- Bitcoin’s high-stakes war ends amicably
- Amazon’s cryptic crypto moves
- The unstoppable high-tech engine called NVDA
- Another case of “obvious” gold manipulation
- The cost of war: $8 trillion in interest alone?!
- GE slashes dividend… counterfeit gold for fun and profit… our fondness for “Armistice Day”… and more!
“Without even a shot fired, the bitcoin civil war is now over,” says our resident cryptocurrency millionaire James Altucher.
As we mentioned on Thursday, plans for a bitcoin “fork” have been shelved due to lack of popular demand.
“Supporters of the software upgrade (called 2x) posted a message online,” says James, “announcing their intention to suspend plans to implement the controversial split.
“The announcement follows months of controversy regarding the upgrade. Many within the bitcoin community including a group of influential developers who maintain the bitcoin code, likened the upgrade to a hostile takeover of the network by miners.”
The stakes were enormous, James tells us: Unlike another fork back in August, this one “would have created uncertainty across bitcoin and other digital currencies with potentially disastrous consequences.
“As a result, cryptocurrency markets had been holding their breath the past few weeks awaiting the outcome of the fork, which was scheduled to take place this week.”
Not to put too fine a point on it, James says, “the market has avoided a potentially cataclysmic event.
“This progress is especially important as regulators and traditional financial institutions continue to evaluate the introduction of new bitcoin-based financial products.” As James explained here last week, widespread adoption of bitcoin by banks, brokerages and exchanges has the potential to drive a stampede into crypto.
“By avoiding a potentially disastrous event at this critical point, the bitcoin community has demonstrated readiness for inclusion in traditional financial markets,” he tells us now.
“As a result, the path to the integration of bitcoin within the traditional financial system looks more promising than ever.”
Meanwhile, Amazon has fulfilled one of James’ crypto predictions.
A few days ago, the company registered three domain names: amazoncryptocurrencies.com, amazoncryptocurrency.com and amazonethereum.com.
Awhile back, James said Amazon would make some sort of bitcoin play, perhaps as early as October. “When I made this prediction, everyone laughed. I got trashed on Twitter by followers who thought the prediction was insane and the timing was impossible. They’re laughing less this week.
“The news proves that this is something which Amazon is looking at in a serious way. As I’ve said in the past, Amazon’s acceptance of digital currency is inevitable.”
James’ conclusion: “I remain bullish on the long-term potential of bitcoin and ethereum and continue to advise readers to buy dips.”
And oh what a dip there’s been since the no-fork news.
From a spike near $7,800 shortly after the announcement Wednesday, bitcoin tumbled to just above $5,500 yesterday morning. It has since recovered to [better check our screens, hard to keep up] $6,462.
Depending on whom you talk to, there’s been a flood out of bitcoin and into “bitcoin cash” — the new crypto that resulted from the August fork. At least one currency broker cited by Bloomberg is unconcerned: “We have seen similar steep falls in bitcoin throughout the year — specifically in June and September — but every time a considerable decline occurs, new investors jump in to experience the new asset class,” says Hussein Sayed from FXTM.
Which sounds a lot like James’ guidance.
There’s more where that came from, by the way: After the phenomenal success of his first Cryptocurrency Masterclass, James has agreed to open another session to new students. This is the very script he used to make $1.8 million off crypto in a single trade. For cost, enrollment deadline and other pertinent details, just follow this link.
The major U.S. stock indexes are eking out the tiniest of gains as a new week begins; they’re all in the green, but by no more than a tenth of a percent. The Dow rests at 23,433.
Among the market movers — General Electric. GE went and slashed its dividend in half this morning as the company continues to reorganize and shore up its balance sheet.
Our income specialist Zach Scheidt had high hopes for GE’s makeover, but no more: “I’m very disappointed to see one of our cash cows cutting dividends. This goes against the three principles we use for evaluating income opportunities. I’m watching to see how the stock reacts to the news and will be looking for an opportunity to exit at an attractive price.”
Even if you’re not crazy about crypto, buying into the high-end computer gear that mines digital currency makes sense.
A pioneer in this space — Nvidia Corp. (NVDA) — developed graphic processing units in 2007; today GPUs “play a huge role in accelerating applications in platforms ranging from artificial intelligence to cars, drones and robots,” per Nvidia’s website.
What Nvidia’s site fails to mention is GPUs are great for crypto-mining; so great, in fact, orders for GPU cards are backlogged… Coincidentally, you can find complete “mining rigs” on eBay marked up exponentially because of their GPUs.
Late last week, Nvidia announced vigorous third-quarter earnings that pushed the stock higher by almost 6%. Nvidia shares have grown an astonishing 1,000% in three years but analysts question if the stock has much more room to grow.
Loup Ventures analyst Gene Munster says, “Nvidia’s bread-and-butter business is around data centers and gaming, but the company will evolve to become the hardware foundation beneath AI, autonomy, and cryptocurrencies.”
To be sure, crypto represents a small segment of Nvidia’s earnings… but it’s a booming segment. Ray Blanco, our tech stock maven, says, “The icing on the cake is the cryptocurrency craze sweeping the globe. It’s created huge demand for GPUs to perform the operations needed to distribute transaction data or mine currency.”
Ray recommended Nvidia in Technology Profits Confidential back in 2013… and the position is up 90% this year and 930% since he said, “Buy.”
Gold is slowly climbing back from a spill it took in New York on Friday about 10 minutes after trading in London closed.
When we wrote you on Friday, the bid was $1,284. Then someone or a group of someones traded nearly 40,000 contracts in a matter of minutes — an enormous amount of volume.
Said a metals dealer to Bloomberg, “We didn’t see any headlines, any news to make gold drop $10, but it just did. It’s going with someone who has a huge position that can trigger stops and make the market move in a direction.”
And so it goes. “Gold manipulation is now so obvious the manipulators should be embarrassed,” said Jim Rickards in this space three years ago.
Checking our screens now, we see the bid is back to $1,278.
Wow: On a national debt that’s already over $20 trillion, you can add another $8 trillion in interest costs stemming entirely from America’s post-Sept. 11 war footing.
We’re reading more deeply into the Brown University study noted here last week — the one that says total military costs racked up since that day in 2001 are now $5.6 trillion. That includes not only Pentagon expenses, but also the State Department, Homeland Security, veterans’ health care… and $534 billion in interest costs arising from those expenses.
But oh, the future costs: “Even if the U.S. stopped spending on war at the end of this fiscal year, interest costs alone on borrowing to pay for the wars will continue to grow apace,” says the report’s lead author, Boston University poli-sci professor Neta Crawford. “By 2056, a conservative estimate is that interest costs will be about $8 trillion unless the U.S. changes the way that it pays for the wars.”
Sen. Jack Reed, the top Democrat on the Armed Services Committee, describes the present moment as the “first time really in history with any major conflict that we have borrowed rather than ask people to contribute to the national defense directly, and the result is we’ve got this huge fiscal drag… that we’re not really accounting for or factoring into deliberations about fiscal policy as well as military policy.”
Wait a minute, wasn’t Iraqi oil revenue going to pay for rebuilding Iraq? Oh well…
We’re quite certain Sen. Reed is piping up now only because there’s a Republican in the White House again, but the man still has a point.
Counterfeiters are taking fake gold to a whole new level.
Last week we mentioned how a jeweler in Ottawa discovered he’d bought a counterfeit one-ounce gold bar from a Toronto branch of the Royal Bank. The bar and its package were marked with the insignia of the Royal Canadian Mint — to all appearances, the real thing.
But that doesn’t hold a candle to something recently spotted by Byron King, our resident geologist with Rickards’ Gold Speculator: “Now, there’s simply no subterfuge… We’re on the lookout for fake U.S. ‘Walking Liberty’ gold coins straight from China on no less than Alibaba.
“You can even buy them with so-called ‘grade’ levels in convenient plastic containers. Hard to believe that such a reputable gang as China’s Alibaba would allow such a disreputable thing to occur.” (Heh.)
The fake coin is described on Alibaba’s website as “‘collectible and art’ (sic). So not to be used for fraud or counterfeiting — no way!” Byron remonstrates. “Yet it’s pretty much the same weight and dimensions as the real McCoy gold coins from the U.S. West Point Mint. Same imagery. Total fakery.”
Word to the wise: Buyer beware.
“Thank you for finally addressing this in writing,” a reader writes after we mentioned the trouble MSN and Hotmail users are having when they click on our links.
“I did not know if it was just me but am relieved to see it isn’t. I was getting ready to cancel my recent Advisory Reserve upgrade, because why pay extra for something that I could not access?
“May I suggest you address these kinds of technology issues in writing in the future so that we don’t consider (as I was doing) that we have no options other than bailing ship? I’m willing to pay for something and work with resolution of problems as long as I am kept informed. Thanks!”
The 5: We’ll do our best. Really, this is the first time this problem has come up on a widespread basis through no fault of our own. Our IT folks are still working with Microsoft on a solution.
In the same vein, another reader writes: “Wanted to join the Altucher cryptocurrency master class and the link didn’t work. I have been interested in other services but can’t get any links to work. Could you send me a phone number for customer service to try to subscribe?”
The 5: By all means; we’re flattered that you’d go to such trouble in this day and age. Here’s the number to reach our Baltimore-based customer care team— 1-800-708-1020.
“I hadn’t heard about the fake orders for a ‘noncombatant evacuation operation’ two months ago targeting the phones and Facebook accounts of U.S. servicemembers and families,” writes our next correspondent.
“I try to avoid reading too much news. No TV, radio or newspaper these days. Mostly headlines online and of course The 5. Glance at but do not pay too much attention to America Uncensored. It is a bit over the top.
“I wonder if the U.S. was the hoaxer… It would have been a good test to see what would happen, and also throw North Korea off guard… Who else would have access to U.S. servicemembers and their families?”
The 5: Your editor didn’t hear about it at the time either, but that was while I was on vacation and conducting an online news fast.
We’ve seen zip in the way of follow-up coverage. But that’d be one heck of a “psyop,” huh?
“Thanks,” a reader says, “for writing ‘… free.’ rather than the more common ‘… for free.’‘For free’ is completely meaningless, and merely identified the ignorance of the writer.”
The 5: You’re welcome. Your editor is still a stickler when it comes to “like” versus “as,” too.
“Veterans Day hello,” says the subject line from an email we got after we signed off last Friday with “Happy Armistice Day.”
“There are still a few of us left in ‘Agora World’ that remember that Veterans Day was originally titled ‘Armistice Day.’ There are also a number of us who remember the phrase ‘Hey, Mr. Hershey, stick to your chocolate and leave us alone,’ or, in simpler language… ‘S***, I’ve been drafted.’
“Love The 5.”
The 5: Yes, we’re old school that way.
Wikipedia tells us the switch came in 1954. We choose to hark back to a time before Truman’s “wise men” afflicted us in the late 1940s with the national security state and permanent mobilization for war. Heck, it’s generational; my parents supported Taft for the Republican presidential nomination in ’52.
So if you’re wondering why we’re harping on the gargantuan cost of the “war on terror,” that’s part of where we’re coming from. Perhaps our single favorite quotation from the Founders is this one by James Madison in 1795; we’ve cited it here in The 5 once before…
Of all the enemies to public liberty, war is, perhaps, the most to be dreaded, because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes; and armies, and debts and taxes are the known instruments for bringing the many under the domination of the few… No nation could preserve its freedom in the midst of continual warfare.
Here in the second decade of the 21st century, is there any doubt?
The 5 Min. Forecast
P.S. Today’s episode of The 5 has come to you from three airports, two airplanes and one taxi; the Agora Financial editors are converging on our Baltimore headquarters for a week of meetings.
The “big” event comes tomorrow, where our gurus present their latest and greatest ideas — where they’ll be vetted by a tough crowd before they’re judged ready to be put in front of readers like you. Stay tuned!
“There’s no legal impediment to even higher debt levels,” says Jim Rickards, “if Congress wishes.” But there’s no good way out… Read More
Social media’s swift ban hammer on “hate speech” and “misinformation” is more self-serving than you think. Read More
“SPACs right now are hot,” Ray says, “and everyone wants to get into the action somehow.” Read More
Go figure: At the time of writing, the S&P 500 is only 2% off its all-time high — which was achieved only six weeks ago. Read More
Apple’s pricey new iPhone “primes consumers for the higher cost of even more advanced connectivity that could be making its way,” Ray Blanco says. Read More
A curious mainstream narrative begs the question: Is there a 2020 version of the “Froman email” floating around Wall Street and D.C.? Read More
Regardless of the election, gold’s scarcity coupled with swelling demand — and a pandemic in the background — seem like a recipe for a Midas metal rebound. Read More
Ray Blanco on the question that’s overshadowed Trump’s illness, the mainstream media and the election cycle: “Will we get a vaccine before the election?” Read More
“Following the 60/40 [portfolio] rule no longer gives you stability,” says retirement specialist Zach Scheidt. “It actually increases your risk!” Read More
“Is [the Fed’s] perpetual wealth-creating machine free of consequences, as the ‘MMT’ crowd would have you believe?” asks senior analyst Dan Amoss. “Certainly not.” Read More