Bitcoins

Less than a month ago, Bitcoin was selling for less than $5000, but now it has smashed through the $7000 mark with seemingly no end in sight. At this point Bitcoin has a total market cap of more than 100 billion dollars, and some analysts are suggesting that it could eventually go as high as a trillion dollars. Cryptocurrencies overall are up an astounding 640 percent so far in 2017, and personally I regret not investing when Bitcoin was still in the very early stages. I always thought that governments would eventually crack down and regulate cryptocurrencies out of existence, and that still may happen someday, but it hasn’t happened yet.

One of the great things about Bitcoin is that it represents a medium of exchange that is not controlled by the central bankers. So when you use Bitcoin you are choosing to become less dependent on a system that is designed to financially dominate the entire planet. Any way that we can become more independent is a good thing, and so I greatly applaud the use of cryptocurrencies.

But there are those that are warning that a major bubble is forming and that extreme downward price action will be coming at some point. Needless to say, the upward momentum that we are witnessing at the moment is certainly not sustainable indefinitely. The following comes from Breitbart…

The price of Bitcoin smashed another record early Thursday morning — $7,000 for each unit of the digital currency.

As of 7 AM Eastern time, BTC is selling for $7,191.16, according to data from Coinbase. Bitcoin — which is minted by a decentralized network of miners, not a governing body — hit this latest benchmark with a single-day increase of nearly $640, only 13 days after it first became valued at $6,000. If an individual bought 1 BTC exactly one month ago, it has grown $2,902.33 or +67.67% in value.

Anything that goes up that fast is eventually going to come down, and those that invest at $7,000 could end up seeing the price fall back several thousand dollars. Or, the euphoria surrounding Bitcoin cold propel it through the $10,000 mark and make all of the skeptics look like idiots.

We just don’t know, and that is part of the charm of Bitcoin.

And according to Bloomberg, soon investors will be able to trade Bitcoin futures…

The digital currency got new impetus this week after CME Group Inc., the world’s largest exchange owner, said it plans to introduce bitcoin futures by the end of the year, citing pent-up demand from clients. Skeptics including Themis Trading say the rally is evidence that the software-created asset is a bubble that should not be given regulatory cover.

Of course Bitcoin is not the only major cryptocurrency that is out there. In fact, there are rumblings that Amazon is about to start promoting Bitcoin’s chief competitor…

Ethereum, the top digital currency behind Bitcoin, has plunged in price as Bitcoin enjoys its massive surge, falling from a 24-hour high of $301.41 to $277.82 Thursday morning.

However, this Tuesday, Amazon bought the domain names amazonethereum.com, amazoncryptocurrency.com, and amazoncryptocurrencies.com, fueling speculation that it may get into the action on decentralized digital currencies. Ethereum is not just a currency like Bitcoin but an app development platform — the Windows or OSX of blockchain. The domain purchase could be a sign that Amazon may join the Enterprise Ethereum Alliance — a group of large companies, including JP Morgan and Microsoft, putting their weight behind blockchain tech.

If Ethereum ultimately becomes the dominant cryptocurrency in the marketplace, what would that do to Bitcoin?

Or could it be possible that there is room enough for both of them?

The truth is that we don’t know what the future will hold. Cryptocurrencies have never existed before, and there are so many variables at play. The biggest variable is how national governments will respond to these alternate currencies, and I still believe that they will eventually make a move to heavily regulate them.

And unlike gold and silver, these cryptocurrencies do not have any intrinsic value. The only reason that they have any value at all is because people believe they have value. But for the moment the number of believers continues to rise, and this may be a factor in why the price of gold is relatively low right now. This is something that Ron Paul commented on recently…

“Does it represent real money to you?” Cambone further asked the former presidential candidate.

“Not to me, no, it doesn’t,” Paul answered. “But if it serves the voluntary exchanges of people, and serves the purpose of exchanging wealth, … it could act as if it were money ….” he stated.

“Some say Bitcoin is stealing the thunder away from gold,” Cambone continued, “and that’s one of the reasons the yellow metal is not rallying further. Do you agree with this?”

“I think that’s a very strong possibility,” he considered. “I am amazed,” he laughed, “at all the capitalization on these cryptocurrencies. It’s a huge amount of money,” Paul emphasized.

Once again, I greatly applaud the use of cryptocurrencies as a way to become more independent from the system. I love the fact that mediums of exchange are being developed outside of the control of the central banks, and we should greatly resist any efforts by national governments to take control of these emerging new currencies.

However, as an investment these cryptocurrencies are exceedingly risky.

There are some that have already become quite wealthy by investing in Bitcoin at the very beginning, but there are others that will invest at the peak of the market and will get very badly burned.

As with all forms of investing, there will be winners and there will be losers, and timing is everything.

But we should all love the principles underlying Bitcoin and other cryptocurrencies. To me, they are all about liberty and freedom, and the more liberty and freedom we have the better.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

The stock market is not crashing yet, but there are lots of other market crashes happening in the financial world right now. Just like we saw back in 2008, it is taking stocks a little bit of extra time to catch up with economic reality. But almost everywhere else you look, there are signs that a financial avalanche has begun. Bitcoins are crashing, gold and silver are plunging, the price of oil and the overall demand for energy continue to decline, markets all over Europe are collapsing and consumer confidence in the United States just had the biggest miss relative to expectations that has ever been recorded. In many ways, all of this is extremely reminiscent of 2008. Other than the Bitcoin collapse, almost everything else that is happening now also happened back then. So does that mean that a horrible stock market crash is coming as well? Without a doubt, one is coming at some point. The only question is whether it will be sooner or later. Meanwhile, there are a whole lot of other economic crashes that deserve out attention at the moment.

The following are 11 economic crashes that are happening RIGHT NOW…

#1 Bitcoins

As I write this, the price of Bitcoins has fallen more than 70 percent from where it was on Wednesday. This is one of the reasons why I have never recommended Bitcoins to anyone. Yes, alternative currencies are a good thing, but there are a lot of big problems with Bitcoins. Why would anyone want to invest in a currency that could lose 70 percent of its purchasing power in just two days? Why would anyone want to invest in a currency where a single person can arbitrarily decide to suspend trading in that currency at any time?

An article by Mike Adams of Natural News described some of the things that we have learned about Bitcoins this week…

#1) The bitcoin infrastructure cannot handle a selloff. Once the rush for the exits gains momentum, you will not be able to get out. Only those who sell early will be able to exit the market.

#2) The bitcoin infrastructure is subject to the whims of just one person running MTGox who can arbitrarily decide to shut it down whenever he thinks the market needs a “cooling period.” This is nearly equivalent to a financial dictatorship where one person calls the shots.

#3) Every piece of bad news will be “spun” by exchanges like MTGox into good-sounding news. As bitcoin was crashing yesterday by 60% in value in mere hours, MTGox announced it was a “victim of our own success!” So while bitcoin holders watched $1 billion in market valuation evaporate, MTGox called it a success. Gee, then what would you call it when bitcoin loses 99%? A “raging” success?

#2 Gold

The price of gold was down by about 4 percent on Friday. Gold has now fallen below $1500 an ounce for the first time since July 2011. Overall, the price of gold has fallen by about 10 percent since the beginning of the year, and it is about 22 percent below the record high set back in September 2011.

Yes, the price of gold is likely being pushed down by the banksters. And yes, gold is a fantastic investment for the long-term. But there will be times when the price of gold does fall dramatically just like we saw back in 2008.

#3 Silver

The price of silver fell by about 5 percent on Friday. If it falls much more it is going to be at a level that presents a historically good buying opportunity.

Just like gold, there will be times when the price of silver swings dramatically. But the truth is that silver is probably an even better long-term investment than gold is.

#4 Oil

The price of oil declined by about 3 percent on Friday. Many will consider this a positive thing, but just remember what happened back in 2008. Back then, the price of oil dropped like a rock. If the price of oil gets below $80, that could very well be a clear signal that a major economic crisis is about to happen.

#5 Consumer Confidence

As I mentioned above, consumer confidence in the U.S. just had its biggest miss relative to expectations that has ever been recorded. The following is from an article posted on Zero Hedge on Friday…

Well if this doesn’t send the market into all-time record high territory, nothing ever will: seconds ago the UMich Consumer Confidence plummeted from 78.6 to 72.3, on expectations of an unchanged 78.6 print. This was not only a 9 month low in the index, but more importantly the biggest miss to expectations in recorded history!

#6 Retirement Accounts

According to Wells Fargo, the number of Americans taking loans from their 401(k) accounts has risen by 28 percent over the past year…

Through an analysis of participants enrolled in Wells Fargo-administered defined contribution plans, the bank announced today that in the fourth quarter of 2012, there was a 28 percent increase in the number of people taking loans out from their 401(k) and that the average new loan balances increased to $7,126 from those taken out in the fourth quarter of 2011 – a 7% increase from $6,662.

Of the participants who took out loans, the greatest percentage were to people in their 50s (34.2%), followed by those in their 60s (28.9%) and then by those in their 40s (27.3%). The increase among participants in their 50s was nearly double the increase among those under 30. This is based on an analysis of a subset of 1.9 million eligible participants in retirement plans that Wells Fargo administers.

“The increased loan activity particularly among older participants is concerning because those are the years when workers can start to make ‘catch-up’ contributions and really need to focus on preparing for retirement,” said Laurie Nordquist, director of Wells Fargo Retirement.

#7 Casino Spending

Casino spending is declining again. Many people (including myself) would consider this to be a good thing, but casino spending is also one of the most reliable indicators about the overall health of the economy. Remember, casino spending crashed during the last financial crisis as well. That is why it is so alarming that casino spending is now back to levels that we have not seen since the last recession.

#8 Employment In Greece

Over in Europe, things just continue to get worse. According to numbers that were just released, the unemployment rate in Greece has soared to 27.2 percent, which was up from 25.7 percent the previous month. That means that the unemployment rate in Greece rose by 1.5 percent in just a single month. That is not just a crash – that is an avalanche of unemployment.

#9 European Financial Stocks

European financial stocks have been hit particularly hard lately. And for good reason actually – most of the major banks in Europe are essentially insolvent at this point. This week, European financial stocks fell to seven month lows, and this is probably only just the beginning.

#10 Spanish Bankruptcies

According to Reuters, the number of Spanish companies going bankrupt has risen by 45 percent over the past year…

A record number of Spanish companies went bust in the first quarter of 2013 as companies remained under intense pressure from tight credit conditions and meager demand, a study showed on Monday.

The 2,564 firms filing for insolvency proceedings in first three months of the year was a 10 percent rise from the previous quarter and a 45 percent increase on the same period in 2012, the survey by credit rating agency Axesor said.

#11 Demand For Energy

Just like we saw back in 2008, the overall demand for energy in the United States is falling rapidly. There are some shocking charts that prove this that were recently posted on Zero Hedge that you can find right here.

Yes, it is good for people to use a bit less energy, but it is also a clear indication that economic activity is really starting to slow down.

But despite everything that you have just read, the Dow and the S&P 500 have been setting new record highs.

And if you listen to the mainstream media, you would think that this stock market bubble can continue indefinitely.

Fortunately, there are a few voices of reason out there. For example, just check out what Marc Faber recently told CNBC…

In the near-term, the U.S. stock market is overbought and adding that any more near-term gains portend big trouble for the market, “The Gloom, Boom & Doom Report” publisher Marc Faber told CNBC on Monday.

“If we continue to move up, the probability of a crash becomes higher,” Faber predicted in a “Squawk Box” interview, saying it could happen “sometime in the second half of this year.”

As I have written about previously, a bubble is always the biggest right before it bursts. I hope that we still have at least a little bit more time before it happens, but I wouldn’t count on it.

The economic fundamentals tell us that the stock market should be plunging, not rising. At some point the boys over on Wall Street will get the message and the market will catch up to reality very, very rapidly.

But for the moment, the American people are feeling really good. According to CNN, Americans are now more optimistic than they have been in six years…

As the stock market continues to show record highs, the number of Americans who say things are going well in the country has reached 50% for the first time in more than six years, according to a new national survey.

So what do you think will happen for the rest of the year?

Do you think that the good times will continue to roll, or do you believe that the bubble is about to burst?

Please feel free to share your opinion by posting a comment below…

How High Can It Go? Bitcoin Shocks The World By Crossing The $7000 Mark Less Than 1 Month After It Sold For $5000

11 Economic Crashes That Are Happening RIGHT NOW