Big Drop for Bitcoin

Bitcoin has had a good run since I last wrote about it back in late July. However, somebody decided to smack it down hard today. It was at one point down 20%, but bounced back to a 10% drop on the day. The bounce happened at the 200 day moving average, and it's currently holding onto its 50 day moving average, as can be seen in this chart.

Once again, we see that technical support lines play an important role in large moves. Whales take advantage of the fact that Bitcoin is a speculative bet where technical considerations play an important role in decision making. They drive the price down to preselected levels where they load up for the bounce back to another preselected level, as we have seen happen today.

What's extra concerning to anyone invested in Bitcoin is that today's big move happened on a relatively small volume. Not only that, search interest for Bitcoin remains low. Whatever money changed hands today happened inside the Bitcoin community. For all the headlines about Bitcoin adaption, there doesn't seem to be any increased interest in it. Which means that the fundamental issue of energy cost is going to continue its downward pressure on Bitcoin.

Whale

By Michaël CATANZARITI - by Michaël CATANZARITI, CC BY-SA 3.0, Link

Fauci and the Wuhan Lab Theory

The Wuhan lab theory is making headlines again, this time with Fauci taking center stage. Newly released documentation has the man firmly connected to the Wuhan lab. It looks increasingly likely that he was involved in the development of the virus as well as the vaccine, and that there was a plan to release the virus so as to make money from selling the vaccine.

We're seeing another round of cloaks and daggers, and Fauci looks set to be thrown under the bus. Someone is determined to pin the plague on China and political opponents in the US. However, their goal is not as noble as it may appear. This is not so much about freedom and truth as it is an opportunity to get the upper hand, including an excuse to go to war against China.

The mask of the beast

China's Grey Rhino

Back in January, I made the prediction that China will strengthen its currency as part of its strategy to displace the US as the world's dominant power. I further predicted that this would lead to a financial crash in China, and that this would spread to the rest of the world. The end result will be a stronger Chinese currency, and a relative advantage to China.

More recently, we've seen China use flu outbreaks as excuses to shut down exports whenever they find this convenient. Policies are put into place for an all out economic war. However, the Chinese currency is only up by about 1% relative to the US dollar. Apart from the flu itself and the increased control on exports, China appears hesitant. But that may soon change. There's a grey rhino roaming around in China's financial markets, and if it's left unchecked we're likely to see tremendous damage to financial assets throughout the world.

Evergrande is a Chinese investment company in urgent need of $300 billion dollars. This money isn't going to come from private investors, so it's up to the Chinese government to decide its fate. What China chooses to do in this case will determine the global financial climate going forward. If they let it go bankrupt, there will be knock on effects all over the place. If they save it, things will remain calm until some other event stirs the pot.

China is once again in a position to determine world events going forward. With the stage set for China to give the world another blow, I suspect they will let the company go bankrupt and take advantage of the chaos that follows to further strengthen their grip on the world.

Xi Jinping

By Palácio do Planalto - https://www.flickr.com/photos/palaciodoplanalto/47945730807/, CC BY 2.0, Link

Short Lived Joys

My stepdaughter's father got his vaccine shots no more than two months back, at a time when it was already known that it was ineffective against Delta. However, he was pleased with his decision. The vaccine was going to keep him safe from serious illness. He was also pleased with the conveniences afforded by the vaccine. His vaccine passport would give him his freedoms back.

Now that he and his equally vaccinated wife have been through the ordeal of catching Delta, his tune has changed. Never before had either of them been this ill from a flu. Clearly, the vaccine was not very effective. Counterproductive would be a more fitting description.

My stepdaughter tried to put a positive spin on their ordeal by telling her father that they now had immunity and that they weren't any longer in danger of catching the flu. However, her father was not cheered up by this. He replied politely in the positive, but from the tune of it I suspect that he too knows that the vaccine doesn't provide comprehensive immunity. Vaccines are thirteen times less effective than natural immunity. Hence, the ordeal that he and his wife have been through has a high chance of repeating itself through the winter.

This is the problem with high time preferences. The price of a short lived joy can easily turn into a long term nightmare.

Clock

By Mettness, CC BY-SA 3.0, Link

Direct Observations

My stepdaughter just had a call from her father in England. Among other things, he told her that he had been struck down by the flu, and that he was still feeling groggy. His wife had also been hit, and she had to spend a few days in hospital.

I find stories like this interesting because they are first hand accounts of what's going on, and they can therefore be held up and compared to the official narrative.

Both my stepdaughter's father and wife are fully vaccinated. They live in England. The variant they were hit by was most likely Delta. That's supposedly a mild variant. However, the symptoms in this case were severe for both individuals.

The dominant narrative, even among those skeptical to mass vaccination, is that vaccines make the symptoms less severe. That makes it even stranger to see two fully vaccinated individuals, aged between 50 and 65, fall severely ill to Delta.

None of this fits the official narrative, so we're either dealing with two unusual cases, or there's something wrong with the narrative.

Looking at other stories and reports, we find that direct evidence, as in raw data collected by scientists and news relayed directly by journalists, paint the same grim picture. Vaccinated people get hit harder than unvaccinated people. The dominant narrative appears to be a fiction with no hold in reality. However, it has become so ingrained that people will not take anyone seriously unless it's repeated without question.

This is the power of propaganda. Even those skeptical to what's going on will repeat it in order to remain credible. But the narrative is falling apart in face of reality. Notably, my stepdaughter's father didn't ask his daughter about her vaccination status. He didn't tell her to get herself vaccinated. His experience with the virus has left him doubtful. He's no longer convinced that the vaccine has any positive effects.

With flu season approaching, this is how things are likely to progress through the winter. Vaccinated people will be hit hard, and they will notice that the unvaccinated are less affected. The disconnect between the official narrative and what they experience in reality will make them doubtful, which should translate into less conviction in the pro-vaccination camp.

Delta

By Dcoetzee, F l a n k e r - Own work, Public Domain, Link

Predictions Coming True

I like making predictions. It's a great way to check on my thinking about current events. If I'm right, my predictions comes true. If I'm wrong, they don't. There're also the in between cases, where my predictions come true in some unexpected way, or there's a twist that makes things unfold slower than expected.

The purpose of this isn't to be able to tell people after the fact that I was right. Such posturing is for losers. Being right is merely a side-effect of good predictions that should be toned down so not to feed the ego with too much confidence. Anyone can make a bunch of predictions and then selectively brag about having some of them come true. However, if there's no positioning or skin in the game when the prediction was made, it has no value to anyone. It's merely a talking point of no consequence.

Predictions are made for the purpose of navigation. The more we get right, the more we benefit, provided we know how to weigh our odds and spread our risks. For instance, I would never bet against crypto-currencies, no matter how sure I am of their eventual demise. Bets are to be placed carefully on things that are likely to pan out in the medium term. Risky bets are to be avoided, or played with small stakes.

This strategy has earned me a reasonable return on my investments. It has also saved me a lot of money in taxes, and it has more recently saved me from making the mistake of getting myself vaccinated. In all of these cases, I've made predictions, and positioned myself accordingly.

The big financial move that set me going on my current path was the sale of my house in Norway. That decision was based on my observation that taxes and fees related to my house were growing faster in percentage terms than the appreciation on the house itself. I foresaw a likely turning point where house prices would increase less than the fees to hold it, at which point the house would go from being an asset to a liability.

With the state in constant need of more revenues to cover its ever-growing budgets, houses are obvious targets for taxation. They are registered by the state, they cannot be moved abroad or into hiding, and they are generally owned by the better off. Owning more than one house is a luxury that can be taxed even more.

These predictions made it clear that the best move in my case was to sell my house and to use the proceeds to pay off debt on my wife's modest apartment in Porto, and to buy gold. The tax benefits from this ran in the thousands of dollars per year, and gold has appreciated at a healthy rate.

There has been no change in policies since I made my move. The state is as broke today as it was back then, and the number of programs in need of financing are increasing. Hence, my wife and I are not going to buy real-estate or land any time soon. If a buying opportunity comes along, we'll keep our investment small. With the state in constant need of more funding, the last thing we want is to appear rich enough to afford extra taxes.

Our financial positioning has paid off as hoped for. However, it may be our decision not to get vaccinated that turns out to be our most important. This too has been based on predictions. I figured out that the virus was mostly harmless as early as April 2020. April this year we had evidence to suggest that the vaccine was counterproductive.

As of late, there's been a deluge of evidence to suggest that the vaccine is not only pointless, it's potentially deadly. No amount of inconveniences thrown at us for refusing the vaccine will make us change our mind. The vaccine is not proof of health, it's proof of ill health, and I pity the ones sitting in their segregated quarters under the false impression that they are somehow safe from illness. They are lumped together with other vaccinated people, which is likely to be the worst possible combination as far as health is concerned.

It remains to be seen if the vaccinated become the only ones getting seriously ill from the flu in the years to come, but this prediction looks increasingly likely, as does my prediction that the vaccinated will suffer from a lot of illnesses unrelated to the virus. My guess is that we're approaching peek denial at this point and that the worst is behind us as far as pressure to get vaccinated. This winter may be difficult for the vaccinated, but the tide is shifting. The ones standing firm at this point will soon be rewarded with the luxury of good health in a world full of illness.

Making predictions

By John William Waterhouse - http://uploads6.wikiart.org/images/john-william-waterhouse/the-crystal-ball-1902.jpg http://www.wikiart.org/en/john-william-waterhouse/the-crystal-ball-1902, Public Domain, Link

Gold Testing Resistance

Gold bounced off downward resistance at $1670 four weeks ago, and has had a good run since, meeting upward resistance at $1830 this week. Friday marked the highest weekly close for gold in twelve weeks, with a strong finish after a dramatic August that ended unchanged.

This paints a strong picture of gold. There's also an inverse head and shoulder forming in the weekly chart. The neckline corresponds to the upper line of the wedge formation we're currently in. It runs through $1860 at the moment, only $30 above the $1830 line that has been resistance for the past ten weeks.

If $1830 breaks, $1860 is likely to break as well. The gold price will then test resistance at $1920 and $1970 before testing $2100. That's a lot of resistance. However, the upward pressure from a completed inverse head and shoulder formation will be strong. Once $1860 breaks, there's potential for a $240 move up, which happens to correspond to $2100; our year end target.

With four months to go before year end, our target is still within reach, even with multiple resistance lines on the way up.

Rococo Cup with handle

By Vincennes Porcelain (France, circa 1739–1756), Francois Binet (France, active 1750-1775, born 1731) - Image: http://collections.lacma.org/sites/default/files/remote_images/piction/ma-31852871-O3.jpg Gallery: http://collections.lacma.org/node/229367 archive copy, Public Domain, Link