Silver Antidote to Bubble Craziness

CHARACTERISTICS OF BUBBLE CRAZINESS:

  • U.S. stocks, according to many measures, are the most over-valued in history. We live in a Bubble Zone!
  • Bitcoin and other cryptos are definitely in a bubble, but they could rise even higher.
  • Bonds yield little, and in many European countries, less than zero. Central banks have created this distortion to the detriment of savers, insurance companies and pension funds.
  • Real estate: Some locations, such as New Zealand, Canada and Australia are up a factor of 8 to 20 since 1980. Houses have become unaffordable for many, even with historically low interest rates.
  • Silver and gold: No bubble since 1980. Prices have been repressed since 2011 and are attractive now.

INVESTING IN BUBBLE CRAZINESS:

  • Institutions buy stocks because bonds yield so little. This works until the inevitable crash. Think tech stocks in 2000 or 2018(?).
  • Institutions and central banks buy bonds trusting the “greater fool” theory. Argentina sold 100 year bonds. What happens when the world runs out of “greater fools?”
  • People buy Bitcoin because it is going up, and it might double again from here. Are you comfortable investing savings with that plan?
  • Others deposit their digital currency units into a “high yield” checking account that yields 0.01% interest. Or they “invest” in a CD that guarantees a yield of 1% per year in a currency that will be devalued by far more. Others buy a motor coach that depreciates $ 100,000 when they drive it from the dealer lot. Or they purchase a house that costs $ 10,000 to $ 50,000 per year in taxes, insurance, maintenance and utilities before principal and interest.
  • Demand value! Not doing any of the above! Avoid fads, bubbles, central bank distortions and obvious financial insanity.

WHAT’S LEFT? GLAD YOU ASKED!

  • What has been money for thousands of years?
  • What is more permanent than ephemeral digital currency units that are continually devalued?
  • Asia has aggressively accumulated it for decades.
  • What has been secretly sold from western vaults and shipped to Asia?
  • What is used in thousands of industrial and medical applications?
  • What has been suppressed by governments and central banks because they promote their own digital and paper currencies which have zero intrinsic value?

THE WINNERS ARE SILVER AND GOLD!

  • But “they” claim gold and silver are volatile and dangerous. Gold and silver might go up or down (for a few years) when measured in digital currency units created from “thin air” by corrupt central banks. Gold in 1971 was $ 42 and is about $ 1,300 today. Silver prices have increased similarly as central banks devalued the dollar.
  • For other examples of volatile and dangerous prices, consider the price chart for Global Crossing stock or Enron stock. Or the NASDAQ 100 from 2000 to 2002 (down 84%). Or the S&P 500 Index from 2007 to 2009.
  • But “they” claim gold and silver are relics of a bygone era, and digital is the wave of the future. So why are Russia and China accumulating gold bullion? What happened to Iraqi gold, Libyan gold, and Ukrainian gold, and who wanted it?
  • Do dictators escape while carrying paper currency units or gold bullion?
  • Would you prefer 100 ounces of gold or 130,000 paper dollars in a ten year time capsule?
  • Central banks create trillions of U.S. dollars, euros, pounds, yen and Swiss Francs each year. The Swiss central bank “creates” currency units and buys U.S. stocks. The media thinks “creating from nothing” is normal and healthy, yet informs us that investing in gold, to protect from devaluing currencies, is silly and dangerous!

GOLD AND SILVER IN THE BIG PICTURE:

U.S. dollars are created as debt. Central banks and governments want more currency units so debt, deficits and expenses exponentially increase.

Graph the price of silver (times a trillion) divided by the national debt. The ratio is low because debt has increased rapidly and silver is inexpensive.

Silver times 1 trillion to total debt: ratio

Graph the price of silver (times a trillion) divided by U.S. government annual expenses. The ratio is low and silver is inexpensive compared to total U.S. government expenses.

Silver times 1 trillion to U.S. govt. expenditures: ratio

Graph the price of silver (times one trillion) divided by currency in circulation as measured by M3 (St. Louis Fed).

Silver times 1 trillion to M3: Ratio

Graph the ratio of silver to the Dow Jones Industrial Average over 30+ years. The ratio is low, as it was in 2001 when silver sold for under $ 5.00. In early 2018 the DOW is too high and silver is inexpensive. Both will reverse.

Silver times 1,000 to DJIA Index: Ratio

SHOULD WE BUY SILVER OR GOLD?

Graph the ratio of silver to gold. Since 1971 a high ratio has indicated the top of a bull market in both silver and gold. But when the ratio is low (silver is inexpensive compared to gold) both silver and gold are cheap, especially compared to other paper and digital assets – like now!

100 times Silver to Gold: Ratio

The lows in the ratio show excellent times to purchase both silver and gold, particularly silver. Silver prices are listed in the boxes at the ratio lows. Expect the ratio to increase as both metals rise in price during the metals bull market that restarted in December 2015.

CONCLUSIONS

  • Bonds, most stocks, and Bitcoins are too expensive and have risen too far and too fast.
  • Some, perhaps most, real estate is overpriced and ready to fall.
  • Silver in early 2018 is inexpensive compared to M3, National Debt, government expenditures, the Dow and gold.

Republished with permission by The Deviant Investor.




Study Finds That 22 Percent Of Bitcoin Investors Are Using Debt To Fund Their Investments

Investing in cryptocurrencies such as Bitcoin, Ripple, Ethereum and Litecoin is extremely risky, and experts all over the country are warning that people should only invest what they are willing to lose.  Unfortunately, many are getting swept up in the current euphoria surrounding cryptocurrencies and are not listening to that very sound advice.  A disturbing new survey that was just released found that 22 percent of all Bitcoin investors are either directly or indirectly investing in Bitcoin with borrowed money…

According to LendEDU, a personal loan research firm, more than 18 percent of Bitcoin investors have used borrowed money to trade the cryptocurrency. In a global survey of 672 active Bitcoin investors, researchers asked traders the method they used to fund their cryptocurrency trading accounts. The majority of investors used banking systems such as credit cards and ACH transfers to fund their accounts.

But 22 percent of traders revealed that they have not paid off their credit and debit cards after purchasing Bitcoin, effectively investing in the cryptocurrency with borrowed money.

Credit card debt is one of the most toxic forms of debt that you could ever carry, and investing in anything when you still have credit card balances is extremely unwise.

Yes, cryptocurrencies went on an epic run in 2017, but there is absolutely no guarantee that they will continue to rise in 2018.

In fact, there is a very real possibility that we could see a cryptocurrency crash, and there are many investors that are actually eagerly anticipating one

Well, as many traders expected, it appears that institutions are using the futures product to slowly but surely build a short position in bitcoin. According to the CFTC Commitment of Traders report (available CBOE futures), non-commercial traders held a net short position of around $ 30mn as of Tuesday Dec 26, or around half of the total open interest.

Separately, the Traders in Financial Futures breakdown provided by the CFTC show that the leveraged funds category that consists largely of hedge funds and various money managers had a short of around $ 14mn, or around a quarter of the total open interest.

In other words, spec investors have used the futures contracts to establish Bitcoin shorts.

On the other hand, there is also the possibility that cryptocurrencies such as Bitcoin could continue to defy gravity and soar even higher over the next 12 months.

In fact, a rumor that Amazon.com will soon start accepting Bitcoin has lots of people buzzing

As a backdrop to all of this, there is a strong rumor that Amazon is about to accept Bitcoin as a method of payment. Patrick Byrne, the CEO of Overstock, has stated that Amazon will soon have no choice but to start accepting it. He is quoted as saying, “… they have to follow suit. I’ll be stunned if they don’t because they can’t just cede that part of the market to us if we are the only main large retail site taking Bitcoin.” Scott Mullins, an Amazon executive has confirmed that Amazon is, “working with financial institutions and crypto-experts to spur innovation, and facilitate frictionless experimentation.”

If the Amazon rumor turns out to be true – Bitcoin will probably go into orbit! Be prepared…

If someone knew exactly what would happen throughout 2018, that individual could make an absolutely obscene amount of money.

Unfortunately I don’t know where cryptocurrencies are heading, but it does appear that things are about to get a whole lot more interesting.  According to Reuters, it looks like you will soon be able to invest in Bitcoin using leveraged ETFs…

The new idea is to build “leveraged” and “inverse” funds that would rise – or fall – twice as fast as the price of bitcoin on a given day.

Direxion Asset Management LLC plans to list such products on Intercontinental Exchange Inc’s NYSE Arca exchange if U.S. securities regulators give the nod, according to a filing by the exchange this week.

In the filing, the exchange said the listing “will enhance competition among market participants, to the benefit of investors and the marketplace.”

So if Bitcoin rises or falls a thousand dollars in a single day, those financial instruments will be designed to move by about twice as much.

That should be fun.

Meanwhile, some are asking what will happen to cryptocurrencies such as Bitcoin, Ripple, Ethereum and Litecoin if the long-awaited collapse of global financial markets finally happens this year.

Well, some believe that it would be doom for cryptocurrencies, but others believe that cryptocurrencies would be like gold and would actually do extremely well during the next great financial crisis…

The question is what will happen to Bitcoin and Cryptocurrencies once the financial collapse takes place. The signs are that when economic circumstances start to deteriorate the price of Bitcoin rises. A prime example of this is during the Cyprus and Greece bailout which saw the price of BTC rise considerably during this period. With banks stopping access to cash in ATM machines, Bitcoin was the perfect solution to be able to store it safely out of the banks and Governments’ hands.

What also happens during a depression is interest rates skyrocket and start to see hyperinflation. This will mean it is extremely hard to get finance from banks and the cost can make it unsustainable. The ICO market is a perfect solution to this problem and as the banking sector suffers, ICOs will boom. More companies will look to these as a cheap way to raise money and will create their own cryptocurrency.

It will be fascinating to see how all of this plays out.

There are some financial experts that believe that Bitcoin is going to zero, and there are others that are absolutely convinced that it is going to a million dollars.

As with so many things in life, timing is everything.  If you are investing in Bitcoin, let us just hope that you got in at the right time and that you will also get out at the right time.

Michael Snyder is a pro-Trump candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

The Economic Collapse




Bitcoin Comedy & Stock Market Melt-Ups

Tyler here with this week’s Macro Musings.


Recent Articles/Videos —

Blockchain — We discuss the real value of cryptocurrencies like Bitcoin — blockchain. We explain how blockchain works and its potential transformative uses.


Articles I’m reading —

A Hedge-Fund Titan Puts Away the Punch Bowl

Our favorite macro investor, Ray Dalio, has some sobering thoughts on how financial assets will perform over the next 10-years.

The problem is that with interest rates and risk premia near all-time lows and debt and asset values near all-time highs, there’s little fuel to repeat the process. Just as the Fed can’t cut rates much, it can’t raise them much either, or debt servicing would swamp cash flow and asset prices would sink. Thus Mr. Dalio sees years of low interest rates, and while he thinks stocks are fairly valued, returns to a typical stock-bond portfolio over the next decade will be around zero after inflation and taxes. Whatever you need to retire, save it now: Don’t count on portfolio returns.

We agree with his long-term outlook. The FED has to battle the end of a long-term debt cycle which is incredibly hard to do. This reality is a tough pill to swallow for passive investors — but as macro traders we look forward to the opportunity that a deleveraging cycle will bring.


Video I’m watching —

Bitcoin has officially entered the manic/euphoric phase. It seems like every single article on yahoo finance is about ‘crypto’ instead of stocks.

I’ve been trying to limit my crypto media consumption because it can easily waste your time away, but this comedic video from Seth Myers is well worth the 5 minutes. It’s friggin’ hilarious and perfectly describes the type of mindless buying we are seeing right now in the crypto space.


Podcast I’m Listening To —

If you want a break from the bitcoin bullish chorus take a listen to Patrick O’Shaughnessy newest podcast on crypto — A Sober View on Crypto.

In this episode he interviews Adam Ludwin founder and CEO of Chain, a blockchain technology company targeted at large enterprises. Adam is long the space but with a healthy dose of skepticism and caution. His background is in venture capital so he knows how the game works — it isn’t all about instant riches and 100% wins.

I found it refreshing to hear a balanced take on bitcoin and crypto from a professional investor. His sentiment mostly aligns with ours — the underlying technology in crypto is super exciting but the actual value of the coins/tokens is questionable.


Chart(s) I’m looking at —

Jeremy Grantham’s latest note included the chart below showing a possible blow-off top scenario in the S&P 500.

We agree with Jeremy in that the market is likely to accelerate higher in the short-term. We have synchronized economic strength coupled with easy central bank policy. This sets the stage for financial assets to rally considerably until the Fed and the other CBs get further down their hiking cycle.


Trade I’m looking at —

The Nikkei has started off 2018 with a roar. Price has completed an upside breakout of an ascending triangle pattern.

We’ve been long since before the holidays and have recently added to positions.  

We’re across the board bullish on stocks (in the short-term) but the Nikkei has the most attractive setup from a technical perspective which is why are are putting on exposure here.


Quote I’m pondering —

The central truth of the investment business is that investment behavior is driven by career risk. In the professional investment business we are all agents, managing other peoples’ money. The prime directive, as Keynes knew so well, is first and last to keep your job. To do this, he explained that you must never, ever be wrong on your own. To prevent this calamity, professional investors pay ruthless attention to what other investors in general are doing. The great majority ‘go with the flow,’ either completely or partially. This creates herding, or momentum, which drives prices far above or far below fair price. There are many other inefficiencies in market pricing, but this is by far the largest. It explains the discrepancy between a remarkably volatile stock market and a remarkably stable GDP growth, together with an equally stable growth in ‘fair value’ for the stock market.  ~ Jeremy Grantham

We should see even more investment managers and individuals buy the market out of FOMO during this final ascent. If you’re going along for the ride make sure to keep your stops tight. There’s no long-term value at these levels.

That’s all for this week’s Macro Musings.

If you’re not already, be sure to follow us on Twitter: @MacroOps and on Stocktwits: @MacroOps. Alex posts his mindless drivel there daily.

Here’s a link to our latest global macro research. And here’s another to our updated macro trading strategy and education.

Cheers!

Your Macro Operator,

Tyler

 

 

The post Bitcoin Comedy & Stock Market Melt-Ups appeared first on Macro Ops.

Macro Ops




Is Ripple The Next Hot Cryptocurrency? Some Are Calling It ‘The Bitcoin That Banks Like’

After Bitcoin, can you name the second largest cryptocurrency?  Until recently it was Ethereum, but now it is Ripple.  At the start of last year, Ripple was trading for less than a penny, and even just a few months ago you could still get Ripple for about 20 cents.  But now the price of Ripple has absolutely exploded, and as I write this article it is sitting at $ 3.15.  At this point Ripple has a market cap of more than 120 billion dollars, and those that got in when Ripple was under a penny have seen their investments go up by more than 40,000 percent.

If you can believe it, the price of Ripple is up more than 1,000 percent in the last 30 days alone.  So why is Ripple doing so well right now?

Well, many analysts are pointing to the very strong relationships that Ripple has been building with financial institutions

XRP’s price has benefited significantly from Ripple’s new partnerships with banks, noted Chris Keshian, co-founder of the Apex Token Fund, a tokenized crypto fund-of-funds.

He added that as XRP “surpassed ETH as the second largest cryptocurrency, market hype continued to drive the price.”

There are some that believe that Ripple will eventually surpass Bitcoin simply because it is a better way to send and receive money.

And without a doubt, functionality is the key for the long-term survival of any cryptocurrency.  Speculative investment can take a cryptocurrency a long way, but at the end of the day it needs to function well in the real world, and that is one key advantage that Ripple appears to have.  According to the Express, Ripple is being called “the Bitcoin that banks like”…

Bitcoin is feeling the pressure from another cryptocurrency hot on it’s heels.

Ripple has attracted tens of millions of dollars worth of investment leading to it being dubbed the Bitcoin that banks like.

The company uses block chain technology, powered by its own cryptocurrency, to send money across the world in real time settlements, according to the company’s CEO Brad Garlinghouse.

It does not hold the level of anonymity that bitcoin does, which makes the currency more favourable to banks.

One thing that has been holding back the price of Ripple is the fact that it is not listed on some of the key exchanges.  But there are persistent rumors that Ripple will be listed on Coinbase very soon, and that could potentially drive the price of Ripple much higher.

Before you get too excited, let me share a word of caution.  Investing in cryptocurrencies is extremely risky, because they are purely digital creations that do not actually possess any intrinsic value at all.  Right now there are more than 1,000 cryptocurrencies in existence, and most of them are eventually going to zero.

But for the moment, those that were able to capitalize on the cryptocurrency trend in a major way have become incredibly wealthy.  Ripple’s co-founder Chris Larsen is now worth an astounding 37 billion dollars, and that makes him the 15th richest person in America.

Of course he doesn’t actually have 37 billion dollars.  If he does not sell his coins and Ripple eventually goes back to zero, all of that “paper wealth” will be gone.

The big danger is that global governments will start cracking down on cryptocurrencies in a major way, and in late December we did see South Korea impose restrictions on the trading of cryptocurrencies in order to “limit speculation”.  If more governments start piling on, that could absolutely crush the cryptocurrency bubble.

For now, Bitcoin has been rebounding from that announcement, and Ripple just continues to roar higher.  But let us not forget that a single big announcement could change all of that in a single moment

The South Korean Government’s threats of shutting down exchanges seemed to have little influence on Ripple at the end of the year, but with news hitting the wires of just how much of an impact South Korean exchanges had on Ripple’s December rally and it’s not surprising that Ripple has been defending its gains at the start of the year.

Bitcoin may have been the fallout guy when it came to the regulatory chatter at the end of the year, but if the exchanges are closed, it’s not just Bitcoin that will suffer and, if the reports are correct of the South Koreans driving up Ripple trading volumes, things could get messy very quickly.

Whatever happens in the short-term, it appears that Ripple has a real chance to be a long-term solution for global payments.  In a recent statement, the Ripple team noted that using Ripple is faster, cheaper and more efficient than using Bitcoin…

In a year punctuated by the dramatic rise of digital assets, XRP has out performed the entire sector and looks likely to end the year up more than 45,000%. XRP’s performance is driven by a keen focus on solving a real global payments problem for real customers – and at fractions of a penny and about 3 seconds per transaction – it is cheaper, faster and more efficient than BTC or ETH. As others have pointed out, Bitcoin isn’t going to solve a payments problem when a transaction costs $ 40 and takes hours to complete.

The market seems to increasingly understand that there’s real utility for XRP in solving a massive cross-border payments and liquidity problem that is measured in the trillions of dollars.

It is that sort of utility that could make Ripple a long-term success.

But of course new competitors are coming online with each passing day.  The “Facebook of cryptocurrencies” may not have even been invented yet, and this industry is evolving at an absolutely breathtaking pace.

So Ripple may be the hottest cryptocurrency for the moment, but that could change completely by next week.

Nobody knows exactly what is going to happen next, and that is what makes the cryptocurrency market so exciting.  Fortunes will be won and lost in the blink of an eye, and there will be some very big winners and some very big losers.

Michael Snyder is a pro-Trump candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

The Economic Collapse




Bitcoin Isn’t the Bubble It’s the Pin!

I wish I could take credit for that perfect description of Bitcoin, but I can’t. That goes to JP Research.

This Bitcoin bubble will be the “pin” that bursts the more widespread bubble, just like the Nasdaq bubble burst the markets back in the early 2000s.

I wrote about this twice last week, showing you how the Bitcoin bubble compares to the internet bubble, and how much Bitcoin could potentially lose when the burst happens.

Then, last Friday, I took to Facebook with this video, elaborating more on the Bitcoin situation.

I explain why Bitcoin could make one more new-high at best and then what to expect… not only with Bitcoin, but the future of the cryptocurrency industry in general.

Watch this Facebook video, and comment with your thoughts on this Bitcoin bubble.

Harry

 

The post Bitcoin Isn’t the Bubble It’s the Pin! appeared first on Economy and Markets.

Harry Dent – Economy and Markets ()




The Washington Post Ominously Warns That Bitcoin Is Being Used By ‘Extremist Groups’

Demonization is the first step toward making something illegal.  Over the past couple of months, Bitcoin and other cryptocurrencies have experienced a tremendous surge in popularity.  Personally, I was completely floored the other day when my nephew wanted to ask me questions about investing in Bitcoin.  It seems like the whole world is getting caught up in the cryptocurrency revolution, and needless to say, the powers that be cannot be thrilled about this.  Independently-controlled cryptocurrencies represent an existential threat to the global debt-based central banking system that we have today, and so the elite have a very strong incentive to bring about the demise of Bitcoin and other emerging cryptocurrencies.

So it is no surprise that one of the key mouthpieces for the elite, the Washington Post, has begun to demonize Bitcoin.  And if you are going to demonize something, one of the fastest ways to do that is to link it with racists.  The following is an excerpt from an article that the Post just published entitled “Bitcoin’s Boom Is A Boon For Extremist Groups”

Even before Charlottesville, Richard Spencer, a prominent member of the alt-right, a group that espouses racist, anti-Semitic and sexist views and seeks a whites-only state, had gone as far as declaring bitcoin “the currency of the alt right.” But far-right political leaders and experts on extremist movements alike say the adoption of bitcoin gained new urgency after Charlottesville as extremists looked for ways to operate beyond the reach of government control and the shifting policies of U.S. tech companies.

For those of us that are accustomed to thinking critically, we see right through what the Washington Post is trying to do.  The Bitcoin phenomenon has absolutely nothing to do with Richard Spencer and his ilk, but every time the liberal elite want to demonize someone or something they trot out their favorite boogeyman once again.

Just like every other currency, Bitcoin can be used for good purposes or for bad purposes.  But the Washington Post article would have us believe that Bitcoin is at the core of some great “racist conspiracy” that is about to take America by storm…

Extremist figures who invested in bitcoin as a bulwark against efforts to block their political activity now find themselves holding what amount to winning lottery tickets. The proceeds could be used to communicate political messages, organize events and keep websites online even as most mainstream hosting services shun them, experts say.

The truth, of course, is that these sorts of racists are a very, very small fraction of one percent of the U.S. population.  They are so small in numbers that they are not even worth mentioning, but the Washington Post and other liberal outlets love to give them attention because they make the perfect enemies for the narratives that they are trying to promote.

Later on in the article, there was an effort to link Bitcoin to drug traffickers, money launderers and those who use the Internet for other dark purposes…

Extremists are hardly alone in benefiting from surging bitcoin values. Early buyers include cryptography enthusiasts, libertarians and professional investors – as well as drug traffickers, money launderers and others who regularly conduct transactions on the “dark Web,” a part of the Internet only accessible using specialized software that helps shield online activity.

The “logical conclusion” that many on the left are going to come to after reading such an article is that Bitcoin must be banned.

In the months and years ahead, I would expect to see a major push to crack down on cryptocurrencies.  And once independent cryptocurrencies have been dealt with, the elite will promote their own versions as the long-term solution.

According to the Post article, the Southern Poverty Law Center is currently tracking 200 Bitcoin wallets that they believe are owned by extremists.  Apparently, every single transaction that involves these accounts is being monitored…

Public blockchain records make such monitoring possible. Researchers can study the times, dates and amounts of any transaction, along with what accounts are involved. That does not include the actual names of account holders, but such records can illuminate identities. The SPLC, for example, looks on the donation pages of extremist websites for bitcoin accounts that are seeking contributions.

If the elite are ultimately able to convince the general public that Bitcoin and other cryptocurrencies are for racists, criminals, tax evaders and drug dealers, that will make it much easier to crack down on them.

But of course blockchain technology is here to stay.  Once the elite are able to move the public away from “unregulated cryptocurrencies”, they will simply introduce “Fedcoin”, “Utility Settlement Coin” or whichever other digital currency that they want to promote at the time.

For the moment, however, the cryptocurrency revolution is still raging.  Even as I write this article, the price of Bitcoin is flying all over the place.  At the moment it is sitting at $ 14,730, but that will change in a few moments.

I would anticipate even more volatility as we head into 2018, and other experts seem to be of the same opinion.  For example, just consider what Nick Colas is saying

Nick Colas, co-founder of DataTrek Research, has been following the bitcoin phenomenon for at least four years. Looking ahead to 2018, he sees more volatility for an asset that has soared nearly 1,600 percent over the past year.

In fact, he figures bitcoin could slosh in a range between $ 6,500 and $ 22,000; it was around $ 15,750 in Wednesday morning trade.

“Bottom line: bitcoin can rally to $ 22,000 and still be reasonably priced, or plummet to $ 6,500 and also be correctly valued,” Colas said in his daily note. “We expect to see bitcoin trade for both prices in 2018.”

But as I have said before, the key to this phenomenon is not how high the price of Bitcoin can climb.

Rather, the key is if Bitcoin or other cryptocurrencies can truly become methods of exchange that are widely used outside of the control of national governments and global central banks.

If we can create a truly autonomous financial system that is independent of the current debt-based system, that would be a wonderful thing for humanity.

Unfortunately, the elite are going to fight very hard to keep that from happening, because control over currencies is one of the main factors that allows them to have so much control over the entire planet.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

The Economic Collapse




Some Are Calling This ‘The Bitcoin Crash’, But Others Believe It Is Just A Bump In The Road On The Way To $40,000

Bitcoin, Ethereum, Litecoin and other major cryptocurrencies have been on a wild ride this year, and over the past 10 days the volatility that we have witnessed in the marketplace has been absolutely breathtaking.  On December 17th, Bitcoin shot above $ 19,800 for a brief moment before it started plummeting dramatically.  At one point the price of Bitcoin dipped below $ 11,000, which represented close to a 45 percent decline from the record high that it had hit just five days earlier.  And Bitcoin was far from alone – virtually every other major cryptocurrency was also down between 25 and 50 percent during that five day period.  But now almost all of them are bouncing back, and at this moment the price of Bitcoin is $ 14,219.99.

So where do things go from here?

There are many that believe that in the short-term the price of Bitcoin will fall back toward the actual cost of production.  It has been estimated that the cost to produce a new Bitcoin is currently between three and four thousand dollars, and with the price of Bitcoin so high there is a tremendous incentive for Bitcoin miners to produce as many as possible right now.

But there are others that are convinced that Bitcoin could eventually go to zero

Morgan Stanley analyst James Faucette and his team sent a research note to clients a few days ago suggesting that the real value of bitcoin might be … $ 0.

That’s zero dollars. (Bitcoin stood at around $ 14,400 at the time of writing.)

To back up his assessment, Faucette made the following arguments…

• Can Bitcoin be valued like a currency? No. There is no interest rate associated with Bitcoin.

• Like digital gold? Maybe. Does not have any intrinsic use like gold has in electronics or jewelry. But investors appear to be ascribing some value to it.

• Is it a payment network? Yes but it is tough to scale and does not charge a transaction fee.

Faucette also pointed out that the number of online retailers that accept Bitcoin is actually falling.  Five of the top 500 e-commerce merchants accepted Bitcoin during the first quarter of 2016, but now only three still do.

In order for Bitcoin to have a sustainable long-term future, it must become a real currency that is widely used, but many would argue that it is already being surpassed by better and newer options.  In fact, one top cryptocurrency expert recent stated that the old Bitcoin network “is as good as unusable”

Emil Oldenburg, the co-founder of Bitcoin.com – one of the world’s largest sites devoted to the cryptocurrency – recently called the cryptocurrency the “most risky investment you can make,” after he switched to bitcoin cash, which he considers to be the future.

“The old bitcoin network is as good as unusable,” said in an interview with Swedish tech site Breakit.

That certainly doesn’t sound promising, but so far that hasn’t stopped the price of Bitcoin from heading into the stratosphere.  So far in 2017 the price of Bitcoin has risen more than 1,400%, and that number is extremely impressive no matter how you look at it.

Of course virtually all of that “digital wealth” could disappear in just a matter of days during a major crash.  The CEO of Patriarch Equity, Eric Schiffer, believers that Bitcoin investments are eventually heading for “a thermonuclear death”

“I think bitcoin is a ‘tower of death,’” Schiffer says. “It is going to result in the imminent death of your investment – a thermonuclear death.

“Right now we are looking at a financial bubble that is bigger than the tulip craze and I believe that we are headed for a bitcoin crash that will supersede any financial worries of the 21st century,” he added. “People are going to be shocked when they try to liquify their bitcoins.”

Schiffer might be right.

After all, Bitcoin and other cryptocurrencies don’t have any intrinsic value.  Essentially, they are nothing more than digital creations that only have value because people think they have value.

But those that got in back at the beginning and have cashed out now have made enormous amounts of money, and nobody can deny that.

With every form of “investing”, they are winners and there are losers.  Unfortunately, those that chose to jump in at the height of the madness could end up losing very big.  The following comes from Wolf Richter

Betting on cryptos is a peculiar form of online gambling on a global scale that requires a consensus among participants that they only buy, and that you cannot ever cash out, and now that some folks are trying to cash out, the bets for everyone else are souring. The same dynamics that pushed prices up have reversed and are causing them to crash.

But what if the naysayers are wrong?

What if this current “Bitcoin crash” is just a bump in the road on the way to $ 40,000?

Years ago, the price of Bitcoin crashed 75 percent at one point.  What would have happened if the early investors had all bailed out then instead of holding on until now?

Those that sold Bitcoin at $ 12,000 might end up really kicking themselves if the price of Bitcoin does hit $ 40,000 by the end of next year, and that is exactly what some top experts are projecting

Billionaire investors and highly respected analysts including hedge fund investor Mike Novogratz, prominent financial analyst Max Keiser, and Fundstrat’s Tom Lee stated that the price of bitcoin will likely surpass the $ 40,000 margin by the end of 2018, and achieve a $ 1 trillion market cap.

And let us not forget that big names such as John McAfee and James Altucher are predicting that the price of Bitcoin will eventually reach one million dollars.

To me, this is absolutely fascinating.  On the one side, you have financial experts that believe that Bitcoin is going to zero, and on the other side you have financial experts that are projecting that someday a single Bitcoin will be worth one million dollars.

I don’t know which side will ultimately prevail, but it will be a lot of fun to watch how everything plays out.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

The Economic Collapse




The Washington Post Says That Fedcoin Will Be ‘Bigger’ Than Bitcoin

Fedcoin doesn’t even exist yet, and yet the Washington Post is already hyping it as the primary cryptocurrency that we will be using in the future.  Do they know something that they rest of us do not?  Just a few days ago I warned that global central banks could eventually try to take control of the cryptocurrency phenomenon, and so I was deeply alarmed to see the Post publish this sort of an article.  We want cryptocurrencies to stay completely independent, and we definitely do not want the Federal Reserve and other global central banks to start creating their own versions.  Because of course once they create their own versions they will want to start restricting the use of any competitors.

The one thing that could derail the cryptocurrency revolution faster than anything else would be interference by national governments or global central banks.  Unfortunately, now that Bitcoin, Litecoin, Ethereum and other cryptocurrencies are getting so much attention, it is inevitable that the powers that be will make a move.

On Monday, the Washington Post published an opinion piece by Professor Campbell R. Harvey of Duke University that was entitled “Bitcoin is big. But fedcoin is bigger.”  These days, there is an agenda behind virtually everything that the Washington Post publishes, and so it is not just a coincidence that they have published an article with “fedcoin” in the title.  Here is how that article begins

Over the past few weeks, investors have been flocking to bitcoin, the digital currency whose value has soared by about 2,000 percent in the past year alone. And while many economists are cautioning against excitement about bitcoin — which is caught up in what may be one of the biggest speculative bubbles in history — it’s important to note just how revolutionary the technology may be.

Indeed, the technology underlying bitcoin could fundamentally change the way we think of money.

Professor Harvey goes on to explain that it is “only a matter of time before paper money is phased out”, and that some version of “fedcoin” is inevitable.

But it doesn’t have to be.

The Federal Reserve and other global central banks could just leave us alone and allow us to create our own currencies.  The cryptocurrency revolution is moving along just fine, and there is no need for any sort of interference.

But I have a feeling that the powers that be will eventually manufacture some sort of a “cryptocurrency crisis” if one does not happen naturally.  In the aftermath, they will attempt to introduce some version of “fedcoin”, and many in the general public will be very thankful for the “solution” that the government has provided.

And that day may be closer than we think.  In fact, the U.S. government has already invested millions into cryptocurrency research

To add fuel to the fire, the U.S. government has been rigorously studying Bitcoin for about two years now… and instead of fighting Bitcoin, the Feds seem poised to wipe out the U.S. dollar by creating their own digital currency.

The National Science Foundation, a U.S. government agency that supports and funds research… has awarded $ 3 million to three U.S. universities for wide-ranging cryptocurrency research.

Cornell, the University of Maryland and the University of California Berkeley will focus on developing new cryptocurrency systems that, according to principal investigator Elaine Shi, will address “pain points” attributed to Bitcoin and other existing networks.

The Federal Reserve is far from alone.  Other global central banks are doing their own research, and the Bank for International Settlements says that “all central banks” may eventually need their own cryptocurrencies.  The following comes from CNBC

Central banks may one day need to issue their own cryptocurrencies, the Bank for International Settlements said in its latest quarterly review.

“Whether or not a central bank should provide a digital alternative to cash is most pressing in countries, such as Sweden, where cash usage is rapidly declining,” the Sunday report said. “But all central banks may eventually have to decide whether issuing retail or wholesale [central bank cryptocurrencies] makes sense in their own context.”

This is going to be a critical phase for the cryptocurrency revolution, because the people of the world are going to have to make it exceedingly clear that they do not want central bank cryptocurrencies.

Central bank cryptocurrencies would simply be an extension of the current debt-based system that is systematically enslaving humanity.  The thing that makes cryptocurrencies so great is the fact that they are not debt-based and they are allowing humanity to express independence from the current system.

As existing fiat currencies fail, we want there to be independent cryptocurrencies that people can use as an alternative.  And we don’t have to just imagine what that would look like.  In fact, it is already happening in Venezuela

But in Venezuela, the collapse of the bolivar has forced locals to turn to alternatives like bitcoin and local community-issued currencies with fixed exchange rates. The rapid erosion of the bolivar’s value made everyday transactions like buying groceries and paying cabbies untenable – customers had to pay with large, cumbersome stacks of bolivars that were difficult to transport.

Patricia Laya, a Venezuela-based reporter, tweeted a photo of the 5,000 bolivars – the maximum amount – she was able to withdraw from an ATM in Caracas. They’re worth around $ 0.05. Laya stated that she had waited 20 minutes in line to obtain $ 0.05 in hyperinflated currency worth little to no value, according to CCN.

Even though bitcoin transactions can take hours – even days – to settle, local merchants have readily embraced the digital currency.

This is a revolution that has the potential to completely change the global financial system, but I have a feeling that global central banks will never let it get that far.  The current system funnels literally trillions of dollars to the very top of the food chain, and the elite are going to jealously guard their golden goose.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

The Economic Collapse




Bitcoin Is Now Worth More Than Wal-Mart (The Entire Company)

Would you rather own 100% of Wal-Mart or every Bitcoin in existence?  At one point such a question would have been completely absurd, but now things have changed.  As I write this article, Wal-Mart has a market cap of 287.68 billion dollars.  Wal-Mart is the king of the retail industry in America, and nobody else is even close.  Bitcoin, on the other hand, is an entirely digital creation that did not even exist until 2009.  No government or central bank in the entire world recognizes it as a legitimate currency, and there are very, very few retail establishments that are willing to accept Bitcoin as a form of payment.  And yet at this moment, Bitcoin has a market cap of 310 billion dollars.

When the year began, Bitcoin had just crossed the $ 1,000 threshold, and now it is selling for more than $ 18,000.  Of course other cryptocurrencies have been rising at an even faster pace.  We have never seen anything quite like this before, and some are warning that this is a giant bubble that is about to burst

Axel Weber, the board chairman of big bank UBS, has warned of a possible Bitcoin currency crash. With increasing numbers of small investors jumping on the cryptocurrency bandwagon, it is time for regulators to intervene, he says.

Bitcoin has surged from $ 1,000 (CHF990) at the start of the year to above $ 16,000.

The risks are due to a design fault, which leads to huge currency swings in both directions, Weber said in an interview with the NZZ am Sonntagexternal link. “We as a bank have very consciously warned against this product, because we do not consider it valid and sustainable,” said Weber.

Of course similar things could be said about the stock market.  The Dow Jones Industrial Average is up more than 34 percent in 2017 even though underlying economic activity does not support such ridiculous valuations.

Ultimately, the reason why Bitcoin is so valuable today is because people believe in it.

Those that believed in Bitcoin from the very beginning were relentless in promoting it, and that tight-knit community provided the foundation for what we are witnessing today.  The following comes from Wolf Richter

Libertarians flocked to its banner, because of the potential that Bitcoin offered, as a decentralized form of money. Bitcoin was for the community, maintained by the community and was the community.

Community was a key word. It was a word that was paramount to the success of Bitcoin. Without it, we wouldn’t see the staggering numbers we see today. This push ever onward by the community is why Bitcoin was able to get its footing and build the foundation it vitally needed to survive and prosper.

But could it be possible that the powers that be actually wanted us to embrace Bitcoin and other cryptocurrencies?

Could it even be possible that blockchain technology will someday be used as the foundation for the coming cashless society that we have heard so much about?

I would like for you to take a few moments to consider what Mike Adams of Natural News has reported

First, take a look at this document entitled, “How to make a mint: The cryptography of anonymous electronic cash.” This document, released in 1997 — yes, twenty years ago — detailed the overall structure and function of Bitcoin cryptocurrency.

Who authored the document? Try not to be shocked when you learn it was authored by “mathematical cryptographers at the National Security Agency’s Office of Information Security Research and Technology.”

The NSA, in other words, detailed key elements of Bitcoin long before Bitcoin ever came into existence. Much of the Bitcoin protocol is detailed in this document, including signature authentication techniques, eliminating cryptocoin counterfeits through transaction authentication and several features that support anonymity and untraceability of transactions.

Wow.

I was stunned when I read that.

And Mike Adams has also pointed out that “the agency is also the creator of the SHA-256 hash upon which every Bitcoin transaction in the world depends.”

The powers that be could have destroyed Bitcoin and other cryptocurrencies a long time ago if they had wanted to do so.

But they haven’t.

This has always puzzled me, and up until just recently I never had a good answer for why it had not happened yet.  Could it be possible that they have actually wanted the public to embrace this new technology?  Brandon Smith certainly seems to think so…

Ask yourself this: Why is it that central banks around the world (including the BIS and IMF) are investing in Bitcoin and other crytpocurrencies while developing their own crypto systems based on a similar framework? Could it be that THIS infusion of capital and infrastructure from major banks is the most likely explanation for the incredible spike in the bitcoin market? Why is it that globalist banking conglomerates like Goldman Sachs lavish blockchain technology with praise in their white papers? And, why are central bankers like Ben Bernanke speaking in favor of crypto at major cryptocurrency conferences if crypto is such a threat to central bank control?

Answer — because it is not a threat. They benefit from a cashless system, and liberty champions are helping to give it to them.

Once the public fully accepts blockchain technology, all it is going to take is some sort of massive “cryptocurrency crisis” for cries for government control to reach a crescendo.

But for now the cryptocurrency revolution is rolling along, and the general public is enthusiastically embracing a cashless technology that permanently tracks and records every single transaction.  As an editorial on Zero Hedge has noted, the elite could end this experiment at any time, but instead it appears that it may actually be serving their purposes…

Regardless if the blockchain is a distributed network that cannot be stopped, all one must do is outlaw the use and/or conversion of Bitcoin to the local coin of the realm to immediately stop its rapid, and profitable, propagation. Since this has not occurred to date, one must surmise there is a reason for not doing so.

All the police state needs to do is cry national security and the curtain comes down on the Bitcoin stage (d) production. You do not need to destroy the rebel force in order to render it ineffective.

While the deep state and its minions are rarely of one mind about a multitude of issues, witness the constant infighting and jockeying for position, nothing clears the mind or clarifies its purpose like the certain knowledge of imminent demise. If Bitcoin, blockchain and the hundreds of other cryptocurrencies were the mortal danger loudly advertised by the Bitcoin ideologies, it would be squashed in a New York minute.

If the elite had tried to force a cashless system on all of us, there would have been a tremendous amount of backlash.

But now the entire globe is gleefully embracing “the cryptocurrency revolution”, and most do not even realize that this is a giant step toward a cashless society.

As long as “the cryptocurrency revolution” remains outside of the grip of governments and central banks, it will be a good thing.  But once the elite start cracking down and taking control, everything will change.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

The Economic Collapse




Is Bitcoin Demand Hurting The Price Of Gold?

The popular narrative that has gripped the financial media searching for reasons that the price of gold is sluggish for reasons other than overt western Central Bank manipulation, is that Bitcoin interest is diverting cash that would otherwise be going into gold.  However, I would argue that the type of trading funds playing in the cryptocurrency “sandbox” is little more than “action junkies” looking for anything to buy with high upside velocity.  These “investors” never buy gold other than perhaps chasing gold-related securities when the price of gold speeds higher in price (like from early 2016 through August 2016).  In fact, a recent report attributes a large amount of recent volume in Bitcoin trading to  Japanese retail traders / Japanese men dominate Bitcoin trading (Deutshe Bank)

Seeking Alpha has published my analysis explaining just some of the reasons that the idea that cryptocurrencies are diverting capital away from going into physical gold is little more than anti-gold propaganda.  Note: I am not trying to discourage anyone from buying Bitcoin or any other cryptocurrencies.  Over a long enough period of time, assuming the Government stays out of the market – and I firmly believe the Government will eventually interfere with the process – the market will decide the relative legitimacy of cryptocurrencies vs gold as a store of value and as money.

This analysis focuses on the retail investor demand for gold and Bitcoin. Institutional investors, for the most part, do not invest in gold or cryptocurrencies.

I want to dispel a false narrative about Bitcoin and the price of gold. The mainstream and alternative medias have been propagating the idea that the frenzied capital flowing into Bitcoin is affecting the price of gold negatively. The idea is that Bitcoin is an alleged safe haven asset (very unproven, untested) that is diverting capital away from the precious metals. For instance:

“As gold loses steam after rallying to 12-month highs, one market expert says he is seeing bitcoin (sic) take a chunk out of the yellow metal.”  Source: TheStreet.com

This notion has no validity…You can read the rest of this analysis here: Seeking Alpha/Bitcoin/Gold

Investment Research Dynamics