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Hi friends, 

Hope you're enjoying the mid-summer season. This edition represents three years of Declarative Statements. Thank you to everyone for continuing to read, engage, and inspire me to write, especially those of you who have seen this newsletter evolve from the beginning. 

And thank you for indulging the end-of-the-weekend edition this time :)

Today's Contents:

  • Good Reads: Sensible Investing
  • Good Reads: Trends
  • Weekly Song: Love the One You're With

Good Reads: Sensible Investing

The Nightmare Scenario for Central Banks. Here. The thesis is that under certain conditions inflation becomes self-fulfilling because of human behavioral changes, rational or not. 

The BIS analysis argues that there are two basic inflation regimes – “low” and “high”, each of which has its own self-reinforcing properties, although economies occasionally transition from one to the other. In the low-inflation regime, “relative” or sector-specific price changes are the dominant driver of the CPI. These tend to have a transitory effect, as they die out quickly. This is not a regime in which wage- or price-setters need to pay a great deal of attention to the overall inflation rate. Aggregate price pressures are subdued, and everyone takes this for granted.

In the “high-inflation regime”, on the other hand, broader CPI developments start to have a much more discernible impact, with inflation itself becoming the focal point for private-sector decisions. This shift in emphasis leads, in turn, to behavioural changes that will cause inflation to become entrenched. In the high-inflation regime, even relative price shifts – such as spikes in energy prices – have persistent effects. 

Housing Market Update: Prices Begin to Fall from Record Highs. From Redfin here. When you dig into the data, though, you see that while demand seems to be falling, but prices are still high and selling (albeit dropping a small amount from the most feverish highs).  
  • The seasonally-adjusted Redfin Homebuyer Demand Index—a measure of requests for home tours and other home-buying services from Redfin agents—was down 18% year-over-year during the week ending July 10.
  • The median home sale price was up 12% year-over-year to $393,449. This was down 0.7% from the peak during the four-week period ending June 19. A year ago, the median price rose 0.9% during the same period.
US Series I Bonds Seem Like a Great Deal: Here.
  • $10k/yr/family member
  • 1 year lock-in
  • 9.62% (adjust every 6 months with inflation)
  • Compounds
  • No state tax
  • US government backed (issued by the Treasury)

Good Reads: Trends

Progress vs Categories by Albert Wagner. Here. I generally detest categories, so I agree wholeheartedly with this take.

If you are trying to invent the new (or fund it), it helps to let go of existing boxes, instead of trying to jam innovative ideas into them. One of the reasons really disruptive startups often have a hard time raising money is because they often don’t fit an existing category. At USV we have benefited greatly from having a thesis-based rather than category-based approach for that reason.

Afridigest is a newsletter on business and innovation in Africa. Afridigest has excellent curation by Emeka Ejene. 

Family Offices Investing in Venture Capital. July 2022 SVB report here. TL/DR: Family offices are still investing in venture capital, but more money is going to mega funds. 

Starbucks is Closing 16 Cafes in the US in response to spiking crime including assault, drug use, and theft. Here.

Weekly Song: Love the One You're With

Music video here.

Ostensibly, I was on a work trip last week but ended up spending significant time hanging out with some of my oldest and dearest friends. Usually, the question I ask is "How can I optimize every hour of every trip? How many investors, entrepreneurs, and contacts can I meet in one go? Should I be hosting a happy hour? Can I fit in another coffee? Should I push for this meeting?" 

I like the message of 'Love the One You're With' about staying in the present. Be satisfied and enjoy it. 

That message isn't too hard to adapt with friends like these and meals like this. 

"Love the One You're With" by Crosby, Stills & Nash

If you're down and confused
And you don't remember who you're talking to
Concentration slip away
Because your baby is so far away

Well, there's a rose in a fisted glove
And the eagle flies with the dove
And if you can't be with the one you love, honey
Love the one you're with


Thanks for reading, friends. Please always be in touch.

As always,

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Katelyn Donnelly
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