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THIS WEEK’S EDITORIAL
BITCOIN CRASH: The US Dollar price of Bitcoin fell hard again at the end of last week. Overall, it has fallen 40 % from its absolute peak price on November 10th of $69,000 to $41,000 on 7th January. THAT is a CRASH. In the world of conventional assets, a 40 % drop in price in just 2 months would be regarded as horrendous.
On November 10th, the top price for Ethereum was US$4,868. It fell to $3,113 on 7th January. That is a 36 % fall. Not as bad as Bitcoin but still a crash.
And if you had looked at the Top 100 Cryptos last Friday to find the worst performer in the last 7 days, you would have discovered the Spell Token. It had fallen by more than 32% in the previous 7 days. So the Spell had clearly been broken. It is still valued at over $1 Billion at its current market capitalization. BOOM suspects that its real value may be considerably lower.
On November 11th, the entire market capitalization of the Crypto market was almost $3 Trillion. It is now below $2 Trillion (at the time of writing) — a 33 % plunge. BOOM suspects that its real value may be considerably lower.
Trading volumes have not increased during these plunges. So panic selling has not happened. If it does, look out below (!).
SILVER AND GOLD WEAK: The US Dollar price of Gold and (especially) Silver currently look weak. If Silver falls below $21 in the near future, it will look ugly. If Gold falls below $1,700, then it too will look ugly.
Out there in Internet land, people have been urged to buy into the promise of Bitcoin and other Crypto’s, Gold and Silver. That promise is starting to look very suspect. BOOM has been warning readers of this for some time. The next few weeks will certainly be interesting in regard to these commodities and their prices.
CBDC’s — OH SHOCK HORROR: So-called Central Bank Digital Currencies — CBDC’s — are also getting a lot of attention in Internet land. Numerous articles by experts are stating “oh shock horror — the central bankers will be able to track all our transactions if we allow this” (!).
They usually go on to say that CBDC’s are a methodology to enslave the world and will be used to bring sophisticated social control measures forward. Apparently, they haven’t noticed that massive social control measures have already been put in place over the last 2 years in response to a virus — there has been no need to create elaborate new money systems to achieve that.
This moral panic is hard to understand if you know how our money supply comes into existence. During the 1960’s, the banking sector adopted computerized ledger entries to store our money and record our transactions. So the entire commercial banking sector has been able to track almost all of our transactions ever since (except cash).
The vast majority of our money since the mid 1960’s has been created in digital form on those ledgers (except cash). So where does the idea come from that “digital currencies” which can be “tracked” are something new? And that they somehow suddenly will threaten our freedom?
Since the 1960’s, cash has slowly dwindled in usage to just 2 % of the total money supply. The other 98 % is made up of credit money — money created as a bank loan. All of that money is tracked from bank ledger to bank ledger and has been for over 50 years.
Now BOOM is not opposed to the concept of cash. Quite the contrary. Cash is essential to the long term health of any money system and the society it serves. Why? Because it is non-interest bearing. BOOM wants to see cash back towards the levels seen during the 1950’s and early 1960’s. A noble aim would be to perhaps achieve 50% cash and 50 % credit money. The best ratio has never actually been determined and must be subject to deep analysis over time as cash surges yet again.
To achieve that, we need electronic cash and the central bankers of the world know this — they read BOOM every Sunday. Their CBDC’s are their response to this problem.
However, we don’t need to create new currencies for this purpose or use new technologies. We just need to re-arrange our current money creation systems a little by re-arranging the relationships between our commercial banks, our central banks and our governments.
That is what BOOM’s Quantitative Boosting initiative does. A relatively small change in how the central banks operate in that space can direct electronic cash directly into the real economy without first travelling through the asset economy. It’s that simple.
Money supply is like water for a garden. Currently, we have a borrower shortage caused by demographic changes beyond our control. Without private borrowers, credit money cannot be created. Thus since 2008, the central banks have stepped up to the plate, bridged the gap and have provided the great western governments with the funding necessary to run their huge budgets via Quantitative Easing ‘QE’. But this QE funding flows into the asset economy first before arriving in the real economy. That is the problem in a nutshell — and it explains why QE helps but never enough.
QB EXPLAINED: https://boomfinanceandeconomics.wordpress.com/2019/12/15/boom-as-at-15th-december-2019/
CBDC DEVELOPMENTS: China has conducted 4 regional, time limited experiments in digital, electronic cash over the last 4 years. They essentially followed BOOM’s suggestions and the experiments were a great success as measured by increased velocity of money in the regions being studied. There were no social controls involved. The money was distributed by lottery. BOOM expects China to release digital cash inside its economy in more regions in February.
The Bahamas, Nigeria and Jamaica have also been conducting trials of CBDCs. Other nations moving down this pathway include Russia, Kazakhstan and Brazil.
The Western world which is dominated by its banking sector is reluctant to experiment with its money supply but eventually they will be forced to do so. Why? Because the relative paucity of borrowers is continuing to affect its economies going forward. Eventually, the banks almost total stranglehold on money supply must be broken.
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.
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No social controls in China? Rubbish.
Augustus Carstens of BIS has clearly stated that CBDC will allow central banks to monitor and control transactions. He described cash transactions as “unacceptable” because they can’t be monitored.
This BOOM character may be happy to sign up for digital ID, UBI, and MMT, but he doesn’t seem to have considered what this all means for us: utter dependence and utter subjection. No thanks.
Boom sounds like a central banker to me.
If I said “Go, IOMEGA” and left it at that, would you know why it is funny?
Editing because it isn’t a quiz… the technology jump the IOMEGA storage disc and hard drive represented duped many of us into believing it was ingenious.
I have several discs storing information I might never access, but yet, I keep those little bits and bytes stored away for some intrinsic value they hold and may someday yet reveal to me.
IOMEGA was perhaps the DOGECOIN of its day.
No social controls were involved. YET!!! There is enough malarkey in this article to supply the world malarkey market for quite some time.
We need to get rid of cash like we need to get rid of the Constitution and the Bill of Rights; and we need only FedCoin (Digital Currency) like we need The Mark Of The Beast (to buy and sell). Woe unto those who call Evil good and good evil; the scroll tasted sweet in my mouth but then it turned bitter in my stomach; all of you who agree with TPTB Plans are like the bird that hasteth to the snare and knoweth not that it is for his life.