TREND ALERT®:
Bitcoin bounce, gold moving higher: Trend or fad
KINGSTON, NY, 8 February 2017—Yesterday, Bitcoin spiked more than 2 percent, hitting its highest price since January 4. Today, gold hit a three-month peak, pushing prices up 7 percent this year.
And although equity markets continue to trade near all-time highs in the US, bitcoin and gold prices also have moved higher. Are bitcoin and gold's steady rise signaling the onset of the market storm? Or is a greater trend taking shape?
This is unlike the old days when strong equity markets, a strong dollar and strong economic growth would push gold prices lower. In the new world geopolitical and economic order, we forecast that gold and the relatively new alternative currency, bitcoin, will rise despite positive market conditions.
As for bitcoin, yesterday's jump was largely attributed to the news that China's foreign-exchange reserves continued to shrink. They fell for the seventh consecutive month, down $12.3 billion, sinking below the psychologically key $3 trillion level.
Beijing already has scrapped over $75 billion in foreign transactions last year to stem currency outflows, and it is burning through its reserves to stem its currency depreciation (the yuan is down 6.6 percent against the dollar, its worst performance since 1994). That's inspiring Chinese citizens to buy bitcoins as a hedge against further yuan depreciation. Although the government hit bitcoin traders with a flat fee of 0.2 percent per transaction two weeks ago and pledged to "further curb market manipulation and extreme volatility," trading volume continues to accelerate.
Going for the gold
On the gold front, we noted in last week's "Trend Alert: Where's gold going? Play the Trump Card!" that the Dow Jones Industrial Average had its worst day since Election Day after a number of President Trump's executive orders, including restricting immigration into the US from seven Muslim-majority countries. As the equity markets sank, gold spiked some $15 per ounce, gaining more than 5 percent in January, its best month since June 2016.
Beyond the Trump Card, investor confidence is being unnerved by unsettling rumblings across the geopolitical landscape. In France, for example, Marine Le Pen's anti-European Union, anti-euro National Front party has overtaken former establishment party frontrunner François Fillon in the presidential race. That followed accusations that he showered his wife and children with nearly $1 million in taxpayer money for no-show jobs.
In Germany, the Netherlands and Italy, strong eurosceptic, anti-immigration populist parties continue to gain momentum, threatening the established economic and political European order.
And on the war front, beyond the endless War on Terror and Middle East wars, tensions again have escalated in Israel following both the government's decree to build thousands of illegal settlement homes in occupied Palestinian territory and the passing of a new law allowing the expropriation of private Palestinian land. Over in Ukraine, the civil war powder keg has again been lit.
TREND FORECAST: Rising interest rates in the States will push gold prices lower as the dollar strengthens. However, as a myriad of destabilizing geo-economic and geopolitical tensions increase, gold prices will rise as investors seek safe-haven assets. And while bitcoin continues to gain strength and respectability, government attacks to diminish its value remain a possibility.
Technology fails, EMP Or Digital control(s)? No bit coin either! No "money" a digital illusion! How many paper currencies have failed, hyper-inflated like Germany post WW1 ? Globalist figure on their puppet media/politicians to control the compliant populations of sheep while hyper-inflating debt and importing enemy, non assimilating combatants. Chaos from financial collapse and global war? Pretty well assured.
The advocates of crypto-currencies believe that they will eventually replace fiat currencies because the blockchain software does not allow unlimited printing/coining/generating of its currency. It is limited to a certain coin amount by the software and that theoretically no one can hack into the software in order to generate more currency than the predetermined upper limit figure. This is what they believe and that it is a sure fire way to prevent governments from creating more and more currency thereby diluting the existing currency and lowering is value. So far they are right but I just cannot believe that some one or several brilliant tecbies won't come up with a way to defeat the blockchain wall/lock on limiting the generation of more currency. Gold has always, historically, prevented government fraud, waste and abuse since there is only so much of it and only so much can be mined and added each year to the existing world gold pile. I have been around software long enough to know that no software is bullet proof. That is why it should not be used in elections or in any critical usage without extreme caution and safeguards. There is no substitute for gold in the world of currencies. Gold is real money and everything else is a fragile substitute or BS.
Italy, historically, has suffered from Muslim/Arab invasions where they would capture children of rich people and try to ransom them for gold. I believe Italy is wise to the middle eastern immigration of mostly men and realize that many of these men are SOLDIERS WITHOUT UNIFORM whose sole intention is take over all European countries through peaceful/deceitful means by talking out of both sides of their mouth (forked tongue speak). If one is a Muslim then he must advocate his political/religion since he cannot separate the politics from the religion. Islam will not allow it. Therefore he must push forward to spread Islam in any way he can, even if he has to be deceitful because he firmly believes that his God will forgive him because of the supposedly good results of the spread of his faith. Bottom line is that we westerners cannot and should not believe anything that they say even though they are deeply faithful. They cannot keep themselves from being deceitful since is will be for the ultimate good in their mind and in their spread of the faith. Therefore if we give them credibility we are in fact slitting our own future throats and we will end up as Lebanon did, i.e., in a civil war. The problem with those Americans and Europeans who want to believe that the immigration will in the end work out for good are deceiving themselves and are putting their children and grandchildren in jeopardy, unfortunately. Understanding correct history and not revised history is essential to our future well being. I think that the Italians have a better handle on the truth than other nations, except for Spain.
CLARIFICATION: In my comment that software should not be used for voting I did not mean to imply that included blockchain (crypto-type) software which cannot be hacked even with supercomputers at this point in time.