{"id":46317,"date":"2017-12-09T04:15:03","date_gmt":"2017-12-09T12:15:03","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=46317"},"modified":"2017-12-12T06:39:11","modified_gmt":"2017-12-12T14:39:11","slug":"black-coffee-9-december-2017","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id46317-black-coffee-9-december-2017.html","title":{"rendered":"Black Coffee: Rethinking the ‘Wisdom’ of the Crowd"},"content":{"rendered":"

\"\"<\/a>It’s time to sit back, relax and enjoy a little joe …<\/em><\/p>\n

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.<\/p>\n

Let’s get right to it this week …<\/p>\n

“Bulls make money, bears make money, pigs get slaughtered.”<\/em><\/p><\/blockquote>\n

— Anonymous<\/strong><\/p>\n

“We live in a fantasy world, a world of illusion. The great task in life is to find reality.”<\/em><\/p><\/blockquote>\n

— Iris Murdoch<\/strong><\/p>\n

Credits and Debits<\/strong><\/p>\n

Credit:<\/strong><\/span> As Northman Trader observes, “No period is worse for bears<\/a> 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<\/em>, 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.<\/p>\n

Debit:<\/strong><\/span> You have to admit, technically speaking, the current bull market is absolutely crazy<\/a>. When one digs down and examines the fundamentals, there’s absolutely no reasonable justification for the latest run-up. At all.<\/p>\n

Debit:<\/strong><\/span> 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<\/a> to protect markets.” And since Brexit, markets now rebound so quickly that central banks no longer need<\/em> to respond. In other words, investors have become utterly fearless.<\/p>\n

Debit:<\/strong><\/span> 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<\/a>, 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.)<\/p>\n

Credit:<\/strong><\/span> 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<\/a> — only to see the price promptly plunge $4500 in less than an hour. No, I didn’t forget a decimal point.<\/p>\n

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(click to enlarge)<\/p><\/div>\n

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Debit:<\/strong><\/span> 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<\/a> for the equivalent of 281 troy ounces of gold. So maybe this bitcoin craze still has a long way to go.<\/p>\n

Debit:<\/strong><\/span> Meanwhile, the banksters’ war on precious metals<\/a> 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?<\/p>\n

Debit:<\/strong><\/span> According to Paul Craig Roberts, “What we are witnessing in the US, and throughout the western world, is the total failure of capitalism<\/a>. 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<\/em> capitalism.<\/p>\n

Credit:<\/strong><\/span> 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<\/a>. One day, even the stock and bond markets will figure that out.<\/p>\n

Debit:<\/strong><\/span> Finally … Check out this textbook example of 1984-style newspeak<\/a> 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.<\/p>\n

The Question of the Week<\/strong><\/p>\n

[poll id=”192″]<\/p>\n

Last Week’s Poll Result<\/strong><\/p>\n

Do you think bitcoin is in a bubble?<\/p>\n

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