BIG FALLS IN BITCOIN AND CRYPTO MARKETS
Over the last week, the US Dollar price of Bitcoin has fallen by 8 %.
Since its recent price High on 11th November, ten days ago, it has fallen by 15 % and the total market capitalization of the entire Crypto world has fallen by 17.3 %. That is a very big fall in price indeed in a very short timeframe.
BOOM’s regular readers would not have been surprised by this turn of events. Why? Because, in the BOOM editorial of 24th October, BOOM warned readers by writing — “the BITO ETF can be manipulated down via well known pathways of manipulation that exist in a cash settled futures contract listed on a futures exchange”. The Bitcoin Strategy ETF — BITO — based upon Bitcoin Futures, began trading 5 weeks ago as an Exchange Traded Fund on the Amex Stock Market.
A new ETF called CRYPTO Innovators was launched on the Australian stock market on 4th November. The ASX Code for it is CRYP. It has fallen by 16 % since its price High on the 9th November. Ouch.
While these price falls in Crypto commodities have been occurring, the US Dollar Index has been rising strongly. And the price of Oil in US Dollars has been falling.
Perhaps all the falls in these commodity prices are the result of US Dollar strength? If so, why is there a sudden rush into the safe haven Reserve Currency? That is usually seen as a global “Risk Off” move in anticipation of a major Geopolitical threat.
EXPLANATIONS — GEOPOLITICAL OR COVID
When looked at from a high vantage point, it looks like large, liquid funds are moving into US Dollar bank and brokerage accounts from offshore currency holdings. The two major Geopolitical threats which could explain this would appear to be centered around Taiwan and Ukraine/Belarus.
However, another possible threat as explanation is the fact that Covid Case numbers are now rising very sharply in Europe, especially in Eastern Europe.
Also, as BOOM explained last week, death numbers from ALL causes are rising steadily in Europe/UK in the younger age groups 14 – 75 years. Those death numbers are also higher than 2019 and 2020.
VACCINATED VERSUS UNVACCINATED
Now let’s look at the death numbers of vaccinated versus unvaccinated. A recent analysis (published today) by Alex Berenson shows that vaccinated UK adults below age 60 are dying at twice the rate of the unvaccinated.
Berenson’s article contains a graph showing that the vaccinated death numbers crossed over the unvaccinated in April this year and have consistently been higher ever since. That chart is chilling for anyone who has been vaccinated with the experimental Covid vaccines that are still in Clinical Trial phase. The reality here is that the unvaccinated are now the Control Group because the original control groups in the trials run by Pfizer/Biontech, AstraZeneca in late 2020 were all vaccinated in early 2021. (That is another bizarre and disturbing fact).
It seems that everyone is suddenly waking up to the fact that the Covid Vaccines provide little to no long term protection after 4 – 6 months. And during that short time frame, the vaccines provide only 1 % (or less) of Absolute Risk Reduction against the virus.
And worse, we will all soon have to consider if the vaccines are the cause of the mysterious rise in deaths being observed in the UK and in Europe.
Vaccines that don’t work and that instead kill and maim are the ultimate nightmare for populations that have been coerced and mandated into taking the jabs. The violent protests seen in Rotterdam over the last few days may be the precursor of more to come as social unrest erupts.
It is looking more and more as if the politicians have sold us all a pup in the “vaccines will save us” argument. If so, confidence in the leadership of the western advanced economies is about to take a big plunge. Where will they hide if they become the hunted?
Alex Berenson Analysis: https://alexberenson.substack.com/p/vaccinated-english-adults-under-60
ENERGY PRICE COLLAPSE COMING?
In general, BOOM likes Gail Tverberg’s macro analyses that she publishes at her website called Our Finite World. Gail’s usual approach is that financial system failure will lead to energy supply problems (not the other way around) and that such a sequence of events will subsequently cause lots of failure in other areas of the advanced economies.
BOOM agrees. Energy (both labor and heat dissipating) is inert until it is put to use and it must be put to use via a trusted financial (and political) system. The best example of this is to be found in Venezuela which has abundant energy, lots of labor and thus, theoretically, it should be an economy to marvel at. Instead, it is the opposite. Why? Because it has a financial and political system that none of its citizens trusts.
Excess energy is not enough to create a sustainable economy. Money creation, built on trust in the banking sector and which is not CPI inflationary and which does not lead to currency collapse is the Magic Formula of sustainability. Complex societal structures must be carefully put into place and nurtured for that to happen. Without that, all the energy in the world will not be put to effective use to build a long term successful economy.
A TRUSTED MONEY SYSTEM
Our money creation system has evolved from 14th/15th century Venice — it involves the creation of credit money as bank loans (which require sufficient optimistic borrowers). That credit money should be in balance with sovereign money (cash) and that system essentially worked for 400 years until 2008 — the Global Financial Crisis.
Then we hit the reality of insufficient borrowers and insolvent commercial banks (especially in the US). Since then, we have adopted Quantitative Easing (QE) by our central banks that has funded the large and growing government deficit spending programs. The advanced economy Governments have dutifully spent that money and that funding has kept our economies functioning … but in a relative Zombie state. This can go on for a long time …. as long as sustained CPI inflation does not break out and as long as the currencies stay relatively stable in relation to each other.
The problem of QE lies in its methodology — the money flows are all mediated via the Bond markets which means that we have distortion in the pricing of Bonds. Asset Price Inflation is the result — and that is abundant now in the advanced western economies.
The answer is not to just stop QE — that would cause big problems. We need to change over to QB — Quantitative Boosting — as described by BOOM in numerous editorials. QB is a new form of money creation — very similar to QE but where the Bond market is not used as the conduit for the funds.
THE BOOM SOLUTION
BOOM has considered all of these matters in many editorials as long term readers know. The best solution is to repair (and restore) the balance between Credit Money (money created as a bank loan and principally collateralized against pre-existing physical assets) and Sovereign Money (money created, interest free by the State and distributed directly into the real economy of goods and services provision).
In our modern world, that requires electronic cash created by the Treasury. This is where BOOM’s Quantitative Boosting (QB) solution comes to the rescue — a form of electronic money free of interest costs, in national currency and injected straight into the real economy (not via the asset markets). The long term aim is to move towards a 50:50 balanced money supply. At present, in the advanced economies Credit Money is 98% of the money supply and Cash is just 2%.
That ratio is at the very crux of the matter and until it is fixed, our financial system will generate more and more wealth just for the wealthy. The end result will be more social inequality, more social upheaval, political upheaval and distress. Ultimately, we will be back at the Gates of the Bastille and the guillotines will be erected for the wealthy.
and BOOM’s Perfect Economy
In economics, things work until they don’t. Until next week ………… Make your own conclusions, do your own research. BOOM does not offer investment advice.
Disclaimer: All content is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the authors alone on the current and future status of the markets and various economies. It is subject to error and change without notice.The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.
Neither the information nor any opinion expressed constitutes a solicitation to buy or sell any securities nor investments. Do NOT ever purchase any security or investment without doing your own and sufficient research. Neither BOOM Finance and Economics.com nor any of its principals or contributors are under any obligation to update or keep current the information contained herein. The principals and related parties may at times have positions in the securities or investments referred to and may make purchases or sales of these securities and investments while this site is live. The analysis contained is based on both technical and fundamental research.
Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.
Disclosure: We accept no advertising or compensation, and have no material connection to any products, brands, topics or companies mentioned anywhere on the site.
Fair Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of economic and social significance. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.