Crypto Currency

Discussion in 'West Mall' started by AC, Mar 25, 2020.

  1. AC

    AC 1,000+ Posts

    What is Wrong with The Economy & What Can I Do About It? Part 2
    RETURN TO THE BLOG
    Today we should begin with more explanation about inflation. The CPI index tracks USD compared to a basket of goods and services. 50 Million Americans are given cost of living raises based on CPI. Here is the formula:


    CPI= Cost of Market Basket in Base Year / Cost of Market Basket in Given Year × 100


    Since 1983, when interest rates were very high the government started changing this index to make inflation look lower. They used this time period as “the stake in the ground” with which to compare all future years to this time period when inflation was very high. In the above formula, the 100 multiplier is from the following years:


    Most CPI index series use 1982-84 as the basis for comparison.
    Source: Corporate Finance Institute


    Purchasing power is the power to buy things required to live. If there is extra money, then a person can buy the extras to live even better. Hence, quality of life. If the purchasing power of your currency is equal to the other currencies in the world. Does that tell you that your quality of life is better than other countries or not? No, it fails to answer the question. If the basis used to measure inflation is 1982 – 1984, when inflation was at all time highs. Does that answer the question? No, it does’nt! The only way to know if your purchasing power in your currency is going up or going down, is to compare its purchasing power to the cost of goods and services required to live in the given calander year. Therefore, Neutral ATM would like to re-introduce everyone to the chapwood index, www.chapwoodindex.com.


    Please read this index in the link above. Understand it. If food, travel expenses (Gas, hotels), education, and utilities were 60% of your budget last year, and 72% of your budget this year. The difference is inflation. CPI is used by the government to ascertain government employee pay raises, pension increases, insurance payouts and many other expenses. Naturally, the government is incentivized to keep CPI low. The index is the issue here. Please understand, The CPI is indexed to 1982 – 1984!

    Paul Volker was the Fed Chairman in those years. He was an Austrian Economist not a Keynsian Economist as we see in the US today. He raised interest rates to slow down out of control inflation like what was seen in the 70’s. That is the basis for the CPI.



    1982 inflation rate was 6.16%, 1983 was 3.21%, 1984 was 4.32%.
    Source: Bureau of Labor Statistics.


    These numbers appear to explain the difference between the Chapwood Index and the CPI. In the CPI there is a built in buffer of about 4.56%. So every year inflation is kept under control compared to 1982-1984, the CPI looks better by 4% to 5%. There may be other factors in play that we have not been able to discover. For example the 20% top and bottom inflation rates are shaved off. This could also skew the number a little. The Fed announcing a goal of 2% inflation could actually mean closer to 10% or higher if you are using the index from www.chapwoodindex.com! Remember, Jerome Powell announced a couple of months ago the Fed will run inflation hot for the foreseeable future. Even this week Biden stated the $900 billion stimulus was only a “down payment”.


    Now we will attempt to tie this misleading CPI number back to present day and Bitcoin. Bitcoin is scarce, we have shown everyone the stock to flow model numerous times. It measures Bitcoin production which can be counted daily against the price action of Bitcoin. The production of Bitcoin is reduced by 50% every 210,000 blocks, which is about every 4 years. A block is added to the blockchain every 10 minutes. 210,000 blocks produced every 10 minutes is 3.995 years. So in 2009, Bitcoin was producing 7,200 Bitcoin per day. On May 11, 2020 we had the 3rd halving of Bitcoin, which dropped production to just 900 Bitcoin per day. By comparison, USD has seen 22% of all USD in circulation today, were printed in 2020. Federal debt is now $27.5 trillion. A few years ago it was in the $billions not $trillions. Money supply has seen an exponential increase in 2020. Here is an adoption curve chart of Bitcoin, below. It shows institutional adoption has just started this year. As adoption goes out the curve, volatility is drastically reduced. Tech stocks proved this in the 90’s as they reached the apex of their adoption curves. Here is the chart:

    [​IMG]

    Listen to Michael Saylor discussing Bitcoin in an interview yesterday, regarding Bitcoin adoption. His company Micro Strategy invested $500 Million into Bitcoin this summer. It doubled in Months. Now they raised money to borrow fiat currency at incredibly low rates, to then buy another $60 million in Bitcoin. Almost 79 days of 2020 Bitcoin production is owned by Micro Strategy. Here is the video of Michael Saylor, 7:27 minutes:



    Michael Saylor even tweeted with Elon Musk about how to move large sums of USD into Bitcoin. We’ll see what Elon Musk does. He is very private, it will come out eventually. Bitcoin now has over $432 billion in market cap. There are $350 trillion tied up in bonds. If you take the inflation discount on bonds of 10%, which is real inflation. Bonds are negative. That means 40% of every 60/40 ETF portfolio is negative. It is drastically hurting pensions and endowments. When not if, a significant % of that $350 trillion moves in to Bitcoin as a safe haven store of value. What will that do to the price of a Bitcoin? Are you willing to wait? Here’s Michael Saylor again, 1:10 minutes:




    Neutral ATM is here to get everyone off of zero Bitcoin.


    Give Neutral ATM a try. We have low rates, convenient locations and we are expanding. Contact Neutral ATM, we will answer all your questions about Bitcoin and using our ATM machines. Find a Neutral ATM Bitcoin machine location near you.
     
  2. AC

    AC 1,000+ Posts

    The above blog is from 12/23/2020. We had a Bitcoin meet-up at Texas Gun Club last week, and I spoke on this blog and another business owner spoke about starting a node. In February we will have a meet up at his business, Holler Brewing, in mid town. Horn Fan guys in Houston should try to come we have fun! John Holler is a Florida Gator from the Urban Meyer era there. So we talk CFB too.
     
  3. iatrogenic

    iatrogenic 2,500+ Posts

    Yellen talking Bitcoin down due to its use for illicit transactions, and the mighty blockchain looks like it had a flaw on a double spend recently. May be time to sell high.
     
  4. Run Pincher

    Run Pincher 1,000+ Posts

  5. AustinHorn24

    AustinHorn24 250+ Posts

    I'm a little skeptical of the theory that cold wallets are unhackable. Don't you have to connect your wallet to a USB drive on a computer to use it? Hackers can place code on that machine just as easily as they can hack a server.

    How secure are the CoinBase servers? Are they up to Bank of America standards? Or is this still the wild west Bitcoin era that hasn't caught up to modern security protocols?
     
  6. AC

    AC 1,000+ Posts

    I’ll answer the last two posts which had questions here. As for illicit activity using Bitcoin I’ve heard .3% and maybe it’s a little higher. But USD for illicit activity is $2Trillion per year. The entire Bitcoin market cap is $600-$650 Billion. Even 1% of that is only ~$6 Billion.

    I hear Coinbase is not as secure as others. I choose to use Kraken which is the most secure exchange. I use Trezor offline wallets, I hear cold card is a good one too. I have used Kraken and Trezor for 10 months with no issues at all. If you want to hedge inflation, Bitcoin is the best way. No it’s not set it and forget it. It is an education. It’s worth it to me!
     
  7. iatrogenic

    iatrogenic 2,500+ Posts

    How could you possibly determine the percentage or quantity of "currency" used for illicit purposes, for either Bitcoin or the U.S. dollar? One of those does have reporting requirements for certain cash transactions, but some of those requirements can be avoided.
     
  8. Driver 8

    Driver 8 smoooove

    There was no double spend, it was FUD "journalism" per usual
    If it were true the price would probably be near zero today
    A little homework and understanding of how the blockchain works would dispel silly rumors like this but that's hard
    Andreas explains it here (warning: time and effort required!)
     
    • Like Like x 1
  9. iatrogenic

    iatrogenic 2,500+ Posts

    Well, telling everyone it didn't happen using terminology no one can understand certainly clears it up.

    Thank goodness it's only dropped 20% in the last 15 days. Guess I'll hold.
     
  10. Run Pincher

    Run Pincher 1,000+ Posts

  11. AC

    AC 1,000+ Posts

    I wrote 4 blogs this week and last Friday about why Bitcoin price doesn’t matter. Basically just hold long term and use it as collateral, like the wealthy use prime real estate. If you can Dollar Cost Average into Bitcoin and never sell for 10 years, it will be a pristine collateral asset to pass down to the next generation. I’ll send the blogs over the next few days. Power outages!
     
  12. AC

    AC 1,000+ Posts

    The charts don't paste. www.neutralatm.com click on blogs to view. I have 5 versions on this subject. Bitcoin will hit $1Million in 2025. The key is to wait through bull and bear markets:

    Neutral ATM

    Bitcoin ATM’s in Texas

    Sugarland * Pearland * Katy * El Campo


    Why the price of Bitcoin does’nt matter:

    02152021


    This exercize will look further out into the future, 5 to 10 years, to demonstrate why Bitcoin’s price does not matter right now. We understand that is hard to do. Remember, that there will only ever be 12 million Bitcoin produced. Now, that is 900 Bitcoin per day, then after 210,000 blocks are produced at that level it will drop to 450 Bitcoin per day. That will happen in 2024. Then in 2028, it will drop to 225 Bitcoin per day. This happens regardless of the demand for Bitcoin. At the same time, lets look at fiat currency production (money supply). Now that the impeachment trial is over. The senate and congress can focus on the $1.9 trillion stimulus package put forth last month. If it passes, which appears likely now that the democrats have control of all three phases of the government. Adding $1.9 trillion to the money supply, as it stands now, would mean 40% of all dollars in circulation have been printed in the last 12 months. So in USD terms, Bitcoin’s price has to increase over time unless demand for Bitcoin drops to almost zero. USD is not a viable replacement for Bitcoin. Gold is the most likely candidate as a scarce asset. Yet Gold has lost 99% of its value, priced in Bitcoin, over the last 5 years:



    So that is unlikely as well. Even if the US were to go on to a Gold standard backing a digital currency. Bitcoin demand would still exist, as it is much scarcer than Gold. If Gold price increases, production increases. If more Gold is somehow found in the future, supply just increased as a result. Yet with Bitcoin, nothing can change the programmatic tightening of Bitcoin supply, regardless of the demand. We have spoken recently of exchanging Bitcon for real estate when or if Bitcoin hits its peak later this year. Below is a chart on how to do that, follow this left to right, it is numbered 1 through 6:




    Bitcoin is also decentralized, which we have also brought up a lot in past blogs. It cannot be controlled by any central bank or government. If the central bank keeps up the rate of stimulus and QE (quantitative easing) in 2021-2023, the value of the USD will fall, garaunteed. It may even collapse at some point. Who knows when. We believe it is likely that stimulus and QE will continue to some degree over the next two years. Therefore, it is likely the US dollar continues its precipitous fall. Here is a recent chart of the DXY (USD index):




    Keep in mind, many experts have been predicting a major stock market crash in the April timeframe. If the market crashes there would be a rush into the dollar. This chart predicts a bounce. But the above point we were making, is that the DXY has gone from 104 (pre-Covid 19) to 90. That is a major drop. If the above scenario does play out and the stock market crash predicted actally happens, the DXY and Gold would bounce. See the Gold chart:



    If Gold bounces when the market crashes which way would Bitcoin go? It may very well drop off a little, as it is re-accumulating just under $50K right now. We do not believe Bitcoin would drop below $40K. That floor has been established for now. But looking out long term. The overall supply shock of the May 2020 Bitcoin halving and the future, 2024 Bitcoin halving, coupled with all of this stimulus and QE from the Fed. That is going to catapult Bitcoin up. It has since March 2020, when Bitcoin was under $4,000 for a day, now it is $48,602 and it hit $49,665 yesterday. These global macro trends changed because of covid 19. Or at least the trends sped up. So, that means more money supply growth from now until end of 2024, to varying degrees, will greatly push up demand. We have already seen corporations, hedge funds, institutional investors buying up Bitcoin at amazing rates in 2020 and 2021. This is the demand side of the equation. Once the 2024 halving occurs, another supply shock will set in, and Bitcoin could catapult close to the levels in the first chart we showed on page two. It may take until early 2025 to reach $1million per Bitcoin. But looking at the past bull market cycles, Bitcoin could easily reach this level in the next cycle (2024-2025). Use your Bitcoin stack to leverage it into real estate, or fine art. Anything scarce. A flood of money supply has been hitting the market and your dollars buying power is plummeting! The only life boat to save a person is a large stack of Bitcoin. Diversify into Gold or Ethereum, fine art, real estate. So focus on how much Bitcoin you own, not how much one Bitcoin is worth. Over years of time the value will grow at an amazing rate. Supply/Demand! This is your life boat. Do not expect the Government to save you!

    Neutral ATM buys and sells Bitcoin as little as $20 at a time!You do NOT have to buy an entire Bitcoin. Neutral ATM is here to get everyone off of zero Bitcoin.

    Find us at:

    *Texas Gun Club

    206 Brand Lane

    Stafford, TX 77477

    *Singh Mart - Shell

    12725 S Gessner

    Missouri City, TX 77489
     

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