The Difference Between Gold and Bitcoin is Time

Bitcoin is crashing today, along with all cryptocurrencies. I’m not “happy” because I like bitcoin. It’s crashing today because of Asian legal worries. Eventually, all cryptocurrencies will be outlawed entirely. All of them, except government cryptocurrencies. Those will be inflated continuously and purchases using them will be tracked entirely.

Gold cannot be outlawed because it has too much support as a thing that exists in reality over time. Cryptocurrencies can be outlawed entirely because they are new, and have little support outside of core grassroots cryptoenthusiasts. If you’re playing for collapse, which I am, the play is gold, not bitcoin. All cryptocurrencies will eventually go to zero as global government bankruptcy gets closer. Only hard assets with an intrinsic market value based on use value will be worth anything. Cryptos will be firewalled and pushed into black markets at best. Those who trade them will be termed monetary terrorists and the biggest of them will be those who use cryptocurrencies for contract killing, taken to court in public trials and portrayed as if everyone who owns any amount of bitcoin makes their living killing people.

Obviously, the vast majority if digitial currency owners are innocent people who do nothing wrong whatsoever. But they will not be portrayed that way. Be very careful.

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Shortage vs High Prices in Chazal

Mdirash Rabba Breishit, Toldot 64:2 – Chazal seem to recognize the difference between high prices and a bona fide shortage. A shortage happens only when buying and/or selling at the market price is forbidden by government. If prices are mandated by government to be lower than the market price, a shortage will develop when more buyers than sellers are willing to exchange. Some buyers will not find what they want. At the market price, the amount of buyers and sellers equal out.

The Midrash here is discussing the famine that Yitzchak tried to escape from. God told him to stay in Israel and not to go down to Egypt like his father:

Is it not taught that one may not leave the land [of Israel] unless two se’ahs of wheat are being sold for a selah? Rebbi Shimon says when does this apply? When there is no wheat to by. But if there is wheat available, even one se’ah for a selah (meaning twice the price as above) one may not leave the land. Since Elimelech left the land he was punished, in that he and his sons died.

If food is very expensive in Israel, it isn’t sufficient reason to leave. But if there is a shortage and you can’t buy what you’re looking for, then you can leave. Nafka mina bewteen high cost of living and real shortage of goods due to economic intervention. Without government, there are no shortages because price always finds market level.

 

Gold Flag Forming Today

Took a look at the futures this morning and the S&P, Nasdaq, and the Dow all spiked down together with the dollar index and bond futures. The long term treasury ETF (TLT) is down close to 1% in premarket. Gold is up close to 1%.

When stocks, bonds, and the dollar index are all down together with gold up, that’s a gold flag. The end game will see gold flag after gold flag for weeks at a time.

What is happening with cryptocurrencies now will happen with gold. If bitcoin can move from $1,000 to $20,000 in 8 months, gold can, too. Except with gold, I believe it won’t go back down after it spikes. Cryptocurrencies will all go to zero if they ever become a popular medium of exchange because government will blame a falling dollar on bitcoin and the rest, outlaw any business from accepting any digital coins and game over, but gold will keep going up.

This is just one gold flag. Let’s see if it maintains itself and if it repeats again tomorrow.

Once price inflation hits 3-5% by government indexes, I believe the final stages in dollar hegemony will begin.