It’s time to sit back, relax and enjoy a little joe …
Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance.
Let’s get right to it this week …
“Bulls make money, bears make money, pigs get slaughtered.”
— Anonymous
“We live in a fantasy world, a world of illusion. The great task in life is to find reality.”
— Iris Murdoch
Credits and Debits
Credit: As Northman Trader observes, “No period is worse for bears than when it’s the best time to sell stocks. It’s the polar opposite of when conditions are worst for bulls: when it’s the best time to buy, as it was in March 2009. November’s close marked the 13th consecutive month straight up for global markets.” Thank you. Now I know why I’m so miserable at the moment.
Debit: You have to admit, technically speaking, the current bull market is absolutely crazy. When one digs down and examines the fundamentals, there’s absolutely no reasonable justification for the latest run-up. At all.
Debit: If you’re wondering why stocks and bonds rarely have a down day anymore, you can thank the world’s central bankers. According to Bank of America: “In every major market shock since the 2013 Taper Tantrum, central banks have stepped in to protect markets.” And since Brexit, markets now rebound so quickly that central banks no longer need to respond. In other words, investors have become utterly fearless.
Debit: Evidence that bitcoin is in bubble territory continues to mount too. If it pleases the court, I’d like to present Exhibit 73: stripper Dee Heath, who is now advising would-be bitcoin investors on how to navigate the cryptocurrency world. In fact, she now has her own website that teaches bitcoin investing basics. I know. (Insert your own joke here.)
Credit: Frankly, I’ve never believed in the “wisdom” of the crowd; in fact, it seems like the crowd is more often wrong than right. On Thursday, the crowd managed to push bitcoin past the $19,000 milestone — only to see the price promptly plunge $4500 in less than an hour. No, I didn’t forget a decimal point.
(click to enlarge)
Debit: If you believe the current lot of investors, one ethereal bitcoin at the current market price, is now worth more than 13 troy ounces of physical gold. Uh huh. Sure it is. Then again, during the peak of Tulip mania in the 17th Century, the crowd was actually willing to exchange a single tulip bulb for the equivalent of 281 troy ounces of gold. So maybe this bitcoin craze still has a long way to go.
Debit: Meanwhile, the banksters’ war on precious metals is intensifying, with market manipulation more blatant than ever. If there’s a … ahem, silver lining to any of this, it’s that the price suppression is giving everyone a chance to purchase a little wealth insurance at sale prices. And who doesn’t love a good sale?
Debit: According to Paul Craig Roberts, “What we are witnessing in the US, and throughout the western world, is the total failure of capitalism. Capitalism is now merely a looting machine. The financial sector no longer supplies capital for production — (it) turns discretionary consumer income into interest and fee payments to banks.” Actually, capitalism isn’t the problem, Paul — it’s crony capitalism.
Credit: Of course, “capitalism” is also failing because our debt-based international monetary system is a Ponzi scheme that’s dependent upon perpetual growth to stay solvent. But, as Chris Hamilton notes, a debt-saturated populace, coupled with negative fertility rates and waning immigration, means America’s consumption-based economy is running on vapors. One day, even the stock and bond markets will figure that out.
Debit: Finally … Check out this textbook example of 1984-style newspeak from the MarketWatch opinion page entitled: “Janet Yellen’s true legacy is her focus on middle-class wages.” What???? Black is white. Down is up. War is peace. Slavery is liberty. And debt is money. Yes, it’s extremely frustrating — but this, too, shall pass. I just hope it happens during my lifetime.
The Question of the Week
[poll id=”192″]
Last Week’s Poll Result
Do you think bitcoin is in a bubble?
- Yes (70%)
- What’s a bitcoin? (18%)
- No (11%)
Who knew? More than 1400 people responded to last week’s question and 7 in 10 believe bitcoin is in a bubble. Nearly 1 in 5 folks apparently still haven’t heard of it. At this point, that’s probably a good thing.
By the Numbers
How high will bitcoin get before the bubble finally bursts? Here’s the latest rundown on how long it took the cybercurrency to reach each $1000 milestone on its march to $19,000:
4.9 Years to reach $1000
3.5 Years to reach $2000
0.7 Months to reach $3000
2 Months to reach $4000
2 Months to reach $5000
8 Days to reach $6000
13 Days to reach $7000
14 Days to reach $8000
9 Days to reach $9000
2 Days to reach $10,000
1 Days to reach $11,000
6 Days to reach $12,000
17 Hours to reach $13,000
4 Hours to reach $14,000
10 Hours to reach $15,000
5 Hours to reach $16,000
2 Hours to reach $17,000
10 Minutes to reach $18,000
3 Minutes to reach $19,000
24 Hours to fall from $19,000 to $15,000
Source: Zero Hedge
Useless News: Engineers
A priest, a doctor, and an engineer were waiting one morning for a particularly slow group of golfers. The engineer fumed, “What’s with those guys? We must have been waiting for fifteen minutes!”
The doctor chimed in, “I don’t know, but I’ve never seen such inept golf!”
The priest said, “Here comes the green-keeper. Let’s have a word with him.”
He said, “Hello George, what’s wrong with that group ahead of us? They’re rather slow, aren’t they?”
The green-keeper replied, “Oh, yes. That’s a group of blind firemen. They lost their sight saving our clubhouse from a fire last year, so we always let them play for free anytime.”
The group fell silent for a moment.
The priest said, “That’s so sad. I think I will say a special prayer for them tonight.”
The doctor said, “Good idea. I’m going to contact my ophthalmologist colleague and see if there’s anything he can do for them.”
The engineer said, “Why can’t they play at night?”
(h/t: RD Blakeslee)
Other Useless News
Here are the top — and bottom — five states in terms of the average number of pages viewed per visit here at Len Penzo dot Com over the past 30 days:
1. South Dakota (3.11 pages/visit) (!)
2. Arkansas (1.70)
3. Montana (1.63)
4. Hawaii (1.62)
5. Maine (1.61)
46. New Mexico (1.23)
47. South Carolina (1.21)
48. Wyoming (1.13)
49. Vermont (1.12)
50. Missouri (1.11)
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Letters, I Get Letters
Every week I feature the most interesting question or comment — assuming I get one, that is. And folks who are lucky enough to have the only question in the mailbag get their letter highlighted here whether it’s interesting or not! You can reach out to me at: Len@LenPenzo.com
After reading my article explaining why waterbeds are for suckers, Trisha explained why she disagrees:
“Best. Sex. Ever. The water is a huge assistance in getting the groove right …”
Frankly, you can get the exact same results by playing a few Barry White tunes.
I’m Len Penzo and I approved this message.
Photo Credit: breweddaily.com
Len, thanks for another great cup of Black Coffee!
Now I’m heading out to do my Christmas shopping. Wish me luck!
Sara
Have fun, Sara. Since Black Friday is behind it, it should be a relatively enjoyable experience. (Should be.)
Bitcoin futures start trading tomorrow night. That should allow the banksters to control the price like they do in the gold/silver “markets”.
That’s the conventional wisdom, Nick. We shall see!
Thanks for the info, Len!
A workaround is easy , knowing that.
Most comments about bitcoin show that most people here do not understand it. This technology is the future. Cryptocurrency is here to stay. Bitcoin price is merely a reflection of inflation that is not allowed in the manipulated precious metal markets.
“We live in a fantasy world, a world of illusion. The great task in life is to find reality.” – Iris Murdoch
As with all such pronouncements, it is wise, I think, to be skeptical of the inclusive we.
As for me, I am not one of Murdochs we, nor do I think finding reality is my task in life. My reality is my life.
That need not be impeded by a world of illusion; One can insist on creating one’s own reality (life), with minimal attention to that world.
Part of my particular strategy includes living away from major population centers, which are intrinsically dictatorial and constraining.
For me (not necessarily we, e.g. you!), here’s a more symbiotic philosophy: “If a man loses pace with his companions, perhaps it is because he hears a different drummer. Let him step to the music which he hears, however measured, or far away.” – Henry David Thoreau
p.s. re waterbeds: Folks greet me with “what’s up” and I say, “Not much, at my age.”
Len, I wish we had post editing capability.
For some reason, most of the quotation marks were dropped from the post above.
For some reason, the WordPress software doesn’t take too kindly to cutting and pasting certain characters; it seems to always ignore quotation marks, dashes and apostrophes.
Dave, as someone who lives in one of the largest metropolitan areas in America, I can attest to your comment about them being “intrinsically dictatorial and constraining.” That they are.
The central banks may have slowed down QE, but they can’t reverse course because there’s just too much debt sloshing around. If they did, there would be a deflationary implosion that would wipe out the sovereigns. The market understands this and knows the only political way out is to keep printing and inflating the market.
Is it possible that there will never be another market crash down but, rather, only a hyperinflationary “boom” upwards, a la the current Venezuelan markets or Zimbabwe’s circa 2009-10?
Do they still make waterbeds anymore? I haven’t seen one in decades.
Oh, they still make them, Julie. But I suspect it is a very tiny slice of the market these days.
Bitcoin is stealing the show from precious metals but I don’t expect that to last. The government wants to get rid of cash and get everybody on a digital system so they can control it. I think they are patiently watching and developing their own cryptocurrency and will force everyone to transfer to theirs- GovCoin, OrwellCoin, or something similar.
Couldn’t agree more, Jack. But they won’t be able to do it until they can ensure processing transaction times are fast enough; equivalent to those of credit cards, bitcoin and cash. Until then, it won’t be practical for everyday use.
Right now, it can take hours to confirm a transaction via bitcoin. Ethereum and others are faster … but still not fast enough.
I stumbled onto a lengthy audio interview the other day. It was a conference call with Bix Weir, Clif High, Bill Holter, Jim Sinclair and a guy named Dave. Now I fully understand the term “drinking the Kool Aid.” By the end of the interview Jim Sinclair (Mr. Gold) was calling Clif High the “Nostradamus of Cryptocurrencies.” It was actually pretty unbelievable. Bill Holter was having none of it, to his credit.
I listened to that interview too, Jack. I don’t know why Sinclair (yes, a.k.a. “Mr. Gold”) refused to challenge Bix and Clif’s nonsense assertions; I was certainly dumbfounded by Sinclair’s fawning remarks. Unlike Weir, I always considered Clif High to be a huckster and fraud. In the past I was never very impressed with Weir, but after listening to his arguments for bitcoin and (essentially) against precious metals — then listening to Holter’s devastating counterpoints that both Weir (and High) were unable to defend — it became clear to me that Weir actually has a very poor grasp of macroeconomics.
In my opinion Bill Holter’s long-time theory on how the dollar-based international monetary system end-game will play out continues to unfold just as he predicted. The only question he — and everybody else — is struggling to answer is when the final curtain will fall.
It is interesting to see some long-time metals guys abandon PMs for bitcoin. Bix Weir says the age of precious metals is over and cryptos are the wave of the future. Cliff High says there is too much gold above ground to be truly valuable anymore. Even Andy Hoffman who used to work for Miles Franklin is disparaging silver and traded of it in for bitcoin.
Hmm…on the periodic chart of elements, there is one gold….and one silver. Both are limited by the amount that can be ACTUALLY mined, and appear to be in decline from that.
On the list of crypo-currencies, there are hundreds, with the potential for more of them unlimited.
WHY would anyone favor bitcoin over the next one and the next one ? The whole thing looks like a “tulip mania” just looking for a place to crash.
Andy, when this charade is all over, the inevitable conclusion that has yet to show itself will look obvious to everyone in hindsight. Until then, folks who think like us will continue to look like crackpots to those blinded by normalcy bias.
Len,
Remember quite awhile back, when you were preparing your article about my living on less than $40K?
In recognition of my ancientness, you asked for “words of wisdom” from someone just short of the other side (i hasten to add: YOU never said that!)
Well, the gist of the reply was “Don’t be greedy. Know when you have enough and quit striving for more”.
I was able to quit quite awhile ago now, and I don’t think I’m a crackpot for being disinterested in cryptocurrencies or, indeed, much of anything else preoccupying the crowd.
I agree with you Andy. I was just pointing out that there’s ex-gold and silver people out there who have decided to move on from PMs in favor of bitcoin. If that isn’t sign of capitulation we’re told that signals market bottoms then I don’t know what is!
Regarding bitcoin mania: For me, living in my corner of a real world, maybe I should be glad big money is chasing after more big money. While they’re busy with that, they might overlook opportunities to steal my way of life, via legislation, etc.
Don’t be so sure, Dave …