
Distribution Yield (TTM): 3.02%

Received a distribution of $1.0140 per share this month which was reinvested at $139.29.

On the one hand, it was a bit disappointing. The distribution was down from $1.2578 in June of 2020.

On the other hand, VPU distributions were extremely volatile in 2020. Last year's abnormally high distribution (as seen here) made for a very difficult comparison this year. In theory, this September's upcoming distribution should have a much easier year over year comparison.

In any event, overall performance is more than safisfactory so far. As a long-term Treasury bond substitute, I have no complaints. At least not yet.

Firmly HODLING with cast-iron hands. They are strong hands, but they're also brittle and prone to rusting. ;)

Swamp Cooler for Sale

This is the current weather forecast for where I live in Western Washington. I've lived in this home for more than 24 years and have never seen a more dire weather report. July and August are our hottest months, averaging roughly 78 degrees for a high. This is June and a whopping 111 is possible, if not likely.

This is our new homemade swamp cooler. It was built using a styrofoam cooler, 2 leaf blower elbow attachments, and a personal fan. Holds 16+ pounds of ice. Won't cool a room but does offer some relief if sitting in front of it. Designed for two. Each nozzle can be rotated independently.

Current estimated retail value in a world where bitcoin trades at $30k+ (and air conditioning units are in short supply) is conservatively estimated to be $15k+. That's just half a bitcoin for this truly unique and rare limited edition item. Not saying that you should embrace FOMO (fear of missing out) here, but the manufacturer will not be making many more. And don't forget to YOLO (you only live once). Item will be available on or after Tuesday. Free shipping! Personalized handwritten thank you note from the designer included with every purchase! ;)

Bitcoinfinger Movie Idea

James Bond: Yes, well, I've worked out a few statistics of my own. Fifteen billion dollars in gold bullion bitcoin weighs ten thousand, five hundred zero tons. Sixty Zero men would take twelve zero days to load it onto two hundred zero trucks. Now, at the most, you're going to have two hours before the army, navy, air force, marines move in and make you put it back.

Bitcoinfinger: Who mentioned anything about removing it?

...

James Bond: I apologize, Goldfinger Bitcoinfinger. It's an inspired deal. They get what they want -- economic chaos in the West -- and the value of your gold bitcoin increases many times.

Bitcoinfinger: I conservatively estimate ten 100 billion times.

VPU Performance v.005

Months Elapsed: 5
Total Growth: 6.65%
Annualized Growth Rate: 16.70%
Distribution Yield (TTM): 3.13%

5 months down, 195 to go. I'm thankful that it's much like watching paint dry, at least so far. Definitely not looking for any drama here.

The Sarcasm Report v.285

Love this advertisement. Let's zoom in for a closer look.

South Park is using obsolete old school thinking. Why limit yourself to a 100% loss? Leverage up! A 459.66% loss for the win! 20 million people can't be wrong!!

Teslacoin Idea

Tesla should make digital teslacoin. Each coin would buy one Tesla of your choice. Tesla would sell the coins directly and the price would initially be set to equal the most expensive Tesla currently being sold. The coins are also collectible and transferable. Only 21 million will ever be made, so they should appreciate dramatically in this environment. And if, due to the rarity of these coins, they do appreciate, investors may wish to hoard them instead of using them to actually buy a Tesla. This could transform Tesla into the first auto manufacturer that no longer needs to manufacture any cars. Investors make money. Tesla makes money. Win win.

If this idea is successful, it could spread to all the other areas of our economy. At some point, we may never need to manufacture anything real again. Just go 100% digital. Let them eat cakecoin! Everybody wins!

The Fed’s Near Miss

The line in black shows what the effective Federal Funds rate has been. The line in red is what the Fed thinks the effective Federal Funds rate will be over the longer term.

A stopped analog clock is exactly right twice per day. No idea why I mention it.

The Cascading Exponential Trend Failures of Real GDP Growth

The headlines are dominated by talk of robust GDP growth during the recovery. Thought it might be a good time to offset that with a few charts of real GDP reality.

Here is a short-term chart of the natural log of real GDP. When using logarithms, constant exponential growth is seen as a straight line.

Note that, thanks to the virus, we failed to stay in the green channel. We're currently throwing everything at real GDP, including the kitchen sink, just in an attempt to get back to where we were. Also note that real GDP growth was weakening before the virus even hit. The Fed raised rates in 2017 and 2018. In 2019, the Fed was forced to backtrack on that plan. In hindsight, a rate of 2.4% was too draconian. The Fed ended the year at only 1.6%. And then, the virus hit.

So, in the short-term, we're definitely attempting to claw our way back to that green trend channel. But what about long-term?

The red channel is where we once were. That ship has sailed. No hope of ever getting back to it, especially now that we have a Covid baby bust. That exponential trend failed spectacularly, leaving us with a new green channel. The green channel then failed too. Cascading exponential trend failures. That's where we are now.

Here's the good news. We're all in this perma-ZIRP handbasket together and some of us strongly suspect where we are headed. Brush up on your Japanese and enjoy the ride! We might not like the ultimate destination all that much, but the path to get there is filled with easy money. And when I say easy money, I'm not expecting retired savers patiently waiting for interest rates to "normalize" to someday make out like bandits. This isn't a Hollywood movie. If anything, it's more like Gilligan's Island. Being stuck at zero is normal. Interest rates have been exponentially decaying for 40 years. It's just more of the same.