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Gold silver sell off amid rebound in USDX uptick in bond yields

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Gold, silver sell off amid rebound in USDX, uptick in bond yields

Gold and silver prices are lower in midday U.S. trading Wednesday, with gold suffering solid losses. Corrective pullbacks from recent good price gains are featured at mid-week. A rebound in the U.S. dollar index and rising U.S. Treasury yields are negatives for the precious metals on this day. June gold futures were last down $22.30 at $1,843.10. July Comex silver futures were last down $0.228 at $21.84 an ounce.

Traders were awaiting the U.S. data point of the week: this afternoon’s release of the minutes from the last meeting of the Federal Reserve’s Open Market Committee (FOMC). The marketplace will be looking for further guidance on the timing and pace of the Fed’s monetary policy tightening cycle, and on inflation prospects. Trading could become more active in the immediate aftermath of the 2:00 p.m. EDT release of the FOMC minutes.

Global stock markets were mixed overnight. U.S. stock indexes are pointed toward narrowly mixed openings when the New York day session begins.

The coming recession will be mild; the U.S. economy could boom if Republicans win elections – Mark Skousen

The key outside markets today see Nymex crude oil futures prices slightly higher and trading around $110.00 a barrel. Meantime, the U.S. dollar index is higher on a corrective bounce from recent strong selling pressure. The yield on the 10-year U.S. Treasury note is fetching 2.75%.

Technically, June gold futures saw a corrective pullback after recent good gains. A 2.5-month-old price downtrend is in place on the daily bar chart. Bears have the firm overall near-term technical advantage. Bulls' next upside price objective is to produce a close above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the May low of $1,785.00. First resistance is seen at $1,850.00 and then at this week’s high of $1,869.10. First support is seen at today’s low of $1,838.70 and then at $1,830.00. Wyckoff's Market Rating: 3.0

July silver futures see a 2.5-month-old price downtrend in place on the daily bar chart. The silver bears have the firm overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the May low of $20.42. First resistance is seen at $22.00 and then at this week’s high of $22.215. Next support is seen at this week’s low of $21.645 and then at $21.50. Wyckoff's Market Rating: 2.5.

July N.Y. copper closed down 600 points at 424.60 cents today. Prices closed nearer the session low today. The copper bears have the firm overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 445.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the May low of 403.70 cents. First resistance is seen at 430.00 cents and then at this week’s high of 435.50 cents. First support is seen at today’s low of 422.30 cents and then at 420.00 cents. Wyckoff's Market Rating: 2.5.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

Tim Moseley

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Project Blue Beam According To Serge Monast

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Project Blue Beam According To Serge Monast 

Possibly one of the last series of events before the globalists' takeover?

Over the decades, many scenarios have been projected as conspiracy theories and dismissed by the majority. That being the case, it begs the question of why mainstream media won’t discuss it, and social media giants delete the content and ban the user? What do they want to hide? 

Many of us are waking up and seeing that these conspiracy theories are, in fact, now being realized. The concept of a new world order is no longer a conspiracy theory, and we are already experiencing how it’s being rolled out. Nor are the horrific stories of adverse events and death worldwide due to the vaccination said to be the solution to the latest pandemic. 

Equally, the authorities' restrictions, mandates, and control over the population being dished out keep people in fear and oppression so they may become compliant with their orders. All of this is part of the transition to new world order and one-world government, and they haven’t been that secretive about it either.

We can find the clues in the Georgia Guidestones constructed back in 1980, and there have been many publications since, but falling on deaf ears for the most part or were dismissed entirely. Who would dare to think our government leaders would betray the human race with such psychological terror? It’s just not plausible. Is it? 

But the fact is that government agencies and corporations that work with the global elites toward New World Order are prepared to promote anything that will help them achieve their objective of total social control and make way for the great reset. These unelected globalists who believe they are superior beings think they have the answer to everything.  

I came across an article published in 2015 portraying a strategy for further mind control. Given what we have experienced and know now, it’s probably one of the final straws the new world order needs for complete infiltration worldwide. It’s called Project Blue Beam. 

One reason for NASA’s Project Blue Beam was developed and brought to light by Serge Monast in 1994. Monast was a journalist, poet, and essayist who believed generating a global New Age religion was the only thing that would make a worldwide dictatorship possible and, of course, debunked as a grand conspiracy theory.

However, in 2015, a strange occurrence was recorded on film showing dark skyscrapers floating in the clouds above China, perplexing the world. While scientists quickly denied the event was a mirage, not everyone agreed. Monast’s conspiracy theory started to gain serious momentum in the days that followed—the idea that the sighting was caused by a secret NASA mission known as Project Blue Beam. 


Source: CNN

Based on Monast’s theory, NASA and the United Nations plan to establish a new world order by using technologically enhanced mind control to create a global new age religion. He said that Project Blue Beam would be implemented in four phases.

 
Phase 1: The Collapse of All Archaeological Knowledge

According to Serge Monast, NASA will use earthquakes to destroy all existing archaeological information to discredit all existing religions. He believes that earthquakes will occur at specific locations on the planet during step one to disprove the interpretations of significant religious beliefs. Supposedly new discoveries will suddenly explain the wrong meaning of all major religions.

Serge suggests that by providing evidence to falsify the teachings of all major religions, people will be more likely to accept the new age religion when it is established. It is expected that this form of evidence-based religion will make the transition from current beliefs easier. According to the theory, most people will abandon religion as it is inaccurate, thus allowing the new age religion to be established as the only true religion.

Phase 2: A Monumental Space Show with 3D Holographic Laser Projections

The second stage in creating a new world order will be to utilize a vast space display with 3D holographic laser and audio projections to seduce people into accepting the “new god.” A laser projection of holographic images will be used to convey to various parts of the world, each with its own message corresponding to the predominant regional or national religious belief. 

He said that followers of various religions would see their own returned Messiah in convincing lifelike reality from the depths of space. Stunned followers will witness their messiah returning to them and appear in a true-to-life fashion due to this graphic illusion. All of these messiah images will then merge into one. 

Monast states,

“This one god will, in fact, be the anti-Christ who will explain the various scriptures have been misunderstood, that the religions of all are responsible for turning brother against brother, nation against nation; therefore, the world’s religions must be abolished to make way for the Golden Age.”

 

Phase 3: Telepathic Two-way Communication using ELF Waves

According to Monast’s theory, NASA plans to use low-frequency radio waves to telepathically communicate with humans in an effort to shape their beliefs to match those of the new age religion. Telepathic communication will be used as a form of mind control to trick people into thinking their God is communicating with them directly. 

He says a device will be used to deliver audible signals directly to an individual and undetectable to anyone else. This device can broadcast voices straight into the brain using a microwave beam at audio frequencies, and it can be used from space by satellite to reach anybody on the planet. 

Such waves from a satellite are fed from the memory of computers which store a lot of data about human beings and languages. This is basically mind control, and it is a reality at a time when artificial intelligence and voice recognition software is more advanced. The device will be programmed with specific affirmations or beliefs to shape the thinking of those who are exposed to it.

Phase 4: Universal supernatural manifestations 

The last step of Project Blue Beam is to create a chaotic event that will convince people to accept the new world order and could occur with up to three distinct orientations.

According to Mr. Monast, one of the ways is to lead people to believe that an alien invasion is imminent and will strike every major city on earth. The goal is to push each major nation to use its nuclear to strike back. This way, it would put each of these nations in a state of complete disarmament in front of the United Nations after the false attack. 
  
The second is to make the Christians believe in a major rapture with the supposedly divine intervention of an alleged good alien force coming to save the people from a brutal satanic attack.  Its goal is to eliminate all significant opposition to the new world order and usher in a new era of global governance and a one-world religion. 

Thirdly, a mixture of electronic and supernatural forces will play a prominent role in the fourth step. This phase will attempt to create global satanic ghosts in order to push all populations around the world into a suicide wave, resulting in mass suicide, murder, and permanent psychological disorders. 

As stated in the transcript of a taped presentation by Serge Monast in 1994,

“The waves used at that time will allow supernatural forces to travel through optical fiber, coaxial cable… the one used for cable TV, electric and phone lines in order to penetrate everywhere on electronic equipment, appliances will be already installed with microchips. The goal of this one deals with global Satanic  ghosts – spector – all around the world in order to push all population on the edge to drown into a wave of suicide, killing and permanent psychological disorders.”

 

Do The 4 Phases Have Any Credibility? 

Are there any indications that the theory is true? Even though this subject is highly contentious, there are some solid beliefs against the conspiracy theory. Are these things just a coincidence, or do they provide evidence for the four phases? The most considerable supporting evidence for step one occurred in 2012 when 39 earthquakes struck the Earth in just two days. 

After the incident, leading seismologist Gheorghe Marmureanu was puzzled. He said, 

“There is no doubt that something is seriously wrong. There have been too many strong earthquakes. The quakes are a surprise that cannot be easily explained by current scientific knowledge.” 

 

The archaeological findings of what some believe to be Jesus Christ's tomb and skeleton remains also give credence to step one.

Step two seems to have the most evidence, with many reports of holograms appearing in the sky. Apart from the city appearing in the clouds over China, there have been numerous videos of unexplained sightings, one being a Jesus crucifix.

Regarding step three, there has been an entire US federal department working to allow communication without the use of vocalized speech through neural signal analysis. This has already been proven by telepathically controlling monkey limbs. 

There is no substantial evidence for step four, although there have been several cases where paranormal investigators have used electronic voice phenomenon recording devices to discover ghosts. 

 


Source: Bitchute

 

Monast’s Research Into Vaccines

In 1993, Serge Monast talked about the dossier he intended to start writing the following week concerning vaccines, experimental military medicine, and liquid crystals. It was prompted by the different developments in military research produced by the CIA in the United States in terms of vaccines.

He explains this in the video below,

“It is possible to administer a vaccine inside of which there does not appear to be anything apparently and which is not offensive to health in any way. But on the other hand, the same vaccine, because of its ill-defined content, put in relation a year or two years later with another vaccine, which too seems harmless at first sight, but the two combined together will produce implausible problems.

And I recently knew that it was possible, without this being necessarily detected at the level of scientific analysis, that it was possible to cut in half a liquid crystal, to put part of it in a vaccine, and a year or two years later, the second part is found in another vaccine. The combination of the two, with the information I have at the liquid crystal level, allows the control of individuals, via satellite in order to arrive, at some point, at absolute political control over populations.”

The full 54-minute version of this video. "Special Serge Monast" – by Christian Martineau, where Serge Monast talks about the vaccination and concentration camp file, is unfortunately but not surprisingly removed from YouTube due to violating community guidelines. 

Two years later, in 1995, Pierre Gilbert also talked about liquid crystals in vaccines,

“In the biological destruction, there are the organized tempests on the magnetic fields. What will follow is the contamination of the bloodstreams of mankind, creating intentional infections. This will be enforced via laws that will make vaccination mandatory. And these vaccines will make it possible to control people.

The vaccines will have liquid crystals that will become hosted in the brain cells, which will become micro receivers of electromagnetic fields where waves of very, very low frequencies will be sent. And through these low-frequency waves, people will be unable to think; you’ll be turned into a zombie. Don’t think of this as a hypothesis… this has been done.” – Pierre Gilbert (1995)

 

Monast’s Demise

Law enforcement officials and authorities began to hunt for Serge Monast in 1995 and 1996 for having links to 'networks of forbidden information.' His two children, who he homeschooled, were taken away and declared wards of the state in September 1996 so that they could receive a public education.

On December 13, 1996, the day after his arrest, where he spent a night in jail, he died of a heart attack in his home at the age of 51. His followers believe that he was murdered with 'psychotronic weapons' to prevent him from continuing his research.

 


Source: Sweetliberty.org

Beware Of False Prophets

We are all very mindful to beware of false prophets and all of this information resurfacing at this uncertain and terrifying time for many is very poignant. We need to all stay vigilant and not be misled or conned into anything. What could manifest out of these evil meticulous plots is definitely full of false prophets. 

I’ve seen enough not to take anything for granted over the last three years or dismiss anything as ridiculous. Anything is possible and even probable, given today’s technology combined with the evil and greed in the world.

With all that is happening, I consider the plans laid out here to be vital in hijacking the masses into worshipping the antichrist without even realizing it. Stay true and pure of heart and close to God the Father’s Word, and false signs and wonders will not deceive you. Know that Jesus (Yeshua) is with you always.  

 

 

References: EducateYourself.org

 

Also published @ BeforeIt’sNews.com: https://beforeitsnews.com/conspiracy-theories/2022/05/project-blue-beam-according-to-serge-monast-2519467.html

 

Tim Moseley

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The Human Body as a Touchpad

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The Human Body As A Touchpad

 

The next step to connect man and machine has been taken. 

 

The" decoration of the skin," which conceals elements of technology, is not unimaginable today. Having introduced tattooing as a sophisticated health monitoring device a few years ago, it is logical that researchers intend to continue to tinker with the technique even further.

Wearable technology is probably the most likely "music of the future." From smart bracelets and watches, humanity is slowly moving towards chips under the skin and interactive tattoos. Scientists intend to go even further and would like to turn the human body into a touchpad.

Google invested considerable sums in the development of wearable technology. This time, it is a completely unique tattoo that can practically "turn" a person's whole body into a kind of a giant touchpad.

Generally, smart tattoos are technically called epidermal electronic systems. They can be anything from personalized circuits to microprocessors or adhesives and conductors that a person can, for lack of a better word, glue onto their skin.

 

Image source: The Verge

SkinMarks Temporary Tattoo

The whole project is called SkinMarks, and its goal is to ensure that human interaction with all sorts of technological "gadgets" is as natural and smooth as possible. According to the engineers, it should be possible to apply SkinMarks directly to the fingers of the hand or even to another part of the body. 

 

The subsequent use of wearable technology would be quite simple; it would be enough just to move a finger, clench a fist, or define other gestures that would become easy to learn for the user relatively quickly. Imagine if you could control your phone without having to pick it up. And much more….

Thanks to the greatly reduced thickness of the tattoo and increased extensibility, the SkinMark is thin and flexible enough to adapt to irregular geometry such as bending lines and protruding bones. 

SkinMarks will be produced with the help of screen printing technology and conductive ink. Everything will be transferred to tattoo paper and then to the skin after heat treatment to avoid possible deformation.

https://www.youtube.com/embed/vJF3dzMavhU

For the time being, the developers themselves do not know when and whether mass production will be started at all or if it will be just a prototype, but the idea is interesting. 

The new technology could really make life easier in the future. But already now, there are opponents of this novelty.

Critics accuse Google of being just another way to get the most detailed data from people and to use it for personalized ads. There is no easier way to collect data than to have sensors tattooed directly onto human skin. An interesting fact is that targeted advertising annually brings Google more than $160 billion.

The main challenge is that putting anything on the body means that it has to be bio-compatible. That rules out many materials that people are allergic to and anything that could cause irritation over a long period of time.

On the other hand, it seems easy – the sensors can be triggered by traditional touch or swipe gestures as we perform on smartphones, and you can do it even without looking. You could squeeze the area around the tattoo or bend your fingers or limbs to activate the sensors. 

 

The future will show if this wearable technology will become popular.

 

 

Source: https://epochalnisvet.cz/lidske-telo-jako-touchpad/

 

Tim Moseley

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Gold silver rally as stock markets bond yields drop

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Gold, silver rally as stock markets, bond yields drop

JGold and silver prices are solidly up in midday U.S. trading Tuesday, boosted by another sell off in the U.S. stock indexes, falling U.S. Treasury yields and by the recent sharp losses in the U.S. dollar index that hit another four-week low today. Risk aversion is keener in the general marketplace early this week, and that’s inviting safe-haven demand for the precious metals. June gold futures were last up $19.10 at $1,866.90. July Comex silver futures were last up $0.392 at $22.12 an ounce.

Global stock markets were mostly lower overnight. U.S. stock indexes are lower at midday and are in or near bear market territory, defined as 20% or more below their recent highs. Geopolitical and inflation worries are keeping equities market bulls squeamish. Fears of U.S. economic recession are rising after some downbeat U.S. economic data released today.

Hedge funds continue to sell gold but sentiment is shifting

Later today, Fed Chairman Jerome Powell will deliver remarks at an economic summit in Las Vegas.

The other key outside market today sees Nymex crude oil futures prices weaker and trading around $109.50 a barrel. Meantime, the yield on the 10-year U.S. Treasury note is fetching 2.749%.

Technically, June gold futures prices hit a two-week high again today. A 2.5-month-old price downtrend is still in place on the daily bar chart. However, more price gains this week could negate the downtrend. Bears have the overall near-term technical advantage. However, bulls have momentum on their side. Bulls' next upside price objective is to produce a close above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the May low of $1,785.00. First resistance is seen at $1,875.00 and then at $1,883.00. First support is seen at $1,850.00 and then at this week’s low of $1,843.30. Wyckoff's Market Rating: 4.0.

July silver futures see a price downtrend still in place on the daily bar chart. However, more price gains this week could negate the downtrend. The silver bears have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at $23.00 an ounce. The next downside price objective for the bears is closing prices below solid support at the May low of $20.42. First resistance is seen at today’s high of $22.215 and then at $22.50. Next support is seen at today’s low of $21.645 and then at $21.50. Wyckoff's Market Rating: 3.0.

July N.Y. copper closed down 345 points at 431.05 cents today. Prices closed nearer the session high today. The copper bears have the overall near-term technical advantage. However, more gains this week could negate a price downtrend on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 450.00 cents. The next downside price objective for the bears is closing prices below solid technical support at the May low of 403.70 cents. First resistance is seen at this week’s high of 435.50 cents and then at 440.00 cents. First support is seen at today’s low of 425.65 cents and then at 422.50 cents. Wyckoff's Market Rating: 3.0.

By Jim Wyckoff

For Kitco News

Time to buy Gold and Silver on the dips

 

 

Tim Moseley

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Bitcoin’s Difficult’ Past: Exponential Network Growth Powered By Perfect Competition

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Bitcoin’s ‘Difficult’ Past: Exponential Network Growth Powered By Perfect Competition

by Hass Mccook 

 

Reviewing the difficulty changes in Bitcoin’s history demonstrates that the practice of mining is near-perfectly competitive and is becoming increasingly so.

As of the date of this writing, block 737,000, Bitcoin is almost two-thirds into its 366th difficulty epoch. A difficulty epoch is a period in which 2,016 blocks are added to Bitcoin’s ledger, ideally in 20,160 minutes, or 14 days. If the epoch ends in less time, the network adjusts the difficulty of successfully mining a Bitcoin block upwards to regain a 10-minute block cadence, and vice versa. The entire history of Bitcoin’s difficulty is shown in the graphic below (you may need to zoom in — it’s quite a huge graphic).Figure one: Historical Difficulty Changes Since Inception

Figure one: Historical Difficulty Changes Since Inception

In total, 15 epochs, around 4% of all epochs, experienced no difficulty change. These just so happened to be the very first 15 epochs where basically just Satoshi Nakamoto, Hal Finney and a few dozen other people were mining. Of the remaining 351 epochs, 283 (77.5% of all epochs) would see a difficulty increase, with 67 epochs seeing a difficulty decrease. We will delve into these periods of decrease later in this piece.

Toward the end of 2009, Nakamoto made a plea to the greedy, opportunistic Bitcoiner community to not mine with their GPUs. And I quote, “We should have a gentleman's agreement to postpone the GPU arms race as long as we can for the good of the network. It's much easer [sic] to get new users up to speed if they don't have to worry about GPU drivers and compatibility. It's nice how anyone with just a CPU can compete fairly equally right now.”

Bitcoiners being the greedy opportunists that they are (this, by the way, is great for Bitcoin, as it drives all innovation) broke this gentleman’s agreement, and the GPU mining era would commence, and eventually, so too the ASIC mining era, but more on that later.

Figure two: Difficulty Vs. Price, Log-Log Scale, 2009. Here we see that Bitcoin doesn’t even have a market price, and difficulty is stable for the entire year, save for one large jump at the commencement of the GPU mining era at year’s end.

In 2009, the average difficulty increase was 0.966%, with a standard deviation of 3.865%. Obviously, since bitcoin didn’t have a market price in 2009, profitability calculations are moot, but if you didn’t add any CPU or GPU power, for the year, if you were earning 1 BTC at the start of the year, you would earn 14.39% less, or around 0.8561 BTC, by the end. Obviously, this assumes the miner has 100% absolute uptime, and doesn’t lose income thusly (highly unlikely, but let’s be generous!).

2010 To 2013: The GPU Mining Era

Summary Difficulty Statistics: 2010 to 20132010

In 2010, we witnessed bitcoin acquire a market price for the first time in its history, as well as its first exponential “price rip” upwards. Aside from one difficulty drop in May (before Bitcoin had a market price), we saw 32 difficulty increases with an average of 22.85%, and a standard deviation of 15.54%. If you were earning 1 BTC per hashing unit on January 1 of that year, and didn’t spend any more money on additional GPUs, by December 31 you were earning 99.98% less, or about 19,178 sats instead of a whole coin. Rough.

Figure three: Difficulty Vs. Price, Log-Log Scale, 2010
2011

2011 wasn’t much better for the miners than 2010, where if you were earning 1 BTC per hashing unit at the start of the year without adding to your GPU fleet, you would be earning 97.81% less, or about 2.19 million sats — technically over 100 times better off than you were in 2010, at least!

2011 saw bitcoin’s first mega-pump, with price increasing about 100 times from $0.30 to $30 in the first six months of the year, before taking a 93.3% bath back down to $2 by November. One difficulty drop was experienced during the 50% price drop between February and April, with the other eight drops for the year occurring during “bath time.” There were 21 increases throughout the year. The average difficulty adjustment was 11.96%, with a standard deviation of 16.96%.

Figure four: Difficulty Vs. Price, Log-Log Scale, 2011
2012

2012 was an interesting year, as it was the first time that the industry would ever experience going through a block reward halving. While you could fetch around $7 for a bitcoin in early January, a Valentine’s Day massacre nearly halved the price, and price was consistently down 30% to 35% from the January high until the middle of the year. This resulted in five difficulty drops in that six-month period. A doubling in price from June to August saw healthy difficulty increases again, with no drops in difficulty to be witnessed until “The Halving” in late November, which saw two consecutive difficulty drops to end the year.

There were 20 increases throughout the year, and seven drops, with the average difficulty adjustment being an increase of 3.26%, with a standard deviation of plus 6.04%. You would be earning 59.11% less on December 31 if you hadn’t invested in any new hardware for the year. Not too bad compared to previous years.

Figure five: Difficulty Vs. Price, Log-Log Scale, 2012
2013

Aside from a 9.46% drop in difficulty in late January, 2013 would be an “up only” year thanks to two mega-pumps, the first a near-20-timeser, going from $13.22 at the start of the year to $229.47 on April 9, and a 17-bagger from early July until early December. Alongside the solitary difficulty drop to start the year, there were 30 positive adjustments, averaging 17.16% with a standard deviation of plus 8.34%. Similar to 2010, your 1 BTC of earnings on January 1 reduced to 292,156 sats if you didn’t add any GPUs to your farm, a 99.71% drop. However, as of the end of 2013, nobody would be adding any GPUs to their farms (aside from shitcoin miners of course!), as the age of the ASIC was now upon us.

Figure six: Difficulty Vs. Price, Log-Log Scale, 2013
2014 To 2020: The ASIC Mining Era

Summary Difficulty Statistics: 2014 to 2019
2014

Despite the collapse of Mt. Gox starting the longest bear market in the history of Bitcoin, with the high watermark of $1,134.39 not to be passed again for the final time until April 2017 — a full 1,218 days later (trust me, as a November 2013 first-time buyer, I lived it and was counting the days!). 2014 was yet another seemingly “up only” year for difficulty, with 28 increases, and two small decreases of 0.73% and 1.39% to round out the year. The average difficulty change was plus 10.9% with a standard deviation of plus 6.57%. If you didn’t add any ASICs to your farm in 2014, your 1 BTC of earning power was slashed by 96.86% to 3.14 million sats.

Figure seven: Difficulty Vs. Price, Log-Log Scale, 2014
2015

Even with Mt. Gox being dead for almost two years, the “Goxxings” just seemed to keep coming, with price bouncing between $300 and $150 for most of the year, with all five of the difficulty drops occuring in 2015 coinciding with sharp 30% to 50% drops in price over a short time period. ASIC manufacturers were still feeling out the space and perfecting their art, as shown in the graphic below from the Cambridge University SHA256 technology tracker. This meant that the average difficulty change for 2015 was only plus 3.31% with a standard deviation of plus 4.62%. Still, if you didn’t add any rigs to your farm, your 1 BTC of earnings on January 1 was cut by almost 60% to 0.403 BTC.

Figure eight:. Source: Cambridge University SHA-256 State of Technology Tracker

Figure nine: Difficulty Vs. Price, Log-Log Scale, 2015
2016

2016 was one of the most special years in mining history, as it witnessed a halving as well as the release of the AK-47 of mining rigs, the Antminer S9, which would enjoy profitable service for six years up until the very recent major price drop witnessed in May 2022.

Price growth for the year was sluggish, save for the last few months which saw substantial growth, and the goxxings would still continue during 2016 despite the exchange collapsing more than two years prior. All of this would result in 22 difficulty increases, and five drops, three of which occurred prior to the halving.

The average change was plus 3.93% with standard deviation of plus 4.93%, resulting in a reduction of BTC income of 47.36% for the year.

Figure 10: Difficulty Vs. Price, Log-Log Scale, 2016
2017

2017 saw two major events, a 20-times run up in price throughout the year, and the resolution of “the blocksize war” toward the very end of the year. I obviously cannot do justice to the blocksize war in one paragraph, so I will quote the blurb of Jonathan Bier’s seminal March 2021 book “The Blocksize War: The Battle Over Who Controls Bitcoin’s Protocol Rules”:

“[The Blocksize War] was about the amount of data allowed in each Bitcoin block, however it exposed much deeper issues, such as who controls Bitcoin’s protocol rules.”

The ultimate resolution was the creation of a new fork of Bitcoin, known as Bitcoin Cash (BCH), which could also be mined using the SHA-256 protocol. Huge increases in the price of BCH toward the end of the year were enough to coax miners away from mining the Bitcoin network and mine on the BCH network on three occasions after its launch in August, with a small drop in July taking the tally to four downward adjustments for the year.

There were still 23 increases for the year however, and with an average change of plus 6.16% with standard deviation of plus 6.15%, these changes resulted in a reduction of income of 82.06% for the year. More mining rig manufacturers would enter the game this year, but no dramatic improvements in rig efficiency were achieved.

Figure 11: Difficulty Vs. Price, Log-Log Scale, 2017
2018

2018 saw much more competition in the ASIC hardware space, with rig efficiency almost doubling. Rigs were becoming so efficient, having an 80% drawdown in price over the year did little to stop hash rate growth.

There was an average change of plus 3.59% with standard deviation of plus 7.31%, across 23 difficulty increases, a drop in July when bitcoin’s price was at about $6,000, and four drops which occurred during the final price capitulation from about $6,000 to about $3,000 late in the year. The end result was a reduction of income of 64.09% for the year compared to your start-of-year earnings.

Figure 12: Difficulty Vs. Price, Log-Log Scale, 2018
2019

After the brutal bear market of 2018, traders saw a relief rally that took the price from $4,000 at the start of the year to about $13,000 mid-year. Aside from five minor negative difficulty adjustments of less than 1% in the first half of the year, and two drops in the second half of the year when bitcoin would return to a price of $6,000, there were 19 increases. The average change of plus 3.06% with a standard deviation of plus 4.49% resulted in a reduction of income of 55.42% for the year.

This was mainly driven by even more competition and efficiency gains in the ASIC hardware market as opposed to chasing price-cost arbitrage, with the 2019 fleet of new rigs being more than twice as efficient as their 2017 peers. 2019 was also the first year we saw modular mining techniques at large scale, where miners would essentially turn shipping containers into portable ASIC farms, and simply ship them to the world’s cheapest power sources. The large drop in difficulty in late October was more likely from Chinese miners physically migrating to cheaper hydroelectric power sources due to the wet season, than a miner capitulation over a small drop in price. This would become far more apparent in the migrations of 2020.

Figure 13: Difficulty Vs. Price, Log-Log Scale, 2019

Summary Difficulty Statistics: January 1, 2020 to May 10, 2022
2020

The most difficulty drops in Bitcoin history would happen in 2020, with 11 drops, some of previously-unseen magnitudes, occurring throughout the year, for different reasons. Despite the “COVID-19 everything crash of March 2020,” the substantial hash rate drops witnessed in April and late October would mostly be the result of Chinese miners physically migrating from Xinjiang province (which is coal heavy) to Sichuan province (which is hydro heavy) during the wet season, and then back at the conclusion of the wet season. The profit on offer was so great as a result of much cheaper power that it was worth it for miners to simply pack up, move and establish themselves elsewhere, despite the associated risk and downtime. Of course, the halving of May 2020 would result in two consecutive drops of 6.39% and 10.24%.

Mining techniques and rigs would continue to improve, with firmware service providers like Braiins.OS providing miners with software that dramatically increased the efficiency of their rigs and was easy enough to use by mining enthusiasts. Immersion-cooled mining would also start being used by various operations as a way to further increase efficiency and reduce downtime and maintenance costs.

The average change of plus 1.06% with standard deviation of plus 7.74% resulted in a reduction of bitcoin-denominated income by 24.91% for the year. Considering that the price of bitcoin would grow by four times in 2020 however, this would start a period of time where home and collocated mining started to look more appealing to a far wider user base due to the seemingly irresistible cost-price arbitrage on offer in a booming market, seemingly protected from competition, at least temporarily, due to the COVID-induced global supply chain issues afflicting the market.

Figure 14: Difficulty Vs. Price, Log-Log Scale, 2020
2021 To Current: China Bans Bitcoin And The (Near) Instant Recovery 2021

2021 was the year mining “hit the streets,” with colocation companies booming despite long lead times for delivery, hardware prices were going through the roof (in near lockstep with the price). Mining companies were still migrating for the cheapest power. They were going public at a rate of knots, and corporate treasuries were collateralizing their bitcoin in interesting ways. Just some of the mania you would expect to see during a meteoric bull run. To top it all off, there was a huge blackout in China which caused a near 15% negative difficulty change, then, only a month later China totally banned Bitcoin mining, causing four consecutive negative difficulty changes of 19%, 5.6%, 38.8% and 5%. This meant that anyone who was already mining saw a huge temporary bump in profits, and would be forgiven for thinking, “Whoever isn’t considering getting into mining right now would be stupid!”

But if you’ve stayed with me up until this point, you know how this story ends. Good times are short, and are always followed by cripplingly hard times for miners. These times would come soon. Those saying the Chinese hash rate would not return for months or years were selling the most picks and shovels, but return it did, mostly within three months, and all of it by the end of the year.

There were 19 increases, and seven drops — five of which were related to China, the other two small and within tolerance. The interesting statistic to look at is the standard deviation, and while difficulty averaged a change of plus 0.5%, its standard deviation was 10.9%. So, if you were in the game at the start of the year, you performed stellarly, and only had your income reduced by 12.33% for the year. However, if you were one of the unlucky ones who started in late July 2021 (or later), you had 12 changes for the rest of the year (11 of which were positive), and an average of plus 4.61%, meaning you’d lost about 77% of your income by the end of the year, with the bitcoin price going south, quickly. Again, if you were already established, 2021 was a fantastic year. For everyone else, buying bitcoin would have been the wiser option. 

Figure 15: Difficulty vs. Price, Log-Log Scale, 2021
2022

We are 10 difficulty changes into 2022 — seven increases and three drops. Despite a 20% crash in price since the last difficulty change, it is predicted that the upcoming difficulty change will be a drop of around 1%. Of the ten changes so far, the average change was plus 2.44% with a standard deviation of plus 3.39%, resulting in a reduction of income of 21.89% year to date, but I predict it will be a reduction of 50% by year end. Home miners beware!

Most interestingly, 2022 saw Intel enter the mining game, forming a large partnership with green miner GRIID, and word that even oil-and-gas giants Exxon Mobil and Conoco Philips had started flare mining using mobile, containerized mining solutions. Even with bitcoin’s price being in the doldrums, competition has been getting stiffer and stiffer.

2022 has seen more COVID-19 supply chain issues clearing, more innovation in mining firmware and techniques and, with what looks to be yet another protracted bear market for price, will see a flushing out of over-leveraged or low-margin miners, as we have witnessed in previous bear markets.

Figure 16: Difficulty Vs. Price, Log-Log Scale, 2022 to Date
Conclusion: Bitcoin Mining Is Perfectly Competitive

The nature of competition in Bitcoin mining is near perfect which means miners will work extremely hard to have the most efficient operation, and indeed, the most efficient supply chain. It also means that they are ready and able to physically go wherever is required to achieve this. Mining is not easy, and for a home miner, is akin to panning for gold in 2022 — it sounds far more glamorous and rewarding than it actually is! There are better ways to pique your curiosity about mining than spending money trying it out yourself (read: going short spot-Bitcoin in hopes you’ll earn more by mining versus going long spot-BTC) — but you will never hear this from the people selling picks and shovels!

Bitcoin mining has been able to absorb most of my time and intellectual capacity for eight years, yet I have never even turned on a miner in my life. When it comes to mining, it’s best to leave the bread to the baker, as they are most capable of identifying, assuming and managing the risks. The history speaks for itself: When it comes to hash rate and difficulty, “number go up” harder, faster and more consistently than price, and while this is great for Bitcoin, it is terrible for those looking to compete in what is a perfectly competitive space.

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Tim Moseley

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The love of God and a lump of bread

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The love of God and a lump of bread

When the Privy Councillor of Medicine died, his sons began to sort out his estate. In a glass display case, which the old doctor had guarded like a shrine, they found, among other treasures and mementos, a strange object: a gray, shriveled and bone-hard lump – a dried-up piece of bread.

Perplexed, they asked the old housekeeper. The housekeeper told them that the doctor had once been seriously ill during the famine years after the World War. The acute illness was accompanied by a general state of exhaustion. Strong food was necessary – but rare. An acquaintance sent half a loaf of bread. Good, wholesome bread, which he himself had received from a foreigner friend.

At that time, the teacher's little daughter was sick in the neighboring house. The medical councilor therefore sent the bread to the teacher's family without eating it himself. But even they did not want to keep the bread. The old widow over there under the roof in the emergency quarters needed it more. She passed it on to her daughter with the two children in the puny basement apartment. She remembered the sick medical councillor who had recently treated one of her boys without asking anything in return.

"We recognized it at once," concluded the housekeeper, "by the stamp stuck on the bottom of the bread, showing a colorful little picture." When the Medical Councillor held his own bread in his hands again, he was shaken beyond measure and said, "As long as there is still love among us that shares its last piece of bread, as long as I have no fear for all of us helps; This bread has filled many people without a single one eating it."

This story makes tangible the power of love: "The love of God has been poured out into our hearts through the Holy Spirit who has been given to us." (Romans 5:5) And this love is palpable in our four walls: this good, loving spirit is blowing. No, our houses are not gray concrete, it is rather living space for the good spirit of God. But the spirit also breaks many a space and frame. Because this love can be experienced through our heart attitude beyond all borders: We do not only keep what we have for ourselves, but give others a share of it – so that something remains!

And so, once again, and in the midst of us, in the here and now, a miracle happens: a feeding of thousands – three thousand employees and over six thousand people entrusted to us – they are fed.

I wish this miracle for all of us again and again.

 

Tim Moseley

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Are you being scammed?

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Are you being scammed?!

 

by Marc Lichtenfeld, Chief Income Strategist, The Oxford Club

Are You Being Scammed?!

 

Protect Your Wealth When You're Vulnerable

A few years ago, a family member got sick. In addition to her physical ailments, her mental clarity nose-dived. I not only was worried about her health but also was very concerned she'd be vulnerable to fraud, as there were caregivers in her house.

But even healthy seniors fall prey to increasingly sophisticated financial abuse and fraud.

 

 

It turns out there is a physiological reason for this.

According to a UCLA study, older people have less activity in the part of the brain that is responsible for what is known as "gut feeling." Oftentimes, it is that gut feeling that tells a person when someone is not trustworthy or something doesn't seem right.

As we age, these changes in our brains can cause us to become more trusting and focus on positive thoughts and memories, making us more likely to help someone out or believe that a windfall is within our reach.

Fortunately, this family member and I have a very strong relationship, and she trusted me to look after her finances while she recovered. We signed a power of attorney for her accounts, and I let her advisor know I was monitoring things for now. Importantly, I let the advisor and the relative know that my brother also had access to the information.

I trust my brother completely. I shared this information because I wanted the family member and the advisor to know that there were no secrets – because secrecy is one of the signposts of fraud.

In many of the scams that target older people, the victim is told to keep what is happening quiet. They are forbidden from telling their spouse, children, advisors, and friends.

Sometimes the threat is that the senior won't receive the funds they've been promised or get out of the supposed trouble that they are in.

Those threats can escalate to physical violence or harm to their family, though I've never heard of someone who was physically hurt in a scam by someone they didn't know.

If you are ever told to keep a financial transaction a secret, run – don't walk – away. I've never met a legitimate financial advisor, salesperson, or anyone involved in a real financial opportunity who insisted on secrecy.

The same goes for a representative from a government agency. If you have a real problem concerning the IRS, Social Security Administration, FBI, etc., they will not insist on secrecy either.

In fact, just the opposite is true. They will often encourage you to get help from a professional, such as a lawyer or accountant.

Furthermore, if you have a relative who fell for a scam, you may want to have them assessed by a doctor for dementia or Alzheimer's.

According to a study published in Annals of Internal Medicine, "Low scam awareness in older people is associated with risk for developing Alzheimer's dementia or mild cognitive impairment in the future."

So it's not just a matter of not being smart. Lots of intelligent people fall for scams. In fact, sometimes we're shocked that someone so sophisticated could be duped by what seems like an obvious fraud.

But as we age, our bodies change. And that includes our brains.

Simply being aware that the chemistry shift in your brain may make you more trusting of others can help you keep your guard up and question things that sound too good to be true.

 

New Opportunities Are Emerging For Citizens of The World.

Freedom and democracy may appear to be struggling to stay alive in America, but there may be a knock-out punch ready to be released. The evolution of the blockchain-enabled metaverse is going to enable the 'Citizens of the World' to gain their own Freedom by democratizing power and creating a new world with new rules, new players, and new opportunities. For 99.99% of us, the metaverse will improve our real-world lives through the democratization of power and opportunity.

Along with the major long-term trend of society towards decentralization and smaller-scale organizations, there are new opportunities developing to help 'Preparers' in the cryptocurrency sector. Businesses are beginning to issue their own Crypto Coins that can be traded on Cryptocoin Exchanges.

Markethive.com for example will be releasing its HiveCoin (HIV) in the coming weeks. It has tremendous upside potential that is outlined in a Video by Founder Tom Prendergast, "Entrepreneur Advantage…".

Not only that, if you go to their website and register as a FREE Member, you will be given 500 HiveCoins for "FREE" along with access to several Earning Opportunities and online tools to increase your HiveCoin balance.

Be sure to check it out today – Markethive.com

Markethive

Tim Moseley

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Extreme dollar weakness today overcomes sel ling pressure in gold:

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Extreme dollar weakness today overcomes sel
ling pressure in gold:

103.80 was and continues to remain an important price level of technical resistance for the U.S. dollar index. The dollar index has flirted with this price point on three occasions, first occurring at the end of 2016 and then again during the first quarter of 2017.

According to Investopedia, the U.S. dollar index (USDX) measures the value of the U.S. dollar relative to a basket of foreign currencies. The USDX was established by the Federal Reserve in 1973 after the dissolution of the Bretton Woods agreement. The index measures dollar strength or weakness against six primary currencies and was updated in 1999.

The chart above is a weekly Japanese candlestick chart of the dollar index. It begins at the end of 2016, with the dollar rising to a high just shy of 103.80. This is the first occurrence of dollar strength resulting in the index trading over 100 since the end of 2002.

This can be seen in a monthly Japanese candlestick chart of the dollar index below (chart 2). What followed after the dollar surged past 100 at the end of 2016 was a dramatic decline in value from 103.779 to a low of 88.08 during the first quarter of 2018. This represents a price decline of 16% during that year. From 2018 to the first quarter of 2020, the dollar index increased in value until it reached approximately 104, the second occurrence of the index reaching this level and then declining significantly immediately thereafter.

At the beginning of 2021, the dollar had fallen to approximately 89 before finding technical support and resuming a multi-year climb to a higher value. Dollar strength continued and breached this significant technical level 2 weeks ago. The dollar index traded to just above 105 during the week beginning May 9. However, last week the dollar index opened at approximately 104.70 and closed at approximately 103.20. Today the dollar index continued to spiral to lower pricing losing 1.04%. As of 4:55 PM EDT, the dollar index is currently fixed at 102.105.

The decline in the U.S. dollar over the last two weeks has given gold significant tailwinds moving the precious yellow metal higher. Gold futures basis the most active June 2022 contract is currently up $9.90 or 0.54% and fixed at $1852. Gains in gold value today were 100% the result of dollar weakness in conjunction with selling pressure from market participants. The screenprint of the Kitco Gold Index above was taken at 4:12 PM EDT and shows spot gold fixed at $1853, a net gain of $6.30. On closer inspection, dollar weakness contributed $17.20 in gains while selling pressure resulted in a decline of $10.90.
 

By Gary Wagner

Contributing to kitco.com

Time to buy Gold and Silver on the dips

Tim Moseley

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What Warren Buffett Gets Right About Bitcoin

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What Warren Buffett Gets Right About Bitcoin

by Joakim Book 

 

Warren Buffet’s most recent critique about Bitcoin is its lack of “producing” anything, which actually proves its monetary properties and usefulness as money.

Before I exited academia, I trained as a financial historian. I looked at balance sheets in dusty, old archives and I investigated what banks were doing in Victorian Britain; I ran fancy statistical analyses on 19th-century stock prices to see if they behaved like modern portfolio analysis suggests stock prices should; and I looked at how money operated and how monetary regimes changed over time.

In all my reading, nothing annoyed me more than established economists with equation-filled whiteboards and paper models arrogantly declaring that some feature of money and banking was defective. With zero knowledge of the past, academics often stood up from their endowed university chairs and proclaimed that money could not be private, financial markets would disintegrate without regulators, and banks could not operate without governments backstopping them.

Strange, I thought, looking at the historical documents in front of me. They clearly used to …?

Buffett’s Monetary Misadventures

When you say things that are directly contradicted by reality, historical or present, you should probably just stop doing that. But when you’re 91 years old, the fifth(-ish) richest person on the planet and carry a reputation as the greatest investor of all times, different rules apply. With cameras pointed at you and hungry newspaper fanboys praising your every word, you can get away with nonsense that otherwise wouldn’t fly.

Take Warren Buffett’s latest musings on bitcoin, from his company Berkshire Hathaway’s latest annual meeting on May 1, 2022:

 

ecosystem for entrepreneurs

 

“If the people in this room owned all the farmland in the United States and you offered me a 1% interest in it […] and said ‘pay us a bargain price of $25 billion dollars,’ I’ll write you a check this afternoon.

“If you tell me you own 1% of the apartment houses in the United States, and you offer me… uh… so I would have a 1% interest in all the apartment houses in the country, and you want, whatever it may be — another $25 billion or something, I’ll write you a check. It’s very simple.

“Now, if you told me that you owned all of the bitcoin in the world and you offered it to me for $25, I wouldn’t take it, because what would I do with it? I have to sell it back to you one way or another! Maybe they’re the same people [who sold it to him], but it isn’t going to do anything.”

This particular accusation is old and Buffett himself has repeatedly levied it against gold: the yellow metal can’t be valuable and must be a poor investment since it doesn’t produce any yield, return or interest — “It doesn’t do anything but sit there and look at you.” For bitcoin, being an improved version of gold, we can understand that this busy nonagenarian simply recycled his gold rant. Buffett continues:

 

“The apartments are going to produce rental [income] and the farms are going to produce food […] and that explains the difference between ‘productive assets’ and something that depends on the next guy paying more than the last guy got.”

 

Bitcoin is all a scam, a circus, according to Buffett: “There’s no more money in the room, it’s just changed hands — with a lot of maybe fraud and costs involved […] Basically: assets, to be of value, they have to deliver something to somebody.”

Let’s unpack this.

What Holds For Bitcoin, Holds For Other Monies Too

It is amusing how opponents of bitcoin levy arguments against it that apply equally well to all other monies: You’re not persuasively attacking or denouncing bitcoin by stating that it has features of other well-functioning money; or refer to practices in bitcoin that regularly occur also in the currency at the top rung of the monetary ladder. 

It is too expensive to transact with bitcoin!

Yes, for the times when block space has been congested and network fees high — but even then, properly considering bitcoin as a first-layer settlement media rather than a censorable third-layer fiat digital entry, it’s probably cheaper than the legacy system (Bitcoin is comparable to Fedwire, not Visa). With financial hedging and price-level uncertainty, the resource-cost debate of fiat versus hard money has clearly come out against the fiat dollar.

Bitcoin is used by criminals and money-launderers!

Yes, to a surprisingly small extent — but more importantly: so is the dollar. The features that make a money good for us well-behaved and law-abiding citizens also make it a good money for criminals. Criminals want anonymity, transaction privacy and reliable settlement just like the rest of us — and they want to tap into the most accessible and liquid monetary network that provides those things. All monies are for enemies.

Bitcoin wallets can be hacked and funds lost!

Yes, and so can bank accounts and credit cards in the fiat world — or plain old cash if you physically lose it, or if you’re mugged on the street, or suffer the flash kidnappings that Brazil’s new fiat fast-payment system enabled. Not to mention the perfectly legal extortions that fiat banks routinely engage in: insanely slow payment mechanisms, blocked transactions, overdraft charges and below-inflation interest rates. (Source)Bitcoin Doesn’t Produce Anything

 

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“The gold and silver money which circulates in any country, and by means of which the produce of its land and labor is annually circulated and distributed to the proper consumers, is, in the same manner as the ready money of the dealer, all dead stock. It is a very valuable part of the capital of the country, which produces nothing to the country.” – Adam Smith, (1776)

Buffett’s main concern with bitcoin (and gold) is that owning some doesn’t “produce” anything. To be of value, assets have to “deliver something to somebody” in his view.

If we had a look at Buffett’s fiat wallet, would we not find cotton-and-linen bills with U.S. presidents on them? If we peeked into his bank account, would there not be fiat digital entries sitting there, not “producing” anything? Bitcoin is a way of holding money that isn’t an investment — it’s a refusal to finance commercial banks’ assets or the Federal Reserve’s seigniorage-yielding assets, both of which emerge when individuals hold their notes or deposit funds with them. Even while doing nothing, producing nothing, the institution of money is crucial to any society more complex than a self-sufficient household. Wrote Ludwig von Mises 

“Money, in fact, is indispensable in our economic order. But as an economic good it is not a physical component of the social distributive apparatus in the way that account books, prisons or firearms are. No part of the total result of production is dependent on the collaboration of money, even though the use of money may be one of the fundamental principles on which the economic order is based.”

Long ago, monetary economists established that money, a non-interest-bearing asset, provides its value to individuals through acting as a hedge against the uncertainty of the future — the transaction possibilities that may emerge down the line but that we can’t predict or appraise right now. We give up the potential return we could have earned had we invested that money in some venture that “produced” something — grain, dividends, interest — in exchange for the convenience of having ready cash for transactions not yet made.

Buffet’s company, Berkshire Hathaway, holds north of $100 billion in bank deposits and short-term Treasurys, explicitly to protect the company against unexpected expenditures and allow it to take advantage of future investments. Dissonance, anyone?

From John Maynard Keynes to Mises to Carl Menger and further back through the history of erudite economists, money is crucial to the facilitation of trade while not producing anything on its own. Its purpose isn’t to produce “something to somebody.” Instead, money has the strange property that it is acquired not to be consumed or used, but to be given away in future transactions.

If we were a little snarky with Mr. Buffett, then, we could ridicule his claim that he has to sell bitcoin “back to you one way or another” by once more pointing to the dollar bills in his pocket or the cash balances his company holds. Those don’t “do” anything either; to procure anything real with them, they must be sold back to others — others from whom, collectively speaking, he once acquired them. 

… And What About Those Apartments?

If the above ironies and own goals weren’t enough, there is something strange going on with the examples that Buffett picked in illustrating his argument. Farm and farmland is hard to argue with, as plants literally grow more plants — though not automatically, and not without considering assistance from farmers, machines and fertilizers.

Apartment buildings and real estate, however, are a different story. Manhattan condos don’t spin off little apartment babies that grow into valuable real estate in the fertile soil of a housing boom. Certainly, owning some would let you rent them out to other people who in turn benefit from what the statisticians at Bureau of Labor statistics would call “shelter services” — or, in case you own the house in which you reside, using some creative accounting in the consumer price index calculations they result in “owners’ equivalent rent.” 

At the end of a given number of real estate transactions there are, per Buffett, “No more [apartments] in the room, it’s just changed hands.” Does that mean apartments have no use and no value?

But here’s the awkward point for Mr. Buffett: Bitcoin, just like other monies, can only provide a profit for its owner if it’s rented or sold to somebody else at a future (higher) price. Apartments, owned outright, can only recoup their cost of investment by selling them to another buyer at a higher future price. In Buffett’s example, he rents them out (possibly to the same nondescript collective of people from which he hypothetically purchased them), a service that must be sold at high enough a rent to cover costs and repairs — an income stream, economically speaking, equivalent to a high enough sale price, spread out over time.

To be valuable in a free market, any good, service or asset must “deliver value to somebody.” The fact that we might not be able to tell what that value is does not automatically undermine it as an asset in some objective sense. For its viability, bitcoin does not require Mr. Buffett's understanding.

In whichever version they emerge (academics, central bankers or as one of the richest men alive), angry, old men incessantly yelling at clouds, are rarely persuasive. Saying things that are instantly undermined by reality, or history, makes for poor presentation.

In this case, however, Warren Buffett was surprisingly correct about bitcoin and its monetary properties.

The fact that an item’s only feasible use is to be sold back to the community at a later stage is almost definitionally what money is — an item you acquire not to use, produce or consume, but to give away later. Money, unlike farmland or dividend-paying stocks, doesn’t equate to earnings for its owner.

Instead, it allows us to navigate transactions in an uncertain future. Like the quotes from Mises and Smith illustrate, we’ve long known how the seemingly wasteful use of costly money improves the overall economy’s operation.

Perhaps Mr. Buffett didn’t realize it, but he just denounced bitcoin by accusing it of having monetary properties. Hurray!

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Tim Moseley

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Gold’s big 1800 test on the radar next week as stocks’ steep selloff intensifies

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Gold's big $1,800 test on the radar next week as stocks' steep selloff intensifies

With the U.S. stock market still at risk, should gold be trading higher? Analysts see next week as an important test for gold as markets debate the effects of the Federal Reserve's oversized hikes.

Gold is ending the week with its first weekly gain in five weeks as the precious metal finally saw renewed safe-haven demand on concerns over inflation and economic growth. June Comex gold futures were last trading at $1,841.40, up 1.8% on the week.

Going into next week, the steep selloff in the equity space might not be over as the S&P 500 is now 20% below its all-time highs posted in January.

"During the last few weeks, we saw the stock market selling off and gold going along with it. But then we got a short-term peak in Treasury yields, which opened the door for gold to behave as a safe haven," OANDA senior market analyst Edward Moya told Kitco News. "The U.S. stock market is still at risk. We could see one last major plunge. And we'll probably see gold's safe-haven [properties] being tested once more. Selling exhaustion should be settling soon."

Markets are concerned whether inflation and growth can react quickly enough to the Fed's interest rate hikes, said CIBC World Markets chief economist Avery Shenfeld.

If that is not the case, the Fed would be forced to step up its already aggressive tightening schedule, Shenfeld noted. "That's the one-two punch that the equity market is now fretting over: higher rates that lower equity multiples, coupled with a recession that crushes earnings. If, instead, a smaller dose of Fed medicine, and consumer resistance to higher prices, brings an earlier cooling, the recession risks would be significantly diminished," he said.

2022's $1 trillion crypto wipeout: 'necessary cleansing' of excess speculation just like dot-com bubble – Bloomberg Intelligence

Expectations of steeper rate increases are again rising, warned DailyFX strategist Michael Boutros.

"Markets are having to reprice Fed's outlook on rates. There is doubt that 50bps at this level of inflation would be enough. If the Fed's 75bps hike is readjusted again, it will be a headwind for gold. Gold is stuck sideways as we wait for that story to flash out," Boutros told Kitco News.

The idea that the Fed is making a policy error by acting too slow is becoming more common, he added. "They need to slam on the break and accelerate rate hikes even faster. At this point, they are already late," Boutros stated.

This is why gold is in a tough spot and could be at risk of a further selloff below the $1,800 an ounce level, especially if there is a close below the $1,791 level.

"With what we are seeing in the equity market, you would expect gold to catch a bid. We did this week, but the rally was unimpressive. From a technical standpoint, we are at risk of testing the lows. The $1,781 level or deeper is still on the table," Boutros noted.

Investors should gear up for a sideways price action until gold can move above the $1,895 an ounce level, he pointed out.

Moya was more optimistic looking further out, with economic growth concerns remaining one of the main stories for the rest of the year. This narrative should weigh on the U.S. dollar index, which has been recently trading near 20-year highs and limiting gold's upside.

"We've seen weaker economic data in the U.S. this week. Even jobless claims went up. All expectations are for data to deteriorate. There should be some pullback for the dollar," he said. "It should be good news for gold. We should see gold hold $1,800 through the next week. But more downside movement in equities could break that."

Moya sees the Fed slowing down once financial conditions tighten enough and credit spreads widen. And this should not be too far out in the future.

"That's starting to happen. If the stock market drops another 5% lower, volatility will spike higher, and credit markets will force the Fed into a less hawkish stance of 25-basis-point hikes. And that's not too far away. It should be good news for gold," Moya said.

Next week's key data releases are flash PMI and personal spending. "Consumer spending is projected to weaken. The FOMC minutes are likely to be dated as we already heard Fed Chair Powell and other FOMC members after the May meeting. Flash PMI will be important, especially if we start to see if data get closer to contraction territory," he outlined.

Next week's data

Monday: U.S. manufacturing PMI

Tuesday: U.S. new home sales

Wednesday: U.S. durable goods orders, FOMC meeting minutes

Thursday: U.S. GDP Q1, initial jobless claims, pending home sales

Friday: PCE price index
 

By Anna Golubova

For Kitco News

Time to buy Gold and Silver on the dips

 

 

Tim Moseley

The Artist that came out of the Winter