BTC ETF and Inflation Drives Assets
Before we delve into what’s driving the markets, including the Feds baton hand off of fake tapering, let’s look into the news that Proshares new Bitcoin ETF is going to launch soon.
This shouldn’t be news and any Bitcoin purist knows, this is not what the technology was designed for. Rather this is Wall Streets meager attempt to feast on an ever growing asset class that has become to large for the main street players to ignore. Long time Econemotions readers know that we have been avid proponents of Bitcoin both as a technology and even more so as a store of real wealth from all the debasement and inflationary games that come with global fiat constructs.
Bitcoin in its purest form, the actual private key and cold storage version will always be the superior product and any deviation from that, such as an ETF or any traded derivative is just more Wall Street gaming. Hey look we don’t blame them, plenty of people will be dumb enough to go into a Bitcoin ETF. We aren’t using the word “dumb” as derogatory, but rather as a lack of pure knowledge as to what their options truly are.
We will be honest, Bitcoin means responsibility and many lack the conviction to be responsible and when it comes to Bitcoin, one has full control over their private keys and storage, this means if you lose your keys or passcode, well you are out of luck and there won’t be any one to blame but yourself. So we suggest complete all out attention. If anyone wants to play this game from a purer standpoint then one will have to become responsible and realize that in today’s world, very few things actually belong to us, Bitcoin changes all of that and it comes with a fiat discounter to counteract fiat’s labor devaluation mechanism.
If we are being truly honest, let’s just say the central banks know their product is inferior and yet there isn’t anything they can do about it except keep pouring fuel on the fiat fire, which is why you see charts like this:
With commercial bank assets growing by +10% yoy, who doesn’t expect asset price, food, commodity, gas, etc, etc inflation??? Fools its all just increase, increase in the price you pay, which is nothing more than a decrease in real savings or a devaluation of your labor, which is truly the only way you should look at this.
When one sees that inflation chart, then one must surely be able to surmise the obviousness of this next chart:
A robust democracy requires a normal distribution, not a Pareto distribution. This isn’t capitalism, this is feudalism, Oligarchy, etc. and Tony Montana from the movie Scarface, put it best,
"In this country, you gotta make the money first. Then when you get the money, you get the power. Then when you get the power, then you get the women." (Scarface 1983)
Money = Power, it buys influence and if it buys influence, it buys votes, if it buys votes then it buys individual ideologies and when the system no longer serves the many, well then calls for Socialism, arise…you get the picture.
This happens time and time again, why isn’t Solzhenitsyn mandatory reading for young adults? Great question, yet knowledge seems to be the last thing people want these days, too their own detriment unfortunately. God forbid they unplug their noses from the diseases known as Social Media and pick up a book and learn something, its no wonder the world finds itself in such a quagmire. Isn’t it obvious?
So with such a system hell bent on printing its way to prosperity via debt, means that Bitcoin should continue to discount all fiats and appreciate accordingly. The great design flaw of fiat is exposed inherently in Bitcoin and we believe this is becoming more and more obvious by the day and PlanB@100trillionUSD has a model that we believe nobody can stop, well unless you shut the whole internet down:
Mathematics is a beautiful thing and maybe this is why we find ourselves in a world that knows no direction, we are on a major precipice of change of how we value things, what we value and this type of transition throughout history has never been taken lightly. Nobody likes to lose power, yet if the writing on the wall hasn’t been sprayed enough for all to see, well then you just aren’t looking. We have watched Bitcoin from the start and have understood it to be one of the greatest inventions of all time.
With all this fiat gaming, tapering, which is nothing more than smoke and mirrors because we know the routine, one central bank slows the bond buying, while the other picks it up, its sleight of hand nothing more. Remember in a fiat debt fractional reserve world your print or die, there is no alternative. So let’s look at the US yield curve calling for a rate hike by smashing the 5s30 yield curve and flattening it to 89bp down from 163 bp earlier this year:
All this hawkish discounting is also hitting the US Dollar and setting up the Euro for a reversal of fortunes as it holds the 116-00 area:
Copper has exploded lately but it may be running into prior high resistance here so better locations to buy should be offered ahead:
Moving to the equities we see the Nasdaq with a nice 900 point pop off the lows and actually back above 15162 which now becomes our bull/bear line here:
As we noted when the 100eMA was breached, the risk was not an extension but an ongoing patient buy zone at those levels has and continues to be the trend, this time was no different, the angle of that long term trend in the chart above should be pretty obvious..
Finally the Nikkei, it too held the .382 fib and is in a bull mode once again:
The big question Econemotions has is, how long can global equity markets continue to ignore the bond markets? This idea that the rate hikes are short lived and that the central banks will always print seems solidified in all investors psyche, call it the FED put or whatever. The facts remain, nobody thinks markets can ever fall and this condition or shall we say axiom seem pretty well entrenched. DONT FIGHT THE FED…yea we know, but when we see Crude and when we go get gas, we can’t help but think how high can prices go? In regards to Crude, well $90 seems obvious now:
Alright, so we hope you learned something today, we hope you research more and continue to gain an upper hand on the markets and what drives them. We know you have many outlets and you can view and read many things, so we just wanted to say thanks for reading, thank for sharing and we hope you have a great day!
Till next time.
Please think about joining the ranks that subscribe and get our thought process when we see things that are relevant, that matter and not just the BS fluff you get everywhere else. Your support is greatly appreciated. We write about the equivalent of one book a year on this site and the volumes we speak should transcend a lot further than these pages. You should be able to implement a lot of this into your game plan not just in trading, but in all walks of your life. We are in this together whether you believe that or not, it doesn’t matter, we are all connected, so stay positive and know your atoms do have an effect on everyone else around you, so STAY CALM and SIGN UP TODAY!
-Magnelibra Econemotions
DISCLAIMER: For educational purposes only. This is not a solicitation to buy or sell commodity futures or options on neither commodity futures. The risk of trading securities, futures and options can be substantial and is not for everyone. Such investments may not be appropriate for the recipient. The valuation of futures and options may fluctuate, and, as a result, clients may lose more than their original investment. Nothing contained in this message may be construed as an express or an implied promise, guarantee or implication by, of, or from the author Michael Agne owner of Magnelibra Capital Advisors. We will never claim that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Although care has been taken to assure the accuracy, completeness and reliability of the information contained herein, we make no warranty, express or implied, or assume any legal liability or responsibility for the accuracy, completeness, reliability or usefulness of any information, product, service or process disclosed. ALL RIGHTS RESERVED 2021