POITOU, FRANCE – “It doesn’t seem real to me.”

A cousin, visiting from Maryland, probably spoke for millions of people.

The subject was bitcoin. And he was right. It’s not “real” in a traditional sense. You can’t touch it. You can’t see it. You can’t stack it up and count it out. You can’t put it in your pocket or tip the shoeshine boy with it.

And yet bitcoin… as money… is more real than the dollar. Like other real things, it is a prisoner of time.

[Editor’s Note: Catch up on Bill’s earlier conversations with his “in-house crypto expert” here, here, and here.]

Honest Money

Day after day, all week long, we’ve been dazzled by the numbers:

“I made another $8,000 last night,” said the son with a satisfied air this morning. “I’m going to sell some of this one. And it’s so easy. You just go online and you can do it in real time. 24/7.

“Oh… and I’m up 80% on my Civic tokens.”

“Huh?”

The young man has been on the bitcoin case from the early days. In fact, he seems to have played a small and inadvertent role in its creation.

“I was working with Douglas Jackson on the e-gold project,” he explains.

“We were trying to create more reliable, more honest money. But it had a weakness: The government could shut it down easily. Which it did.

“I didn’t know it at the time, but the guy who is thought to be Satoshi Nakamoto, you know, the guy who created bitcoin… said he was watching what we were doing in Florida.

“When he saw Doug get shut down by the feds, he said he started to think about how you could create a decentralized money system that the government couldn’t shut down.

“There are some specialized chat rooms with computer nerds who talk about these things. He worked out the key elements of bitcoin on one of them in the early 2000s. And the rest is, well, history.”

14,000% Gain

It’s recent history. Bitcoin wasn’t released until 2009 – fewer than 10 years ago. It now has a market cap of $54 billion… and it’s going up almost every day.

“It’s going up because it’s real money,” our in-house expert continued.

“And people need real money. Yesterday, you wrote about what caused the 21st century to be such a dud. You focused on time. But you could just as well have focused on how the feds’ fake-money system forces people into so many win-lose deals.

“That’s how the Deep State got so big. It has access to almost unlimited funding… And that’s why we waste so much money on wars and stupid regulations – because we don’t know how much money we really have.

“If your savings appear to be unlimited, you may as well waste them. In fact, the concept of ‘waste’ makes no sense if there is no limit on money. And since we know there is a limit on real resources – time and money – we also know that today’s dollar can’t be real.

“That’s why the cryptos are moving up so much. It’s limited, real money. It’s the money people actually want and need.

“Overnight, NEO went up about 20%. In less than 24 hours. One of the other coins I have went up 43%. It’s wild.

“I don’t follow this carefully enough myself to know what to buy. Mostly, I just take Teeka Tiwari’s advice [Teeka is an analyst who works with our research group in Florida]. He recommended NEO at 13 cents. It’s now at $23. That’s about a 14,000% gain. It sounds ridiculous. But that’s what’s happening in this crypto world.

“And now the insiders are catching on,” our expert continued.

“Fidelity is reporting bitcoin prices on its account statements. Goldman Sachs is making predictions about it, too; it says it expects bitcoin to hit $3,900 this year. And it’s offering bitcoin analysis to its clients. I don’t know how in the world they can do that… It’s pure guesswork as near as I can figure.

“Just this week, Vladimir Putin’s government announced a $100 million project in the bitcoin space. It was of ‘strategic importance.’

“And pretty soon, central banks may begin buying cryptocurrencies. Then you’re going to see some real fireworks.”

Here to Stay

A dull alarm went off in our brain.

Wait. Of course! The feds will use their fake money to buy real money. Why not? They have nearly unlimited buying power. They can buy as much cryptocurrency as they want – and who will care?

“There is a cap on the bitcoin money supply of 21 million bitcoins. Unless the system blows up, someone is going to own them. So it’s crazy for central banks to ignore them. This could be the world’s next monetary base.

“Of course, it’s still early days. Like the early days of the automobile, we don’t know which of these jalopies will survive.

“And by the way, I read the feedback you’re getting from your readers. One objection was that bitcoin won’t work when the electricity goes off.

“That’s true. But imagine the person who says he won’t buy a car because he’s afraid gasoline may not be available someday.

“Of course, things go wrong. In the early days of the automobile, there were hundreds of competing auto companies. Most of them went out of business.

“The cars didn’t work very well. They were uncomfortable. Dangerous. With very limited range. And the roads were horrible. And anyone who drove one was considered very daring.

“But the automobile was such an important innovation, it was unstoppable.

“That’s the way it’s going with cryptocurrencies. This is an idea whose time has come. They’re here to stay.”

Regards,

Signature

Bill

Editor’s Note: When it comes to trading cryptocurrencies, we often check in with our colleague Teeka Tiwari, the cryptocurrency expert Bill mentioned above.

Teeka recently put together an online presentation to show crypto newcomers everything he’s learned about this booming market. That includes revealing what’s causing these little-known assets to jump as much as 14,000% in a few months… and how average investors can get involved today. Teeka explains it all himself right here.

 

Market Insight: The Dollar Is Headed South


BY CHRIS LOWE, EDITOR AT LARGE, Bonner & partners


bill bonner

The U.S. dollar is in trouble…

As the buying power of bitcoin goes through the roof – buying more euro, more yen, more rubles – the dollar has been headed south.

Today’s chart is of the U.S. Dollar Index, a measure of dollar strength versus a basket of six major trading-partner currencies.

As you can see, since the start of the year, the U.S. Dollar Index has fallen 10%.

Over the same time, bitcoin is up 236% in dollar terms.

Chris Lowe

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According to a report from research house Oxford Economics, there is a “significant possibility” of a major stock market correction in the near future. When it comes, the global economy will be hit… hard.

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Mailbag

Today, readers consider why the 21st century has been such a disappointment

You shined again today, this time on what a time waster the internet age has become. This goes hand in hand with the peril we find ourselves in with the phony money people now use to understand or know how they are really doing. You’ve been talking a lot about bitcoin. Will the world be forced to run on bitcoin ultimately, when the sheer ineptitude of our currencies fail us? That would be tragic in my humble opinion, but perhaps inevitable.

– Michael C.

This is the century that will see the end of a lot of things we have not bothered to protect. What you have to realize is that venerable institutions whether in law, in governance, or in societal respect and ethics have been eroded at the base. The good principles upon which they were built have progressively been taken apart, brick by brick, by self-interests. Now these edifices of civilization are crumbling like a neglected house and the people are caught in this chaos. It will only get worse before a humanistic rational social structure emerges out of it. Let’s hope the planet survives and us with it.

– Marie-Paule M.

Meanwhile, discussion on cryptocurrencies continues to dominate the mailbag.

One of your readers in the mailbag recently asked what would happen if the dollar tanked or Bitcoin could no longer be exchanged for dollars. I think the most obvious answer in that Bitcoin and other cryptocurrencies would be accepted directly instead of the dollar. Direct acceptance of Bitcoin by merchants is already gaining speed in the U.S. and is exploding in Japan. As acceptance of cryptos increases, the ease of banking and using them will too.

– Wynn R.

My biggest concern about Bitcoin and all the other cryptocurrencies is that they all depend on electricity and the internet that can go out from time to time. Our grid is subject to terrorist attacks or a high electromagnetic pulse that is easy to do. If that happens, we may not have access to our cryptocurrency accounts for what could be years.

– Joseph M.

I have a question… How would the economy be affected when Bitcoin crashes?

– Ben A.

Short and maybe not so sweet: Creepocurrencies make me think of Dutch tulips. If that doesn’t happen, I anticipate governments will eventually outlaw all blockchains except their own as part of getting rid of cash. Just another way for the government to keep its nose in our business. We’ll hear the same arguments from the government about cryptos that we are now hearing as part of the plan to ban cash.

When the government steps in, the non-government-sanctioned currency users will face jail time.

– Leo G.

I don’t understand how a cell phone connects to another cell phone on the other side of the world or even right across the street for that matter. I don’t even get how the radio works! Bitcoin is just a word to me. It’s another thing I don’t understand.

I deduct each withdrawal I make from my bank account and each check I write. I watch my change being counted back to me from a purchase. Bitcoin appears to be none of these… Intangible. And if it’s intangible, couldn’t it disappear right in front of my eyes?

– Ginni G.

As long as we have a stable internet we can have the stability and safety of blockchains, and maybe they can free us from economies controlled by banks or governments. But is everything so safely digitized and independently backed up so that all important information really is never lost?

What if banks and governments, where nearly all power now resides, decide to put a stop to blockchains? CAN they?

– Bill B.

I just started reading your Diary and I must say that I don’t know much at all about the subject matter you write on. I’d like to suggest that you do a piece on how to obtain these bitcoins for total [clueless] people, i.e., me.

– Joan G.

Editor’s Note: If you’re a crypto newcomer, we recommend you start by checking out the work of our colleague Teeka Tiwari. As Bill’s “in-house crypto expert” mentioned above, Teeka is the analyst who identified a small crypto asset months before it exploded more than 14,000%.

Teeka recently put together an online presentation for new crypto investors. Be sure to watch it right here.

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