I don’t write or stream much anymore, particularly on macroeconomic matters. The reason being, I just don’t see the value addition of doing so. After 15 years of publicly commentating on Precious Metals, and four in cryptocurrency, the investment community has become so saturated with information, it’s impossible to lift your voice above the crowd.
If I have a specific cause to champion, it’s difficult enough – like getting people to acquire MWC when it was FREE, and dirt cheap; and now, selling it, because it has become heavily manipulated, and overvalued.
However, for the things that made me well-known – macroeconomic trends and sound money alternatives – there is barely an audience, amongst the noise in the rapidly growing (but still relatively small) crypto community.
That, and the ever-increasing amount of trolls and attackers – who, unlike the vast majority of SILENT readers and listeners, do their best to discredit you, in most cases by lying about you or twisting the intent of your words and actions.
That said, the reason I became interested in Precious Metals in 2002 (which I sold in 2017-18 due to my view Bitcoin will usurp their use cases); and Bitcoin in 2014; were the inevitable self-destruction of what I long ago deemed “history’s largest, broadest, most destructive fiat Ponzi scheme.” That is, the dollar-based regime that arose August 15th, 1971 – when, for the first time, ALL currencies were unbacked by gold or silver.
Historically, the average fiat regime has lasted about 40 years. However, due to dramatic advances in manipulative monetary policy and trading practices, Central banks have added another 10 years to this one – at the cost of the historic inflation rates and the parabolic debt growth that MUST inevitably implode.
To think, at the time of the 2008 financial crisis, the U.S. national debt was “just” $10 trillion - compared to $23.4 trillion today, PLUS $5 trillion of “off balance sheet” debt from the 2008 nationalization of Fannie Mae. This, despite interest rates, due to relentless Fed “liquidity” increases, plunging to all-time lows. To wit, just FIVE DAYS ago, the ALL-TIME LOW 10-year Treasury bond yield, going back to the 1960s, was 1.46%...whilst today, it is 1.19%!
It’s hard to believe it’s been SIX YEARS since the ECB reduced interest rates below zero, when Mario Draghi said he’d do “whatever it takes’ to “save” the Euro; and the Bank of Japan, four years. In both cases, accomplishing nothing but buying time, whilst debt and inflation exploded further. And, of course, stock and bond markets - due to the direct, daily manipulation that has become as ubiquitous as Precious Metal price suppression.
However, the net result is a world that has NOT BEEN ALLOWED to report, let alone experience, a major recession or bear market – that today, is more overvalued, overleveraged, and unhealthy, unsustainably so, than any time in global history. Which is why, shortly, the historic monetary paradigm change I have long been predicting will arrive.
The book has not yet been written, but the gist is this…if the Central banks lose control of financial markets, it will be the end game for all we have monetarily known – as unlike 2008, when the “emergency responses” that brought us to where we are today were implemented (QE, 24/7 market support, economic data rigging), there will be no new remedies to introduce.
Confidence in Central banks will die entirely – and frankly, if this process commences in the coming months, ahead of a crucial U.S. presidential election with a dangerous socialist like Bernie Sanders waiting in the wings, the compounded effect of populist politics with collapsing fiat purchasing power could be doubly lethal.
Make no mistake, they will do “whatever it takes” to avert this – like, for instance, instituting “emergency” rate cuts and QE increases this weekend if today, stock, bond, and commodity markets continue to spiral out of control. However, at this point it is FINALLY becoming painfully apparent that there are no more monetary weapons to launch…as indeed, the Central bankers have no clothes.
How this transformation will occur, and how long it will take, only time will tell. However, what I VERY strongly believe is that Bitcoin will play a MAJOR role in the global monetary future – one day, surpassing gold’s current market cap of roughly $8 trillion.
Yes, gold has some legacy value that will take time to fade – but the fact is, it is hopelessly archaic in a world where Bitcoin exists…which will become increasingly obvious as Millennials and Gen Z’s inherit Precious Metals over the next 2-3 decades, and serially dump them for MODERN store-of-value vehicles like Bitcoin.
To that end, when I sold my silver in the summer of 2017, I officially declared it DEAD as a monetary metal – as unlike gold, it has lost essentially ALL its legacy value. Not to mention, platinum, which has since plummeted to 17 year lows. Don’t believe me? Well, consider that TODAY, just as U.S. interest rates have plummeted to an ALL-TIME LOW, the gold/silver ratio has exploded to an ALL-TIME HIGH of 95!
As for fiat currency, old habits die hard – so it will take some time for the world to be weaned off something they have trusted, but repeatedly burned by, for 1,000 years. However, the exploding debt and inflation they are now causing – that will result in either hyperinflation or a new, 2008-like deflation (that CANNOT be rescued by monetary response) – will no longer be able to be ignored.
Which is why, in my VERY strong view, Bitcoin’s reward/risk ratio, ESPECIALLY following this week’s “baby with the bathwater” broad market decline, has NEVER been more favorable.