Bitcoin: Horrible Technicals

Horrible week technically for Bitcoin. GBTC had an outside reversal week. It took out the prior week's high, then closed below the prior week's low. The pattern may repeat on a monthly chart too. GBTC already took out the August high. Now it just needs to closed below the August low.

Central Banks Keep Buying Gold

Central banks globally added another net 56.7 tons of gold to their reserves in May as more banks dip into the gold market, according to the latest data compiled by the World Gold Council.

Gold-buying by central banks slowed last year from the record pace we saw in 2018 and 2019. That trend has continued into 2021, but buying is ahead of last year’s pace as many countries continue to load up on the yellow metal.


-- in Schiff Gold

Video: Labor Market, Inflation and Gold

 

• Inflation spilling into the labor market. 
• Pressures pushing dollar down and costs up. 
• What does Basel III mean for gold? 
• CNBC pundits are as clueless now as they were in 2006 and 2007.

Inflation Forces Retailers To Sharply Increase Prices

As inflation forces all retailers to sharply raise their prices look for lots of excuses as to why it's happening. But the biggest excuses will come from the government and the Federal Reserve, that will blame everything and everyone but their own policies.

You Don't Buy Gold To Get Rich

You don't buy gold to get rich. You buy gold to stay rich. Most people who are buying Bitcoin are doing so to get rich. The problem with putting too much money into something that has the potential to make you rich is that it also has an even greater potential to make you poor.

Bitcoin: Supply & Demand Dynamics

The price of Bitcoin is set by supply and demand. The problem for Bitcoin HODLers is that the future supply of people who own Bitcoin and need to sell will exceed the demand from people who don't own Bitcoin and want to buy. All Bitcoin owners need to sell. No one needs to buy.

Fed Policy Has Failed To Produce Real Economic Growth

The Senior Economic Reporter on CNBC claims the weak jobs report vindicates Fed policy. It actually confirms the opposite. Fed policy has failed to produce real economic growth. April's anemic Jobs Report proves the Federal Reserve only succeeded in creating inflation and blowing bubbles.

Bitcoin & Gold

Gold falling and Bitcoin rising in the face of massive money printing doesn't mean Bitcoin has replaced gold as the preferred store of value. In reality, investors are not buying gold because they're not worried about inflation. They're confident the Federal Reserve has it under control.

Inflation Is A Big Threat

Those who think inflation isn't a threat and the Federal Reserve will stay loose are wrong. Those who think inflation is a threat and the Federal Reserve will tighten are wrong. Inflation is a bigger threat than the latter thinks, but the Federal Reserve will ease further to support asset prices and consumption.

Also exploding federal budget deficits, and a new housing bubble, leaves both the public and private sector extremely vulnerable to rising interest rates. So as inflation expectations push rates up, the Federal Reserve will crank up QE to push them back down to prevent a financial crisis.

High Inflation Is Bullish For Gold, Bearish For Nasdaq Stocks!

While high inflation is very bullish for gold, historically it has been very bearish for high-multiple growth stocks. Instead of dumping their gold and gold mining stocks due to rising inflation and higher bond yields, investors should be selling NASDAQ stocks.

Cryptos: There's No Substantive Difference Between Bitcoin and Dogecoin

All of those Bitcoin bugs, like Novogratz criticizing Elon Musk for promoting Dogecoin can't see the irony that there is no substantive difference between Bitcoin and Dogecoin. In fact, Dogecoin, despite its being started as a joke, is arguably the superior crypto currency!

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.

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.

Bitcoin: A New Kind Of Bubble?

Will the Bitcoin bubble be the first in history where the little guys get in early and sophisticated investors arrive late to the party?

Roubini: Bitcoin Has No Role In Portfolios

"Bitcoin has no role in institutional or retail investors portfolios. It is not a currency: not an unit of account, not a scalable means of payment & is a highly volatile store of value. It is heavily manipulated."

-- Nouriel Roubini, economist

The Bitcoin Mania On CNBC

The reason it's so easy for Bitcoin pumpers to fool CNBC anchors into buying into the Bitcoin mania is that their understanding of investments, fiat money, gold, and economics is so limited. CNBC anchors are entertainers. At least sports anchors know something about sports.

Bitcoin Is Not Taking Any Market Share From Gold

Bitcoin is not taking any market share away from gold. 

That hype is just part of the pump so the whales can dump. 

The only markets where Bitcoin is taking share are for lottery tickets, sports betting, casino gaming, penny-stocks, and some overpriced large cap momentum stocks.

Bitcoin: When The Speculative Fever Dies Down

Since PayPal customers buying Bitcoin in anticipation of using it to fund future purchases must sell Bitcoin to buy an actual currency to transact with merchants, today's buyers are tomorrows sellers. If speculative fever dies down, who will take the other side of those trades?

PayPal's foray into Bitcoin is a gimmick designed to provide a short-term boost to Bitcoin's price. If PayPal really wanted to offer its customers an alternative and reliable long-term store of value, it could have allowed them to buy gold and store it to fund future purchases.