Bitcoin-gold
Equities to push higher on Stimulus?If you follow my work, my analysis on central banking actions are coming true. Central banks original mandate was to be the lender of last resort. It morphed to stabilizing prices and maximizing employment as mercantile economics came back in the form of keynesianism. Now, we are seeing central banks becoming the BUYERS of last resort.
President Trump's Achilles heel are the Stock Markets. He needs markets to be up, and avoid recession, in order to win the elections next year. The truth is all incumbents or ruling parties are voted out due to economics. If the economy was as strong as Obama and the Democrats said it was, then Hillary would have won the elections. It is all about economics, everything else is noise.
This is why China holds the cards with this trade war. They know if markets tumble, it will be President Trump who will be forced to the trade talk table in order to take a China dictated trade deal. China has no elections, and has a pretty strong state grip on the people (surveillance etc).
So I talked about why the Fed would be cutting rates. In my post below, I outline why rates must be cut...and why it may not help the US Dollar to go lower. This is where we seem to be heading, however, in the long term, all fiat currency will die. We are seeing this occur now as central banks begin cutting rates. It is a race to the bottom.
On Thursday night, and on CNBC the day after the word "stimulus" was floated out. More stimulus along with rate cut is coming. They won't call it Quantitative Easing (QE). Why? QE was supposed to be a desperate policy to prevent another 1920's-30's like great depression. The truth is we did not solve anything. Bad debts and debts are getting larger.
However, I argue there will be a confidence crisis as many investor's and market participants realize that this QE (will be called stimulus or a new name for it) will be the norm. Central banks become buyers of last resort. They will become more powerful.
Once this came out on stimulus, bonds began to stabilize a bit. The 2 and 10 went back to normal, and the 30 back over 2%. This tells us something VERY IMPORTANT. Money is leaving the safety of bonds and is going into the stock markets.
As interest rates are cut, yields will still be going lower. However, this means if you want yield, there will be nowhere to go except stocks. Bonds won't be held for yield. Real Estate might lag because you would want to wait for interest rates to be cut to the bottom. Why take a mortgage when you know rates are heading lower.
This is the game folks. Everything and anything will be done to keep the stock market up. Fake markets. This is because the President needs this to win re-election but ALSO the pension funds who have been forced to go into stocks due to suppressed bond yields. If stocks ever fall, many will not see their retirements and we will have a pension crisis as well.
The game here is to kill the middle class. When this all reverses, it will be the middle class left holding the bag. The banks will be out. The wealthy will be out. Just realize that the party is not over yet. Stimulus and rate cuts are only for propping the stock market up due to the geopolitical and economic reasons I mentioned. This means inequality and other social issues will get worse. This will be a golden age for active traders. Use this game to our advantage.
We will know the party is over once bonds begin to sell off and rates spike. This is still a long ways away, and the Fed may even pull off a Bank of Japan and European Central Bank by going negative and then killing the bond market where they are the only purchasers...but this would likely mean the fall of the US Dollar as a reserve currency.
Also, confidence crisis can occur anytime, which I have outlined in my posts before. Geopolitical tensions will arise as well. As economic issues worsen, leaders of nations will want to protect themselves...going to war is what they will do. When all else fails, they take you to war. Turkey is the big one to watch...but now even China perhaps.
So if we see markets break above the flip zone re-test once the promise of stimulus gets more cemented and assured, we will likely see our first fib target on the weekly be hit at 3108. Again, there will be nowhere to go for yield except markets.
In the long run, I think you want to be in Gold and Silver and perhaps even Bitcoin as fiat currencies die.
Bitcoin, Altcoins and ... Crisis?For those that are following me on Twitter or Tradingview, you probably already know what I've been saying for some time. For those who don't, below I have all my recent ideas on Bitcoin, Altcoins, Central Banks, Bitcoin, Bonds, Gold and Stocks. Here are some key takeaways and updates
Split your assets into USD, JPY, Gold and Bitcoin. For more risky stuff short European banks, buy silver, long gold stocks, long stocks that perform well in a recession and lend fiat on crypto exchanges. You can long bonds with good risk management. They are a bubble that I don't see popping soon, but could pop any time. To me they are like buying Bitcoin at 5-10k, so they clearly have room, but nobody knows when the music stops. As for Gold it is doing better than I expected, but for me to turn into a proper bull I'd like to see it clear 1560.
For Bitcoin the timing was not right, but I informed people that I pretty much stayed out since 11800. Even all the way down I explain what I though was the best way to play it for those that are long only. Since I started longing at 10400 I made a few mistakes that took away some of my profits, but at least I escaped bad losses. To me it is all about increasing my BTC stash, but mainly through longing.
Imagine how bearish things were, that even I, a mega bull realized that things were not right. Imagine that a guy that hates shorting had to short in order to hedge his BTC exposure. Too many bulls, too many longs and many other signs of the trend had changed and we were due for a drop. Managed to get a late average entry at 10800 on Huobi's quarterlies and I am ready to add more. I am all in on BTC and the best way for me to protect myself is hedging (not selling spot).
In my opinion the current situation is very bearish. I don't think we are going to put a local bottom right at 10k. We've lost pretty much all important support levels, momentum is pretty bearish, the long/short ratios are only growing and alts are back into falling both in BTC and USD terms like in July. The best zone for a drop right now is at 7800-8500. For me to turn bullish without seeing that area tested, I'd need to see 11500 broken... We went up too fast, too soon and the Daily RSI hasn't been oversold since Dec 2018.
Altcoins were performing well in BTC terms during the Bitcoin drop, until things snapped. I literally updated that idea a few minutes before some of them fell really hard. The reason is that many of these alts are overleveraged in USD terms, so when Bitcoin goes down, it drags them with it. Initially they fall less in USD terms by having a relief rally in BTC terms... until most retest their recently broken support levels in BTC terms, while slowly breaking their USD support levels. After a certain level things get ugly and this isn't the first time this has happened. Not surprisingly it once again happened right at the moment that Bitcoin Dominance was retesting an old high. This shows that the altcoin bear market is still strong.
Now let's get into Bitcoin's role in the current macro environment. The reality is that it is not correlated with any other asset class and anyone who says the opposite is just spewing random nonsense while trying to find a narrative based on his beliefs. Bitcoin whales, market makers and other retail participants other than institutional investors, have pretty much nothing to do with traditional finance. Most people here have survived through insane drops and mad volatility. Most are here to protect themselves from a potential crisis. Very few of them hold other assets, and if they do, then Bitcoin and cryptos are probably just a small fraction of their portfolios. Most Bitcoin investors are either really well off or have very little left from. At the same time many traditional investors have started viewing Bitcoin as a Digital Gold or an uncorrelated asset with tremendous potential that isn't going away.
Finally, in my opinion altcoins have more to fear as they are way more speculative than Bitcoin. With potential harsh regulations in environment where banks are losing control, and all the current negativity around them, they are coming closer and closer to their potential capitulation. We don't know how deep this could be, but we know that Bitcoin will most likely be negatively affected by this event if it occurs on the way down. Alts could capitulate either by BTC mooning or falling hard, but the second scenario would make things worse as we could see a vicious negative feedback loop. The whole situation looks very fragile and until I see most of the longs gone or Bitcoin making a decisive bottom, I'd be very cautious.
Bitcoin to be tested during the coming RECESSION!If you follow my work, I have been speaking about the upcoming recession. Central banks are out of tools and cannot admit their policies were wrong. We did not solve the 2008 crisis, we just papered over the debt problem with more debt.
Central Banks will be cutting rates more extensively than before but need to do it in a way to maintain the confidence. It is also very likely QE will be re-initiated... even though we were told it was a one time desperate policy to prevent another 1930-40's type great depression.
I have spoken about the recession signs many times and why this time it will be much worse. Links below.
I have spoken about why Gold will be performing well. It is a confidence crisis asset and we will be seeing a confidence crisis in government, banks and the fiat money. Human history is cycles of fiat/soft money and hard money. No fiat has ever survived (average lifespan is 40 years).
Other recession signs are what we are seeing with Copper (link below), negative PMI data, and the yield curve. I want to address the 2 and 10 year yield.
The 2 and 10 year yields are about to invert. The media has been downplaying the yield curve inversion because the 2 and 10 have not inverted...once they do, there is no hiding it. When I was trading today, the spread was 8. We got up to 5 and then closed around 6.
Why is this important? Because the 2 and 10 year inversion have a 100% success rate in calling market crashes, recessions and depressions. Now I am not saying the markets will crash right away, but we do cross a threshold. You can see people are very uncertain and are running into bonds for safety.
Also look at the 30 year yield lol. It is almost yielding the lowest ever in history...and yielding more than the fed funds (overnight lending) rate.
Now the big question is how will Bitcoin perform? This will be the first time Bitcoin will be tested during a recession. Although, keep in mind, I believe what is coming will be far worse. It will be a confidence crisis since central banks are out of options. Japan and Europe are the best case examples. We go negative interest rates and stagflate/deflate. Effectively killing the bond markets where central banks are the only buyers of negative yielding debt. Banks will have negative interest rates, and we will very likely go to a national/international digital currency to prevent people from pulling money out of banks since they have to pay banks for keeping money in them with negative interest rates.
A digital currency ensures we are forced to keep money in banks so they get paid, and also for other reasons such as taxation in case we go the MMT path. Again I have outlined this many times in previous posts.
So back to Bitcoin. It is a great way to hide money or transfer money. The Chinese have been using it with great effectiveness basically creating the rise in Bitcoin. I don't think they are holding it as a storage of value however...more of an in between mechanism for transferring money or getting it out of the country. Remember, buying physical Gold does not really affect the prices...it is the paper market that does (hence why it is likely China and Russia have put large short gold paper contracts to keep prices low while they stockpiled physical at depressed prices).
Again, I believe cryptos will do well (specifically Bitcoin) because of the fiat crisis. With central banks cutting rates, there is a race to the bottom to see which country can cut the fastest. Check out my post on why the US will attempt to do so but the US Dollar may rise...thereby forcing the Fed to 'kill' the dollar. The middle class/main street will lose. Government will win. Wall street will win.
Very bullish on the precious metal complex due to the confidence crisis but also saying Bitcoin will see money run into it. Then it is all about government fighting Bitcoin. Trust me, we have not even seen an effort made by government to attempt to take down bitcoin. They can never shut it down, but can make it illegal which would see the average joe crypto trader/investor sell their positions due to fear of punishment from the government.
Also another word of caution: If Bitcoin hits 50k it may be tough taking profits...most of these crypto exchanges will not have the money. Since they are not regulated they do not need too. You do not have depositer insurance.
Crypto or Gold? Solutions to solve the Economic Problems.
Both Gold and Bitcoin have had their moves lately. Gold is more of a confidence crisis asset, while Bitcoin right now is all about China. links below if you want to know more about both of these topics.
There has always been this Gold vs Crypto debate. I think both have their uses. Human history is cycles of soft money and hard money, a battle between the classical economists (which is not really taught anymore but is about hard money and low taxes) vs the mercantile/keynesian economists (who favour big government and devaluing currency for policy which leads to more taxes). There has never been a fiat currency system that has survived, we always go back to hard money (Gold backed).
Gold has been used as money because of its stock-to-flow ratio. Meaning: the supply of Gold (stock) increases relatively slowly (the flow) when prices of Gold go up due to its rarity and difficulty in mining Gold. When Gold prices increase a lot, Gold mining output remains around 2%.
When Copper, Silver, Seashells or beads were used as money the flow could increase due to many reasons which would then kill the currency. In Silver and Coppers case, when the prices increased, more energy went into mining more Silver and Copper for material reasons...this meant the flow increased dramatically. In the case of Beads and seashells, when the Europeans came to Africa and saw this form of money, it was easily made back in Europe so they brought this large supply of beads and seashells over and inflated the local money supply. In summary, people lose confidence in the money.
If you read the book "The Bitcoin Standard" by Saifedean Ammous, it is primarily about classical economics vs mercantile economics. Mr Ammous says in the book that Gold will have the best stock-to-flow ratio to be used for money...however Bitcoin will overtake Gold in this category around 2025.
So having this background on classical and mercantile and the stock-to-flow ratio, let us look at some solutions to how to solve our economic issues. There will be pain regardless. We should have solved all this in 2008. Quantitative Easing (QE) was sold as a one time thing to prevent another 1920's-30's like depression. There was so much debt and bad debt in the system that if people did not pay them, the whole system would have fallen. QE was a way to buy this bad debt to keep the system afloat. Essentially, all we did was paper over our problems with more debt. We did not solve the economic problem. Now, if you read my work, I have said that central banks are going back to QE. They have no choice. They will be the buyers of last resort. People will begin to understand that QE was not a one time desperate policy...it is the norm. Central banks and governments will get bigger. The free market will all but disappear.
Again, there will be pain. Either we solve it now with the solutions I describe below, or we inflate into a bigger problem which will cause even more damage (to be honest, we are already there, not sure how much more central bank balance sheets can take).
1)STABLE MONEY AND HIGH (NORMALIZED) INTEREST RATES
This will change currency from being a debt instrument to that of wealth. More importantly, it will bring back confidence to the system and to money.
The two schools of economics are: classical economics and mercantile (what we call Keynesian today) economics.
Classical economics is about stable money and low taxes. The idea is imagine waking up in the morning everyday having to calculate how many metres there are in 1 kilometre today. They believe money should not fluctuate greatly, and should be kept stable, perhaps fluctuating as little as 1-2%.
The mercantilists/Keynesians believe in a floating currency because it can be devalued for political and policy purposes. Make money cheaper when required.
It is no coincidence that the Keynesians advocate government intervention and spending in the economy, their aggregate demand theory. This leads to big government, requiring more control and higher taxes to pay for all of this.
Again, it is not a coincidence that Keynesian economics is taught at post -secondary schools worldwide. It benefits the academics and the government (post-secondary having a more leftist/socialist influence but that is for another post).
Throughout history, civilizations and empires have started with classical economic principles, before reverting to mercantile principles which is near the end of their zenith, seeing a period of decadence. Collapses occur as mercantile economic principles fail.
It seems we are at that point today. The Keynesian’s today cannot admit they were wrong, and their solution is always to do more of what is not working. “Oh we did not cut rates low enough (more negative in the case of Europe). “Oh we did not print enough money and the government did not spend enough”.
No fiat currency has ever survived. Human history goes through cycles of classical economics-stable money, and mercantile economics- soft money.
Athens tested a paper currency. Once Phillip of Macedon and his son, Alexander the Great, took over Greece, they re-installed hard money.
The Roman empire saw a confidence crisis when the state began devaluing their currency. The Roman state kept raising taxes that some people began giving up their Roman citizenship because slaves did not have to pay taxes! It got so bad that Emperor Valens had to create a law stating that no Roman citizen could give up their citizenship to avoid paying taxes. Government always react the same as they hunt for money and taxes. On a quick side note, this is why Christianity gained so much popularity. It was a reactionary movement to the economic problems of the empire. Christianity condemned usury, charging high interest for money. This countered Judaism, which was the religion at the time (and still today I believe) that advocates lending on interest. A capitalist religion if you will. This is why throughout history Jews have always been the money lenders, and why throughout their history, they are blamed for economic problems.
The Roman empire split into East and West. The West maintaining a failing mercantile system, while the East reverted to classical economics, issuing the Solidus gold coin. A coin that would continue to be used for hundreds of years after the fall of the empire much like the Spanish silver currency- US Spanish dollars, and China used Spanish silver coins until the beginning of the 20th century.
So now we have to talk about Gold. Just so nations cannot print unlimited amounts of money, gold is generally used as a way to back the currency. To give the currency confidence. So if the government begins printing currency more than the people are comfortable with, they can exchange their fiat for Gold. Purely for confidence.
On this note, it is worth mentioning there has never been a 100% backed gold currency. A central bank can easily hold a small amount of Gold, and government bonds and using the bonds to buy Gold to increase their reserves as required. Much as a currency board is run today…and even how ETF’s are managed.
Once more, if you do not like the currency you are holding, you can exchange it for Gold. It instills confidence rather than being backed by air and a corrupt, short-term thinking government.
After 1971, schools have not taught any principles of classical economics. Gold being referred to as the “barbarous relic” (was not really Gold, but the Gold standard).
The Keynesian’s believe they have created success, but in reality, there are only a handful of mercantile/keynesian success stories (maybe 2 at most really).
Classical economics has had much more success. The British empire had 100 years of economic growth with interest rates staying steady around 4% based on classical economics. Allowing Britain to be the financial capital of the world as well as prospering and creating the largest empire in history.
As nations get abundant with the classical cycle, we see decadence and leaders wanting more power and wealth…which brings about mercantile economics and money being devalued by the state.
The Dutch and the Spanish were before them.
This is generally for warfare. Under classical economics, nations cannot afford long wars. They can only pay for it by taxation. This is how the income tax got invented. During the Napoleonic wars and then World War 1, the British initially used the income tax for war, before closing the gold window to go to mercantile economics where cheap money could be printed to finance the longer wars . The income tax being phased out after the Napoleonic wars, with Britain going back to the Gold standard, only then for it to be suspended again, and the income tax and cheap money being re-introduced for WWI.
What is worth mentioning is that during times of classical economics, peace and nations working together to solve issues is the best option since nations cannot afford to go to war for very long. This is why we see ‘Golden ages’ during these times. The Napoleonic wars and WWI both displayed a more devastating type of warfare, simply because Britain and other nations could finance them with cheap money which they could keep printing, allowing wars to continue for years and years.
You can see why the income tax was kept on when Keynes introduced his idea of aggregate demand. Government having to spend more meaning they would need a form of taxation to continue to spend.
Once again, the two misconceptions are that the currency has to be backed 100% with gold, and a country with more gold can print more money.
As mentioned, no nation has had 100% backing of their currency with Gold. In fact it can be done with a 1% backing and the rest with government bonds, selling bonds to buy gold when required. Running like a currency board or ETF.
We still have them today with Hong Kong, Singapore and many other Asian nations. There was a debate in the past about democracy being crucial for a strong economy… however we have seen this is not the case. It has been principles of classical economics-stable money and low taxes.
Whatever nation goes back to classical economics will ‘win’. It is looking likely that the East (Russia, China etc) may be going this way. They have been adding to their gold reserves, and western central banks are beginning to do so as well.
Yes, the East could be using gold to counter the US Dollar (a way to settle payments since nations do not want to hold the Ruble, Yuan, Rial, Rupee, Lira etc- settle the payments using gold which can then be converted back to the domestic currency).
Of course the US supposedly has the largest gold reserve on the planet in Fort Knox…however it has not been seen or audited for quite some time…leading to theories stating that the gold isn’t there. Could have been sold off to make money for government deficit spending as social payments go higher…this was the case for Canada which sold all her gold reserves essentially to make money for government payments and programs.
This leads to speculation that since China and Russia are buying large amounts of gold, it is really them who are shorting large paper contracts to keep prices low, and then buying the physical. Just what you would do if you want to keep stacking. You would rather pay low amounts for it.
Many people laugh at the idea of going back to classical economic principles, however human history shows we go through these cycles.
This is also why when President Trump nominated Judy Shelton to the Fed (who is a Gold standard advocate) it really got people thinking...
China has a huge debt problem. The largest debt bubble in human history. They may very well revert to classical economics. Classical principles have made China the #1 super power twice in the past, and maybe even for a third time in the future.
2)DEBT RESET/RESTRUCTURE/FORGIVENESS
This is going to be very controversial, but hear me out.
If we apply the first concept, there will be problems with debt as interest rates are normalized. You can already see the affects of interest rates going to 2.50% in the US and what it does to indebted people.
If rates continued to normalize, people would not be able to afford their homes and loans etc. This is why currently, central banks are cutting interest rates once again. They are stuck, they know their policies have failed. Rates will be cut and remain low so people can access more debt to spend on things. Social inequality will continue to grow, and the real economy will not grow. Only those who understand markets will profit from this. In summary, we are just pushing the problem down the road, meaning that when it all fails, the impact and chaos will be even greater. There will be instability no matter what. Either we live with the pain now, or pay for it later.
Some sort of debt restructuring or reset would have to happen.
Martin Armstrong talks about debt-to-equity restructuring say that it can be pulled off easily. This has occurred in the past.
However, what this means, is that banks will have to take a hit on profits and miss out on money they could have made.
In today’s world, this would be an issue because banks are too big to fail. Moral hazard. Also, the Keynesian economists, who are employed by the banks, are taught that the government should take an active role and bail out the banks because it is good for the economy. The banks will not lose.
Career politicians also receive donations from banks. We know that Obama and Clinton received money from the banks, and continue to receive money from them as they speak at their conferences. Other career politicians also land roles with banks being a consultant or adviser after they leave politics…big money salaries too of course.
This means that career politicians will put the banks interest first ahead of the people. The same with corporations and the rich who donate to them. It does not matter what colour their skin is, what gender they are, how trendy they are. Career politicians are in it for the money. Many politicians retire with millions of dollars even when their salaries are around the 100k mark or less.
Everyone right now wants to see President Trump’s tax returns, but nobody wants to see the tax returns of career politicians. People will very quickly know where the problem lies if those tax returns were shown.
Many say President Trump is in it for the money (everyone before him were here to help us). I think this shows how ignorant people are when it comes to money and the markets.
President Trump could have easily made 3-6 billion in a day without working. He could have gone public with Trump International. An IPO. Even when he leaves office, and decides to do this, he will not get nearly enough due to the way the financial media and the mainstream media would probably sabotage and portray this IPO.
Business men do not really run for politics because they make money through the markets. They generally donate money to politicians (scratch my back, I’ll scratch yours). They do not need to run for office to get rulings or laws to benefit them.
I think this puts President Trump in a unique position, and why he can be the only one to bring upon these changes. He has a powerful stance over wall street and the banks. He did not need donations to finance his campaign. He owes nobody any favours…and I think this is why the media hates him (generally the CEO’s of media companies donate money to parties…without naming them, you can tell which media outlets have a Democratic bias vs a Republican bias). The establishment sees him as a threat.
Had Trump International been a publicly traded company, wall street and the banks would be attacking the President’s wealth by shorting the stock and other nefarious methods (downgrading it etc).
This is also why I do not believe anyone with a publicly traded company will run for office (ie: Howard Schultz). They can be controlled by the banks and wall street by having their personal wealth attacked.
3)LOW TAXES AND LESS REGULATIONS
Historically, this is the magic formula (together with stable money) that has created consistent growth. Classical economics.
It has been shown that nations with low tax rates, or even a fixed tax rate instead of a progressive tax rate, have done well and collect even more revenue for the government. In fact it was Karl Marx who stated that a way to a communist system is by implementing the progressive tax system. The rich and companies have no incentive to use tax loopholes or hide money and avoid taxes. They will pay their due.
This is how America became the greatest nation in the world. Also how Japan and Germany grew at astounding pace. Once these nations went back to mercantile/keynesian economics, taxes had to be raised in order to account for government spending, which also created more regulations as government took an active role in the economy. This is what caused their downfalls that we are seeing today, with the real economy not improving.
Companies and businesses fuel growth. They thrive in areas with less taxes and regulations. As an employee, our labour is useless without businesses, entrepeneurs, and companies/corporations.
Japan had this environment fueling her growth until they began raising taxes on everything once the Liberal Democratic party came to power. Perhaps the links between socialism and keynesian economics is for another post.
Once more, due to the aggregate demand theory, and government taking an active role in the economy, they have had to raise taxes, and also have had to get bigger. Creating more government with more regulations and bureaucracy purely to hire people.
Rent control is an example given by the Austrian school of economics. When the government installs rent controls, home builders lose out as people do not want to buy new homes for rental properties, or expect the rent to help them pay their mortgage. Also homeowners have no incentive to maintain their rental suites or even upgrading them as the cost would not be worth it.
The Keynesian solution to this is more government.
Government should subsidize home builders so they can remain employed and build homes.
Government should also install laws and regulations demanding home owners have to fix and maintain their rental suites even when it is not economically viable.
All this does is create new government departments and bureaucracies, and discourages businesses and people from taking risks and spending money on investments and other things.
4)SMALL GOVERNMENT
This fits in with the third point just discussed. Government has been getting bigger due to the idea that they should take an active role in the economy. Government hires more people for regulation agencies which means taxes need to go up to sustain bigger and bloated governments, while regulations hamper real economic growth.
Government also are in a position now where they need to keep inflating things: real estate and goods and services need to keep increasing because this means more revenue for government through the sales tax and property tax etc.
We are now getting to a point where the government is essentially going authoritarian, as they get bigger and need more tax revenues to sustain themselves, they begin hunting for money. They also need to go authoritarian to protect themselves from the eventual rising mob and angry citizens.
On a closing note, it seems these changes will not be implemented. The keynesian’s will propose more government spending (maybe in the form of universal income or modern monetary theory). This means government will be getting larger and more authoritarian.
Digital currency will probably be introduced after the next economic crisis. People will be running to the banks for money, but banks will be closed. When they are re-opened, in order to prevent bank runs, the government will say our funds are available using the new digital money system we have.
This will be all for taxation. To track money. Tips at restaurants will be tracked and taxed, as well as you doing a private job for your neighbour or tutouring, and even selling something on ebay or craigslist can be taxed.
It really will be about going after small business income. Lot’s of small business loopholes are being closed now, but they can really be enforced once we get on a digital currency.
If we go down the MMT/universal basic income path, the socialist economists know that giving people more money to buy goods and services which have not increased will cause inflation. The solution? Higher taxes. The government acts as the central bank using taxation as a way to remove money supply from the system. Who knows what else will be taxed. A lot of green taxes can be imposed this way too such as a km driven tax etc.
It is likely this digital currency WILL be Gold backed and also will be universal. Since moving Gold will be cumbersome to settle balance of trade payments, the Blockchain will be used to track payments and then periodically in a year (say 2x or 4x a year) nations will settle payments on a NET basis and exchange Gold.
Unfortunately, I think we are coming to an end of a cycle in history. You can see it with the economic, social, and political issues and tensions. Wait until the US 2020 elections. Neither side will accept defeat, and what we will see on the streets will show how divided America truly is.
If we remain in this keynesian system, they will continue to devalue money, even going to zero and negative interest rates like Japan, Switzerland and Europe (who announced today that they will go even more negative).
Social issues and inequality will continue to rise and will take us to the limit. There will have to be some sort of resolution to all of this, and I think it will be an immense turning point and period of change.
As a reader of history, I can confidently say that more books will be written about the next upcoming few years than any other period in history.
If you made it to the end, I thank you for taking the time to read my post. Greatly Appreciated.
The Trap EP2, The first is The lastDisclaimer : As a chartist I don't have any intention to manipulate the prices, all our work is completely based on our research and analysis, we request you to please read the complete report before making any type of comments. the only thing that matters for a trader is to make profit and protect his capital. Markets does not understand bullish or bearish situations, they are just a reflection of human emotions, and my work is to capture the future direction without a crystal ball, so i could be wrong, so it's better that you should invest on your own risk. Thankyou.
Hell-looo... guys welcome to a brand new update of Bitcoin The Trap Ep2 the first is the last, connecting dots with Gold, Stocks and Geopolitics. Now before getting in to this I really need to thank all of you for huge support on my first update of The Trap, and The Same Old Pattern series, really i’ve got so much support from all of you even after things don’t work out in my previous update. In just a fraction of time this community has grown like Bitcoin’s prices in the past few weeks;)
Plus you all guys are unique with a very productive view towards my chart analysis, so cheers to all of you.
Meanwhile my way of writing isn't satirical at all, but I'll keep adding more spices with boring trading lessons, so you guys won’t sleep while reading this report…
Gosh am really missing funny stickers here, hey TV are you listening?...
So without wasting your time, let’s jump into this…
First of all if you’re not familiar with my “The Trap” series or looking first time my report, than I'll recommend you to first check out my previous update on Bitcoin here it is…
And do also check my “Same Old Pattern” series, link below or checkout my profile
Now lots of you think that I've been bearish on Bitcoin, which is not completely correct, i've also mentioned the bullish scenario as well, although there was a high probability for the bearish move at that time, but things changed really fast.
If you’ll focus on some major levels i've mentioned like 10800, 11200 and 11800, so you'll clearly find that, how strongly bears have protected this levels, have a look at this chart below...
I’ve said that above 10800 bears will start to loose control and above 11800 bulls will totally crush bears, so if you’ve followed this advice and made profits by getting long from 11200 than congratulations to you, am not taking any type of credits for that.
Now another important point I've discussed is that above 11800 chance for a new high will definitely increases, and this thing looks damn bullish in daily or hourly chart, all the indicators are turned out to be bullish right now. So here’s what you all are waiting for the bullish scenario…
ABC flat corrective formation has ended perfectly and now a new wave is in progress and looks like we've already completed the 3rd wave and next corrective wave 4 could gain support from 11200, amazing… how perfect it is, isn’t it?
Have a look at this another chart, 21EMA is damn bullish, 50MA has crossed 200MA in 4h chart golden cross indicator, volume is rising, RSI is getting bullish momentum, what else you want from your life man?... everything is bullish, even a noob can easily predict the price direction, book your lambo, before it gets out of stock;)
Alright now am shifting here from technicals to fundamentals, to deeply understand this growth. We need to expand our vision from here and look at the geopolitics and how it's directly affecting Bitcoin.
We all know that there’s an ongoing trade war between the US and China, and on Aug1 US President Trump has announced to impose 10% extra tariff on 300 billion of chinese goods which directly affect the Chinese manufacturing Industry. In reaction to this PBOC (Public Bank of China) allowed Chinese Yuan to fall below 0.143$ which is the lowest level since 2009, this step will allow chinese goods to be cheaper and more competitive and also cuts the extra taxes. Against this step of China, president Trump accused China as a currency manipulator on twitter.
Now I won't go in depth to waste your time you can google everything you want to know. Things we need to consider here is that when Chinese Yuan started to drop, lots of chinese investors start to move their funds in safe assets like gold, silver and Bitcoin which caused a massive rally in commodities and huge crashes in stock markets. Now Chinese Yuan could be a very good indicator for Bitcoin and Gold price predictions. Coz when people will start to move from Yuan to Bitcoin or Gold, they’ll pump, and when people will start to move again from Bitcoin or Gold to Yuan, they'll dump, it's just that simple…
Have a look at Yuan chart…
By the technicals looks like Yuan is getting strength for a short rally in mid term, which suggests for a correction in Gold and Bitcoin, so maybe we could see an small correction upto 11k or maybe 10k level, the better we should be prepared for that.
Meanwhile Gold is looking stronger than Bitcoin but due for a small wave 4 correction, which could lead the prices upto 1460s level. But the allover trend for gold looks damn bullish and in coming days we could even see +1600 zone, new ATH since 2013, so cheers for Gold holders…:)
However this whole currency drama had a very negative impact on major markets like DOW, S&P500 or Nasdaq.
Have a look at the chart of major markets, i think i don’t need to say so much on this, all the markets have achieved their ATH and lots of analysts are predicting for the next major recession in 2019-20.
An important question arises here, that is this recession is good for Bitcoin? And there’s no fixed answer for that. Coz Bitcoin has not seen any major recession yet.
Lots of people are creating hype over this that during the major recession Bitcoin and Gold will keep rising, and what they argue here is that Bitcoin is anti fiat currency, which is limited like gold. So during the recession when fiat will fail, gold and Bitcoin will take its place. Which is definitely not the complete truth.
Here I want to clear this thing that am also a bitcoin supporter and I do have faith in blockchain, but my eyes are open and I can see what’s happening. There’s an image created against fiat and inflation and painted this with all the negativity and showed you that everything is scam, conspirated and evil, which is definitely only one side of the coin.
Inflated currencies are actually a good thing for capitalism which encourages people to invest in economy and generates value. If you’ll lock 1kg of gold bar for 10 years, it won’t grow upto 2kg, obviously it's value will grow with time, but that gold has not generated any value which is contributed in economy, but if you’ll invest 1kg gold worth of money in economy like in S&P500 than you’re contributing in economy to generate value, and you’ll definitely get some really good returns over that.
But just like any other system fiat also has its own limitations and flaws which are misused by banks and this can be solved with blockchain.
Alright now the question which is striking your head is, “alright husain but how the hell all this will affect Bitcoin???”, so the fact that Bitcoin will moon in the next recession has not any strong base, just opposite to this if you'll look at the correlation between stock markets and Bitcoin both have performed quite similar movements in the past.
Have a look at this charts...
Notice that prices of Bitcoin has almost equal reaction with Nasdaq and the reason is very simple, everyone has invested in Bitcoin to earn more dollars. That’s the real joke, we’ve invested in anti fiat currency to earn more fiat currency and labelling that fiat as scam, evil and conspirated. You know why, coz US Dollar is the legal agreement issued by FED, backed by Economy and protected by your elected government which generates more trust in it, and here I also want to add this that Trump Administration will do what’s best in favour of US Dollar and economy, so the drop in Yuan won’t last longer.
Meanwhile I don't deny the possibility for the next recession but most likely Bitcoin will also drop with stock markets, coz investors will short everything they get, and then they'll don't care about the tech, all they want is just exit from everything at any cost and secure what they already have.
Now turn view and look what’s happening, today the whole crypto industry is losing its value, coz it has stand for decentralisation and now the whole industry is getting centralised to only Bitcoin. Ask yourself what Bitcoin stands for, its decentralisation and now what's happening? We're moving towards the centralised power, one authority is controlling all the power and majority is supporting this and those who oppose or criticise this, majority attacks on them.
No one cares what is the potential of blockchain everyone just wants to push the prices of Bitcoin higher and higher and claims to fly towards the moon, but just look where we are right now we're already on the moon, Bitcoin has surged from 3200 to 14000 without any major correction whereas other altcoins have not recorded this intense growth, which clearly shows that people are not really interested in tech, they’re all greedy and just want to make quick money from Bitcoin.
Look how dominance of Bitcoin has just kept rising and passed 2017s ath, when we’ve reached the 20k level, if it goes above 80% than altcoin market will be completely dead, there’ll be no sense to invest in technology, this will be the only place for speculators and gamblers.
This is the eye opening moment to see what's actually happening, everything is bullish without any solid fundamentals, this complete hype is hollow from inside. If whole crypto market is mooning than why only bitcoins has got all the benefits?
Market cap of altcoins is still sinking and most likely this will continue to drop in the coming days.
Whereas if you’ll look at top Altcoin Ethereum, it has so respectfully followed the Same Old Pattern theory, and will keep it continue in coming days.
Moving towards the conclusion what I actually mean here is that most likely Bitcoin has topped out and soon we can see a massive drop, yeah we could possibly climb upto 13ks or 14ks level in coming days, coz trend is very strong, but we are in a Bubble right now, which could pop out soon.
Have a look at this chart, this is my custom indicator am working right now, which indicates various zones for prices. If you’ll look at Dec 2017s price movement we were moving in red zone bubble territory and in Dec 2018 to Feb 2019 we were moving in green zone, which is extreme undervalued zone and now we’re again in the red zone which is Bubble territory.
Another view towards this is that this rally could be an X wave which goes upto fib618 level of a complete corrective ABC formation, which could indicate that we’re moving towards double3 corrective formation, where first wave is a flat ABC and second one is Zigzag ABC, in that situation new lows upto 8k are possible, the better we should be prepared for both situations .
Ok guys That’s all for now, if you’ve enjoyed reading this report than do like and follow us to appreciate our hard work, it took a lot of time and effort to bring this, and don’t forget to comment and share your opinion with us, thankyou:)
BTC/USD symmetrical triangle complete - Bullish move next Lower highs
Higher lows.
ABCDE counted
all sub-waves counted
volume matches a symmetrical triangle
now we need the breakout.
we are already in from wave C
but if you want to get in right here would be a great time. (current price is $11,685) with SL under wave C ($11,450)
Can you feel the pump on BitcoinBitcoin is pumping like a Reebok pump sneaker. Seems to be strong support around $11,800 usd. I am upset I don't have anymore money to put in.
Bitcoin vs Gold Fractal I believe Bitcoin is on the way to 16k8 on September but the break out of 11k resistance won't happen at this time
Long Crypto, Gold, Silver - Short FiatFED has begun a cycle of rate cuts although they don't want us catching that idea. Trump is downright determined to get the FFR back to 0% as quickly as possible, going so far as to demand the FED to cut rates 100bps at yesterday's meeting. Powell made clear that the FED doesn't want to turn this into a "trend of rate cuts" but that they would take appropriate action if trade tensions and global growth continued to weigh on the economy.
In a nice, slappy way, Trump delivered the tariff bomb today. FFR futures, which priced another 25bp cut in September at around 50% probability following yesterday's FOMC, shot up to an 84% probability following Trump's announcement. It is clear what the long plan is here: lower rates, weaken the dollar, increase outstanding debt. AKA further the dependence on an exponentially increasing supply of dollars and place spikes on the landing pad of a recession. We are headed toward a global negative interest rate environment - worked for Japan didn't it?!
This is setup is bigly huge for assets holding the qualities of money to be revalued.
In fact, it is inevitable. Timeline? My money - I mean currency - is on a few years, but ultimately it comes down to when the powers that be want to kick the fiat currency system into a hyperinflationary grave. You be the judge.
LONG TERM HYPERBULLISH.
Bitcoin Potential Head and Shoulders Indicating Reversal?Bitcoin is holding an important support/flip zone at around the 9000 zone. We still have lower highs and lower lows, but a break above this 10089 zone would nullify the recent lower high swing. Ideally, would look for a higher low to confirm the beginning of a new uptrend. This can occur here which would coincide with a head and shoulders pattern giving us more confluence for the trade. This is the ideal. Hope to see a pullback, creating a higher low, before moving higher.
At time of writing the Fed has cut by 25 basis points. If you read my previous works, central banks are out of options. Running out of tools. This is all about maintaining confidence now. Excuses such as low inflation is a way for them to maintain face and confidence while cutting rates. There will be a big crisis occurring, as I believe the Dollar will continue higher.
Gold does well in a confidence crisis...when people lose confidence in government, in central banks and the fiat money they run into Gold. Cryptocurrencies will also receive a bid in my opinion if we go down this path. It really is inevitable. The best case scenario is stagflation like Japan and Europe...but this may mean the US Dollar would lose reserve currency status.
Buy BTGETH from Binance.DISCLAIMER :- This is not a financial advice.
Buy BTGETH right now,
Place stop loss at 0.102981
and take profit at 0.122411
or at whichever price you like. :)
Remember, always risk 1% of your capital.
If you have any questions/doubts, feel free to comment below.
Happy Trading. :)
GBP CHF 1/7 R/R Amazing opportunitySo we're waiting for good LONG opportunity here on all GBP pair. Especially after strong fundamental reasons
1) GBP CHF is on very STRONG monthly support now
2) 1200 pips we've made here without any correction - so no fuel to go further downside = BASICALLY YOU CAN BUY ALL GBP PAIRS now ! But here on GBP CHF i see good R/R and very obvious area for SL
3) So just before this movement, we've made the SL hunting and i believe that this week we will close bullish on WEEKLY which is gonna be the start of good bull run here on GBP pairs
Good luck! Control your risks!
AS ALWAYS - FOR ALL THE SETUPS WE'RE USING STOP ORDERS
BTC v GOLD Daily/GOLD Weekly | patterns within a patternBTC will attempt the similar smaller time frame pattern before ever attempting the larger time frame pattern.
BTC following the GOLD patternBTC following the Gold pattern, but it actually makes sense.
1. Test of the mean.
2. The retest to see if it can hold the mean.
3. Price stalls before it gets too bearish, participants weary of a bear market.
4. The test of the mean from below, which holds, followed by the tests of the upper bands to push the market into a bullish sentiment. It's looking successful short term, prices are driven higher.
The first sign of weakness is the breach, with candle close, of the upper middle band on the 12th July 2019 for BTC and around 10th August 1987 for Gold.
5. BTC/Gold fails to hold the upper lowest band (1.25 multiplier), price falls to the mean, trades under the mean, trades above the mean in a narrow range, fails to do anything significant at all, dumps.
300% GAIN FOR BITCOIN IN 8 MONTHS! 48,000 INCOMING!
Bitcoin on the two day and gold on the monthly are following essentially identical market cycles with the same pattern of expansion compression. The similarities are uncanny and the widespread bias is currently bearish, the sentiment of "this is a sucker's rally" can be found on a vast majority top posts throughout the tradingview ideas section. Hopefully this idea can make its way to the very top!
This is the perfect time to buy in with minimal risk!
We just saw the bullish Daily CCI roll on Bitcoin which has been our ideal trend reentry signal for the past month. If we break a lower low, we will simply reenter bullishly on the next 14 period CCI roll. You can set this up your self by loading up the default Tradingview CCI and setting it to the 14 period. When the line goes below the -100 and crosses back up above, that will be your buy signal if this current trade fails.
As long as the upward trend is defined, you can take this signal as many times as you like.
Always use good risk management and godspeed! Make sure to like this idea if you found my thoughts particularly revealing. This may very well be the lowest bitcoin ever goes for the next two years. If we make a lower low, I'll wait for the CCI roll and say it again! It's ok to risk 5% when your upside is 300%.
Dat gold similarity though! (part 2)A while ago I did a fractal comparison between BTC and gold, because a few people here on TV and me noticed the incredible fractal similarity between the BTC behavior and the gold behavior.
Of course, the timescale for gold is far greater, since gold has a much higher marketcap, thus doing everything much slower.
But in principle, the charts look really similar.
I adjusted the fractal components a bit, because it seems that this latest pump to 13.8k and dump to now low 10k's matches more to the gold runup to 740 in May 2006, instead of the runup to 1040 in March 2008.
This would mean that BTC should continue pumping soon.
We would get a strong dump around ATH, which makes sense since there is historically always very high resistance.
But then surprisingly it would resume the uptrend and peak at around 60k, which would also fit the other longterm curved trendline analyses.
In the next weeks it will be shown if BTC indeed does a gold runup,
or if BTC decided to shift in lower gears and take a break for a while.
I'm fine with either way :)
On the record prediction for DJIOctober 2019 will be the beginning of the end of our current international financial system.
#Gold and #Bitcoin will play an important role in the new 21st century "Bretton Woods v3.0" (?) one.
