Tune out the jabbering of the mob….

Wednesday, 31st July 2019

Tune out the jabbering of the mob….

Have you ever been stood in a train station on Saturday night with two sets of inebriated football fans shouting, bawling and gesticulating at one another from opposing platforms?

It’s not the greatest advert for the public transport system. But it isn’t a bad metaphor for the world of cryptocurrencies….

The to-ing and fro-ing between proponents of cryptos and their detractors is never going to descend into mindless violence (at least it hasn’t yet), but it is sometimes equally tiresome….

I’ve been keeping track of the soap opera throughout July….

  • For and against….

Bitcoin could reach $100,000 before the end of next year. So says Anthony Pompliano of Morgan Creek Digital….

Motley Fool reporter, Sean Williams, reckons that Bitcoin is ‘fundamentally flawed’ and that the bull rally we’ve seen during 2019 will not be sustained….

Mike Novogratz, billionaire investor and long-time Bitcoin superfan, says the first-mover crypto is set to rise above $40,000 by 2020….

Trading stalwart Peter Brandt says Bitcoin could fall all the way back to $3,000, if the current parabolic pattern breaks….

The CEO of Morgan Creek, Mark Yusko tells us Bitcoin is headed for $30,000.… Click here to read more

Is it madness or fear at work?

Tuesday, 16th July 2019

Is it madness or fear at work?

I need a favour and I wonder if you can help me out….

I’m a little short of the folding stuff at the moment and it would be a great help if you could see your way fit to lending me £5000….

Don’t worry. I will pay you back. That’s for sure….

And better still, I won’t charge you an exorbitant rate of interest for giving me the loan….

You can lend me the full sum and it will hardly cost you any money at all….

Does that sound like a good deal?

No, I didn’t think so….

But that’s the kind of deal that’s being done with increasing frequency in bond markets right now….

  • What’s happening?

Under normal circumstances when investors lend money to governments, the government will not only undertake to pay the principal capital back after a fixed-term – but will also pay what is called a ‘yield’….

That yield is the interest – the price the government pays for the privilege of borrowing the capital in the first place….

As I say, that’s what happens under normal circumstances….

But circumstances are anything but normal right now….… Click here to read more

Better the devil you know….

Tuesday, 2nd July 2019

Better the devil you know….

Avid followers of the financial news cannot help but be aware of Facebook’s plans to enter into the world of cryptocurrencies….

Acres of column inches have been devoted to the subject over the last fortnight….

Mark Zuckerberg and his corporate apparatus are calling their new cryptocurrency Libra…. 

It will be introduced with the intention of enabling users to spend and transmit money all over the world at next to no cost….

If Libra catches on and achieves significant take-up amongst Facebook’s huge user base, the time might not be far away when online life becomes impossible to negotiate without a wallet replete with Libra coin….

In my book, that would be a dangerous and undesirable state of affairs….

  • How it will work….

Libra will be what people who know about these things call a ‘stable coin’….

It will be pegged-to – and purchased with – a tranche of fiat currencies like the dollar or the pound or the euro….

The idea is that this connection to stable (relatively) domestic fiat currencies will render the Libra coin less volatile than something like Bitcoin, for example – a crypto that isn’t pegged to anything and suffers from extreme volatility as a consequence (as the last week amply demonstrates)….… Click here to read more