Renaissancemen.org

All – I don’t talk about my work here, you can get a good idea of the work I have done in the past if you stalk my LinkedIn profile. I haven’t written here or on Twitter much the last month – keeping a lower profile and my time is kind of gone. I can tell you one aspect of my new job, is I no longer have the 90 minute commute each way! I started working for Kinesis on Sunday evening, Oct 1st – and with this, I’m super excited to join the team. That being said, it’s been hard in my mind trying to explain to friends and family where I’m going to. So, I wanted to dedicate this post towards giving the 50,000 ft overview. I also want to tell you about how I arrived there – as my background has led me to this point! Lastly – for many of you on Twitter that follow me, this might be able to help you understand what the company is and lean in.

Here is the Kinesis series of videos from them that explains the system.

Skating to where the puck is going

There’s a saying – you want to “skate to where the puck is going”. Meaning, you see a future vision of where things are going, and you plan for that future vision. I’ve always been a rather strategic thinker. I loved a form of game planning things out. It served me well, rising to play in the World Open of Chess at 15, but also had me want to go to West Point and be an army general. I never quite made the latter, but the former is a good indicator of how I think. I am not really good at just showing up to a job. I want to pick an industry I think will go places, and have my career path coincide with where I think things are going. I want my work to make a difference. I’ll give you some examples…

1. Criminal justice – I went to school to work in the FBI. I had a LOT of law classes and am very schooled in the law. However, my sophomore year I decided that I didn’t like criminals, and my mind couldn’t handle what some of these people are capable of. I started to look like a cop 20 years on the beat, and didn’t want to be divorced. I switched to computer information systems and used my legal classes to have a minor in physical security. Got some great internships in college and got a terrific job right out of college working at The Vanguard Group of Mutual Funds (yes, that Vanguard was 45 mins from where I grew up).
2. IT security – an event at a job in 2004 had me realize that I needed to really look hard at IT security, and this led to me working with hardening systems with scripting, automation, and SMS/SCCM. This led me to
3. Working under US Cybercom as a federal contractor – I ended up getting a CISSP, MS in cybersecurity, and I spent nearly 15 years working in the defense industry as an enterprise admin, architect, and as a technical manager the last 10 years. To be more complete – I worked under the 93rd SB, under the 7th SC, under the 9th SC (NETCOM) under USCYBERCOM. For the last 6.5 years, I ran the 70 person IT baseline services contract team for Aberdeen PG covering cybersecurity, desktop support, systems administration, server administration, networking, and telecom.

There are probably a few dozen examples I can march out here, but it’s how I got to where I was in my career before leaving. But a funny thing happened in 2019, which led me to evaluate that the puck was starting to move somewhere else.

That is, in 2019 – on October 16th, the repo market blew up. I’m not going to sit here and tell you I know the exact plumbing of the repo market, or how it works – but I remember from a grad school class in like 2002 a 30 minute talk on it. Essentially, what this all boils down to is that banks did not trust the collateral offered by other banks for overnight lending. The government had to step in to keep the whole thing from blowing up.

This was a red alert. Banks didn’t trust the collateral that everyone else had. Let that sink in.

Since that day, this has been my impression of the entire financial system.

So I fell down a rabbit hole, which led me to Mike Maloney’s series on gold – The Hidden Secrets of Money It is a 10 episode series that you can see on YouTube, and it will tell you all about what’s going on with our money. My friends probably recall how I was talking about inflation a year before any of them saw it – to the point of nauseating them. But it was important stuff to know, and many just stuck their head in the sand and plodded on with life. Why?

Because many of us grew up with the Walter Kronkites of the world. We trusted news. Journalism and ethics were a big deal. When they told you years ago that all is well – you believed them because you trusted them. Today, you have to peer under the hood, and when you do, it’s not a pretty picture. Everyone has to really dig in for themselves to understand what I’m talking about.

But what I saw was….the world starting to pivot away from the US dollar. Albeit possibly slowly at first, but the alarming part was my paycheck was coming from the US government which is running up silly bar tabs like drunken sailors on leave after 6 months at sea, and felt that sooner or later, budget cuts will HAVE to happen, and with that, contractors (me) are the first to get the axe. Meaning, I knew my time was limited where I was, and I wanted to learn on how to profit from this issue. Where is the puck going to be?

If you haven’t seen it yet, please take a look at the movie “The Big Short”. That movie talks about how Michael Burry saw a problem with the housing market, and created a “short bet” which had him profit on the disaster in the housing market. This time around, a LOT of things are going to blow up, so I wanted to learn on how to profit on it.

Meaning – IF the US dollar is in decline, and there is an everything bubble that may pop, what can I do to profit off of this? What is the anti-dollar? How can I protect my family?

Gold. The last 3-4 years, I have been involved with gold, silver, miners, futures, and just about anything associated with it. Knowing in the back of my mind that this sector is going to go nuts in the future – why not work for a company in the sector?

Growing up with a silver spoon?

Not really – but my parents were silver bugs. My mom was a foreign exchange student to Peru when she was a senior in HS. She got to watch the moon landing from there. Well, she brought back silver from there, and I inherited it. It’s not a ton by weight, but my mom always spoke fondly of Peru and the silver she got from there.

My dad was “The coin king” who sold silver in 1980, and he got in on the whole move – and then rode it all the way down the elevator. I remember many times in my youth, where I’d spend hours at my grandmom’s house going through giant piles of change looking for mercury dimes, Indian Head pennies, etc for my dad and grandfather (dad’s father). This was perhaps 1981-1982 and I remember back in the day finding quite a bit of them. Even from the time you are a small child, you just know what money is.

My grandfather (mother’s father) passed in 2016 or so, and with that, I got an inheritance from him – maybe a total of $100 at the time, but it was a roll of silver dimes, a peace dollar, and a few other trinkets. I remember my mother and her siblings taking my grandfather’s silver to a dealer when he passed. I guess they held a little bit back for us grandkids. But I also would get those US mint coin sets as a kid, and had a decent coin collection! Seems he was a silverbug too.

So between both parents, both sets of grandparents, I’ve always been attracted to silver as money. My parents also used to have the “silver plated” tea sets and silverware, which is really not worth anything, but I’d remember them cleaning it and how wowed I was with its beauty.

I had the bug, but the repo market mess, followed by Maloney – then led me to dig out the roll of dimes from my grandfather and get started.

Crypto

Bitcoin became a thing in 2008 or so, and I never was a big fan of it. Not my thing, but I supported others who speculated. Given my background in IT and IT security, this was a completely different tech sector. It was interesting, but to me I felt it was sort of a fad. Little did I know that it would have bitcoin getting to $69,000 or spawning 20,000 other tokens! How did I miss that?? Still – to me, it was speculative, but I was interested in the technology from a business perspective. My wheels started spinning.

To this day, I have never bought bitcoin or any of the associated items like Ethereum or Doge or anything like that. But what I noticed was an entire generation of young adults now also learning about the fiat problems, and trying to bypass the banking system with a form of decentralized currency – where you can pay someone else directly, and cut the banks out of it.

Currently – you want to buy something at the store with your card, the banks/credit cards may charge the merchant like 3% for the transaction. This means, on just about any purchase you make, banks are “getting their beaks wet”.

Right now, there are MILLIONS of people worldwide interested in using a form of currency that bypasses the banks, is almost instant, and almost damn near free to do. I saw that merchants were starting to take some, as this alleviated the 3% fees.

BRICS

When finishing my MBA in 2016, I had learned about the “BRICS + 16” and my senior thesis (125 page paper) was all focused around it. My last class in grad school was international marketing, and your team had to pick an industry, then pick a company, and then pick an emerging economy to sell it to. You learn a lot then about how companies have to incorporate in different jurisdictions. You learn a lot about geography of countries – like while Brazil might have a lot of hydro possibilities for EVs, their electric infrastructure is poor. We picked “auto industry” and “Tesla” and “South Korea”. Meaning – half of South Korea’s population was in metro areas like Seoul.

With that exercise, you also put your geopolitics hat on, along with the marketing segmentation of who you are going to sell what to, at what price points. You have to learn a lot about the pros and cons of these emerging economies. It’s almost like investing in a stock. You have to understand political stability, rule of law, and demographics. How safe is it to invest there? What does the population need? What is their GDP per capita?

What I saw with “emerging economies” in 2016 blew my mind. Even a country like Vietnam, which I grew up understanding in a different context – is today an emerging market that is growing. Southeast Asia is exploding, and with this – they want to modernize everything, including banking and financial technology.

When doing a deep dive into the BRICS+, you find a lot of exciting opportunities there. You can also see how the last few years have then led a lot of these countries to start drawing down their USD holdings, and many of them have or are unwinding their ownership of US debt.

Then, since the global financial crisis – it is easy to see that many countries started stockpiling gold. Why? The US took on “world reserve currency status” and has abused it. I love my country so much it hurts. But when you have a song called “Rich Men North of Richmond” rise to number 1 in all charts in the US, by an unknown, that gets 80 million views in a month, it can tell you all you need to know about what’s going on here. Our middle class, over the last 40 years, has mostly evaporated. What has been left has been “people who have survived” and “people who have been left behind”. The “people who have survived” then is represented by people like me who live in a decent home – but am far overshadowed by the multimillionaires and billionaires. I simply learned how to play the game with going to grad school and had a hunger inside to make it. Many just keep punching the clock and watching the news and they don’t realize they are being left behind daily. It’s a salami slice at a time.

There is a general sense among all Americans that something is deeply broken here. For the Marin Katusas of the world that talk about the strength of the US dollar worldwide, they have no idea the powderkeg of instability that lies beneath the cheap veneer at the moment. Maybe they do – but aren’t calculating how fragile we are currently.

I feel, like many, that there is a growing sense that emerging markets around the world are going to capture a lot of “financial energy” as time goes on. For example, Nigeria is destined to have a much larger population in the coming 25-50 years, and “electrification” is big deal there. Where is the copper coming from? It is said that Africa is going to be a MASSIVELY big deal moving forward with commodities.

With that being said, you have countries like Ghana now who are requiring gold miners to sell them 20% of the gold they mine in their local currency. It’s a brilliant move, which helps stabilize the local currency, but then also is a step in de-dollarizing.

Backed versus unbacked currency

In my 4 years of my MBA, there was not one mention of gold or silver. Not one. What happened here in the US was that gold and silver were part of our Constitution, but given the formation of the Fed in the early 1900s, inflation is baked into this system. This eventually forced us off of precious metals to back our currency.

We started out for many years with $20 being worth one ounce of gold. You’d then exchange your physical gold at the bank to get bank notes which were essentially promises to pay gold to the holder.

This allowed you to walk around with paper money and get change in things like this:

And this:

The “money” above is 90% silver coins. That is, quarters, dimes, half dollars, and dollars made in 1964 and before. What eventually happened was similar to what is happening today in nickels – the cost to produce the change costs more than the face value of it. So in 1965, they switched to relatively worthless metal for coinage.

In 1971, Nixon “closed the gold window” and at that point, our currency was then treated as “money”. There was no longer guaranteed convertibility with the paper to the metals. And this then had the metals “float” in value to the paper.

This is the price of gold, in USD. Note what happened in 1971.

What’s going to bake your noodle, Neo, is to ask yourself if the value of gold went up in USD, or, perhaps, the value of the USD went DOWN against gold? Once you understand that concept, you start looking at everything differently.

You then start measuring things – in gold (and silver). An average house in 1920 may have cost 200 oz of gold. Today, an average house may cost 200 oz of gold. Two silver dimes in 1964 would buy you a gallon of gas. Today, if you take those same two silver dimes, cashed them in at the coin dealer, you could buy a gallon of gas with it. Take any real asset, and go back 100 years. You could then state that the same amount of gold (or silver) would buy you the same, today.

Gold as a hedge against the dollar

Using the above information, let’s go back in a time machine to 1910. We are going to take a $20 bill and an oz of gold, and put it into a safe. They are of equal value then. We hop back into the time machine, and open the vault today. The same $20 bill and gold coin remain.

The $20 bill will now, today, buy you 2 McDonald’s value meals. The gold coin will buy you 200 McDonald’s value meals. This is called “purchasing power”. How did this gold increase in value? Answer – it did not. IF McDonald’s existed in 1910, that gold AND the $20 bill both would have bought you 200 value meals.

Gold (and it’s wild younger brother silver) both are “hedges” against the dollar. For generations, wealthy people may capitalize on a huge stock market move – and then sell those winnings in US dollar CURRENCY. They then take those winnings and wish to PRESERVE that spending power as the markets fall and the USD gets weaker over time. A portion of these winnings would go into “risk off” items like gold and US Treasuries. That is, they would exchange their fiat CURRENCY for MONEY (gold). Gold acts, of sorts, like a financial energy battery. Or perhaps better to our analogy, a spending power time capsule.

If you have seen the NASDAQ go up 16x in 11 years, and the Dow go up 7x, would it not make sense for this asset inflation to capture the winnings in gold or treasuries to STORE the spending power as markets recede?

To me – I felt given all of the above evidence, I needed to invest in gold, silver – miners – futures – anything related to precious metals. Including my career and future earnings. Today, gold is at or near an all-time high in all currencies, except the USD. And even so here, we are about 10-15% off of all-time highs.

Does it make sense to buy precious metals in this circumstance? Why yes, it does. But there’s a lot of problems with owning a lot of precious metals at home.

1. Security. If you have any amount of “size” at home, you have a security risk to you and your family.
2. Cashing in. So you have precious metals – and you bought at a high premium. Now you want to cash them in, and a local dealer gives you below spot. You can then take this cash currency to buy food.

A better mouse trap

In 2021, I became aware of Kinesis. This is written for some of you who never heard of it. What it is, is a “financial technology” (fintech) company that allows you to store and spend gold/silver using electronic means.

Remember this?

This is a PROMISE to give you an ounce of gold. This is PAPER CURRENCY that can be exchanged for MONEY.

We then evolved in the 1990s on with electronic forms of currency. This promises to give you dollars. This uses banking institutions and may have high transaction fees. This is ELECTRONIC payments that give you access to CURRENCY.

We have now evolved to this below: Kinesis KAU. It is a digital currency (electronic payment) that promises to give you a gram of gold – MONEY (with very low fees) OR its PAPER CURRENCY equivalent (using banks) at point of sale. This is the KAU. There is a KAG, which is one silver ounce.

The KAU today lives on the Kinesis exchange, and several others. 1 KAU is equal to one gram of gold – and you can redeem this when you own 100 of these and get a 100g bar sent to you. If you own 200 KAG, you can redeem that as well. I believe they are working on smaller redemptions down the road, but the key here is this – these digital tokens are ways to salami slice a gram of gold many millions of times.

The “Wild West” may have had people walking around with a satchel of coins. Maybe a “billfold” to carry their paper notes they could redeem for gold. The physical gold made it not really easy to buy things and get change from it. Imagine you walked into a grocery store today and had an ounce of gold and wanted to buy a loaf of bread. Gold at the moment is like $1850, and the load of bread is $4.

However, in 61 countries, you have a system where you can store your financial energy in a vault – at no cost – and then use a debit card to buy your loaf of bread with gold. There are two systems to do this, currently. One, at point of sale (POS) Kinesis sells just enough gold for you to pay the bill in USD. Or Euros, or many other currencies. Two, you can send that amount of gold or silver to a merchant. Maybe I agree to buy a 1/2 cord of firewood from my friend Mark for 2 ounces of silver. I can send 2 KAG directly to him. 50 years from now, the firewood may still be worth 2 KAG. The VALUE of the gold or silver stays RELATIVE to everything else. It’s the PAPER CURRENCY that is volatile.

But why vault?

Remember what I said about having too much precious metals in your house? On top of that, when you buy a lot of this, you get killed on premiums at the coin shop. I think everyone should have SOME physical at their house, but in many settings it doesn’t make sense to have TOO much there. Also – remember, you may get killed going back to sell it.

Remember also about the time travel adventure we had? While that was over 100 years, imagine what is happening year over year to the cash you have in savings at a bank earning .25% interest, if you are lucky – with perhaps 5-10% inflation normal by most measures.

But what if you could immediately vault your financial energy in gold/silver in a vault, at no cost to you, and then later – at your time of choosing – can use a debit card to spend your financial energy then?

Use case – Imagine for a moment, that you are buying in silver at $20 in Kinesis to store financial energy. You wake up one day and see silver at $30. You then go to the grocery store, spend your silver. Go to the gas pump, spend your silver. Go to the department store, buy clothing for the family. You just got 50% more spending power. Think about how you just got more for your dollar? Silver doesn’t go vertical, but it stair steps up and down. Perhaps on times when the price is lower, you re-load your account. When price is higher, you start spending it. Same thing with gold.

As I mentioned this is currently in 61 countries – but the US is still not there….yet. Kinesis is a company with origins in Australia, and with it – they focused a lot on southeast Asia, Europe, and the US was to come later. I’m skating to where the puck is going here as I find this system to be revolutionary. There are some other tokens that do some of the same things – but Kinesis is much bigger than most, and also have far lower redemptions and regular auditing. Additionally, Kinesis worked on a project with Indonesia for 5 years and recently they had the kickoff there – so this has had the in-depth scrutiny at the highest levels. Nation states trust Kinesis, and with this – their size is about to break out to the upside.

Growth is about to be a big word there.

But what is it? Really?

It is a digital currency that exists on the Stellar blockchain. A term I coined, which is now being used in the industry, is “Asset Backed Digital Currency”. Let me explain the difference from non-asset backed digital currency….

Non-asset backed digital currencies like Bitcoin, Doge, Ethereum – they rely on scarcity and utility of the coin for value. Traders then buy and sell on exchanges all over the world. However, all of these, in some way, can go to zero. There is no asset backing the cryptocurrency. It is speculation that one day, that particular coin may be used over others for commerce.

Asset Backed digital currency – like Kinesis KAG/KAU can be exchanged for the underlying metal and therefore its value is the metal itself. This is essentially the best of four worlds: Preserving spending power storing financial energy in gold/silver, using gold/silver as money, debit cards for exchangeability at POS for local currency, and the blockchain for low-cost transactions. This currency cannot go to zero, as it is tied to the underlying metal. Meaning – the VALUE of the KAG/KAU is tied to the value of gold/silver, not the scarcity of the token. In fact, the tokens are “minted” into existence when gold/silver added to the vault, and removed from existence when gold/silver leave the vault.

The design of this is also pretty interesting. IF the demand on the exchange is super high – it can drive the price of a gram of gold higher than if you were to buy from a local coin shop. This means you could buy gold at $60 per gram at a coin shop and send it in to Kinesis and sell it there for $65, winning on that arbitrage. Likewise, you may be able to “mint” gold into existence cheaper than buying on the exchange, thus adding more gold to the system. The reverse can also be true. Assume the price of silver on the exchange is low at $20, but your coin shop is paying $23. You can buy 200 oz of silver at $20, remove it from the system and play that arbitrage with the coin dealer.

So because of the above – the exchanges usually have pretty tight spreads.

Geopolitical concerns

One can just look around at the local landscape and see there is a move to de-dollarize. It may not happen next week, or next year, but it is in motion.

The chart above shows as high as 72% of global FX reserves were in USD in 2001, but this shows it dipping to 60% in 2013, and some estimates now I have seen at 47%. Other estimates I have seen were 54-57%. The recent “big deal” was the US punishing Russia for invading Ukraine by seizing its assets. Using the world’s reserve currency as a policy weapon has seemed to drive many countries recently to start reducing their exposure to the dollar and dollar debt. It doesn’t mean the dollar is dying tomorrow, but what it means in lay terms is that it may be worth less over time, as it is exchanged for things like gold and US-based assets. This is more or less “re-homing” the dollars here and thus inflationary to anyone holding US dollars. Meaning, devaluing them faster, and less demand for it can have it flailing eventually.

You can see the GFC sort of created a big problem with the rest of the world.

So with my “skating to where the puck is going” abilities, I can see the following TWELVE trends emerging over the next decade:

1. The US dollar will lose value, faster, as the world is using the dollar less. It will not die, but this will lead to inflation as USD come home to compete for goods and services. It makes sense to store purchasing power in precious metals.
2. Digital payment systems with financial technology are rapidly advancing, and companies like Visa and Mastercard are being phased out of countries like Indonesia. These companies are at the cutting edge of technology, and by design transact far cheaper than their behemoth peers.
3. Central banks around the world have been on a gold buying spree since 2009, as their holdings of USD for reserve currency are dropping. Perhaps they are gearing up to use gold as a means of settlement in the future – as money.
4. The BRICS+ now overtake the G7+ in GDP – or rival it. What may have started out as an annoying faction 15 years ago has now mushroomed into a full out movement. All of these cultures have precious metals in their DNA for hundreds if not thousands of years.
5. The US is running massive deficits, and cannot sustain this. Budget cuts have to happen, at some point, which directly would have affected my job as a federal contractor.
6. Kinesis is the global leader in asset backed digital currencies
7. Non-backed digital currencies have peaked – and many who were attracted to this story for sound money and decentralized finance will eventually move to understand asset backed digital currencies as the true stablecoin to their entire ecosystem.
8. Kinesis is trusted by a nation state and has 15 vaults all over the world. They are increasing in size daily – but more important to me, there are many, many aspects to their business and project pipelines that make this perhaps the most exciting company on the planet. Most only see the retail side of this – but there’s a lot of amazing things coming we hear about in the vaultside chats.
9. Two years ago when I looked at the company for employment – and then a few months ago – I noticed the exec team had virtually no difference. This is a strong company where the leaders believe in the product and WANT to be here to see it succeed. Low turnover at the higest ranks over that period of time is very comforting to me.
10. More countries will see what Indonesia has done and will invite Kinesis into their future plans. Since a blueprint and use case is there, Kinesis should be able to have tailored solutions with a lot of big picture problems already solved that can be replicated.
11. I see a day 10 years from now on Amazon check out, worldwide, you have Visa/Mastercard/Discover/AMEX/Kinesis – and you will have a 2.5% discount applied if you use Kinesis because the cost to transact is so low. Nations may stop trusting each other’s currency – and gold is the universal translator to all currencies. So if you are in country A selling to country B – you can send gold as payment to country A because country A doesn’t allow the currency of country B or there’s some form of embargo against the currency. Gold is sold in ALL currencies worldwide.
12. The design of this system is absolutely genius, and I feel the CEO is perhaps the fintech version of the next Elon Musk. I don’t say this lightly. I feel I’m buying Amazon stock in 1999 here with joining this team. This system design will be written about in business text books for the next 100 years. I have read enough case studies in my MBA classes to be completely and utterly fascinated by the design of this. I believe so much in this person, I left an extremely steady federal contracting job I had for 6.5 years to join their team. He is inspiring – genuine – and the real deal. When you find people in your life that inspire you – follow them. Bring value to them. Learn. Challenge.

So there you have it – I believe in this product so much – I went to work for them. I wanted to write this so I could explain to my friends, family, and co-workers where I went and WHY I am so excited to work for them. And – why I may be recruiting them down the road. I believe the growth story of this company in 10 years will be like nothing anyone has seen before. Rome wasn’t built in a day – and neither will Kinesis. But, for those of us looking for the Romes of the world to move to with our career, when one of these comes to your attention, you go all in.