Welcome to I Found This - a weekly competition between two old friends, your hosts, James and Keith. Here each week, you’ll decide who’s find made your eyebrow raise higher.

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 Happy Monday!

Keith & The King

It’s getting cold out there. In 1076 the king of Germany and (unofficially) the holy roman emperor, King Henry IV kneeled barefoot in the snow begging for mercy. The man who stood above him was no conqueror. He had no armies at his disposal. He was no assassin. He had nothing of the sort over Henry. What he did have was a position of authority over the souls of the German people, so they believed.   The King of Germany had picked a fight with the pope. In his defense, in years past, all the smart money would be on the monarch who opposed a pontiff. Just ask Henry’s father who deposed 3 popes and handpicked 3 more in his day. But unfortunately for our holy roman king of Germany friend, this was not your grandma’s Bishop of Rome. This was Gregory VII – a man who wouldn’t back down from a fight, even if it was with the most powerful man on the planet. After Henry made moves to replace Greggory, the king got hit with the right hook of the papacy – he was excommunicated from the Hoy Catholic Church. Since Germany was, you know, Catholic, this posed a serious problem for Henry and his claim to rule. So, the king travelled across the alps in the dead of winter to a castle called Canossa in the hills of Tuscany to plead for mercy. It took three days and three nights but by the end even the stone cold Gregory was moved to compassion. In his own words, “And there, having laid aside all the belongings of royalty, wretchedly, with bare feet and clad in wool, he continued for three days to stand before the gate of the castle. Nor did he desist from imploring with many tears the aid and consolation of the apostolic mercy until he had moved all of those who were present there.”(LINK) So, the next time you start to shiver in the cooling fall air, just be grateful that you’re not the holy roman emperor in a squabble with the pope, bare footed and bowed down at the gates of Canossa.

Tuscany is better in the spring, I hear - Keith

Bitcoin vs Bucks

This match up usually comes in the form of Bitcoin fans proselytizing the inevitability of Bitcoin(BTC). The argument goes that with a weakening US dollar, BTC will take it’s place. Nevermind that hundreds of cryptocurrencies are created and go defunct every day, Bitcoin is a whale worth hundreds of millions of dollars and that has been around for decades. BTC is the whale that moves the market and there are ideological proponents and detractors to it replacing the US Dollar(USD).

The obvious question then is what does BTC do historically when the US dollar weakens or strengthens relative to an index of other currencies? While past performance shouldn’t be taken as gospel of future performance, it should carry some weight. Thankfully the folks at SPGlobal already ran this analysis comparing the strength of the US dollar to crypto/digital assets: LINK Chart #13

From the authors “Chart 13 shows the Nominal Broad US Dollar Index and S&P BDMI. The historical correlation between their daily returns is –0.16. That compares with a –0.40 correlation between the US Dollar Index and S&P GSCI Gold…Idiosyncratic events may derail the expected relationship between crypto and the US Dollar Index over short time periods. Furthermore, because correlation does not substitute for causation, it is not obvious that a change in the US Dollar Index can provide insight into future movements in the crypto markets. In fact, there is no Granger causality between the US Dollar Index and Bitcoin prices.”

My take? If your main argument in favor of BTC is a weakening US dollar, BTC is not the way to go.

It’s all about the money - James