Sound Money Weekly Update: Gold, Silver, Bitcoin, Ethereum – 07.21.2017

PMCryptos

Approximate spot prices

Gold: $1,255 per paper ounce
Silver: $16.70 per paper ounce
Bitcoin: $2,600 per BTC
Ethereum: $210 per ETH

Due to an extensive travel schedule I’ve been unable to produce a sound money weekly update for almost a month. However, this week we’re back on track and adding Ethereum (ETH) to our coverage. My hope is that this report won’t become too cumbersome, so while I may be able to add coverage of Litecoin (LTC) and Veritaseum (VERI) in the near future – plenty of whispers about good news coming for both those names – I certainly won’t be able to generate updates that cover the entirety of the cryptocurrency space. But enough with the housekeeping…

We’re now living in a world where the US has stopped its not-so-covert program arming moderate Syrian rebels ISIS, CNN keeps serving up nothingburgers and losing meme wars, the Deep State Republicans are being exposed as thoroughly feckless, and identity politics continues to proliferate. All the while it seems that President Trump is only now – six months into his administration – beginning to gain a proper foothold. Breathless accusations aside, the prognosticators – of all stripes – continue to be woefully inaccurate about the pace and nature of developments.

No surprise there. And don’t look at me like I have all the answers. I have access to the same public information as anyone else. This is The Amateur Society after all. I don’t have any inside information or sources – anonymous or otherwise. The plan here is to continue updating everyone on the state of affairs as I see them. If you’re looking for more real-time information, I’ve been tweeting my cryptocurrency accumulation entry points (@ontheobjective) as well as other content from our On the Objective podcast network (https://ontheobjective.org/).

There will be more shakeups ahead, but it certainly doesn’t seem like the #Resist crowd has any real groundswell of mobilized action behind it. Another wave could of course be in the works. However, after many promised ‘days of rage’ and ‘summers of rage’ appear to have fallen short, it looks like the primary battlefield has shifted from the streets to the legal system.

Keep your eyes open. Watch carefully, but don’t be afraid to step back every now and again. Keep the faith and keep your strength. Continue to accumulate sound money.

Gold

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The rangebound activity in gold continues. A couple months ago I said to wake me up when we got above $1,300 or below $1,200. By that definition I should still be asleep. The latest push up coincided with Mueller expanding the probe of the Trump administration to include business dealings. I’m skeptical that anything will come of it other than more hearsay and hair-pulling. If there was something on President Trump, then it would have come to light by now considering the lengths individuals and organizations have been willing to go in order to fabricate evidence. The Federal Reserve chatter continues, but it’s hard to shake the feeling that it’s becoming increasingly meaningless. At any rate you can rest assured that any future unwinding of the balance sheet would certainly be mitigated by a distinct unwinding in the shadow balance sheet.

Silver

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A huge high five to anyone who had orders in to grab silver and caught some on the plunge to $14.00! Although it didn’t last, it wasn’t really a flash crash by the strictest definition. This appears to have been an institutional algorithm game whereby they dumped the market with some invented contracts, triggered massive amounts of stop orders, and used the resulting cascade to cover their short positions. Typically after something like that we move in the opposite direction, which we are currently seeing. It’s of course absolutely criminal, but that’s what happens when the primary exchange participants and regulators are criminals themselves. If only we had a disruptive technology that could sidestep these fraudulent exchanges by setting up a parallel architecture that is more efficient, less expensive, and actually transparent… (hint: http://veritas.veritaseum.com/).

Bitcoin

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So much for the cryptocurrency civil war narrative. With the implementation of BIP91, Bitcoin promptly gained $1,000 in price and looks clear to chop around, settle down, and then blast through the $3,000 level. As mentioned last month, the $2,000 area did provide a solid buying opportunity. The sound money community is still at each other’s throats about precious metals vs. cryptocurrencies, but the arguments I’m seeing from both sides – particularly the precious metals crowd – these days aren’t properly researched or thought out. Let’s all take a breath, do some actual homework, read some whitepapers, learn from people in these spaces, and figure out what’s happening before we take buckshot to people who are ostensibly all on the same team against centralized, corrupt money.

Since locking in profits on the first run up to $2,800 I’ve been sitting on my Bitcoin holdings as previously mentioned. I didn’t make any moves leading up to the August 1st scaling debate deadline, but I was prepared to do so if things started to look dicey. It turns out there was too much at stake for arguably unnecessary drastic measures. I for one appreciate the vigorous and often vicious debate in the Bitcoin community. In an open source, decentralized environment it is up to an actual exchange of ideas and development of consensus to drive necessary change. Imagine that!

Ethereum

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ETH 720 07212017

It was hard not to chuckle when the sharp pullback in Ethereum triggered many to call for its demise and that the price drop was evidence that the entire cryptocurrency space is a scam. Consider me skeptical. How much of a retreat is appropriate when you go from $4 to $400 in six months or $40 to $400 in two months? More than 50% seems reasonable particularly considering the ICO (Initial Coin Offering) market has created a situation where fundraisers need to sell ETH to fund parts of their operations. The warning about volatility is still in place. I continue to buy the big dips to maintain a position for getting involved with specialty tokens that I think have disruptive potential. I’m not a huge player in the ICO space, having only participated in one directly (PLR), but here’s a word of caution: the due diligence homework requirement applies in triplicate here. People have been scammed extensively, but if you conduct proper research you will be able to avoid being victimized.

Listen to our latest podcasts from The Amateur Society if you’re looking to begin understanding what a blockchain is and what it is being used for: https://www.youtube.com/playlist?list=PLyWGES8Ta2zUXYc-vbsmTob6uEb8GLj-M

Conclusion

If you’re not yet involved with sound money it’s not too late. Figure out what you understand, come up with a plan, and execute it. I’m holding precious metals and cryptos without involving a third party for the long run because I believe in the value propositions for the instruments I’m involved with. If the thesis changes I’ll let you know, but don’t just follow what I’m doing. Take the time to learn something new, and don’t spend your time lambasting people who may disagree with your portfolio applications. If you’re focused on other people’s investments then you’re not focused on optimizing your own. These are historically significant times: the petty and the shortsighted will not be positioned properly.

Disclaimer: These are one amateur’s fallible opinions. Holding any asset is risky, so do your own research and make your own investment decisions.

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