I realise that (almost) nobody cares about Kinesis here at TFMR and this post would be rather interesting and on-topic for patrons of Kinesis Telegram group chat. However, I'd rather publish it here, exclusively, at TFMR amongst us long suffering ones and probably get largely ignored. But that's OK, because loyalty counts and at least I won't be preaching to those, largely with set ideas about Kinesis!
Velocity (V) and Market Capitalization (MC) figures - I wholeheartedly support Kinesis publishing the hypothetical projections made in the Blueprint (P39), because it is a very good mathematical illustration of how the system can work. Using examples physical gold market penetration (MC) and modest stable coin, Tether Velocity, simply gives a very good example of the potential power of the system and is, not at all a specific forecast.
I’m not at all concerned whether these examples of Phyzz Au or Stable Coin market dynamics will be achieved or not. However, 0.1% of 180 Thousand Tonnes of above ground gold (WGC stat) is 180 Tonnes and 3% in 5 Years is 5400 Tonnes. To me – that’s quite plausible.
I think that a good point is made that quite a lot of this may be hoarded and not spent – I agree with this. Some of this will have low velocity. However, consider this…Analyst Steve St Angelo (of SRS Rocco) produces wonderful studies of how the gigantic Gold and Silver paper futures markets, that dwarf the physically traded metals, have an uncanny knack of discovering Au and Ag prices slightly above or below all-in sustaining costs (AISC) of production. Meaning, that most mining companies struggle to make a profit! With costs almost always very high and price volatility often determining a profit or loss. If metals prices are significantly higher than costs, miners will generally mitigate future price volatility risk, by selling a certain percent of production forward in the futures markets (thus feeding the beast that drives prices down). However, the miners invariably do not hedge all of their production and often there is no hedging. For un-hedged gold and silver, selling refined product into the Kinesis Monetary System, this will be very interesting in terms of both overall cost reduction for producers and, very high velocity caused by continual flow of metals into accounts and almost equal payments, moving directly out to cover AISC. This velocity of this could mimic a drunkard, gambler’s weekly welfare bank deposit velocity.
Getting back to Tether, I presume Tether’s existence relied on it having high liquidity and trust (that USD are somehow all there waiting if required). Liquidity to Crypto trading exchanges/ markets seemed to hold up (I guess infinite liquidity is possible for computerized tokens), however, the trust seems to be highly questionable. I think Tether will not be able to compete with Kinesis in terms of trust and Kinesis certainly can compete in terms of liquidity. I don’t know if Kinesis can generate velocity of around 200%, like Tether did a year or so ago, however 30% - definitely yes and the stable coin market cap was not accounted for in the projection.
Precious Metal markets also include $5 Trillion USD paper market for the $15 Billion physical silver market. Imagine a 0.1% infiltration into the paper Ag market by certain hedge/wealth funds. That’s about the same MC as physical gold. The Paper Gold markets are huge too and also unaccounted for. Companies like Samsung, in South Korea, are doing deals with Canadian Miners (in Mexico) for direct supply of Ag, because it’s a key component of all of their electronics and physical supply is so tight. Kinesis could easily become a key facilitator and metals liquidity provider for industrial giants around the world.
Then there are people like me. I’ll investigate the feasibility of having my moderately good income deposited into KCoins and generally, speaking, my costs (outgoings) almost invariably always seem to match my income. I’m quite sure this principle applies to Phillipina Maids in Dubai wanting to kindly send their money cross border back to their family or crazy rich Chinese Businessmen that don’t want to send money back to their families. Backpackers that don't want to set up Bank accounts in every country they work, while getting hit with exchange rate fees and taxes. The possibilities are endless for both market cap and velocity in multiple markets (Individual, Corporate and Financial). The projections made in the blueprint aren’t forecasts. They help make it easier for us people who are not Austrian Economists, who remain annoyed that the Fed doesn’t publish M3 Velocity figures anymore, to understand how this system can work.
Good work dingo. I’m sure more will be interested after the imminent release of turds next interview with Tom and Andrew. Very interesting times.