by Greg Buck
Bitcoin to $1,000,000? Why not? Zimbabwe issued Z$20 trillion notes in order that people could buy bread. Venezuela has hyperinflation. Folks in the Weimar republic went around with suitcases full of money.
I remember saying to a colleague a few years back that interest rates HAVE TO GO UP. “Why” was the retort. “Why can’t Central banks just keep them at zero forever?” Because if they don’t raise rates, they’re going to blow up the financial system was my 2 cents. They’re going to blow it up because they’re killing the most important price signal in the entire monetary universe, the price of money itself.
That was years back.
Now, the financial system is blowing up, right before our eyes.
Debase the money, falsify prices, bail out speculators, punish savers, actively encourage waste and gambling over thrift and prudence, and what the hell do you think you’re going to get? You’re going to get what we’ve got. Price discovery is dead, nobody knows what anything is worth any more, prices can only go up, and if they ever go down, well, the central bank cavalry will ride to the rescue, won’t they?
To quote David Stockman of davidstockmanscontracorner.com,
“The central banks have now completely asphyxiated fear of risk and long ago destroyed returns on honest liquid investments. So doing, they have morphed Wall Street and homegamers alike into a stampeding herd of financial wildebeests blindly chasing returns and riches.”
There is absolutely no doubt that we are witnessing speculative bubbles everywhere, from houses to stocks to forged art to bitcoin and just about everything and anything else whose value is not based on real, productive work .. like wages. Wall Street now wants in, lobbying successfully to bring in “cryptocurrency futures trading”. That’s right, they want to use other people’s money to gamble on the price of bitcoin without having to actually buy or sell bitcoin. They want to be allowed to manipulate the price of cryptocurrencies too!
Central banks are printing so much money to “keep the economy going” that they’ve run out of things to spend it on. So much so that in Europe, the central bank (ECB) now buys bonds issued by almost-junk rated companies. That’s right. Companies. In June 2017, the ECB bought the bonds of a junk-rated mattress manufacturer, which has now gone bust, because the bosses spent all the money buying back their own stock to boost their bonuses instead of doing something productive with it. See more here.
Print, print, print. Falsify, bailout, speculate. Everything is based on debt.
Call it the Mother of All Bubbles.
It will pop, and when it does, you just watch… amid the guaranteed carnage, none of the geniuses at our central banks will have seen it coming.
If bitcoin keeps going to the moon, pretty soon it will be “worth” hundreds of billions as an asset class. In this age of no risk and bailouts, that means “too big to fail”.
Now, wouldn’t that be something? Central banks stepping in and buying bitcoin, “saving us” by bailing out all of the bitcoin gamblers with our money!
You’re a nice guy, Greg. You don’t think malice.
I think malice.
If it could have been planned, to cause social disaster, it probably was planned.
Read “Behind the Nylon Curtain” about the DuPonts. ‘Mazing.
I take it, Greg, that you’re not a fan of “crypto-currencies”, like Bitcoin. As you say, central banks have printed currencies to oblivion via Quantitative Easing (QE), rigged markets for their corporate mates and pretty much engaged in fraud of monumental proportions. The Bitcoin/crypto phenomenon seems to be a free market response to their shenanigans over the years since the GFC. Bitcoin and many of the more credible cryptos and tokens may well fulfill the needs of a modern world for sound money. Fungiibe, durable, portable, divisible, unit of account, a means of exchange (instantly anywhere in the world) and a store of value over time
BTW I have a fair dinkum Zimbabwean One Hundred Trillion central bank issued note. Signed by the governor and everything. All fiat currencies everntually return to their intrinsic vale. ZERO!
Oh, I am a fan. I actually bought some way back in 2014.. But like it or not, this is 100% a speculative bubble right now. Bitcoin and all other cryptos, like fiat, are also based on “nothing”, backed by nothing, and they can also be infinitely reproduced and divided (or “forked”). I just find it fascinating to see central bankers deliberately debase their currency, and then complain when folks want out! Central banks, particularly since 2008, have created SUCH as mess it’s almost beyond belief.
Good to know that you ARE a fan.
As to whether bitcoin is based on nothing, I beg to differ. “Mining” takes time,effort and has a real cost.(approx. $1000 each I believe,according to John McAfee). Plus it takes a fair chunk of electricity, which also has a cost. Bitcoin is capped at 21 million ever but can be divided down to 8 decimal places. (just as well if trillions of fiat dollars, yen, pounds, renminbi, euros, pesos, francs, etc need to be accommodated)
Granted, there’s Litecoin (bitcoins little brother which is capped at 84 million), ethereum, dash, et al. We’ll just have to see which ones the market decides to support and which ones will vaporise.
And then there’s gold and silver!! Poor old gold and silver. Alas, when the prices of metals are set in the Comex futures exchange, and they sell the equivalent of over a years total production OF THE WORLD in a nano second, is it any wonder that the prices of G & S are severely depressed. Maybe one day soon, we’ll see the collapse of the Chicago Mercantile Exchange.(CME) It ‘s just a purely criminal operation.
And there’s bitcoin cash. So, while bitcoin proper is capped at 21M, “forking” allows expansion to infinity. The cryptos right now have real limitations – there are no sellers, just buyers, so no real market yet, no security really because they are easily stolen aka hacked .. all of the action is on the exchanges, sort of cross trading without purpose – but I really like the anonymity. That’s how it should be. Methinks that with the arrival of “futures” trading, cryptos run the risk of going the way of gold and silver .. manipulated by the big guys who will trade orders of magnitude more bitcoin than actually exist, manipulating the price.
But I do like the crypto idea. See here .. http://www.zerohedge.com/news/2017-12-08/crypto-cornucopia-part-3-system-no-justice-no-order-no-rules-no-predictability
`Greg, I’m hearing (via Clif High) that “Bitcoin futures” may be the biggest Own-Goal to hit the Comex ever. Like shooting oneself in BOTH feet. Couldn’t happen to a nicer bunch of arch-criminals.
Hope he’s right!!! This may be how silver and gold get released from the manipulation.
I never believed the birth of bitcoin, some anon programmer releases a blockchain and buys a pizza I think from memory. Nobody can identify who exactly, come on, really and now everyone calls it currancey. Who audits this thing anyway, an algorithm. The power brokers give it fungibility by there acceptance as money.
For me duribility is questionable, as computer can say no.
Thanks Greg, always enjoy your contributions, I keep quiet on the pop now as I’ve been waiting almost 15 years
Yeah Greg, the elusive 10 bagger and then some, your shout for pizza (not DC kind).
Another financial con, in my opinion, is the paying of deposits on a housing unit where the building is only a dream on a piece of paper. These units are generally more expensive than an ordinary house on a block of land, in the same suburb.
Many times the enterprise goes bust before the units are built and the depositors lose their money. What other article can I legally sell, without having ownership of that article, or when that article does not exist? Even if the units are completed the new owner has an asset on land that he or she cannot own.
In Western Australia, if I erect a building, usually by mistake, on another person’s block, that building becomes the property of the block owner.
Mal, what do you mean — “Even if the units are completed the new owner has an asset on land that he or she cannot own.”
Is bitcoin a fiat currency? Is it a fiat currency pegged to the price of gold?
Kevin, I think bitcoin is semi distrubuted digital journal. Think a book made with rows and columns,
as those change, the master books (exchanges) record and check changes. So yes its a fiat currency. As the transactions have a lag time and the price is so volatile, it must be causing the users to only guess its worth at transaction time.
Now if it were tied to gold or any other commodity, it becomes real currency and if the system is honest it becomes money.
Backdoors, snouts trying to get to a bucket of money (Greg accepted), no transparency, human history (what we know anyway). So currency at best, useful still, and if your buying a car or home, you would want the transaction recorded and viewable.
Now a conspiracy theorist would think if people thought it really anonymous and its not at all from the ground up. Perfect for blackmail and setup, confessional box v2.0
All the Sumerians wanted was relief from humping bags of wheat around. And now it’s come to this: humans arguing over the price of electrical pulses. Empire wins again – divide and rule. At least Tulips had nature’s beauty. Human’s had natural beauty before they identified solely with their minds: those malleable electrical pulses in their heads that cause them misery and servitude – the intrinsic values of money. What does it matter if the bitcoins go to a $trillion. We all will remain in servitude to this sick system our greedy minds have created and dumb minds allow to persist.
Stripping the problem down to its essence, we have a debt-based money system coupled with a political system which actively encourages greed. Those who get there first are allowed to grab as much as they can for themselves, before the price and debt goes up for everybody else. A really simple example is buying a house. It used to be doable on a single income. Then, everyone who already had one got breaks so they could get another. Then more breaks to get another. Getting houses gets easier and easier if you already have some. Shouldn’t be like this, because it guarantees that those who are around first get everything. Like Monopoly. A land tax on ALL houses would address this, but no, we can’t do that, because that will disadvantage those who were born first! We desperately need to ditch the system we have. Maybe bitcoin is a start, because its much more likely to be adopted by younger folk, and it’s not issued as debt.
The house can become a millstone too. People successfully front run gov policy, either through luck or inside infomation. The purchase price is usually = 99 year council rates. More than one property attracts state stamp duties. Free lunches are are lottery to the unconnected.
A couple retires to a cheap beach location to retire. The coast becomes popular and the rates go through the roof. The home has been forced into an investment. They were there first (for augument lets say no prior claim to land and home). They are older and there first, thats ok thats natural.
That stupid game monopoly has a lot to answer for, I was encouraged to play as a child, always wanted to be the banker.
Today , the central bank controlled by the Money Power is the super government administration controlling ” all the state forces “.
From Natural News
https://www.naturalnews.com/2017-12-10-evidence-points-to-bitcoin-being-an-nsa-psyop-roll-out-one-world-digital-currency.html
“….it’s now becoming increasingly evident that Bitcoin may be a creation of the NSA and was rolled out as a “normalization” experiment to get the public familiar with digital currency. Once this is established, the world’s fiat currencies will be obliterated in an engineered debt collapse (see below for the sequence of events), then replaced with a government approved cryptocurrency with tracking of all transactions and digital wallets by the world’s western governments.
NSA mathematicians detailed “digital cash” two decades ago
What evidence supports this notion? 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….”
Speculation and monopoly is now a rampant aspect of our economic reality, but it comes at a very heavy price of unnecessary instability, war and grave injustice for billions of humans who get little genuine real choice at best, direct and indirect debt slavery is the more common rule.
Bitcoin is a fascinating technology that does not solve our money monopoly condition beyond perhaps exposing the fluid and complex nature of money.
Who would dare predict how it will turn out?