Tag Archives: Bitcoin

Bitcoin’s Inconvenient Truths: The Silence Is Deafening

Gold is instantly and optically recognizable as money. You dont have to explain it. Bitcoin and Special Drawing Rights (SDR), like a bad joke, have to be explained. There are plenty of sites available that paint it clearly, like bitcoin.com.au, but many “cryptologitsts” from the start gave up trying to explain Bitcoin and just sell it as virtual gold, which is de facto fake gold. – Dan Popescu, investment consultant

Numerous inconvenient truths are conveniently ignored by Bitcoin/crypto-currency promoters. Not the least of which is that the fact that the original concept for cryptographic currency was envisioned by the NSA. I guess it’s convenient to assume the NSA developed this concept and then put it out there for the private sector to develop. Sure, that makes sense.

A rapid rise in price does not validate an investment concept. Dozens of dot.com stocks went from simple websites to multi-billion dollar market caps and back to zero in the late 1990’s. Until proven otherwise by the long test of time, Bitcoin could be another product of a fiat money printing bubble that is 100x the size of the money bubble that fueled the dot.com bubble. Gold and silver have withstood the test of 5,000 years. Bitcoin has less than 3,000 days of time-testing, but yet people have become millionaires, whether people believe this being due to luck, or reading the rise and falls of various cryptocurrency rates, Funfair compared the two cryptocurrencies it’s online gambling site uses.

Be leery of the serial promoters who have dropped their previous advocacy of gold and silver like a hot potato to become religiously zealous salesmen of Bitcoin. These were often among the most raucously vocal in their protest of the use of Comex gold and silver futures to manipulate the market price. Yet, their silence on the introduction of Bitcoin futures hurts my ears. However, it’s been seen with the advancement of technology and the knowledge of such tech has created many different streams to purchase and sell cryptocurrencies such as Bitcoin and others, for example, check this website out called Zipmex and other similar sites online that can allow you to dive into the world of cryptos for investment purposes. Perhaps with the addition of sites like this, the stocks of cryptocurrencies could remain high, and indeed a valuable asset for investors and others trying to make a pretty penny!

The bulwark promotion of Bitcoin is that it is a de-centralized form of money that exists outside of Government control. But is it really? I dare say the roll-out of CME Bitcoin futures, as “regulated” by the CFTC, certainly smells like the implementation of official intervention. Those who previously protested gold/silver futures must not deny this fact. Perhaps more troublesome is the embedded forms of counter-party risk endemic to the system which creates Bitcoin.

Anything that exists in cyberspace is vulnerable to hacking. This is a fact that has yet to be invalidated. Circling back to the NSA white paper referenced above, can anyone out there truly claim the expertise required to deny that the NSA, or any other major sovereign intelligence agency, does not have the ability to corrupt the block-chain? To be sure, cryptocurrencies are subject to network or infrastructure risk during a crisis. Unequivocally, crypos are subject to government regulation.

Speaking of which, if I were a Bitcoin advocate, it would bother me that western governments go out of their way to hide their interest in gold as a monetary asset, yet they openly embrace cryptocurrencies. Perhaps when the BIS declares Bitcoin or Ethereum to be a Basel 3 Tier 1 Central Bank asset like gold, I’ll have a change of heart. If you’re like me, you could take a look at Bitcoin Revolution to understand cryptocurrencies in more detail.

The price of Bitcoin has experienced a remarkable run in price this year. Of course, the same could have been said for Dutch tulip bulbs from late 1636 to late 1637. Most of the traders are chasing the price higher, with little to no understanding of the object they are chasing with their money, in hopes that someone at a later point in time will come along and pay a higher price to them. Even worse, these price-chasers have placed undying faith in the analysis of Bitcoin coming from the same con artists with whom they placed religious faith in the analysis of precious metals.

Also, up to this point there’s been an absence of two-way price discovery for Bitcoin. Once the CME futures are rolled out, it will introduce – albeit in an unwelcome format – a provocative method to sell Bitcoin on margin. The use of margin is the hallmark of a fiat currency-based fractional banking system – the very nature of which Bitcoin supposedly repudiates. The Bitcoin longs will face the same unlimited supply potential of paper Bitcoin that precious metals investors have endured for decades.

Make no mistake, I’m not trying to derail anyone’s interest in Bitcoin or cryptocurrencies. And I’ll be the first to admit that it’s likely the price will go a lot higher from here. But if the issues I raise here are indeed legitimate, how do you know when it will be the right time to sell? That is to say, while the parabolic rise in Bitcoin has been largely continuous, any number of events could occur that would force the price re-discovery to be a step-function. It’s all wine and roses on the way up, but at what price will there be a bid for you relieve yourself of your position?

Buy Into An Asset Bubble Before It Becomes A Bubble

Let’s face it, the trillions of fiat currency printed by Central Banks globally, which has been compounded by an even greater amount of debt issuance derived from the printed currency, has fomented multiple assets bubbles of historic proportions. Bitcoin is a bubble. The FANG stocks plus Tesla, among dozens of other daytrader and hedge fund momentum darlings, are bubbles. Novo Resources, for now, is a bubble.

Rather than buying into today’s bubble valuations, real money can be made anticipating the next asset bubble sector. Please note that I consider cryptocurrencies to be de facto fiat currency because they share many similar attributes with electronically produced Central Bank currency. When the fiat currency experiment fails, which it will (please see Voltaire, et al), the next bubble will form from the race out of fiat money into real money – gold and silver. The bubble will not be gold and silver. The bubble will be the derivatives of gold and silver:  mining stocks.

William Powers, of MiningStockEducation.com, invited me onto to his program to discuss the precious metals market and investing in junior mining stocks. Junior mining stocks are extraordinarily undervalued and will likely be the next great asset bubble – Bill and I discuss why and several other topics:

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Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom

Stewart Dougherty returns with unique insight into the powerful Deep State forces behind the relentless manipulation of gold and silver. He also presents a searing look at Jim Rickards’ deceptive role as the Deep State’s grifter.

“There are crooks everywhere you look now. The situation is desperate.” Final blog entry by Daphne Caruana Galizia, 53, renowned Maltese investigative reporter who specialized in exposing state corruption; posted on 16 October 2017, one day before she and her vehicle were blown to bits by a car bomb in Bidnija, Malta

In 2011, gold pulled a “Bitcoin” before anyone even knew what Bitcoin was: its price went vertical to $1,900 per ounce. Inflation-adjusted, the price was still far below its 1980 all-time high, and from all indications, it was going to keep heading north toward its free market print.

In surging, gold blurted out the Deep State Central Planners’ strategy for dealing with the Great Financial Crisis: the hyperinflation of bond, equities and real estate prices via the hyperinflation of both official and totally clandestine, off-the-books money supply, in order to create the hyperinflation of tax revenues desperately required by the government to forestall its fiscal collapse. Gold’s exposure of the Deep State Central Planners’ secret strategy was absolutely unacceptable to them, and had to be stopped.

Worse, gold’s price breakout interfered with the continuation of the largest and most profitable financial crime in history: gold price manipulation. As we have outlined in previous articles, including “Gold and Silver Price Manipulation: The Biggest Financial Crime in History,” from its commencement in 1980, this crime has netted its perpetrators more than $1 trillion in criminal, Mafia-style profits. The epic scale of this crime is exactly why it continues unabated to this day. (While the gold price rigging crime is virtually identical to the manipulation of silver prices, in the interests of brevity, we will solely focus on gold in this article.)

The weapon used in the gold price manipulation crime is paper, or, better stated, electronic gold in five distinct forms: gold futures; gold options on futures; bullion-bank controlled, deliberately audit-proof gold ETFs; gold EFPs (Exchanges for Physical); and the equities of bullion bank-controlled major mining companies. (The major miners serve the bullion banks, not their shareholders, and have actively participated in gold’s price destruction for years, starting with the “hedging” campaign that handed guaranteed profits to the banks and pitiful share prices to the stakeholders.)

These electronic (in other words, non-physical and unreal) gold products are used by Deep State financial insiders to misdirect funds intended by investors to flow into gold, away from gold. Those who “invest” in electronic gold are, in fact, aiding and abetting the exact financial criminals who are stealing from them. The Deep State financial elite is laughing itself sick that suckers still fall for the electronic gold scam nearly four decades after they first hatched it and after already having stolen $1 trillion from their marks. Proof that many people in our world never learn.

Simplified, the gold price rigging scam works by the orchestrators allowing natural market forces to increase the price in roughly $50 – 100 increments, whereupon they unleash massive, synchronized, simultaneous, shock-and-awe-style naked short sales, unbacked by any physical gold they actually own, that take the price right back down by $50 to $100 in a matter of minutes to a few days. This forces the price-attacked longs to dump their losing positions, enabling the shorts to cover at an illegal profit. Each such large-scale price raid produces hundreds of millions of dollars in profits for the criminal orchestrators, not just from the futures market, but from the companion options, swaps and equities markets, all of which act in unison, and in a price-predictable up or down manner. This identical wash, rinse, repeat cycle has occurred literally hundreds of times over the past 38 years, with no serious investigations or prosecutions whatsoever in that this is official, state-sponsored, for-profit corruption.

For any one of hundreds of reasons, gold should be in a raging bull market at this time. Given that its price remains lackluster and greatly disappointing, rich gallows humor has emerged as a form of therapy for those attempting to deal with the irrationality of it all.

One gallows joke that made the rounds was that if nuclear war were declared, gold’s price would go down and the DJIA would go up. While this was a funny take on the absurdity of the situation, it seemed a bit far-fetched.

In an October 20, 2017 podcast interview, Mr. James Rickards, a leading public commentator on gold, stated that he had spent the previous day in an extremely exclusive national intelligence planning session overseen by CIA Director Mike Pompeo and National Security Advisor H.R. McMaster. Rickards reported that Pompeo told him, categorically, that military action will be taken against North Korea within 5 months, or by March 20, 2018. Rickards also reported that the group was informed that the assassination of Kim Jong Un is one U.S. military option officially on the table.

In the trading days after Mr. Rickards made that public announcement, the price of gold declined and the DJIA hit record highs.

CONTINUE READING (it’s worth it)

Will The New Bitcoin CME Futures Contract Benefit Gold?

The Chicago Mercantile Exchange (CME) announced a plan to launch bitcoin futures by the end of the year. The price of Bitcoin surged to a new record in response to the announcement. It was reminiscent of the dot.com era, when a dot.com stock would jump 10% if Maria Bartiromo merely whispered the name of the company on CNBC.

Ironically, the cheers for this new contract from the Bitcoin faithful could turn out to be analogous to chickens in the barnyard cheering at the appearance of Colonel Sanders. For those that aren’t sure about Bitcoin but interested in seeing what it has to offer – try websites like About Bitcoin to get a basic knowledge of how it all works.

GATA released an article about the new Bitcoin futures contract titled “So Long Cryptos.” I’m sure that editorial stance puzzled most Bitcoin price-momentum chasers. Crypto aficionados, for now, overlook the fact that CME futures are used aggressively to push around the dollar-based Comex gold and silver futures contracts.

As GATA points out, the ability to manipulate precious metals futures contracts by the official entities motivated to suppress the price of gold is reinforced by the volume trading discounts given from the CME to Governments and Central Banks who trade on the CME.

If there any reason to assume that the same volume discounts will not be extended to the Bitcoin contract? Another curious feature of the Bitcoin contract is that it will be settled in cash. I would point out the original intent behind futures contracts was to enable producers and users to agree ahead of time on a price that would be paid for the delivery of the underlying commodity associated with the futures contract. Futures were a financing tool intended to facilitate the production and distribution of the underlying commodity product.

The Bitcoin futures contract is settled only in cash – U.S. dollars. To wit, does this not theoretically sabotage the intended purpose of Bitcoin, which is to provide an alternative to fiat currencies? Why would you want to receive fiat dollars rather than delivery of the underlying?

Technically this is not a bona fide futures contract. It’s a derivative of the “index” price of Bitcoin but it does not facilitate the production and distribution of Bitcoin. As such, it’s an instrument of pure speculation. By definition, this opens the door to manipulation by the entities who might be motivated to control the price of Bitcoin. Oh, by the way, those entities can buy and sell the contracts at a price advantage to the speculators by virtue of the volume discounts.

At least with gold and silver contracts, the contract enables the contract owner to take delivery of the actual physical commodity connected to the contract. To a limited extent, this mechanism serves to prevent the complete unfettered manipulation of gold and silver via the Comex futures contract.

With the Bitcoin futures contract, the contract owner is paid cash. The absence of a requirement to deliver actual Bitcoins enables the issuance of an unlimited number of fiat dollar-based paper Bitcoin contracts which can be used to drive the price lower by increasing the supply of the contract relative to the demand. So much for the idea that Bitcoin supply issuance is firmly capped. This could actually be quite entertaining to observe

It’s also quite possible that Bitcoin futures could divert hedge fund trading volume away from gold and silver futures. This is why many are deciding to learn from those similar to what you can find at https://bitcoinrevolution.cloud/about/ about how to trade cryptocurrencies. This would be a blessing in disguise if this occurs. The price-momentum chasing hedge fund algo trading enables the Comex bank manipulation of Comex futures contracts. Remove this source of volume and it will remove to some degree the ability of the banks to push the price around by exploiting the hedge fund algos.

If the percentage of open interest in gold and silver Comex futures contracts becomes skewed toward the users of these contracts who actually take bona fide delivery of the underlying physical gold/silver bars because the non-delivery-taking users move over to Bitcoin futures, it could mitigate the ability of the banks to price-cap the price of gold/silver.

In this regard, investors who prefer to keep their wealth stored in physical gold and silver rather than fiat dollars or fiat Bitcoins will indeed welcome the new Bitcoin futures product.

Does your company rely on Blockchain technology and trade in cryptocurrencies such as Bitcoin? If so, you might be looking for ways to improve your business. To find out more, try speaking to a specialist blockchain consultant such as Blockchain Built.

Goldman Sachs Says Gold Is Better Than Bitcoin

“Precious metals remain a relevant asset class in modern portfolios, despite their lack of yield,” analysts including Jeffrey Currie and Michael Hinds wrote. “They are neither a historic accident or a relic.” Looking at properties such as durability and intrinsic value, they are still relevant even with new materials discovered and new assets emerging, such as cryptocurrencies, they said (LINK)

Here’s what blows my mind: When gold ran from $250 to $1900, the entire western mainstream financial media called it a bubble. Bitcoin has run from $250 to $5500 and price momentum-chasers and the usual hypster con artists exclaim that it’s going to $100,000. Qu’est-ce que c’est, Rudolph Havenstein?

This is typically what a bubble looks like:

NVDA is without a doubt in a parabolic bubble. In a recent Short Seller’s Journal I explained in detail why NVDA’s fundamentals might justify a price closer $30 and provided ideas for shorting NVDA. Short-selling is the market’s method of introducing accountability and price discovery into the valuing assets. The problem with Bitcoin is that it can’t be borrowed and shorted. There’s no mechanism to impose express a bearish view of Bitcoin’s fundamental value.

The Goldman report goes on to say: Intrinsic value: There’s a limited supply of gold and other precious metals in the Earth’s crust, whereas in the case of cryptocurrencies, it’s easy to create alternatives, meaning there’s effectively no control over supply at a macroeconomic level and no intrinsic value due to rarity. Unit of account: Gold is better at holding its purchasing power, and has much lower daily volatility. Bitcoin/dollar volatility has averaged almost seven times that of gold in 2017, the bank said. Of course, to some long-term investors that could look to purchase cryptocurrencies through Zipmex or other exchanges, the higher daily volatility could be an enticing factor for those looking to make huge profits while holding cryptos for the future. Choosing the best options for investment portfolios comes down to what you’re looking to invest in, how long for, what kind of trader you are, and if you’re willing to take risks before others seem to do so.

All the pro/con-Bitcoin noise aside, without question the Bitcoin chart reflects “bubble-mania.” Not everyone is “all-in” yet. As with all manias, it will probably become even more manic before someone whispers “fire” and the move toward the exits quickly goes from a brisk walk to a stampede.

But if everyone who has faith is all-in and no one is short, who will be left to buy when flood of sellers are looking for any bid to hit?

Anti-Gold Puppet Now Hints Gold Will Soar

Several representatives of the elitists have been warning about a major global financial crisis.  Recently the former Head of the Monetary and Economics Department at the Bank of International Settlements, the Central Bank of Central Banks, warned that there are “more dangers now than in 2007.”

Goldman Sachs commodities analyst, Jeff Currie, who is infamous for incorrectly predicting gold would drop to $800 about three years ago, recently advised anyone listening to own physical gold:  “don’t buy futures or ETFs…buy the real thing. . .the lesson learned was that if gold liquidity dries up along with the broader market, so does your hedge, unless it’s physical gold in a vault, the true hedge of last resort.”

Jeffrey Christian has spent most of his career operating as a shill for the western Central Banks and bullion banks who lead the effort to manipulate gold using fraudulent paper gold derivatives.  He scoffs at the idea that gold is manipulated.   It was curious, then, when he was interviewed by Kitco and was recommending that investors should hold at least 20% of their assets in gold.  He also forecast a $1700 price target.

SGT Report invited me to discuss the significance Christian’s comments, which of course included a denial of gold manipulation:

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The Bitcoin And Cryptocurrency Bubble

I actively traded the internet stocks during the late stages of the internet/tech stock bubble in 1999 – from the short side. I will admit that I did take a few long-side day trade rides on a few internet stocks. I remember one Chinese internet stock that I bought in the morning at $10 after its IPO free’d up to trade and sold it about 2 hours later at $45. To this day I have no idea what the company’s concept was all about – I think it was one of those incubators. I doubt that company was in existence after 2001. As such, the crypto-currency craze reminds me of the internet stock bubble.

The cryptos certainly are a heated debate. The popularity of bitcoin is crazy, and people seem to be engrossed in news regarding the cryptocurrency. Crypto enthusiasts can check out btcnn for all the top cryptocurrency news stories if they want to stay informed about all the latest bitcoin news. The volume from the Bitcoin defenders is deafening, the degree to which I’ve only seen near the peak of bubbles. I had a subscriber cancel his Mining Stock Journal subcription after sending me an email explaining that he canceled because he was pissed off that I was not a Bitcoin proponent. He accused me of discouraging people from buying Bitcoins. His loss, he’s missed on out some high rate of return trade ideas in a short period of time like Banro and Tahoe Resources. I’m not trying to discourage anyone from buying anything. I’m simply laying out the “caveat emptor” case. Of course, there are a lot of tools out there for those of you who are interested involved with cryptocurrency trading, for example, there are platforms like this DEX crypto trading platform and if it is your thing you could check it out if you want to.

Having said that, there’s truth to the proposition that the inability to short Bitcoin contributes to its soaring valuation. I’d like to have an opportunity to see what would happen to the value of gold if the ability to short gold via the paper gold mechanism was removed from the equation.

Is it “Bitcoin” or “Bitcon?” The cost to produce, or “mine,” a Bitcoin does not imbue it with inherent value, as some have argued. It cost money to produce Pet Rocks in the 1970’s and they took off like a Roman Candle in popularity purchase price. Now if you own a Pet Rock, it’s nearly worthless. It costs money to produce and defend dollars. We know the dollar is headed for the dust-bin of history.

I’m not saying you can’t make money on cryptos. A lot of people made a small fortune on internet company stocks in 1999. But I’d bet that 98% of the internet stocks IPO’d during the tech bubble no longer exist. Currently cryptos are fueled by the “greater fool” model of making money. Most buyers of the cryptos are buying them on the assumption they’ll be able to sell them at a later time to another buyer at a higher price. You need to know your stuff, checking out various trading platforms, Crypto Signals and research into the currency before making an investment.

Cryptos are de facto fiat currencies. Perhaps there’s a limit to the supply of each one individually. But that proposition has not been vetted by the test of time. I do not believe that anything in cyberspace is 100% immune from hacking. Just because there have not been reports of the Bitcoin block-chain being hacked yet does not mean it can’t be hacked. It’s also possible that, for now, any breach has been covered up. Again, the test of time will resolve that. However, as we’ve seen already, the quantity of cryptocurrencies can multiply quickly in a short period of time. Thus, in that regard cryptos are no different than any fiat currency.

Finally, all it takes is the flip of a switch and your Bitcoin is unusable. But all these flaws are, for now, covered up by the euphoria of the mania. This is no different from every flawed “investment” mania in history. The current wave of crypto buyers are buying them with the hope of selling them at higher price later. “Hope” is not a valid investment strategy. “Hope” is the heart-beat of a speculative market bubble.

Perhaps one of the most definitive signals that the top in Bitcoin is imminent is this snapshot taken by the publisher of the Shenandoah blog at johngaltfla.com:

This picture was snapped in Florida. The sign says “got bitcoin? Passive income and no recruiting. Earn up to 1% on your money Monday – Friday.”

I recall reading about the process by which Bitcoins are “mined.” Anyone can get started by signing up at somewhere like swyftx trading, but it involves an upfront investment plus the ongoing expense of the considerable amount of energy used to power the computer system required to engage in the mining process.

Let me guess, the creators of Bitcoin will be happy to assist you with buying the equipment and software necessary to get started? How is this any different from a high-tech-equivalent of a multi-level marketing scheme? As johngaltfla asserts: “When someone implies that it is ‘easy money’ it isn’t, it is a bubble.”

I’m not here to criticize anyone attempting to profit from trading Bitcoin. I am suggesting that it is not a good idea to get married to the trade. I regret not loading up on Bitcoins in 2012.

Without a doubt I believe there is legitimacy to the cryptocurrency concept. However, I can envision a Central Banking-led attempt to implement the crptocurrency model as means of centralizing the process of removing cash currency from the system. But that also means the eventuality that Governments collude to remove competing cryptos from the internet. This is just surmisal on my part. Again, the test of time will determine the ultimate fate of cryptos.

Speaking of time-tested money, it’s worth noting that China is going to roll out a gold-backed yuan oil futures contract – not a cryptocurrency-backed yuan contract. Perhaps one of the major Central Banks will eventually roll out a gold-backed cryptocurrency. That’s where I believe this could be headed.

Should You Use Leverage With Precious Metals And Mining Stocks?

While I will maintain, until proven wrong by the test of time, that Bitcoin and Cryptocurrencies are nothing more than a temporary fad, investing with a long term outlook (20-30 years) gives the investor the best probability of generating life-style changing wealth.

William Powers, of MiningStockEducation.com, invited onto his podcast to discuss using leverage in precious metals and mining stock investing.  We discuss greed/fear, using margin with mining stocks, volatility, options, futures and the leveraged ETFs.

The problem for most investors, and the reason many have not made a lot of money – or might have lost money – in the precious metals sector is the inability to invest with a long term perspective.  Since 2001, gold has outperformed every asset class.  The mining stocks, in general as measured using the HUI index, have outperformed the Dow/Naz since 2001.

If your reason to be invested in a sector is still valid, there’s no reason to sell investments in that sector.  Have the reasons for investing precious metals as a hedge against a collapsing U.S. economic and political system, and thereby a collapse in the U.S. dollar, changed? Have the problems taking the U.S. down been fixed?  The answer is pretty obvious, which means you should be holding your precious metals investments, even if you bought them in early 2011.   In fact, if you bought then, you should be buying more now.  I know I have been adding to my holdings gradually since early 2016.

The next issue of the Mining Stock Journal will be published this Thursday.  I’ll be reviewing a junior stock that  has gone parabolic and a mid-cap producer that has been hammered hard but is poised to bounce back just as sharply.  You can learn more about the MSJ here – new subscribers get all of the back-issues:  Mining Stock Journal information.

Gold, A Banking Collapse And Cryptocurrencies

“We believe the effect of the troubles in the subprime sector on the broader housing market will be limited and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system,” – Fed Chairman, Ben Beranke – May 17, 2007.

“You know probably that would be going too far but I do think we’re much safer and I hope that it will not be in our lifetimes and I don’t believe it will be.” – Fed “Chairman,” Janet Yellen – June 27, 2017

Hmmm…