The Bitcoin Bubble’s “Great Hesitation”

A number of people have asked me privately to explain where we are in the parabolic blow-off in digimoney, especially Bitcoin.

As you know, it did look like the BTCs were going to the moon, or $3,000, but then a funny thing happened.

So let’s take a look at a couple of chars because there is a certain self-similarity between ALL market bubbles, whether you’re talking our favorite “air money” or something as delicious as tulip bulbs…

(Continues below)

 

Here’s how the BTC chart (www.bitcoincharts.com hat tip) looks since December:

Now look closely at where we are in this chart.  We are in what would be called in Bubble Lingo – if there was such a language – a Great Hesitation.

Now let me pull out a chart of the U.S. Stock Market Bubble going into the summer of 1929 for you:

See the area in Yellow I have circled on the 1929 track?  This is where I think (but this is not investment advice!) BTC’s are right now.

Once we get past the next week, or three, I would expect that the  BTCs will zoom up into the mid to late August period, when the whole financial complex should end it’s diabetic sugar rush and set up for the near-brush with death that will roll out over the next year.

Something on the order of $3,150 would be ideal from a modeling standpoint.  But we shall see…

This tells us that all the Trump probing and such, well THAT will be quiet until this summer (late Aug) when the dems will be raising hell with wave three of the coup attempt and with all the libs on the Mueller witch hunting squad, I’m sure we will have a delightful fall.

Just think of it:  War in Korea, a Salem Witch Trial in Congress, a Collapsing Economy…why it just doesn’t get much better for the short-side players who manage the down-side of live in a disciplined way.

Not that we’re here to get RICH on the misery to come, but a 39% gain (which our Peoplenomics Aggregate model back-tested for 2008-2009) would be fine with us.

As we drive the “get away car” to our TreasuryDirect account to avoid the Bail-Ins that will likely follow when the Too Big To Fail card is turned over on the taxpayers, yet again.

Fortunately, for those of us who read history, Greed is not only powerful as a financial aphrodisiac, but it is semi-predictable, too.  Which is how I’ve come to describe our Peoplenomics.com site as “Viagra for the Wallet.”

The “Electrical Nature” of Markets

With the markets set to open higher this morning and they rocked it in Europe last night.  Germany’s market is up the equivalent of 170 Dow points and the Hang Seng in Asia was up what would be about 230 by the Dow.

Nice moves.

And with the week ahead in the US looking tame to lame in terms of data, why would we be having this discussion?  Well…

There was this fascinating alert that popped into my email this morning:

Geomagnetic conditions measured by Dourbes have reached major storm levels, K = 7. However NOAA Kp has remained at Kp = 2. It is unclear if this is a measurement anomaly. The solar wind speeds are currently registered at 550 km/s with interplanetary magnetic field values close to 4 nT, confirming the suspicion that this is a measurement anomaly. There are currently two coronal holes approaching the West limb, but are not in a favourable position to be the source of the enhanced geomagnetic conditions. If the K index remains at enhanced levels for a sustained period a further presto will be issued and the cause investigated further.

Which means?

Honestly, we don’t know.

But whenever we get a note like this, we begin to look at markets with a slight tingle of anticipation.

Back in 1998, or so, a doctor by the name of Robert Becker wrote a WONDERFUL book on point:

The Body Electric: Electromagnetism And The Foundation Of Life

In it, you will get all kinds of information about the subtle (and not so) ways that electrical influences change our behaviors around.

So, naturally, when we get any kind of solar activity – especially something new and different-looking,, like this morning’s alert, we go into studious watch-mode.

Other things influence the market, too.  Stephen J. Peutz has done a lot of work on market-related topics, such as the influence of the full moon on timing of market crashes – and while expensive, $65, his …

Universal Cycle Theory: Neomechanics of the Hierarchically Infinite Universe

…is something to read if you are trying to figure out exactly when the sky might be falling.

As long as we’re on point, I should also put in a plug for some of my recent work on the Peoplenomics side of thing, especially the recent article on the biphasic market solar cycles.  Essentially, I argue the data in long wave economics suggests that it may be a Sun-driven market cycle of 11-11.5 years that drove Clement Juglar to cite the 11-year (Juglar) cycle in economics.  The Wikipedia entry, please?

The Juglar cycle is a fixed investment cycle of 7 to 11 years identified in 1862 by Clément Juglar.[1] Within the Juglar cycle one can observe oscillations of investments into fixed capital and not just changes in the level of employment of the fixed capital (and respective changes in inventories), as is observed with respect to Kitchin cycles. 2010 research employing spectral analysis confirmed the presence of Juglar cycles in world GDP dynamics.

What other researchers seem to have missed (but not us, no sir) is that the solar/stock market relationship may be driven by solar activity as measured by sunspots… BUT it is apparently moderated by the solar AP Index.

All of which causes us to expect a rip-snorter of a market rally, at least early this week and with a lack of economic news in the (lazy) MSM…you can be forgiven for reading either Becker or Peutz at work.

What the MSM Ain’t Saying

Two snapshot of data to ponder since everyone knows we use West Coast container traffic flows as a real useful economic indicator that no one else seems to pay much mind to:

Containers through the Port of Long Beach were up 12% in May, but down 1.3% year-on-year (YoY).

Port or Seattle – part of the NW Port Alliance which is more Bigger government – hasn’t been able to post their May data to their website in a timely manner, but their through April data showed container growth of about 1.2%.

Port of Oakland looks like 4% growth, but hard telling and their “downloadable spreadsheet” was uselessly not updated with 2017 data.  Port PR people make HOW MUCH MONEY??

But the Big Kahuna in all this is the Port of Los Angeles which is reporting up 8.5% for the year-to-date.  And gee, even with all that work going on, they still manage to public readable and timely statistics.

Toss in the Baltic Dry Cargo Index at 848 (lower end of range) then drop in the Fed rate hike, mix thoroughly, and you can make a case for euphoria peaking late summer in the U.S.

Aw, Shoot

Things in Syria are on the front burner this morning as A U.S. Warplane Shot Down a Syrian Jet. Here’s Why That’s a Big Deal.

BREXIT Rolls

As Brexit negotiations: David Davis ‘positive’ as first meeting begins.

News and Such-wise

We can hardly wait for the Climate Change marketeers to ramp up on their claims related to the Portugal forest fire disaster which has already killed something like 65 people.  This morning Portugal forest fire: 12 survive by hiding in a water tank.

-0-

Death toll in the London fire still adding as Grenfell Tower fire: Seventy-nine people feared dead.

Managing Without Data

We see a positive sign as Trump to meet with tech CEOs on government overhaul.

Problem is, as I explained in the Coping section this morning, is really two-fold.

Sure the bureacrazy needs to be hot-swapped. But Congress?

Biggest group of flim-flammers ever.  They meet, appear to actually do things, but when comes to benchmarks, outcomes, metrics and such?

NOTHING USEFUL to speak of.

The poor get some buy-offs, but the higher ed lobby is still over-charging for what could easily be a free, universal online college system for less than the endowment fund of any of the Ivy Leaguers and such…

So sure, nice Trump is working the government overhaul angle, but the truth runs a little deeper and more intractable:  We have monetized government and that leads ultimately to totalitarianism or financial collapse.  And the embeds now have their Salem Plan for Trump, so change?  That’s about all we will have left, and damn little of that. A few cents on the dollar.

Comments

The Bitcoin Bubble’s “Great Hesitation” — 15 Comments

  1. Because of Napoleon you know that’s a formal French gold coin equivalent to 20 Francs called the card game the highest bidder name trumps and if he takes the tricks he has bid, receives from each adversary one chip for each trick ;also,the taking of all the tricks in this game

  2. If I were your daddy and I were the government well you just been slapped because we do not want you to do the Bitcoin thing we want you to be under under our control

  3. Hey George, any connection between

    our geomagnetic storm and lots of

    cell phones not working today?

    Wild Hyena alert!

  4. Every American should want to get to the bottom of Russian interference in our elections. We need to figure out what happened and how to work with our allies to prevent it in the future. Are some Americans (“republicans”) so afraid of where the investigation may lead that they turn their backs?

    In Illinois, investigators found evidence that cyber intruders tried to delete or alter voter data. The hackers accessed software designed to be used by poll workers on Election Day, and in at least one state accessed a campaign finance database. Details of the wave of attacks, in the summer and fall of 2016, were provided by three people with direct knowledge of the U.S. investigation into the matter. In all, the Russian hackers hit systems in a total of 39 states, one of them said.
    https://www.bloomberg.com/politics/articles/2017-06-13/russian-breach-of-39-states-threatens-future-u-s-elections

    Why Did Russia Hack the Voter Rolls?
    http://washingtonmonthly.com/2017/03/30/why-did-russia-hack-the-voter-rolls/

  5. As we drive the “get away car” to our TreasuryDirect account to avoid the Bail-Ins that will likely follow when the Too Big To Fail card is turned over on the taxpayers, yet again!
    Regarding this would you go for 13 month bills or longer. Once they come due the $$ goes back into your bank–then bailed in. Any ideas?

  6. Just a quick update from SIDC about solar activity:
    In response to the recently issued PRESTO (issued on 2017-Jun-19 at 10:50 UTC) discussing enhanced geomagnetic conditions, it has been confirmed that the K index values at 09:00 UT (and the following 2 values at 10:00UT and 11:00UT) are incorrect due to unannounced adjustments of the Dourbes magnetic observatory instruments. The previous PRESTO should be ignored.

  7. The above mentioned alert regarding solar events and resultant geomagnetic conditions was corrected by Belgium. Seems there was an “unannounced” adjustment that was not taken into account. The statement/correction is pasted below (sorry about formatting weirdness). Haven’t had a chance to see what our Rocky Mountain-based experts have to say about it yet.

    Though, one has to wonder how such a “mistake” could even happen since these alerts are taken seriously and protective measures are taken by militaries, other satellite operators, and those responsible for keeping very important, sensitive, and expensive systems from becoming damaged by solar nastiness. There’s big bucks associated with these warnings. I find it all a bit suspect at first glance, and honestly, some of the wording in the “correction” gives me a few chills. It’s probably just a mistake as noted, but still quite concerning when considering the magnitude of impact of these data alerts.

    :Issued: 2017 Jun 19 1130 UTC
    :Product: documentation at http://www.sidc.be/products/presto
    #———————————————————#
    # FAST WARNING ‘PRESTO’ MESSAGE from the SIDC (RWC-Belgium) #
    #———————————————————#
    In response to the recently issued PRESTO (issued on 2017-Jun-19 at 10:50 UTC) discussing enhanced geomagnetic conditions, it has been confirmed that the K index values at 09:00 UT (and the following 2 values at 10:00UT and
    11:00UT) are incorrect due to unannounced adjustments of the Dourbes magnetic observatory instruments. The previous PRESTO should be ignored.

  8. When you discuss “TreasuryDirect” which item are you looking at? Bills, Notes, Bonds, TIPS, FRNs or Savings Bonds?
    A Peoplenomics reply is fine.

    • I like the inflation adjusted savings bonds because they are liquid and when the runaway inflation follows the crash, they will do better than, oh, cash in banks, for example, though they too will hold losses in actual spending power.
      Everything will be broken, so you need to think in terms of highest liquidity and lowest loss of purch power

      • George? Are those called TIPS? Where does a person go to buy an inflation protected bond? Do we get the actual certificate? I remember getting bonds through my employer back in the 70s…but have since cashed them in.

      • Yep TIPS iis what we used.
        They are held electronically – and that is one of the problems with going to TreasDir

        Unfortunately, there is little left in the way of actual paper being issued for anything of value these days – reason being?

        Too easy for north korea and the drug cartels to imitate counterfeit.

      • I used to be able to receive Savings Bonds through payroll deduction at work, a small amount each month that would purchase a specified bond when the available funds reached the purchase level. The company discontinued this service as “a cost saving measure.”

        A few years later I inquired if there were any plans to reinstate the payroll deduction plan and was told bonds could now only be purchased through my bank or credit union. When I asked at my credit union, they said bonds had to be purchased either through my employer (great lines of communication there) or directly from the government. Later, when I tried to redeem some of the bonds at the credit union, I was told they could only be redeemed directly from the Treasury.

        I finally gave in and created a Treasury Direct account, and, reluctantly, converted my paper bonds to their electronic counterparts. Redeeming them was easy enough: the funds were sent electronically to my account after taxes were deducted. The entire process from request to delivery took about 36 hours.

        I believe the bonds George is referencing are the “I” series bonds, which earn interest partially from an amount set at purchase and partially from a rate inflation-indexed and recalculated every six months. (Some of the older bonds I kept were earning a 4.5 percent return the last I checked.) These bonds are purchased at face value (you purchase a $100 bond for $100, it can be redeemed after a period of twelve months, but must be held for a minimum of five years to avoid a withdrawal penalty of three month’s interest). The “EE” bonds are a lower purchase price and earn much less in interest.

        I would note there is a limitation on direct purchase of $10,000 of bonds per calendar year per Social Security number. I had read paper bonds were no longer being issued, but this may have changed as a notation on the treasurydirect.gov site indicates if you use your tax refund to authorize a bond purchase, you can get up to $10,000 of electronic bonds and $5000 of paper bonds. I am not in a position to put this to the test.