by John Galt
March 8, 2018 21:20 ET
Last week, something bizarre happened in reality which really should set the tone for all markets this year. From CNBC:
That’s right, Bitcoin was priced around $1290 each while gold was floundering in its next leg down at $1228 per ounce.
Is it the end of the world?
Or perhaps, like the financial markets as a whole since the 1990’s insanity began it is a reflection of digital fantasy usurping actual reality. After all, how many bitcoins do you have in your pocket?
The headline and story from the UK Telegraph seemed dramatic enough to highlight this point:
In the article they highlighted this Tweet:
— Holger Zschaepitz (@Schuldensuehner) March 3, 2017
And this chart:
Of course, I added the commentary to the chart above, but let’s take a moment to reflect on what this means.
The speculative bubble in financial assets is continuing unabated since the Federal Reserve and other global central banks decided to attempt hyperinflation in a fiat world. Normally, their economic theories would have worked in a normal world. Unfortunately for them, the speculative debt bubble was so much greater than their ability to print it out of existence, the only alternative was to scare investors into believing that they could perform such a feat. The bigger revelation was that besides monetizing debt on a selective basis, the attack on hard assets to dilute those assets which were once considered safe investments had to occur simultaneously. Thus when gold sniffed the $2,000 per ounce price level, that was an indication of central bank weakness and fiat backed governments could not tolerate investors or their citizenry seeking a non-digital, non-credit, non-fiat based alternative currency.
Along comes Bitcoin, a brilliant innovation projecting a future with a global digital currency, but because it was not conceived by a central bank it was not acceptable to the financial powers who run the world. While many view this as a speculative investment, and rightly so, in the end it will fail as world governments will seek to replace it with their own currency and either outlaw or ban the use of Bitcoin for purchases within their borders or via internet portals under their control. The usual false claims of “it’s being used by terrorists” or “it’s for criminals to hide assets” will be used by the banksters and financial media then again, the same insane points have been used against gold in the past.
So the winner for the short term as we enter into a cyclical dollar peak and brief deflationary period in the U.S. economy as a result is:
In the long term however, gold will be the winner. Why?
Please tell me how anyone can use a bitcoin when this happens:
Got gold or silver?
Bitcoin is the ultimate universal currency, until the grid goes down. If the world experiences a period with massive power and internet outages, who in their right mind would accept this a viable universal currency? Despite the promises of security also, it’s only a matter of when, not if, the secured encryption is hacked either by the US, Russian, or Chinese security services and millions of Bitcoins will vanish with the pressing of Alt-Control-Delete. Then what? This is why gold and silver always have and always will be the most recognized currency in human history.
Get it when the price breaks below $1200 and silver below $16 per ounce. Because this could be the last legal time anyone can buy the ultimate universal currency before the global financial elites permanently change the rules in our lifetime.