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An Everyman's Guide To Understanding Cryptocurrencies

What are they exactly? Why consider owning them?
Friday, June 10, 2016, 5:51 PM

When an asset rises by almost 30% in a few weeks, it tends to attract attention.  Recently, that asset was bitcoin (BTC). The price of BTC in dollars rose from $454 on May 23 to $590 on June 6th.

When an asset doubles in a matter of months, it tends to attract attention.  The cryptocurrency Ether (part of the Ethereum platform) doubled from around $7 in April to roughly $14 in early June.

Are these cryptocurrencies mere fads? Or are they potentially game-changing alternatives to the conventional currencies such as the U.S. dollar, Chinese RMB, Japanese yen or European Union euro? » Read more

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Will Cryptocurrencies Soar as the Global Economy Falters?

The reasons why they very well may
Friday, June 10, 2016, 5:50 PM

Executive Summary

  • How will increasing capital controls around the world affect demand for cryptocurrencies?
  • The big banks and corporations are embracing the blockchain. Will that make it harder to ban cryptocurrencies?
  • With far less than 1% of the population holding cryptocurrencies, how large is the remaining updside?
  • What the future may hold for bitcoin and its digital brethren

If you have not yet read An Everyman's Guide To Understanding Cryptocurrencies, available free to all readers, please click here to read it first.

In Part 1, we sketched a brief overview of cryptocurrencies and their potential role as a means of transferring and thus preserving capital from depreciating currencies in destabilized economies to more secure currencies/assets elsewhere in the world.

The Rise of Capital Controls Fuels the Use of Cryptocurrencies

As governments actively devalue their currencies (thereby making everyone using the currency poorer), their citizenry with financial capital are forced to seek ways to move their at-risk wealth into other currencies or assets.

China is a prime example of this trend. As the U.S. dollar has soared 20+%, China’s currency has strengthened along with the USD due to the yuan being pegged to the USD. In response, China must devalue its currency to maintain the global competitiveness of its export sector.

Faced with a massive loss of purchasing power, China’s wealthy class has moved their wealth and their families out of China. This flood of capital has pushed up housing prices in favored markets such as Vancouver B.C. and west coast cities in the U.S.

The sums being transferred abroad are non-trivial. Estimates range into the trillions of dollars. Many observers see the rise of capital controls as... » Read more

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Off The Cuff: We Need Money We Can Trust

A case for a new type of money system
Thursday, May 12, 2016, 9:49 PM

In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss:

  • The Death Of The Status Quo
    • The establishment is in a doomed fight to keep change at bay
  • The Importance Of Free Pricing
    • When we can't trust the signals prices are sending us, we're blind
  • The Need For Sound Money
    • When money is manipulated, mal-investment ensues
  • The CLIME Model
    • Charles walks us through his proposal for a labor-backed currency system

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today. » Read more

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Off The Cuff: The Folly Of Financialization

Its cures are worse than the diseases it tries to fix
Thursday, April 14, 2016, 12:22 PM

In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss:

  • The Future Of Oil
    • Much more volatile prices lie ahead
  • The Folly Of Financialization
    • Central planners are creating cures worse than the diseases they're trying to fix
  • The Dollar Dilemma
    • The direction of dollar now hurts as many player as it helps
  • Return Of 'Race To The Bottom'
    • We risk a global currency war like that seen in the 1930's
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Peak Prosperity

Adam Trexler: A New Way to Hold Gold (2016 Update)

Right alongside the bills in your wallet
Sunday, April 10, 2016, 8:03 PM

What if you could carry and exchange gold in the exact same manner as you do with the dollar bills in your wallet?

Two years ago, we introduced the precious metals community to a company called Valaurum, which has developed a technology that's making this possible. » Read more

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Jim Rickards: The New Case For Gold

A powerful set of arguments for owning the yellow metal
Monday, April 4, 2016, 12:32 AM

Monetary expert Jim Rickards returns this week to share the insights from his latest work The New Case For Gold, a detailed and highly-researched study of the fundamentals likely to drive the price of gold bullion in the years to come.

Rickards is quite confident that the price is going higher -- much higher in fact -- as the current world fit currency regimes falter, to be replaced by ones backed (at least in part) by bullion.

On the way to that outcome, expect the price to be subject to the geopolitical interests and aims of the largest players on the chessboard. » Read more

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The Year Of The Red Monkey: Volatility Reigns Supreme

To preserve capital, you need to outsmart the monkey
Friday, March 11, 2016, 3:16 PM

In the lunar calendar that started February 8, this is the Year of the Red Monkey. I found this description of the Red Monkey quite apt:

"According to Chinese Five Elements Horoscopes, Monkey contains Metal and Water. Metal is connected to gold. Water is connected to wisdom and danger. Therefore, we will deal with more financial events in the year of the Monkey. Monkey is a smart, naughty, wily and vigilant animal. If you want to have good return for your money investment, then you need to outsmart the Monkey. Metal is also connected to the Wind. That implies the status of events will be changing very quickly. Think twice before you leap when making changes for your finance, career, business relationship and people relationship."

(Source)

In other words, the financial world will be volatile. And few will have the agility and wile to outsmart the market-monkey. » Read more

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The Screaming Fundamentals For Owning Gold

We're at a moment of historic opportunity
Tuesday, December 8, 2015, 12:53 PM

Every year or two we update this report, which lays out the investment thesis for gold. Here is this year's version.

Silver is touched upon only as necessary; as a separate report of equal scope is required for that precious metal.

Gold is one of the few investments that every investor should have in their portfolio. We are now at the dangerous end-game period of a very bold but very reckless & disappointing experiment with the world's fiat (unbacked) currencies. If this experiment fails -- and we observe it's in the process of failing -- gold will provide one of the best forms of wealth insurance. But like all insurance products, it only works if you buy it before you need to rely on it. » Read more

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How Much Higher Can The U.S. Dollar Go?

And what will the implications be?
Wednesday, November 25, 2015, 1:11 PM

Our first observation is that trends in the USD tend to last for some time, so if this rally follows the pattern of previous rallies, it’s unlikely to have run its course in one year.

Secondly, previous rallies paused for a multi-month consolidation period before launching upward for the second leg of the long-term rally.

Thirdly, the USD rose sharply to previous peaks and then round-tripped back to the 80 level.

This raises the question: How high could the dollar rise in this rally? » Read more

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Mike Maloney: The Rollercoaster Crash

An updated look on the coming global currency re-set
Sunday, November 22, 2015, 12:53 PM

Precious metals sank to 5-year lows during this past week. The long painful price decline that began at the end of 2011 still continues unabated. Holders of gold & silver are understandably wondering if their faith in precious metals has been misplaced. » Read more