Juggling Dynamite

All the hype about cryptocurrencies being more secure than conventional currencies and banks. How safe, secure and practical does all of this sound? See, ‘Bitcoin Family’ hides crypto codes etched onto metal cards on four continents after recent kidnappings:

The family’s new system involves splitting a single 24-word bitcoin seed phrase — the cryptographic key that unlocks access to their crypto holdings — into four sets of six words, each stored in a different geographic location. Some are kept digitally through blockchain-based encryption platforms, while others are etched by hand into fireproof steel plates using a hammer and letter punch, then hidden in physical locations across four continents.

“Even if someone finds 18 of the 24 words, they can’t do anything,” Taihuttu explained.

On top of that, he’s added a layer of personal encryption, swapping out select words to throw off would-be attackers. The method is simple, but effective.

“You only need to remember which ones you changed,” he said.

Part of the reason for ditching hardware wallets, Taihuttu said, was a growing mistrust of third-party devices. Concerns about backdoors and remote access features — including a controversial update by Ledger in 2023 — prompted the family to abandon physical hardware altogether in favor of encrypted paper and steel backups.

While the family still holds some crypto in “hot” wallets — for daily spending or to run their algorithmic trading strategy — those funds are protected by multi-signature approvals, which require multiple parties to sign off before a transaction can be executed.

The Taihuttus use Safe — formerly Gnosis Safe — for ether and other altcoins, and similarly layered setups for Bitcoin stored on centralized platforms like Bybit.

The World Bank sharply cut its global economic growth forecast.

It now projects the global economy to expand by 2.3% in 2025, down from an earlier forecast of 2.7% (below, courtesy of Bloomberg). This would mark the slowest rate of global growth, outside of a recession, since 2008.Growth is expected to recover modestly to 2.5% in 2026–2027. See, World Bank sharply cuts global growth outlook on trade turbulence:

“Trade uncertainty, especially, has weighed on the outlook, the World Bank suggested.

“International discord — about trade, in particular — has upended many of the policy certainties that helped shrink extreme poverty and expand prosperity after the end of World War II,” Indermit Gill, senior vice president and chief economist of The World Bank Group, said in the report.

It also cut its 2025 growth forecast for the U.S. by 0.9 percentage points to 1.4%, and reduced its euro area GDP expectations by 0.3 percentage points to 0.7%.

Worried about tariff-inspired inflation, the US Federal Reserve has held its overnight target rate steady at 4.25 to 4.5% since December, and markets have walked back easing expectations to just two 25 basis point cuts by year-end.

At the same time, businesses are warning that constantly shifting trade policies are hindering their ability to plan for the future, resulting in hiring and investment freezes. See WSJ, The US economy is headed toward an uncomfortable summer:

The U.S. labour market has been in an uneasy equilibrium, where companies aren’t hiring but are reluctant to fire workers they hired three or four years ago. Like a beach ball that shoots skyward after being held underwater, joblessness can quickly jump once companies decide demand is too soft to keep those workers.

Despite the official unemployment rate still being relatively low at 4.24%, it increased in May for the 4th consecutive month, marking the highest level since October 2021. If 625,000 Americans had not given up and left the job market, the official unemployment rate would be 4.6% and already above the Fed’s peak projection of 4.4% this year.

As Rosenberg Research pointed out yesterday, Friday’s NFP US jobs estimate of +139k in May came amidst downward revisions to the prior three months, totalling -187k. In other words, benchmarked off where we were at the turn of the year, surveyed employment has contracted in 2025.

Cumulative downward revisions from January to April from the first new job estimate to last revisions, have totaled -219k or around -50k per month: “this is the same pattern of downward revisions we had in the fall of 2007, just ahead of the Great Recession, because the thing about downward revisions to the payroll data over multiple months is this: it is a leading indicator for turning points in the cycle”.

With US Federal debt at 125% of GDP, the Treasury market is currently fixated on what appears to be unbridled deficit spending plans. Federal interest expense has doubled from $508 billion in the third quarter of 2020 to $1.114 trillion in the first quarter of 2025 (shown below since 1947).

The US federal government has $10 trillion in refinancing needs over the next year alone, and as Apollo Chief Economist Torsten Slok points out, Rapidly Growing Treasury Supply Crowds Out Other Types of Credit Growth:

Over the past 12 months, roughly half of all fixed income product coming to the market has been Treasuries.

This is not healthy. Half of credit issued in the economy should not be going to the government.

The consequence is that investors need to allocate more and more dollars to finance the government rather than financing growth in the economy through loans to firms and consumers.

The bottom line is that if the level of government debt were significantly lower, more dollars would be available for consumers to buy new cars and new houses, and for companies to build new factories.

The US 10-year Treasury yield, at 4.5%, is back at the same level as early February 2025, May 2024, the fall of 2023, and July 2007, before that; US mortgage interest rates have risen along for the ride.

Not surprisingly, US consumer debt delinquencies have also been rising, raising concerns that deteriorating financial conditions will lead to a more pronounced slowdown in consumer spending.

For the housing market, the spring sales season has been a bust. The US market has nearly 500,000 more sellers than buyers, according to the real estate brokerage Redfin. That is the largest gap since its tally began in 2013 (chart below).

“The market has been at rock bottom for the last 2½ years and there was some hope that we’d get a little bit of a turnaround this year. And it’s just actually been worse than expected,” said Redfin economist Chen Zhao.

For its part, the stock market is still swinging for the fences, with Canada’s TSX near all-time highs and the S&P 5oo having recovered 20% from its April lows, even as earnings estimates have shrank for this year and next.

Wall Street has convinced itself and all who will listen that growth trends in the real economy are irrelevant to asset prices. But if valuations and economies don’t matter, why employ legions of economists, financial analysts, and investment ‘advisers’? The business model, of course, is to urge buyers at all costs and beg for government bailouts when inevitable implosions happen. Individuals are recurring collateral damage; it’s wise to be wary.