Bitcoin, Propaganda, Fake News And Unmitigated Idiocy

I want to show two quotes from commentators in related areas of financial analysis because they illustrate the difference between truthful commentary and unmitigated idiocy.

Yesterday, James “Mc” wrote in Bill Murphy’s nightly “Midas” report:

“The sexiness of Bitcoin, Tesla, Netflix, and hundreds of other techie things will become FAR less sexy in a good old fashion economic crash. Reality will quickly set in, and real stuff, made by real people will prevail. As history has shown everything else becomes superfluous. Millennials, or even Gen-Xer’s for that matter have never experienced truly hard times. Many will be shocked to learn when TSHTF a plumber is far more marketable than an IT guy. Bartering with Bitcoin might prove problematic.”

I doubt there’s anything with that statement with which anyone could dispute. Murphy prior to that made the valid points that Central Banks and sovereign nations will never incorporate Bitcoin into their currency reserves like they do with gold. The point being that, while Bitcoin is accepted as a form of currency by its users, it is not considered a wealth storage asset.

It would be tough to classify James’ comment as propaganda or fake news. Gold is the world’s second oldest form of money (silver is the oldest). Bitcoin may or may not become a passing fad but it certainly has not stood the test of time. Its use can be eliminated by shutting down the global power grid.

Here’s an example of propaganda, fake news and unmitigated idiocy from Citicorp’s “respected” strategist, Tom Fitzpatrick:

“…markets ultimately will be driven by the economic backdrop rather than by headlines. US labor and housing markets remain robust and should continue to drive growth. European growth is picking up. China remains stable in our view despite recent volatility.” LINK

China remains “stable?” I doubt anyone would disagree that China has fomented the second biggest debt and asset bubble in the world, with the U.S. bubble the largest, and its financial system rests on the precipice of systemic collapse resting on a pyramid of debt and derivatives that requires a flood of printed money and credit creation in order to defer the inevitable financial and economic implosion. That’s the truth, in contrast to Fitzpatrick’s moronic assertion.

As for the remark that the U.S. labor market is “robust.” My guess is that a majority of the 95 million working age people (37% of the working age population) in the U.S. who are no longer considered part of the “labor force” would have a different set of adjectives to describe the labor market here (they would also have a set of adjectives to describe Fitzpatrick that would make some blush).

A “robust” housing market? Total home sales are running two-thirds of the long run average and about 50% the last peak in sales. This is despite a steady long term growth in the population. Furthermore, in order to for a home to sell, in general buyers have to resort to using a 0-3% down payment mortgage and use at least 50% of their monthly income to service the mortgage. An oversupply of housing in New York City and Miami is beginning to crush those two housing markets, a dynamic that will soon spread to most major metro areas across the country. Flippers and “investors” were about 35% of all home sales in 2016.

These are unequivocally NOT the attributes of a “robust” housing market, not to mention the fact that the even the monthly manipulated home sales data series published by the Government and the National Association of Realtors have been trending lower this year. Tom Fitzpatrick’s remarks embody the attributes of Wall Street propaganda,  outright fake news and total unmitigated idiocy.  I hope you get rich selling lies and feel good about it, Tom.

There’s been a lot of debate over the meaning and significance of the parabolic move in Bitcoin.  Allhambra Investments’ Jeffrey Snider has come the closest to the truth by equating the Bitcoin move as the manifestation of Gresham’s law.

While this encapsulates the Bitcoin frenzy, beneath the surface represented by Bitcoin is an even bigger movement  of bad money (fiat currencies) piling into physical gold that is occurring in the eastern hemisphere, specifically in India and China.  The evidence of this movement in the form of a higher price expressed in dollars is being hidden by the continuous intervention in the western gold market implemented by the western Central Banks using paper gold derivatives.

The point of this is that the price of Bitcoin is behaving the way price of gold would be behaving in the absence of manipulation.   The rush into both is a rejection by the market of  the continuous devaluation of fiat currencies that is occurring from the trillions of paper currencies that have been created since 2008.

At some point, and there’s not anyone who can predict when, Tom Fitzpatrick’s fake news and unmitigated idiocy will be exposed for what it is as global financial markets and economies crash and money that is pulled out of bubble assets floods into the safety of physical gold and silver.   At that point the Central Bank effort to suppress the price of gold and silver will fail.

It’s been occurring slowly since 1971 (and really since 1913) and will at some point happen all at once.  Have a great Memorial Day weekend and try to enjoy what you can, as much you can, while you still can.

11 thoughts on “Bitcoin, Propaganda, Fake News And Unmitigated Idiocy

    1. BTC = Gold stored in a vault.

      ETH, LTC et al. = Currency, title to land or any other thing you want to establish clear title of ownership.

      Dollar, Pound et al. = fraud

      Someone wake the luddite!

  1. I find it strange that Tom Fitzpatrick gets to spew on some
    pro precious metals sites. The reality is that while the bankers
    front men continue to lie, hardly anyone disputes them. With
    the exception of people like you Dave. The majority of the
    population are in a hypnotic trance via IPhones, entertainment,
    sports and their own daily struggle to survive. These poor souls
    have no idea just how catastrophic the end game is going to be.

  2. The run up to $2800 or so in Bitcoin probably a short term blow-off top, we showed the parabolic chart to a guy at work who was holding a 5 bagger in Ethereum, “dude, take some profits, pigs get slaughtered” but he held, we’ll see. Kind of fun to watch.

  3. Great commentary although I think you are a bit harsh with our friend Tom Fitzpatrick.
    I’m not sure that he really knows that he is putting out garbage. Most of these guys all read the same propaganda non-stop and actually start to believe it. Deep down he may know that some of this nonsense is in fact BS but if he wants to keep his job he needs to toe the line and go along with the wall street cheerleaders.
    I know several investment bankers who all have done well for themselves spewing lies and none of them will admit that there are some ominous signs that the party will soon be over. Even when confronted with undeniable facts, it simply does not register. They would rather take the blue pill, have another drink and turn their back on anyone who clouds their rosy outlook.

  4. “My guess is that a majority of the 95 million working age people (37% of the working age population) in the U.S. who are no longer considered part of the “labor force” would have a different set of adjectives to describe the labor market here…..”

    I think this group is from age 18 to 65? It includes able-bodied people who are stay-at-home parents [in most homes most both…if there are two present…have to work if they can find work that pays enough to pay for child care]. I don’t know if it covers people in that age group who are disabled, but that is a very small percentage. The rest can’t find work or don’t want to work. They are UNEMPLOYED, and they aren’t counted.

  5. Your commentary is concise and factual. I know it’s trivial, but you should post a picture of yourself with your hair combed! When I see your commentary I find it compelling, but the picture throws me off a little when I see it. Just minor constructive commentary. Keep up the good work!

    1. I hear ya – but I pride myself in being anti-“professional,” anti-conventional, irreverent, non-conformist, think outside-the-box.

  6. Lindsey Williams’ elite friend who is now getting very old says we are going into hyperinflation later this summer and all assets will be rising esp. stocks to 50K or more. Get ready it’s coming. Hyperinflation for the next 18 months at least, which means gold/silver and miners are going much, much higher – everything. The cryptos have a very small market cap relative to stocks but tons of smart money will be trying to squeeze into that small garden hose over the next 2 years with an up trend that looks like crocodile teeth. Cryptos are in their own world and many who get into the right ones will make a fortune. Don’t be one of those who get left out. Crptos are like the internet in 1995. Most never saw its absolute necessity 10 years later and the big name stocks that have benefited.

    1. While I sympathize with those who are trying to escape the doomed banking systems, I still find it absolutely insane to jump from one non-hard asset to another while overlooking true monetary assets like gold and silver if that is one’s purpose. Heck, even penny-stocks would be less risky if you’re talking about very short-term needs since (at least in theory) they could be redeemed directly from the company for a piece of its balance sheet in case there are no buyers. Cryptos, at best, are escape-hatches with limited shelf-lives as it’s only a matter of time before everyone comes up with a crypto “coin” of some form or another.

      And mind you, that’s aside from the inherent 3rd-party risk that exists within exchanges, especially those offering deposit-services. Anyone remember Mt. Gox? Talk about stupidity; I thought encrypted “digital wallets” were supposed to eliminate this kind of foolishness. And now we have ransomware like “wannacry”. And then there’s the block-chain business that slows down with more adopters, making runs on cryptos a nightmare if you’re the last out. The list goes on.

      Meanwhile, apart from storage costs (which, really, ought to be expected from a genuine GOOD; not some make-believe “coin” ) you have the metals which are already quite divisible and easy to transact like “Combi-Bars” and Bit-Gold (I personally love the Aurum foldable gold pieces. Very awesome concept) with none of the blockchain problems. So the impression I’m getting is that far from being a sign of a return to sanity, the move into cryptos is just one last gasp by a system of brainwashed investors desperate for liquidity, but not longevity. More gambling and less actual investment.That’s my two-cents at least.

      1. Sounds reasonable to me. There’s no limit at all to the number of cryptos that can be created out of nothingness (gee, sounds nearly like the fractional reserve, IOU-nothing ponziconomy we all labor under today, doesn’t it?), but there is a very definite limit to the number of hard money assets available which have stood the test of time and which can be wrenched out of the ground on an annual basis. I may be missing the boat on cryptos (time alone will tell), but I’m an old dog who would prefer to keep my “pet rocks” in the palm of my own grubby little hands.
        The crazy movement of the cryptos in recent days is to me saying that something definitely is rotten in Denmark, so the only thing I look forward to is the day when those pet rocks, and the companies which hunt for them, begin to melt up in a way that make the crypto movements of late look timid by comparison.

Leave a Reply

Your email address will not be published. Required fields are marked *

Time limit is exhausted. Please reload CAPTCHA.