To
me, a wise and humane policy is occasionally to let inflation rise even when
inflation is running above target.
Janet
Yellen.
It was like the Great
Commodity Inflation Markets of the exciting 1970s yesterday, but the exciting,
erratic, volatile action wasn’t in stocks, commodities or bonds.
Nearly all the casino
action yesterday took place in imaginary assets trading in unicorn land.
While bitcoins like
unicorns, only exist in some people’s imagination, any losses wracked up by
feckless gambling in imaginary assets, are all too real.In “hard” fiat money terms, any losses or
profits have to be paid off, or banked.
If this action was
taking place in the very much larger stock casinos, I would say it was sign of
an approaching end to the stock mania. Bubble over or just about to be.
If this action was taking
place in the wild west commodity markets, I would say that it was just the normal
action of an inflation fear driven, commodity bull market. Commodities in such
markets often traded limit up, limit up, limit up, limit down. Or even limit
down, limit up in a day.
As it took place in a
relatively small fantasy asset market used globally by almost no one, my guess
is that it’s just another sign of how the global central banksters have already
over flooded the world with fiat money, and driven the wealth gap between the
one percent and everyone else, to its widest ever.
At the top, too much
money is piling up thanks to all the trillions of new Magic Money Tree money
flooding out from central banksters and bent populist politicians, with much
more promised still to come.
My take on yesterday’s
unicorn action is that it is a outlier of what is to come in the Great Fiat
Money Inflation ahead, as the scramble to get out of fiat money and into tangible
assets really sets in.
It probably means
nothing for stocks, commodities or bonds unless something like Tesla blew up,
which is highly improbable.
But note it away as
our likely major market future from all the trillions of free cash flooding out
of all the Magic Money Tree forests led by Washington, District of Crooks.
Bitcoin Whipsaws Investors With
Same-Day Plunge, Rally of 30%
Frantic selling
leads to outages on major crypto exchanges·Musk tweet implies Tesla held tight during major
selloff
A 31% plunge in the morning. A 33% surge in the
afternoon.
Such was the wild ride Bitcoin took investors on Wednesday,
lopping off billions in value before comments from some prominent proponents
helped propel it on a torrid rebound.
The extreme price swings in an asset known for its turbulence caused outages on
major crypto exchanges and dominated chatter on Wall Street. The tumult
elicited a tweet from Elon Musk that implied Tesla Inc. wasn’t among the
sellers, while Cathie Wood said her monitors flashed a “capitulation”
that put the digital token “on sale.” Justin Sun, a tech entrepreneur who
founded the cryptocurrency platform Tron, tweeted that he bought $152 million
in Bitcoin for around $37,000 a coin.
Down to within a whisker of $30,000 just after 9 a.m. in New York, the coin
pared its loss to 7% and periodically topped $40,000 again in the afternoon. It
resumed declines into the next session and was trading around $35,500 as of
8:57 a.m. in Hong Kong on Thursday.
Ether, the second-biggest coin, sank more than 40% Wednesday
before cutting that nearly in half, and ended down 26%. It was down as much as
15% on Thursday.
“The history of these assets has been
littered with aggressive rallies and sickening selloffs,” said Stephane
Ouellette, chief executive and co-founder of FRNT Financial.
Rarely do they happen in a single session. The volatility
dominated Wall Street on a day
when stocks and commodities were also under pressure and the Federal Reserve
was set to release minutes from its latest meeting. Frantic selling sparked outages
on some of the biggest exchanges, from Coinbase Global Inc. to Binance.
#Cryptotrading was trending on Twitter, where critics and fans alike were in a
tither over the rout.
Tesla CEO Musk touched off the wild moves last week. Bitcoin
plunged when he announced the carmaker wouldn’t take it as a payment, but then
reversed when he said the company had no plans to sell its corporate crypto
holdings. He seemed to imply in a tweet Wednesday that Tesla is not selling
into the rout.
Volatility erupted in crypto-land last week when Musk
retracted plans to accept Bitcoin for his company’s cars. Selling resumed over
the weekend when the mercurial CEO seemed to suggest Tesla might want to sell
its corporate holdings, but reversed after he tweeted that the carmaker had no
plans to do so. A statement
on the People’s Bank of China’s WeChat on Tuesday reiterating that digital
tokens can’t be used as a form of payment added to the selloff.
While all were proximate causes for the rout, nothing could
explain the frantic rout Wednesday morning, when the coin dropped thousands of
dollars in price in a matter of minutes. Selling gave way to more selling as
investors lured into crypto in search of a quick buck bolted for the exits. The
selling accelerated when Bitcoin fell below its average price for the past 200
days.
Chart-watchers pointed to key technical indicators as the coin
sold off. Bitcoin bounced off the $30,000 level and many are waiting to see if
it can break back above its 200-day moving average line. If it doesn’t, it
could potentially retest Wednesday’s lows.
Cryptocurrency-linked stocks also dropped, with shares of
Coinbase falling near 13% at one point and Marathon Digital Holdings Inc.
slumping as much as 16%.
Bitcoin
had embarked on a multi-month
rally following Tesla’s February announcement,
soaring to its $64,870 peak, in large part due to the company’s embrace.
“Realistically, it is not the first time Elon
Musk’s tweets have been erratic and, frankly, wrong,” said Ulrik Lykke,
executive director at crypto hedge fund ARK36. “The crypto markets are
extremely emotionally driven and their participants are prone to overreacting
to events they perceive as negative.”
Bitcoin’s wild price moves stem
from its design — you’ll need strong nerves to trade it
So you want to play in crypto and become a millionaire
overnight? Brace yourself for more days like Wednesday.
Bitcoin
plunged as
much as 30% to about $30,000, according to Coin Metrics. Ether dropped more than 40% in less
than 24 hours, breaking
below $2,000 at one point. Both gained back substantial ground by the end
of the day.
But this is par for the course in the world of trading
cryptocurrencies. Huge run-ups and equally drastic falls. Over and over.
“Massive retracements are always scary, but seasoned
investors tend to see them as buying opportunities,” said Mati Greenspan,
portfolio manager and founder of Quantum Economics.
Both crypto and market experts tell CNBC that this is the
new normal of investing, and traders should just get used to it.
In
other iffy news, another inflation warning and more semiconductor chip shortage
fallout.Shame that no one’s yet found
that Magic Semiconductor Tree Forest.
Covid outbreaks in Asia could hit
supply chains and raise U.S. inflation, says expert
Rising Covid-19 cases in major manufacturing hubs
in Asia could hit global supply chains — and that could cause inflation to
rise quicker in the U.S., said Richard Martin, managing director of IMA
Asia.
The increase in infections has come as demand for
goods from the U.S. and China has contributed to “a really fast rise” in
factory-gate prices in East Asia, Martin said.
The Federal Reserve may be forced to hike
interest rates sooner than expected, he added.
Fresh waves of Covid-19 cases in
major manufacturing hubs in Asia could hit global supply chains — and that
could cause inflation to rise quicker in the U.S., a business consultant said
Wednesday.
Japan, South Korea, Taiwan and
Vietnam are among Asian manufacturing economies that have reported a renewed
Covid outbreak in the last few weeks. Products or components made in those
economies are shipped globally to places as far as the U.S.
The increase in infections has come
as demand for goods from the U.S. and China — the world’s top two economies —
has contributed to “a really fast rise” in factory-gate prices in East Asia,
said Richard Martin, managing director of IMA Asia.
Martin
told CNBC’s “Street Signs
Asia” that any “glitch” in the global supply chain, such as the shutdown of
“key factories” across Asia could result in “a big push up in inflation.”
“And that goes through to consumer prices in the United
States actually faster than it goes into consumer
prices in China,” he added.
Vietnamese authorities have temporarily shut four
industrial parks in the northern province of Bac Giang, reported
Reuters. Three of those industrial parks house production facilities of
Taiwan’s Foxconn,
a major assembler of Apple products.
Fed could raise
rates earlier
Inflation has been a major focus among investors who are
worried that a quicker rise in consumer prices would prompt the Federal Reserve to hike
interest rates earlier than expected.
----Martin
said the U.S. manufacturing sector would also add to inflation. President Joe Biden’s big infrastructure
spending, if it passes through Congress, will raise demand in manufacturing and
push prices up “very, very quickly.”
Biden
has been meeting Democratic and Republican senators to rally support for
his mammoth package that includes rebuilding U.S. infrastructure including
roads, broadband and utilities, as well as investing in jobs training and
research and development.
Following the markets on both sides of the Atlantic since 1968. A dinosaur, who evolved with the financial system as it was perverted from capitalism to banksterism after the great Nixonian error of abandoning the dollar's link to gold instead of simply revaluing gold. Our money is too important to be left to probity challenged central banksters and crooked politicians.
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