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When I was a lad, I spent a good chunk of my Long Island Press paper-route money collecting baseball cards. In St. Sebastian’s schoolyard, you could trade the Yankees’ Horace Clarke for a couple of forbidden cigarettes. Player popularity determined the price of the card, more than any putative value of a piece of cardboard with a picture on it.

When the baseball card of a rookie is first bought, it is nearly impossible to know whether the card—whether of Hoss Clarke, as he was known, or Honus Wagner—will have long-term value. Collecting cards rarely pays off.

Isn’t trading bitcoin and other cryptocurrencies much like swapping baseball cards—with all of the unknowns about value—but on steroids?

Yes, some will survive and thrive as established financial players move in, as Barron’s has noted (“Bitcoin Storms Wall Street,” Dec. 2). And the bitcoin blockchain technology is clearly useful.

Bitcoin fans would rather liken the phenomenon to gold, with its limited supply of metal, than to baseball cards. There will be only 21 million bitcoins.

Yet there are cryptocurrencies besides bitcoin, like ether and XRP, to name two. Theoretically, there is a limitless supply of these digital currencies. Each new one could weaken interest in the ones that came before. There’s no guarantee that bitcoin will be a survivor. Maybe it will be the equivalent of the rare Honus Wagner card, reportedly last sold for roughly $3 million, or it could be worth the $50 to $100 value of a Horace Clarke card.

Unlike a stock, bond, or real estate, a cryptocurrency has no intrinsic value, with no cash flow or future streams of income. The value is simply what the next buyer is willing to pay, otherwise known as the greater fool theory. This isn’t investing. It’s speculation. Most investors aren’t nimble enough to avoid a battering.

Nor are cryptocurrencies a currency in the traditional sense, defined as a store of value, a medium of exchange, and a unit of account. The wild swings of bitcoin prices belie its store of value. And while you can buy a Lamborghini and reportedly even marijuana with bitcoins, try using them to buy less exotic fare. I’ve yet to see financial accounting results in bitcoin.

Cryptocurrency mania is obvious in the juiced stock market activity of companies like beverage seller Long Island Iced Tea (ticker: LTEA). Its shares soared after it said it would change its name to Long Blockchain.

The real risk is regulatory. Governments around the world will gradually see the cryptocurrencies as a threat to their fiat currencies and policies. Which government, totalitarian or not, will stand by as untaxed money flows out of its country under its very nose? No one is quite as vengeful as a tax man scorned.

It’s not hard to imagine the U.S. government telling banks they cannot transact business in such currencies. Last week, the Securities and Exchange Commission halted trading in the Crypto Co. (CRCW), pending an investigation of “potentially manipulative transactions.” On Friday, bitcoin tumbled to about $15,000 from a Monday high of over $19,000.

Even after Friday’s big drop, I’m not rash enough to predict when or at what price bitcoin will top out. But it’s a mania, and eventually this bubble will pop amid tears.

Where have all the penny-stock hustlers gone? It seems to me they’ve all moved on to cryptocurrencies.

NICK COLAS AND I HAVE ONE THING in common: a morbid fascination with the Federal Reserve’s dot plot, the public but anonymous guesses that senior Fed officials make four times a year about the appropriate future levels of the federal-funds rate. (The rate is used by banks that lend funds maintained at the Fed to other banks.)

Is there a prize, asks Colas, for “closest to the pin” or “most improved” prediction? The sad reality is that the Fed’s dot plot hasn’t been particularly accurate, says Colas, the co-founder of DataTrek, an independent market-research outfit and purveyor of—as he calls it—market “mind candy.” “And that’s strange,” he points out, “since the people doing the guessing are also the ones doing the rate-setting.”

Consider that the December 2014 median dot-plot number for where rates would be a year later was 1.125%. The actual number at year-end 2015: 0.25% to 0.5%. Similarly, the December 2015 prediction for December 2016 was 1.375%. Wrong again. It was actually 0.5% to 0.75%.

Recently, however, the Fed seems to have learned how to play the game. A year ago, the median dot plot for this month was 1.375%. That’s the spot-on midpoint of the 1.25% to 1.5% rate set by Federal Open Market Committee on Dec. 13. Score one for the federales.

You’d think that the market would give the central bank some credit for hitting the mark and perhaps take the dot-plot estimate for its 2018 interest-rate policy to heart. No dice. The Fed’s median rate for November 2018 is 2.125%, a function of the bank’s much-telegraphed three 0.25 percentage-point increases from today’s rate.

As of Friday, however, the fed-futures market suggests there is only a 26% chance that interest rates would hit the Fed’s indicated level by December 2018. The market says, “Fade the Fed,” and Colas agrees.

For one thing, there’s a new chair taking over at the Fed, Jerome Powell. Fortune may favor the bold, Colas adds, but the bold rarely end up running a central bank.

Then there’s the absence of inflation, which the current chair, Janet Yellen, has publicly called a “mystery.” A rate increase or two to keep financial markets from bubbling over seems to make sense, “but three or four hikes, not so much,” Colas says. Futures say inflation is not accelerating.

There’s also the shape of the Treasury yield curve to take into account. Even with last week’s bump up in 10-year yields to 2.49%, the Fed’s median dot plot of 2.125%—assuming no big backup in long yields—would come dangerously close to a flat yield curve and would threaten to become an inverted curve, that classic indicator of a recession. Nobody wants that.

If inflation does rear its ugly head, one of the first places you’ll see it is in the fed-fund futures market.

THE U.S. TREASURY HAS BACKED away from the idea of very long duration bonds, such as 50-year and 100-year issues, and more’s the pity. When Steven Mnuchin became Treasury secretary, he was hot for the idea, making the point that the U.S. could lock in low rates for longer and broaden the investment base, too.

But last month, Treasury unveiled a plan to boost the share of shorter-term issuance and reduce the share of longer-term bonds.

There are obstacles to very long-dated debt, but let’s get one thing out of the way. Though reports said that large financial institutions didn’t see sustainable demand for 100-year bonds, the reality is more nuanced. Institutional dealers don’t like them because they generate less activity, and hence there’s little in it for them.

Nevertheless, the likelihood of strong demand is demonstrable. Indeed, serial defaulter Argentina has 100-year bonds with prices trading at a premium to the coupon. The country’s 7.125% bond due in 2117 yields about 6.93%. (Bond prices move inversely to yields.) Several other nations with far worse credit ratings than the U.S.—Mexico, Belgium, and Ireland—all have sold such long-dated paper.

Who would want these bonds? Insurance and pension companies, which would like to match assets with long-dated liabilities. And there are others who want the long-term security and higher income from what would be highly rated bonds. The U.S. has about $14.9 trillion in outstanding debt held by the public, carrying an average cost of 1.78%. More than two-thirds of the debt matures within five years.

“It’s safe to assume that the 50-year rate, for example, wouldn’t be much higher than the 30-year,” says Jason DeSena Trennert, managing partner at Strategas Research. Currently, the U.S. 30-year bond, with a 2.75% coupon, trades at a slight discount, yielding 2.83%.

Very long-term debt would not be as liquid, which is a negative mainly for traders but less so for long-term investors. For example, if these bonds appear to be a one-off phenomenon, they might also attract less interest because they might not be as liquid as shorter-duration bonds. The government needs to be clear that very long-dated bonds are part of an issuance program.

Interest rates will probably be higher, rather than lower, a few years from now, and the Treasury needs to talk to end-users of these bonds rather than just the dealers. With deficits and, by extension, debt likely to grow further, it makes little sense for the U.S. to have such a significant mismatch between its assets and liabilities.

“The time to secure long-term funding is when you can and it is mildly more expensive, not when you have to and the costs are likely to be exorbitant,” Trennert says.

One caution from a Barron’s story last year (“Taming Federal Debt: The Case for 100-Year Bonds,” Nov. 19, 2016) bears repeating. Politicians love to spend, and there is a risk that shifting interest payments to the long term could lead to more spending over the short term, negating the savings.

Critics of very long debt say such bonds would weigh on 10- and 30-year bonds, pushing up yields at the long end of the yield curve and reducing prices. Given the market’s preoccupation with an inverted yield curve and the Fed’s intention to raise short-term rates, maybe higher rates at the long end isn’t so bad.

The 50- and 100-year Treasury bond is an idea worth revisiting.

Happy holidays to all.

Email: vito.racanelli@barrons.com