While The Price of Gold Drops to Near $1700USD, Bitcoin Bounces Up to $22000, Deflation and Commodity Prices, Why I’m watching Oil Prices – July 18, 2022,
Over a year ago, I predicted Gold Prices would reach record low levels primarily because of economic DEFLATION. Currently, what I expected would happen is happening as Gold and Silver prices are currently retreating. It doesn’t take a rocket scientist to figure out that while the economy is DEFLATING people, many who are overleveraged will sell their gold positions.
Is Gold better than Cash? Ofcourse it is, but is it more CONVENIENT than cash as a medium of exchange in this modern world? No, the market has even pushed the price of Bitcoin to 22,000USD because the market likes digital payments and the U.S dollar system as better mediums of exchange in the modern world. Does this mean you should dump your Gold? Well, that depends on you and your financial position.
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I know quite a few people who bought Bitcoin at $60,000, Bitcoin is currently trading at $22,000, and when I say Bitcoin $60,000 out loud during what I believe is an economic deflationary cycle, that number sounds preposterous, Bitcoin $12,000 makes more sense to me, but Gold $1200USD also sounds about right to me when I say it out loud.
A large chunk of the Western world has never experienced a prolonged recession before, but we could be headed for one right now. Why? Because of this POLITICAL war in western countries on Fossil Fuels. The HIPPIES are now in charge of the white house, and Hippies are stupid; Jimmy Carter was hippie and if we’re to be honest about James Earl Carter Jr., he had more of an excuse for his disastrous economy than Joe Biden has.
Prior to Jimmy Carter, Richard Nixon, instead of REVERSING the “Great Society,” attempted to preserve it by ending the Gold Standard and even enacting price controls. Joe Biden, on the other hand, had the PRIVILEGE of a confidence-based currency. Sure Donald Trump’s attempt at vote buying expanded the money supply, obviously leading to malinvestments by the beneficiaries of the free cash, but CONSUMER price inflation is due in large part to Joe Bidens war on fossil fuels.
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Joe Biden decided to declare war on DOMESTIC oil production, and many of us label the U.S fiat monetary system as the petrodollar system for a reason. Whether you like it or not, Oil is all around us, there’s plastic EVERYWHERE, and in this modern world, Plastic is much more valuable than Gold and Bitcoin.. But Oil is considered a commodity and if we’re going to have an honest discussion on oil-the-commodity during a recession, how do you interpret it?
Well, a recession is a SLOWDOWN of economic activity, and a slowdown may change the DEMAND for oil, but because of the excessive COSTS to drill for oil imposed by Joe Biden and all the idiot Western leaders who share is ideology, oil shortages as they were under the Carter administration will take on a different shape.
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I am anticipating an OIL CRASH, followed by oil shortages, followed an Oil BOOM, as OPEC will MANAGE supply to maximize profitability. The price of Bitcoin during an oil crash could do all sorts of things; Bitcoin for myself, is a gamble during a commodity slowdown because Bitcoin is software and is open to interpretation to the person(s) looking to buy or sell.
Gold and Oil, on the flip side, are needed for the entire world to enjoy their standard of living, but as I point out, oil is far more important than Gold, and it’s for this reason why during an economic downturn, the price of gold could really start to the selloff, especially if an oil prices crash and is met with SHORTAGES of oil.
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If people remember, oil prices were forced to SPIKE to deal with consumer price inflation due to Jimmy Carters UNWILLINGNESS to shrink the size of the government. Joe Biden is and Jimmy Carter share the belief that Big Government is the answer to an economic downturn. People tend to forget that fiat money is based on confidence, but regardless of the medium of exchange, MALINVESTMENTS will always yield the same negative results.
When humans are given free money they’re not going to wake up in the morning and become skilled Warren Buffet investors, but what does happen when governments give the wrong people free money and free resources is that Oil drilling, as an example, will stall while single moms with 3+ kids and no job get money and resources that should have been used by PRODUCTIVE classes to build and maintain property, plant, and equipment.
Malinvestment is the real problem with FIAT money, the U.S dollar reigns supreme, and there’s lots of confidence in it, but as you’ll notice, America is experiencing far more inflation than other Western nations? Why is that you ask? Because of REGULATIONS on the economy, when you’re the government with the most powerful current in the world, you will assume that excessive regulations shouldn’t be a problem for the private sector.
Throwing money at problems is what dumb politicians do; it’s all they know how to do; they don’t understand the COST of doing business and why this matters for the price of Gold especially is that Gold doesn’t produce any cash flow, whereas if the Federal Reserve raises interest rates to combat inflation, the U.S dollar will yield cashflow.
If the Federal Reserve keeps raising rates while BANKRUPTCIES are happening, this will be even more bullish for the U.S dollar and bad for Gold, and the markets will view this as the Federal Reserve attempting to TACKLE inflation. Now, just because you might not understand the function of the Federal Reserve doesn’t matter; the Federal Reserve is designed to do what Gold can’t do, which is give the Federal Government the chance to SHRINK.
Sure Gold can shrink the size of government, but it could also be extremely problematic for the Fractional Reserve PRIVATE banking system. Once we no longer have a FREE MARKET capitalism system, prices can’t deflate properly to reflect changing market conditions and it’s for this reason why I argue I don’t want a Gold Standard.
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Once a stupid law like the minimum wage law exists, the gold standard is under threat because there’s a MARKET price to discover gold, and as an example, a burger flipper might be granted a WAGE higher than the cost to discover gold. There’s a cost for gold and oil exploration, in order for Bitcoin to have value, the designers even had to give Bitcoin an exploration process.
Price controls DESTROY an economy almost immediately, and most countries around the world know this, in Japan as an example, they built their economy by debasing their fiat money to the greenback. Why? To CUT labor costs. Once you understand how the U.S dollar works and why people hoard it, it’s easier to see how DUMB a politician is.
Joe Biden is an idiot, don’t give me the whole Joe Biden has dementia schtick. His war on fossil fuels is a CONSCIOUS effort. Based on Joe Biden’s regulatory policies, he’s making everything more EXPENSIVE, and this is the Federal Reserves’ chance to remind people why it was created. I keep telling people it’s only bankruptcies, will the global economy crash if the Federal Reserve keeps raising interest rates? Yes, but there’s also a lot of money out there; not everybody is overleveraged.
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There’s this silly myth that everyone is BROKE; some people are NOT broke, a lot of people have money saved, money is sidelined, waiting for prices to come down to where they’re supposed to be, and if we’re to be honest GOLD is overvalued. Most people have priced Gold, imagining that the U.S dollar is going to crash? Well, suppose that crash doesn’t happen in our lifetime? what happens to the price of gold if interest rates are returned to a normal 3-7% for the foreseeable future?
If this were to happen, what that means is that many people would b FORCED to return to work, and likely bloated governments would have to SHRINK. Now, I don’t think Joe Biden is smart enough to notice this? But neither was Jimmy Carter. Regarding Bitcoin, it is what it is, it’s worth the gamble at a price you’re comfortable with paying, but it’s not an important part of the economy, so when or if you buy bitcoin, understand that it appears to have a mind of it’s own.
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Interesting times ahead!