POITOU, FRANCE – “Dad, last week I made another $20,000 off that NEO cryptocurrency I bought.
“And last night, I made another $5,000 on my other cryptocurrency investments.”
Our in-house crypto expert was either boasting or pulling our leg; we weren’t sure which.
“I bought into NEO with just $2,000. I’ve already taken out $20,000. The account probably has about $80,000 in it now.”
“The best thing is that I’m now playing with ‘house money.’ I’ve gotten back all of my original investment… and much more. And it’s NEO, not neon. It’s the Chinese version of another one of the big cryptocurrencies, Ethereum.”
Day by day, we stumble toward tomorrow. And as usual, the future casts its shadow backward… onto the wayfarers.
Our children, with more spring in their steps, move along quickly. They buy cryptocurrencies in anticipation.
There are now more than 800 different cryptocurrencies competing for our business. That’s five times as many as the number of conventional currencies.
“It’s really a free-for-all,” continued our in-house expert. “New coins are starting up every day. Most are scams or jokes. Some are both. But something is happening here that we can’t afford to ignore.
“Our whole business is based on trying to understand the world of money. This is the biggest thing to happen in the financial world since the discovery of gold. If we don’t understand this, we don’t understand anything.”
With this alarming thought, we sat down to breakfast this morning. After two cups of coffee and further discussion, the disquiet increased.
Not only do we not understand cryptocurrencies, we judge the odds of ever understanding them at slim.
But maybe we don’t have to.
“You’re never going to understand the geeky technology behind cryptocurrencies – the ‘blockchain,’ ‘proof-of-work algorithms,’ ‘hash rates,’ and ‘Byzantine fault tolerance,’” continued our son.
“Don’t worry about it. We use things every day and most people don’t know how they work. In that famous example – from libertarian writer Leonard Read – none of us could easily make a pencil. But we all feel comfortable using one.
“Most people don’t know how electric motors or automobiles work… and ask anyone how the microwave oven heats things up; they won’t know. We don’t even know how gold works.
“You don’t have to know how these things work… You just have to know what they do and how to use them.”
That was a relief.
“You also have to realize that we now live in a world without real money. We have paper currencies controlled by governments. They aren’t limited in quantity. They can’t be trusted to preserve wealth.
“With bitcoin, you have to use real-world energy – in the form of computer processing power – to increase the money supply. The Fed added something like $4 trillion to the money supply over the last eight years. It created this ‘money’ out of thin air with nothing more than strokes on a computer keyboard. What kind of money is that?”
“I think it was $3.6 trillion…” we corrected the record. Not that it mattered. What’s another $400 billion?
The extra “money” was supposed to light a fire under the economy. Instead, it drenched it in make-believe capital and discouraged savings.
In 1975, the personal savings rate was about 12%. Today, it is only 3%. This leaves the roughly 40 million Americans set to retire over the next 40 years with almost no savings.
“In a modern world, with so many billions of people and so many billions of commercial transactions, real money is not a luxury. It’s a necessity. That’s why this stuff has taken off so fast.”
Adds economist George Gilder in The Scandal of Money:
Reform of world money is less a far-fetched dream than a rising imperative. Gold and digital currencies converge to provide a new solution to the enigma of money. Although there are many potential rivals, bitcoin is the most complete and tested form.
“Look at it another way,” continued our resident bitcoin-o-phile.
“The financial industry has become parasitical. It uses fake money to con billions of dollars out of the Main Street economy… and shift it to Wall Street and the Deep State.
“Cryptocurrencies are not state run or state controlled. They’re a way for ordinary people to take back control of their financial lives.
“You know, Dad, probably the single most important thing you could do for your readers would be to introduce them to cryptocurrencies. I’m not talking about speculating. You’re right. It’s too dangerous for most people. I’m talking about understanding them. And starting to use them.
“Already in Japan, there are some 20,000 merchants who accept bitcoin. They’re not dumb. They know Japan has the biggest government debt in the world.
“And you know what’s another hot spot? Venezuela. They’ve got an annual inflation rate of about 1,000%. They’re discovering the virtues of cryptocurrencies – fast.
“Anyone can create a cryptocurrency. That’s why there are so many of them. You should create one for your readers. They could use it to pay for their newsletter subscriptions.
“It wouldn’t be an investment. And it wouldn’t be worth much… at least not at first. But it would help introduce people to cryptocurrencies and how they work.”
Editor’s Note: Around the office, our go-to cryptocurrency expert is colleague and former fund manager Teeka Tiwari.
Teeka is bullish on bitcoin, but it’s not the only crypto seeing incredible returns right now. Teeka’s team recently found three cryptos that have grown an average of 1,183.23%… including one he calls the “next bitcoin.”
Teeka put together a brief presentation to show readers how these little-known assets could be your ticket to life-changing gains. See for yourself right here.
BY CHRIS LOWE, EDITOR AT LARGE, Bonner & partners
Bitcoin is soaring…
On August 1, the world’s most valuable cryptocurrency by market cap split into two separate cryptocurrencies: the original bitcoin and Bitcoin Cash.
Bitcoin Cash can handle transactions faster than the original bitcoin. Some developers worry that it’s less secure as a result.
As we recently reported, a lot of cryptocurrency skeptics billed the split as the end of bitcoin. But today’s chart reveals just how wrong they were.
As you can see, bitcoin has hit an all-time high of $3,450.
It’s up 27% since the August 1 split.
– Chris Lowe
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In response to last Friday’s Diary, readers consider the root of the economic trouble in Venezuela…
When the Americans ran the oil companies they built in Venezuela, there were hardly any power outages. After Chavez booted them out and took over the companies, frequent power outages began to occur until finally in many areas power was available for only a few hours daily. Chavez couldn’t even run the well-established companies he took over and his country sat on top of the biggest oil reserves!
– Helga N.
I wonder why you do not mention the role of the CIA, Wall Street, and various NGOs in the dismantling of Venezuela. Is it intentional, or something else?
You must know that your description is only part of the whole picture and significant and important facts are missing. Your description is not much different from the mainstream media, which is lately getting famous for providing incomplete information, or else entirely misinforming people.
– Richard P.
Meanwhile, a comment in Friday’s mailbag sparks debate…
Was reading your “mailbag” recently. One of your readers compared Trump to Hitler. Maybe I missed that, exactly when did Trump start rounding up folks and putting them in camps? And why does no one ever bring up what America did in the late ’30s, early ’40s? Closing our borders to the Jews of Europe attempting to find a new home along with many other nationalities trying to flee the Nazis. How about what we did to the Japanese? I am amazed at the success of dumbing down my fellow Americans.
– Ken L.
One of your readers compared Trump to Hitler recently. I share that fear. Trump seems to have taken the words of Joseph Goebbels, Hitler’s propaganda minister, to heart: “The truth is the greatest enemy of the State.” “It is the absolute right of the State to supervise the formation of public opinion.” “If you tell a lie often enough, it becomes the truth.”
When I see what is happening in this country today, from nearly nine decades of observation, I can only suppose the Gestapo is but a step away, and we are all gradually becoming merely tools of government, and of the aristocracy. The liars seem on the verge of triumph. Hopefully I’m wrong…
– Chuck B.
Colleague E.B. Tucker, editor of The Casey Report, just released his second training video…
Today, E.B. dispels a common myth: that when stocks are trading sideways, you should stay on the sidelines.
Instead, he shares a strategy designed to produce gains even when stock prices are going nowhere. You can watch today’s video when you register for E.B.’s free training seminar right here.