In 2002, when I bought my first 100 shares of Newmont Mining, I sensed, rightly so, the dollar was “overvalued”…and thus, commenced a 15-year relationship with Precious Metals – which I was fully invested until I found Bitcoin in 2016…where my entire portfolio sits today.
When the financial crisis hit in 2008, I realized the problem was not the overvalued dollar, per se – which four decades of reserve currency status caused it to be; but fiat currency in general. By then, I was well-aware the previous 700 fiat currencies had all failed – and thus, this one would, too. Only this time, the entire world was on a fiat standard for the first time – enhanced by leverage, derivatives, and the manipulation of everything from financial markets to economic data.
A decade later, the issues that caused the financial crisis – which in my view, BROKE the monetary system – are much worse…as debt has gone parabolic, inflation has surged, wealth inequality is approaching Feudal levels, and financial asset prices are historically high – care of the manipulation of stocks, bonds, and currencies that has destroyed price discovery and caused unprecedented capital misallocation.
Official support of stocks, and suppression of interest rates and gold, bought the “1%” an extra decade – but finally, it appears history’s largest, most destructive fiat Ponzi is on the ropes. Not only are rising interest rates and energy prices wreaking havoc on unprecedentedly high debt, and low savings, but the social ramifications of four decades of money printing are coming home to roost…in the form of a burgeoning European financial crisis.
It’s amazing how few people are paying attention to Deutsche Bank, Europe’s largest, whose stock price plunged to an all-time low this week. Yes, lower than the 2008 financial collapse bottom; and even the 2016 low, when the IMF called it the world’s “systematically most dangerous” financial institution.
https://finance.yahoo.com/quote/Db?ltr=1
And now, fresh political crises in Italy – and to a lesser extent, Spain – threaten the most destructive financial and political union of modern times; whose central bank has executed QE for three years, and negative interest rate policy for four. What’s going on in Italy – easily, Europe’s worst financial basket case – is dire…as it truly looks like it’s going to take the plunge the UK and France narrowly avoided the past two years, by ditching the Euro.
https://www.zerohedge.com/news/2018-05-26/raul-ilargi-meijer-end-euro
The whole “first world” monetary Ponzi is attached at the hip – and if something bad occurs to the Euro, the system as a whole will suffer. Total collapse is not guaranteed, or even likely. However, the flight from fiat will be significant – and no asset is better positioned to benefit than Bitcoin. In the past, Precious Metals were the go-to safe haven and monetary assets…but in my view, Bitcoin has finished off what the Central banks started, when they destroyed the gold and silver markets with derivatives.
Thus, atop the gale force tailwind Bitcoin enjoys in its own right – as a far superior form of money – the reason it came to be in first place…the relentless destruction of fiat currency…may well become a MUCH bigger issue in the coming months.