I’m no “expert” and this isn’t advice. It is however, an observation that has extreme consequences. The US is in financial freefall. The foreign and domestic “national debt” is completely out of control and can not be paid back, period. This debt pales in comparison to the current and future obligations that this government owes “we the people”. The ponzi schemes currently going by names like “social security”, medicare, and millions of public pensions are totally insolvent.
This doesn’t seem to matter to the powers that shouldn’t be. I still get SS taken from every check I get. Am I going to see any return on this so called insurance? I’m thinking that if I do, it won’t be worth the paper it won’t be printed on. After inflation any money they give back to me is an insult. The money they have continually taken from me since I began working has lost value with every successive check. Thus the money taken from me 10 years ago was worth much more than the money taken today. Go back another 10 years and the difference is startling.
So, how do I know this drop in buying power or value is occuring? Well there’s the regular tests like observation of the prices on things like gas, lighters, and candy bars. This simple and child like method for gauging the level of inflation isn’t perfect but it shows us something. Couple my observations with the prices I’m told about by those older folks around me, and it becomes stark and downright scary. My great grandparents bought their first home after my Papa was back from fighting in the Pacific, in Okinawa. They paid a whopping $13,000 for a house in southern California. Now that house, if it still existed, would be anywhere from half a million and up. More likely three quarters of a million would be the baseline for the area. This is a travesty.
Either the soil and sticks that make up a residential home have become extremely scarce and thus have just been following market based laws of supply and demand. Or, the money that we use to purchase everything has lost almost all of its original purchasing power. California has a lot of people, some 40 million or so. They aren’t dispersed throughout the state in anything close to running out of room. Most of this state is wrapped up in state and federal park land. The LA area and the Bay Area including silicon valley are home to the vast majority of Californians. If you live north of Sonoma Co, you have zero representation. If you find yourself in a county north of Mendocino, good luck. Your “representatives” are more interested in protecting “nature” than anything related to human beings and their quality of life.
Now we find ourselves in a historic time. The USD has run its course and we are seeing the all out abandon of caution by the money makers. They invented trillions of new dollars over the last year. They print every year and have done so aggressively since at least 2008. They inflate one asset bubble after the next. The stock market is the ultimate bubble and it will be the last so called bubble to pop. When the markets stop making sense to people who have been investing for decades, we are all in trouble.
Retirement pensions, 401K’s, and traditional investor portfolios are all in grave danger. The people who manage your money are not managing their own retirement like they are yours. When Elon makes an investment does he buy Tesla? No. He just bought a massive amount of Bitcoin. The traditional way to hedge risk against the dollar was precious metals. Gold and silver represent money. They are real, tangible, and their value as far as purchasing power has remained basically constant for 6,000 years. At the time of this writing there is a lot of shenanigans in the differences between gold and silver stocks and the actual supply of the metals themselves. Silver has been totally oversold in paper, meaning there’s more owners than there is physical silver to be redeemed. How this gets “reconciled”, your guess is probably better than mine.
Gold along with platinum and palladium have been less severely distorted. Gold though, has to have some mechanism that can explain its relatively sluggish reaction to the dollar makers. The last year should have sent the gold price to the moon, yet it barely seemed to notice the massive increase in paper money that should express itself through massive inflation in some part of the economy. As far as I can tell, the stock market was the winner of the inflationary lottery this time. The thing is, wall street makes money on every bubble. Whether it’s the dot com or housing bubble, wall street wins every time. Now the asset bubble isn’t a traditional class of investments that has been inflated. It’s the whole stock market in general. There is no relationship between the health of a company and its stock price. Gamestop showed us that in clear as day terms. This should mean a reset of the entire stock market is imminent. A massive shake up and restructuring of every aspect of the stock exchange should be underway. The wall street bunch have cleaned this country out. It’s time to do away with this den of vipers who profit by moving money around instead of providing value in any way to anyone.
So what do you do? Wall street seems risky, at best a scary place to put your hard earned money to see you through your retirement years. Even if you get matching funds from an employer, a 401K is dollar dependent and “managed” by people who make money regardless of what your account looks like when you need it. The pretax jive they sell you is crap. Do you actually believe the taxes will be less when you are older? This is a fairytale view on the future and has no bearing on the historical reality. Taxes and the value of the dollars in your check are as good as they get. The worst tax is inflation and that has already destroyed the dollars you’re saving for retirement. Factor inflation with market volatility and the stock market is little more than a spin on the wheel of fortune.
In comes crypto. Years ago a person, under an assumed name, developed a new type of “money”. This was inspired by the governments destruction of the dollar as well as the privacy that it afforded in purchasing. Well, we know now that Bitcoin isn’t private. The ledger is open source and the code itself is open source. It’s fully transparent and provides for the solving of complex algorithms in order to “mine” Bitcoins and use them to trade or save. Originally the hope for Bitcoin was an alternative to the dollar in everyday transactions. That is clearly not going to happen. The ability for Bitcoin to make thousands of transactions a minute, like Visa, isn’t there. Anyway, the extreme growth in value, compared to the dollar, as well as its ability to swing in price by thousands of dollars a day, has made it clear where Bitcoin belongs, in the menu of money. Bitcoin is a long term store of wealth and has great potential for increasing your holdings dramatically over time. Bitcoin is digital gold.
Silver is a great investment. I think it should be on everyone’s list of investments. The fact that 50% of silver is used in industry makes it valuable for everyone and it’s fundamental role in consumer goods isn’t going away. There is another reason to consider silver specifically as a hedge against risk. People buy silver certificates that are supposed to represent the actual physical silver without having to hold and store the actual metal yourself. Like with gamestop, the silver has been oversold. This puts paper silver owners in a very tight spot. What if the paper they own doesn’t have any silver to back it up? What will that mean for those actually holding silver coins, bars, or jewelry? I think good things come to those who hold and wait.
In terms of the crypto market in general, it’s very exciting. The full adoption of the powerhouse coin, Bitcoin, is on the horizon. It’s being sought out by individual investors, but that’s who have been the drivers to get it to its current price all along. Ya there’s big players that have bought big amounts of Bitcoin, but its not been adopted by the traditional money managers that control the retirements of millions of Americans until just very recently. It’s now being considered acceptable to include in the holdings owned by hedge funds and included in the portfolios of their clients. This is where the game is going and the players that got in early are the heroes of the Bitcoin story. If not for their evangelising and dedication to this experiment in money, we wouldn’t be talking about it. Thank God for the autistic libertarian. I include myself in that definition.
So, who thinks the dollar is coming back and going to be repaired by pegging it to something real? Who thinks that taxes are going to go down? Who thinks that the trillions of new dollars won’t affect the value of the ones already made and spent? If you are at all a thinking person and care at all for your own future, you will answer NO to those questions. This doesn’t require an economics degree. Trillions of dollars is all you should need to know. Right now the entire income tax is spent to service the national debt interest. The income tax, the most egregious and offensive “tax” imposed on a people, doesn’t go to a single service you “get” from government. This is slavery to the bankers and nothing less. Enslaved to pay for the interest on the previous generations decadence. The warfare state has run amok with the help of the printing press. If the wars had to be funded by taxes, I think Americans would adopt a very “live and let live” foreign policy. The insidious debasement of the currency to bankroll illegal wars of aggression is a national disgrace. We should all be ashamed and there should be a massive change in “leadership” by whatever means necessary.
I like Bitcoin and I like to “speculate” on other coins. This is very easy now do to great platforms and apps that have made buying, spending, and trading crypto as easy as it has been to buy stocks. I believe there will be a mass adoption of crypto for everyday purchases, but when, who knows. What coin will take the market to that next level? Can’t say. It will have to be made stable by pegging its price to gold or something similar. If crypto is to be used to by a mocha it has to find a stable price that retains its value without being purely market priced. It will require a tether to a real world asset that is stable and trustworthy. Gold? We will have to see, in the meantime, I like Bitcoin and keep my eyes on all the coins I can.