Bitcoin, As A Means Of Acquiring The “Money Of Kings”

As noted yesterday, this week feels a lot like the ultra-thinly traded July 4th holiday week – in which, armed with fabricated Fed “hawkishness,” the Cartel attacked paper PM’s mercilessly, to enable the covering of massive amounts of “commercial” naked shorts.  Then, when the holiday ended, Whirlybird Janet delivered her “ding dong, the Fed is dead” speech – in which, she infamously espoused “because the neutral rate is currently quite low by historical standards, the federal funds rate would not have to rise all that much further to get to a neutral policy stance.”  Which one week later, was followed by an “unexpectedly” uber-dovish FOMC meeting – whose “minutes” will be published at 2:00 PM EST today.  Given that since then, the vast majority of data has been weak – particularly, “inflation” reports further below the Fed’s 2% “target” – I can’t wait to see how these doctored-for-current-conditions bullet points are portrayed.

I mean, will they revert to the reality of last month’s “Fed is dead” speech and FOMC dovishness, or cite fake reports like yesterday’s 0.6% July retail sales jump?  Yes, a 0.6% increase in July retail sales, driven by surging automobile sales (albeit, due to “record incentives”), despite the reality of the what actual car makers reported; i.e., GM

-1.9%, Ford -3.0%, and Fiat Chrysler +0.3%.  Heck, here’s a smattering of retail-related headlines from yesterday, the same day said “strong” retail sales were reported.

• “Dick’s CEO – Retail industry in panic mode”
• “Chain store carnage continues, despite biggest jump in retail sales since 2016”
• “Business inventories jump, pushing inventory-to-sales ratio to highest since November 2016
• “One analyst throws up on today’s retail sales data” (“No rise in auto sales in the real world and according to the BEA, and a fall in net prices. But in fantasy land, the Census Bureau announces a $1.2 billion m/m increase, and 7% y/y”
• “Fed issues warning as household credit hits new record high”
• “Doomsday train wreck coming to Manhattan luxury real estate – Barry Sternlicht
• AS I EDIT, AN ABYSMAL JULY HOUSING STARTS REPORT
• …and my favorite, straight from the Orwellian, Marxist States of America – “Trump lashes out at Bezos: Amazon doing great damage to retailers, hurting cities and jobs

Throw in today’s news, of the ECB “trial balloon” that Mario Draghi will NOT announce a QE taper at next week’s Jackson Hole symposium, and you can see that in the real world, things are decidedly NOT well.  However, according to current standard operating procedure, sleepy August vacation weeks – reams of PiMaBBEEB headlines notwithstanding – are used to pretend, for a few days, that everything is suddenly great; and thus, that record high stock valuations should go higher, and record low inflation-adjusted PM prices lower.  Regarding the former, how much more obvious can it be that the “powers that be” have created the largest-ever financial asset bubble – and Precious Metal “anti-bubble?”

To the point that, even Wall Street knows it – per the below survey, depicting the same percentage of money managers deeming the market overvalued as at the peak of the dotcom bubble.  This, as the amount of negative yielding sovereign bonds has surged back to nearly $9 trillion, versus “just” $7 trillion during the July 4th week of “fake hawkishness.”

This, as said “anti-bubble” slowly, but surely, inching toward the massive, historic breakout we all know is coming.

Speaking of gold, consider Monday’s Audioblog theme – “gold’s win-win scenarios in the upcoming, historic, crypto-currency explosion”; and then, this email from a reader yesterday…

“Just listened to the gold win-win piece.  I can confirm that Bitcoin is good for gold, as I never owned any Precious Metals until I owned Bitcoin and took my first profits.  (Consequently), I now own more gold than anyone in my family ever has.”

Which got me thinking about the pride he felt in being the first in his family to own what has been known, for centuries, as the “money of kings.”  Yes, silver is the “money of gentleman,” but kings are what all people aspire to be – if not over others, in their own minds.  And why not?  In a world of 7.5 billion people, the desire to be – or at least, feel – “successful” is nearly as strong as the survival instinct itself.  Countless billions, over countless thousands of years, have failed to acquire the most valuable asset mankind has ever known, whilst just a handful have conquered this extremely imposing monetary mountain.  And today, in a world with more debt than ever before, and the weakest economic prospects in generations, the odds of Joe or Jane Sixpack acquiring enough wealth to purchase significant amount of gold are historically low.  Sure, some will be able to do so – but for the vast majority, “king’s money” will forever be out of reach.

That said, Bitcoin is one of the few “growth industries” with the potential to make people of limited means wealthy.  And while the risks of Bitcoin investing remain high – as discussed in yesterday’s “Bitcoin buying and Precious Metal swaps – the wisdom of experience” – there’s no disputing many “Bitcoin millionaires” have been created, with a strong possibility that many more will in the coming years.

Some, like the aforementioned reader, decided to cash out some of their Bitcoin profits to buy the “money of kings”; and unquestionably, assuming “crypto-profits” turn out to be what I anticipate, the lure of owning the most valuable, and cherished, asset the world has ever known will be strong; partly due to pride, partly profit potential, and partly to diversify in the extremely limited universe of time-honored “scarcity assets.”  I know I am proud to have earned enough to own some gold; and unquestionably, this is a noble goal for every wealth-seeking, wealth-storing individual.