Bitcoin: I'm The Voice Of Reason In The Insanity

Many accuse me of tweeting about Bitcoin to get attention. If attention was my goal, I would pretend to jump on the Bitcoin bandwagon and be like all those high-profile Bitcoin promoters who tweet about Bitcoin far more than I do. I'm just the voice of reason in the insanity.

The Main Reason Investors Are So Exuberant

Investors are widely enthusiastic about every asset class except precious metals mining stocks. The irony is that the main reason investors are so exuberant is inflation. It's the reckless monetary policy of central banks that's driving investors out of cash and into risk assets.

Bitcoin: Not A Threat To Central Banks

Bitcoin promoters believe that Bitcoin is an actual threat to central banks and the fiat monetary system. Yet despite this belief they also believe that the U.S. government, which has the most to lose if Bitcoin

 succeeds, will take no action to protect itself from this threat.

The Coming U.S. Dollar Collapse

The coming U.S. Dollar collapse will likely result in China surpassing the U.S to become the world's largest economy before the end of the next presidential term. As America's economic dominance comes to an end, so too will the dollar's status as the dominant reserve currency.

Gold Is An Inflation Hedge

Gold is an inflation hedge because it's also a commodity. When inflation reduces the purchasing power of fiat currencies, it takes more units of the inflated currency to buy a given commodity. Since gold is also a commodity, it maintains its value relative to other commodities.

Since gold retains one hundred percent of its properties over time, and is easy to store, it's an ideal asset for consumers to hold during periods of high inflation. While more units of currency are need to buy commodities, the same quantity of gold can still be exchanged for other commodities.

Why Bond Yields Are So Low

Low bond yields have lulled many investors into a false sense of confidence that inflation is't a rising threat. But yields are only this low because of market manipulation by the Federal Reserve, which ironically intervenes in the bond market by creating even more inflation to buy bonds.

The Reason Why Gold Stocks Aren't Rising Yet

Inflationary pressures are building and investors are bidding up prices of inflation sensitive stocks. But they're not buying gold stocks yet as investors still expect the Federal Reserve to fight inflation by raising interest rates. But the Fed will surrender to inflation without a fight.

Bitcoin, Gold and Gold Mining Stocks

 Some have postulated that investors are selling gold and buying Bitcoin. Since they have nothing in common, I doubt that's happening. But some speculators may be selling gold stocks and buying GBTC, with gold stocks falling as gold rises, and GBTC trading up to a 25% premium.

Unlike Bitcoin and gold, GBTC and gold ming stocks do have something in common. GBTC is a way to speculate on the future price of Bitcoin, and gold stocks are a way to speculate on the future price of gold. The smarter trade is to drop GBTC and pick up some gold mining stocks.

Inflationary Pressures Are Building

Inflationary pressures are building and investors are bidding up prices of inflation sensitive stocks. But they're not buying gold stocks yet as investors still expect the Federal Reserve to fight inflation by raising interest rates. But the Federal Reserve will surrender to inflation without a fight.

Fighting Inflation With Inflation

It's amazing that markets have calmly accepted the widely-held belief that the Federal Reserve will respond to rising inflation expectations by printing even more money to buy bonds to keep yields from rising. Fighting inflation with inflation guarantees inflation wins and the dollar loses.

Bitcoin: A Massive Double Top?

Bitcoin bulls are celebrating because after 3 years Bitcoin finally managed to eke out a new high. But what makes them so sure that this marginal new high doesn't constitute a massive double top? Perhaps they should put away the champagne until an actual breakout is confirmed.

Bond Investors Are Worried About Stagflation

A weaker than expected November jobs report is sending Treasury yields higher, not lower. This means bond investors are worried about stagflation. The weaker the economy gets, the more inflation the Federal Reserve creates to stimulate it and to buy the excess Treasuries investors are dumping.

Bitcoin's Meteoric Rise

Bitcoin bulls argue that Bitcoin's meteoric rise means that major institutions that once shunned Bitcoin now have no choice but to hold their noses and buy it. Not only does Bitcoin's past performance not guarantee its future success, it more likely assures its future failure.

2020 Cambridge Gold Summit

 

Peter Schiff at the 2020 Cambridge Gold Summit.

In 5 years time, the difference between having Biden or Trump as president is only marginally different. 

We are heading over a cliff no matter who is driving the bus - the difference may be how long it takes to get there. 

Most of the funding for the increase in government spending will be printed by the Fed. The Fed will monetize this government debt leading to more inflation and a weaker dollar. Quantitative easing (QE) has returned with a vengeance. Peter believes QE is a never-ending process. 

Economic Recoveries Are Not Created By Central Government Planning

According to Joe Biden the economic team he is putting together will create a strong economic recovery. Recoveries are not created by central government planning. Biden and his team will stifle any recovery that hard working Americans may have otherwise created if left alone.

2021 May Be The Worst Year Ever For The U.S. Dollar

The U.S. dollar is now trading at its lowest level against the Swiss Franc (CHF) since January of 2015. This is a harbinger of things to come. The Swiss Franc is leading the way, but other currencies will soon follow. 2021 may be the worst year ever for the U.S. dollar, at least until 2022.

The euro is closing in on 1.21 verses the dollar, and the Dollar Index is close to breaking below 91, its lowest level since April of 2018, just 3% above a six-year low.