Bitcoin: Was Lincoln Wrong?

Abraham Lincoln once said "You can fool all the people some of the time and some of the people all the time, but you cannot fool all the people all the time.” The only way the Bitcoin bubble won't burst is if Lincoln was wrong.

Against Bitcoin & The Minimum Wage

I think it's interesting the many of the people on social media criticizing me for being against Bitcoin are also criticizing me for being against the minimum wage. If you're anti-force, and support a free market when it comes to Bitcoin you should feel the same way about wages.

Bitcoin: Bubbles, Tesla, Elon Musk

The real reason Elon Musk may be interested in helping to sustain the Bitcoin bubble is that the last thing he wants is for bubbles to start popping. When you live in a bubble it's very dangerous to throw pins at others. The risk is that an errant pin inadvertently pops yours!

Silver: Supply-Demand Dynamics

The supply-demand dynamics are also positive for silver.

Silver investment demand hit a 5-year high in 2020. It won’t likely slow in 2021. And while industrial demand took a big hit due to the coronavirus pandemic, it is expected to rebound as the global economy begins to recover.

Silver demand will also likely get a boost from the push toward solar power and other green energy initiatives in the coming years. Solar power generation is expected to nearly double by 2025 according to a report released last summer by the Silver Institute. Even if the global economy recovers more slowly than expected in the wake of the pandemic, green energy demand for silver will likely remain robust. Analysts expect many government stimulus plans will include funding for green initiatives.

On the supply side, mine output fell sharply in 2020. Production was projected to fall by 6.3% to about 780.1 million ounces. The big drop in silver output is largely a function of mine shutdowns due to coronavirus, but mine output was already trending down before the pandemic. Global mine production fell by 1.3% in 2019.

(in Schiff Gold website) 

The Inflation Threat Will Grow Much Larger

It's clear by the way the Federal Reserve tweaked the language in its official statement that it's more concerned about growth and less worried about inflation. 

This assures the inflation threat will grow much larger as the Federal Reserve ignores its rise and prints more money to fund deficit spending.

Bitcoin Incorporates Elements Of A Ponzi Scheme

Bitcoin is neither a Ponzi Scheme, a Pyramid Scheme, nor a Chain Letter, though it incorporates elements of all three. 

It's really a more sophisticated version modernized for the digital age. 

My guess is that in the future similar schemes will be referred to as a Bitcoin Scheme.

The Reddit Raiders Have Turned Their Attention To Silver Stocks

 It looks like the Reddit raiders have turned their attention to Silver stocks. They're getting smarter. 

Silver stocks are actually cheap, and represent good investment value. The fact that some investors were foolish enough to short these stocks makes their trade even better.

GameStop: The Only People Who Will Walk Away With Any Real Winnings

Attention Bitcoin HODLers: The only people who will walk away with any real winnings from the GameStop (GME) short-squeeze will be those smart enough to sell. 

Those who HODL will likely loose it all. 

Bitcoin HODLers will meet the same fate if they fail to realize their paper profits.

The Greatest Transfer Of Wealth In History

Bitcoin proponents claim that Bitcoin represents the greatest transfer of wealth in history. I partially agree. Not sure it's the greatest but a large wealth transfer is taking place. But the wealth is being transferred from the people who buy Bitcoin to the people who sell it.

Gold Is Wealth, Bitcoin Is Not

Losing the private key to your Bitcoin wallet is not the same thing as forgetting where you buried your gold. When gold is lost the world loses something -- the potential use of that gold as a metal. When Bitcoin is lost the world loses nothing. Gold is wealth. Bitcoin is not.

The Bitcoin Bubble

Talking about the Bitcoin bubble with Liz Claman, Host of FOX Business Network's The Claman Countdown:

Peter Schiff Bursts The Bitcoin Bubble

COVID Stimulus Will Be Paid For By Inflation

I agree with Jeremy Siegel that bondholders will suffer losses as COVID stimulus is paid for by inflation, but disagree with his assessment of how much it will cost. Inflation will be much higher, and the losses far greater than he thinks.

The U.S. Economy After The Pandemic

For all the talk about pent up demand driving strong economic growth after the pandemic, the truth is we must pay the bill for all the stimulus during the pandemic. Because we borrowed so much to mitigate the recession, we need to spend less during the recovery to repay the debt.

Rising Long-Term Rates Shouldn't Be Hurting Gold

Rising long-term interest rates are not helping the U.S. Dollar so they shouldn't be hurting gold. 

The U.S. Dollar is falling despite rising nominal rates because the rise is driven by inflation fears. The Federal Reserve is so far behind the curve it can't even see it. 

This is very bullish for gold.

Lots Of Electrical Power Is Wasted Creating Bitcoin

You can't power anything with Bitcoin.

But a lot of power is wasted creating Bitcoin and operating the network.

Once Bitcoin crashes for good, and all of this finally nonsense finally comes to an end, all of that power will be freed up for productive uses.

Gold Is The Best Money, Not Bitcoin

Bitcoin can't be money as money is the most marketable commodity. 

Bitcoin is not a commodity, so it can't be money. The best Bitcoin can ever hope to be is a digital fiat currency, but it hasn't even managed to achieve that yet. 

Gold is the best money.

Permabulls

It's not a surprise that CNBC's permabulls, who once urged investors to buy stocks based on Trump's plan of tax cuts and deregulation, are just as bullish now despite Biden's plan to raise taxes and increase regulation. They're saying not to let politics influence investments.

Gold & Treasury Yields

Gold traders are the only ones worried about rising Treasury yields. 

Ironically the insignificant rise is actually even less relevant to gold than to other commodities or investment assets. 

If annual inflation is 10% does it really matter if 10-year Treasuries yield 0.9% or 1.1%?

Bitcoin's Rally: Not Being Driven By Wide-Spread Institutional Adoption

The recent surge in Bitcoin is not being driven by wide-spread institutional adoption. CNBC and other crypto shills are exploiting the fact that a few high-profile institutions have taken positions to create the false impression of larger participation to sucker in more buyers.

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.