Joined May 7, 2012
64 Blog Posts

Money has nowhere to hide

India demonetization, Italy’s referendum as a precursor to leaving the Euro, Venezuela hyper-inflation, negative interest rates, the Euro and USD almost at parity.

What’s it all mean?


Last month’s prime example: India is putting their cow worshipping population under the boot and forcing them to open bank accounts so the Government can more efficiently rob their own people.

And what’s the message? The people are there to serve the government, not the other way around. It’s like this clip in Goodfellas:

Negative interest rates encourage people to hoard their savings outside the system in cash. How to counter that? Demonetize large bills to flush that currency back through the system. This is already happening all over the world.

Money has nowhere to hide.

Consider, money is how you store the product of your life’s labor. It represents the value you’ve produced. Do you feel comfortable having that wealth and stored labor locked up in a USD bank account that is a few keystrokes away from being raided by the Fed?

In a bank your money is an entry in a database. In reality, it’s not your money at that point. You don’t own it and you can’t touch it. Banks are trading digits on a ledger that can be manipulated at will until the Government decides to devalue or confiscate what you believe is your money. Don’t think it can happen? It’s happened before. It’s happening almost weekly in China with Yuan devaluation.

How does one track the trend of money having nowhere to hide?

Here’s how Bitcoin did vs Gold in November:


And Bitcoin vs the Dollar:


But you argue, “the dollar is so strong vs everything else!” Well, vs the Mexican Peso, yes. The Chinese funny money Yuan, sure. The Euro, of course. That’s like an adult beating up a child. Is it really something to be proud of?

USD has also beaten Gold the past month, but over the last 100 years Gold has murdered the USD. Gold ETFs have created a paper gold market that has been setting the price of Gold. When those ETFs collapse, the real price of Gold will be determined. Hint: Gold will be much higher.

So what now? Where can you store your wealth that is out of the reach of any Government? The answer is Bitcoin (or Gold and Silver in your physical possession). No government controls Bitcoin. It’s decentralized. Moving $100,000 costs the same as moving $10 and NO one can stop you from doing it. Gold is great but Bitcoin is much more convenient and is being labeled as “The Internet of Money”.

What does Internet of Money mean? If you remember the Internet when webpages were almost all text and dial up speeds were 14.4 on a modem on a phone line, that’s where Bitcoin is today. It’s evolving. Buying Bitcoin now is like buying MSFT in 1989.

So what does all that mean for investing? Fuck if I know. You aren’t paying me for advice so you fucking put it together you lazy fuck.

I can say this chart shows a cup and handle and an inverse head and shoulders for Bitcoin. Kind of like those pictures where it’s either an old lady or a young woman, depending on how you look at it.


Bitcoin is the New Style.

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War on Cash

On November 8th Indian Prime Minister Modi did something unusual:

India’s government banned the use of Rs 500 (~$7.50) and Rs 1,000 ($15) banknotes. This pretty much made most currency-in-use illegal. Banks and ATMs are closed today. The government believes that doing this will help eradicate corruption and push counterfeit money out of circulation.

The hidden intention is to also increase tax revenue which is way below average for a developed country because most transactions in India are in cash. In fact, buying a house in India often involves a suitcase of cash exchanging hands. Driving the majority of this suitcase cash through a bank forces criminals and savers alike to declare their savings with the government, which is taxed heavily above a comically low threshold. As a result of that tax you can sell your old bills in the streets at a 20-30% discount to avoid the nice government folks.


Gold, which is a traditional store of value and has a high cultural value in India, is selling at almost a 100% markup. (warning: zerohedge quote incoming)

97% of the Indian economy is cash-based. With 88% of all outstanding currency no longer usable, the economy is coming to a standstill. The daily-wage laborer, who leads a hand-to-mouth existence in a country with GDP per capita of a mere $1,600, no longer has work, as his employer has no cash to pay his wages.

People are now converting whatever they can into gold, silver, and mostly for the first time into the US dollar and other foreign currencies as well, all of which are trading at huge premiums. Money is also moving out of the country. Gold has shot up to as much as $2,800 per ounce, if you can find it.

Consider India a ground war on cash. Before you discount this as a problem only for India other Countries are already winning a cyber war on Cash. There’s Sweden, which unlike India, is 97% cashless thanks to Swish.

“I don’t use cash any more, for anything,” said Louise Henriksson, 26, a teaching assistant. “You just don’t need it. Shops don’t want it; lots of banks don’t even have it. Even for a candy bar or a paper, you use a card or phone.”

Swedish buses have not taken cash for years, it is impossible to buy a ticket on the Stockholm metro with cash, retailers are legally entitled to refuse coins and notes, and street vendors – and even churches – increasingly prefer card or phone payments.

According to central bank the Riksbank, cash transactions made up barely 2% of the value of all payments made in Sweden last year.

The same week Modi outlawed India currency notes Trump won the US election for POTUS. This happens to coincide with Blockchain announcing a record surge in new Bitcoin wallets.

“We’re setting a new record pretty much every day since the election in terms of activity on the platform.

“People are basically hedging against economic instability. It’s a worrying time to be holding a lot of British pounds or if you’re American — people flee to safe haven assets. Bitcoin is one of those.”

If we give 100% control over our stored labor (cash) to the banks government they will do what’s best for them with your cash and you will have zero recourse. Personally, if I had your cash I could burn mine!

With a Bitcoin wallet you become your own bank which allows frictionless, low cost transactions.

With 1 billion people in India now subject to new levels of taxation will they turn to Bitcoin? That remains to be seen. The richest man in India is setting up free 4G for all of India, that certainly helps!

The great fiat experiment is in various stages across the world. With a record number of new Bitcoin wallets being established and a country of 1 Billion facing controls on their cash will we see a surge in demand for Bitcoin? I think so.

Bitcoin was up from $696 to $740 in past 48 hours when this was posted.

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Bitcoin to Supermoon

Since I posted about Bitcoin in August at $575 it has moved to $750 and is currently resting at ~$710.

Bitcoin is in a $20 trading range the past 48 hours. Ain’t nobody got time for that.

Bitcoin is going to move soon and it could be big. Bitcoin doesn’t give a shit about China Yuan devaluation, the price of Oil, lying politicians with illegal email Servers or even pussy grabbing Orange Swans.

Bitcoin thinks little of these things.

To prove my point I provide the infallible balloon animal chart.


It’s that simple. See you at $1,000.

For the more traditional TA purist, Bitcoin has formed a huge cup and handle long term. I expect a move further north soon.


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Meanwhile in Cryptocurrency…

Bitcoin has breached $690. Needham is out with a research paper with lots of pretty charts setting a target of $848. Here’s a one month chart of Bitcoin vs Gold.


But the real news of the day is the launch of a new Cryptocurrency called Zcash. Zcash has nailed the hype machine. They are releasing the first 100 coins today. Zcash insiders are positioned to cash in large as the unwashed masses fight over those 100 coins. The first few coins started trading moments ago.

Here is a live feed of the developers during launch (screenshot below). Notice it looks like it’s a set from Silicon Valley. You cannot make this shit up.


There are now over 700 Cryptocurrencies in the world, or just over double the number of officially recognized fiat currencies. This is fucking stupid and unsustainable. They will consolidate.

Bitcoin is still the King. All hail the King.

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10 reasons Trump will win

Elections are like Baseball. It only gets interesting when the playoffs start.

Here’s why Trump will win:

1) Russia. What the fuck are we doing? The voters are tired of the US being the world’s policeman. Trump may be a nut but he’s a nut focused inwardly on our problems vs ginning up some drama with Putin. Focusing inward is the best domestic and foreign policy by any POTUS or candidate in the past 30 years. Make America Great Again (except with less racism involved).

2) The Fed. Trump has called them out. He may crash western finance as we know it once in office but it was going to happen anyway. At least he’d be a POTUS dealing with reality vs fiction.

3) Trump is what he is. He’s a xenophobic billionaire womanizer. Who fucking cares. We all have flaws. He’s owned most of his crap and it’s only made him more relatable. It makes him trustworthy by comparison that his cards are on the table.

4) Polls showed Brexit would fail because it was impolite dinner conversation but when in the privacy of a voting booth people pulled the lever that was anti-establishment. I think we’ll see a lot of that in November and it’s not measured in pre election polls.

5) Trump will get more of the woman and minority vote than people are predicting. People are more willing to take the bad with the good than is estimated.

6) “Anything but this” syndrome. The public are so fed up they’ll take a sharp stick in the eye to avoid continuing to get reamed up the ass. The issues may not matter to them, they just want “different”. On some level they know they are voting for a revolution. Consider he’s the least worst candidate.

7) He’s a billionaire and yet he can still get more connected to Middle America than HRC, even if he’s tweeting ad hominem attacks from this gold toilet bowl at 3AM. You may not like what he’s saying but you can get why he’s saying it.

8) He’s survived more attacks than any candidate ever. He’s the fucking honey badger of POTUS election cycles.

9) Trump didn’t cheat Bernie Sanders out of his shot to be the nominee.

10) He’s an American success story. He may have had a leg up and acted like a dick but he’s a billionaire and that draws people in. It says nothing about him being suited for political office but a successful outsider appeals more than an ineffective career politician.

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Bitcoin vs The World

Bitcoin is up 3% on a day the Sterling and other currencies scramble to avoid the gravitational pull of the blackhole of their central bank policies and deals made with the devil (extra EU). The Dollar is the least worst place to be in fiat so it rises in comparison. How much longer will that last?

Tomorrow the SEC either approves or denies the Winklevoss Bitcoin ETF. As pointed out in this article a Bitcoin ETF could be a major boost to Bitcoin price.

Having meandered between $300 and $400 for the previous 15 years, gold prices started to take off in 2004. Within two years of the launch of GLD, gold had hit $600. Within four years, it was over $900.


So a Bitcoin ETF should mimic the price-doubling impact of GLD and SLV.

In fact, the first Bitcoin ETF might pack even more of a punch than its precious metals counterparts.

That’s because a lot of potential Bitcoin investors have been sitting on the sidelines.

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$TWLO Gartley?

The Gartley Pattern: 70% of the time it works every time.

Buy at ~60 with tight stop maybe at 58. Sell at 64 to complete C. Buy at ~$58 with stops at $53.5 and hold for next leg up.

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Stocks – Hot Stove edition

There are certain stocks from which we learn hard lessons. If you trade then you have at least one rags to riches to rags story. Or a tragic margin call that takes a winning portfolio and kicks it down an open manhole.

But as they say, time heals all wounds. And you find yourself lured back to a certain hypnotic ticker, because this time it’s different. Except it’s not. Some stocks are a hot stove. Do NOT touch them.

$FEYE and $TWTR have caused a certain havoc on the IBC community. They are a pox upon the land. I declare them persona non grata. Fuck those stocks.

Ether them like Nas did Jay Z.

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Introduction to Bitcoin

For those of you interested in a primer on Bitcoin here are two great resources. I’ll answer any questions the best I can.

First, here is a speech (video and text transcription) by Andreas Antonopolous on Bitcoin. He wrote Mastering Bitcoin and The Internet of Money.

Andreas hits on several comparisons for Bitcoin including: the earliest writings were spreadsheets (a primitive blockchain), the next generation won’t understand 3-5 days to clear a banking transaction, the network effect, Bitcoin security (be your own bank) and also that money gets created in every social circle. Even Kindergartners. And yes, some of them eventually figure out how to take the other kid’s money.

Second is a link on Zerohedge from Raoul Pal. There are some incredible claims made in that article including Bitcoin at $1,000,000 per coin. It’s still a good read.

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Bill Gross on Bitcoin, Blockchain

Bloomberg reports Bill Gross has the following to say about Bitcoin:

New financial technologies such as bitcoin may become increasingly attractive to investors as a protection against central bank low- and negative-interest-rate policies that threaten capitalism, according to billionaire bond manager Bill Gross.

“Bitcoin and privately agreed upon blockchain technologies amongst a small set of global banks are just a few examples of attempts to stabilize the value of their current assets in future purchasing power terms,” he wrote. “Gold would be another example — historic relic that it is. In any case, the current system is beginning to be challenged.”

Billionaire bond managers are usually pretty smart guys. Most of them stick to what makes them money, traditional financial services, until they see something as inevitable in which case they get ahead of the adoption curve for profit and protection.

Let’s say there is a currency collapse. What’s going to be tradeable? Gold coins or digital tokens that are easily divisible  to .00000001 (one hundred of a millionth) and immune to counterfeit like Bitcoin? Bill is saying he sees the current system being challenged and Bitcoin is a way to hedge, if not outright profit. Bitcoin is an “example of attempts to stabilize the value of their current assets in future purchasing power terms”. In other words, your money is going to shit, says a fucking billionaire.

By the way, Gold got hammered today. Bitcoin was unchanged.

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