A Sheep in Wolves Clothing — Part 2

A Sheep in Wolves Clothing — Part 2

And I’m back.

Just like that, nine days lounging around like a reptile in the hot sun is over.

Time to get back to business.

Although, I didn’t really leave the markets behind. I still found myself poolside flicking through the financial news.

But one particular story caught my eye more than others.

A report published by the Reserve Bank of Australia says Australia’s illicit drug use is increasing even as the broader economy slows.

In fact, the math wizards reckon Aussie’s spent about $13.5 billion on banned substances last year.

And people’s favourite method for paying for some gear? A fifty buck note.

That’s right. Not the $100 note, like most people assume drug lords prefer.

Instead, the drug buy and sell transaction is conducted with the most popular note in Australia.

The crisp pineapple makes up 46% of all of Australia’s notes in circulation. Whereas the $100 note is rarely seen, so people are naturally more sceptical of it.

But get this. The estimated $13.5 billion we throw away on drugs each year could egg on the government and the central bank to push harder to abolish cash.

Sound crazy? It shouldn’t.

The push to eliminate the use of cash is a covert attempt to bring EVERYONE into the financial system.

A system where every single transaction is monitored by the government.

Remember, the report of how much money Aussies spent on drugs didn’t come from a health department…or even a drug rehab program.

As I said, it was a report produced by our own central bank.

Australia isn’t the only country pushing to eliminate cash. Check out the last article from Jim today.

All around the world, the path to rid the world of paper money is being laid out…

Read on below…

Best Wishes,

Shae Russell Signature

Shae Russell,
Editor, The Daily Reckoning Australia

A Sheep in Wolves Clothing (continued…)

Jim Rickards

Today, we continue our glimpse of my ‘five links’ where we left off on Tuesday…

III. Can the Market for Bitcoin Get Any Worse? The Answer Is “Yes”

I did a television interview in December 2017, at a time when the price of Bitcoin was going up $1,000 per week.

The interview went viral and had over 1 million likes on Facebook. On the exact day of the interview, Bitcoin was around $8,000 per coin.

My forecast was that Bitcoin would go to $20,000 and then crash on its way to $200 as a criminal token. So far, that’s exactly what has happened.

You can see the interview here.

Today, Bitcoin has crashed to about $4,000 per coin, down 80% from its top and well on its way to my $200 per coin forecast.

Lately, the drop has accelerated in percentage terms even beyond the January–February crash earlier this year.

This recent crash within a crash is detailed in this article.

The problem with a crash of this kind is that confidence is destroyed, liquidity dries up, and momentum gathers, setting the stage for further losses. Bubbles are not symmetric in their price patterns.

The rising part of the bubble is characterised by slow price gains that accelerate and then quickly go hyperbolic.

This is the classic ‘hockey stick’ chart.

Once the bubble bursts, the initial drop is steep, but this is followed by a series of rallies that fade, followed by another rally in a pattern called “lower highs.”

It can take a few years for a hockey stick bubble to reach its destination low.

This is due to denial, wishful thinking and groupthink among the late buyers who have suffered the greatest losses during the bubble stage.

Meanwhile, the early buyers took the money and ran for the hills.

There’s nothing left of Bitcoin except disappointment and the occasional pump-and-dump by the miners.

Good luck with that.

IV. Just When You Think You’ve Seen Every Crypto Scam… A New One Emerges

Side by side with the Bitcoin price bubble has been a series of scams designed to pump up the price to encourage unsuspecting victims to buy more crypto from unscrupulous miners.

These scams include trading the same crypto back and forth at progressively higher prices to create the false impression of a price rally (known as ‘painting the tape’), bidding up prices to create a rally before dumping miner inventory (known as ‘pump and dump’), stealing cryptos through hacking, propping up crypto prices by selling other coins and using the proceeds to buy cryptos (most famously the Tether ‘stablecoin’), and many more scams.

I’ve chronicled as many of these scams as I can as part of an effort to steer investors away from the crypto mania.

Every time I think I’ve seen it all, a new scam emerges.

As described in this article, a crypto miner can pay a celebrity to endorse a cryptocurrency or give it a good review in a tech publication, even if the endorser knows nothing about cryptos.

A good example is John McAfee, a well-known pioneer in online security.

McAfee revealed that he received $105,000 per tweet to endorse various cryptos on twitter. It’s a simple case of trading your reputation to lure the naïve into the greatest financial bubble in history.

You get to keep the money, but you won’t get your good reputation back.

V. People Are Getting Chip Implants to Buy Coffee. Now They’re Owned

We’ve written many articles on the move towards a ‘cashless society.’

These articles describe how liberal academics such as Ken Rogoff and Larry Summers have campaigned for the elimination of cash and its replacement by 100% digital payments systems.

This is part of a thinly veiled agenda to monitor all financial transactions, impose negative interest rates and readily freeze bank accounts in the next financial crisis.

A lot of the focus has been on Sweden because it has gone further than any other country in the direction of a cashless economy.

The alternative to cash has included credit cards, debit cards, Apple Pay, Venmo and other all-digital payments systems. Even the most advanced of these systems require some kind of device such as a smartphone or chipped card to pay for items.

As shown in this article, Sweden has now gone the last mile by allowing citizens to have microchips implanted in their bodies.

These microchips have what’s called near-field radio identification that links to a bank account or other payment sources and also links to the vendor’s payment system.

When you want to buy a cup of coffee, you simply wave your hand near the coffee shop scanner and your coffee is paid for.

This sounds convenient, but it is actually nefarious.

If an implanted chip can pay for your coffee, it can also be used to track your whereabouts 24/7 and create a complete log of all transactions at all times.

In a more extreme crisis, the government will be able to locate you and round you up easily.

The same is true if you’re carrying an iPhone, but you can always throw your iPhone into a river and keep moving, free of surveillance.

That’s not so easy when the ‘iPhone’ is implanted in your body.

When people trade freedom for convenience, freedom is always the loser.

All the best,

Jim Rickards Signature

Jim Rickards,
For The Daily Reckoning Australia