Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Bitcoin - High Tech Fiat Alchemy

Currencies / Bitcoin Dec 20, 2013 - 12:07 PM GMT

By: Dr_Jeff_Lewis

Currencies

The curious case of Bitcoin and the associated rise of electronic currency has rekindled money and wealth discussions. It has also given rise to the re-birth to a libertarian cyberpunk ideology. In some ways, the response is a natural reflection of the devaluing of paper promises. In others ways, electronic cryto-currency is perfectly positioned to launch into physical metals. In fact, early correlation has been established, despite the overall tight control of the precious metals markets.


The most enthusiastic e-currency proponents have an insatiable appetite and need for understanding and defending their positions. What is fascinating is the much sought after anonymity and speed of movement. More difficult to establish is credible backing.

However, the intensity and enthusiastic defense are manna from heaven for the long-term physical precious metals investor. Such an investor is apathetic to the cause that any significant mass of the populace will gradually wake up to the ongoing (and historically unprecedented and ultimately hyperinflationary) monetary experiment being run today.

Bitcoin investors, outside of the pure speculator, are not necessarily buying from the safety or fear side of the trade. Obviously, the same could be said for the speculative side to precious metals paper trading, though at this point the betting is heavily to the short side of the boat.

The machine will start and feed on itself, becoming more and more fragile. And then velocity hits light speed. Collapse.

The New vs. The Strong

Electronic and currencies have a market backing. And while this may suffice in providing confidence, the speculative patterns that have developed along with the rise of derivatives in the crypto space threaten the worthiness of that market backing.

In much the same way, precious metals trading is dominated by manipulative paper trading wagging the physical dog. Electronic currencies could fall into the same pattern. It is worth noting that (without much of their own defense) the precious mining sector has been nearly destroyed by these illegal and unregulated price management practices.

JP Morgan’s recent patent application for its own digital currency might be construed as a warning sign rather than a vote of confidence. It is easier to imagine this move as stakeholder - just in case the U.S. Treasury’s enforcement arm doesn’t decide to come down on businesses that accept virtual currencies (which if course it already has).

A currency with a “market”, rather than commodity, backing is much more exposed to an array of external influences that are largely political in nature. This makes it much easier to manage perceptions, using a monetary propaganda put in place long ago to keep the oldest forms of money out of the system.

The Bitcoin movement is reminiscent of the tendency to limit our projection of new technologies. In his recent book, "Antifragile", author Nassim Taleb characterizes robustness of the inanimate objects. Taleb notes that if some thing or technology has already existed for a significant amount of time, the likelihood of its survival into the future rises considerably. 

Precious metals are obviously an old world technology that, despite machinations to the contrary, have continued to exist. They wield influence and are desired. The current period of overt price manipulation, horrible sentiment, propaganda and misinformation is spread by the priesthood of monetary policy. This pales in comparison to the demand for physical metal, which has never been stronger.

The Medium vs. The Storehouse

Money loves speed and momentum, and digital currencies offer this in a way that dovetails with the magic of user-friendly electronic devices designed for toddler interaction.

Speed and ease of use, however, is not necessarily conducive to a store of wealth, savings vehicle, or the formation of capital - essential ingredients for organic economic growth.

The use and widespread adoption of digital currencies would easily dovetail with an investment class still anchored by the desperate search for yield and the often fruitless endeavor to have money work for you.

Indeed, the digital currencies could be an essential mechanism for transferring or coaxing the trillions of dollars in retirement accounts and pensions soon to be looking for yield.

Much like a glass of water in the desert, fair value and civilized commerce ultimately revert to the natural predictability of commodity - not debt, military or market-backed mediums of exchange.

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out http://www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

    Copyright © 2013 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dr. Jeff Lewis Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in