Breaking the Mold: Investing in Digital Assets is a Game Changer

Alternatives to Gold: Investing in digital assets

 The Evolution of Investing in Digital Assets

A highbrow is the kind of person who looks at a sausage and thinks of Picasso.
A. P. Herbert

The first reaction from the hard money camp would be to state we are insane or that we longer value hard money.  Taking that line of thought would only set you on the wrong track; we are not against hard money or the Gold standard. However, most of those in the hard money camp have difficulty dealing with reality.  The reality is that very few even understand this concept, and even fewer would be willing to embrace it. In the end, it’s the masses that determine whether or not a new trend, fad, or rule will be embraced or not.

Have the masses done anything besides occasionally complaining about rising prices? Did they embrace the Gold bull market from 2002-2011?

Most of them focus on the crash aspect and not the fact that Gold had soared significantly higher than it was trading back in 2002 despite the strong pullback. The answer on all fronts is no; to understand why no good deed goes unpunished or why the masses will crucify you if you try to alter their mindset, watch Plato’s allegory of the cave.  It provides a clear insight into the mass mindset.

Digital Assets vs Gold: A Battle for Investment Supremacy

Naysayers and doctors of Gloom keep chanting the same song of doom that all paper money will cease to exist one day and that everyone will revert to the gold and silver standard in the not-too-distant future. In a rebellious or romantic manner, this story has a nice ring to it.

However, these people are about several hundred years too late and second of all; they desperately need a massive dose of reality.  As we stated, one must always pay attention to what the masses are embracing or willing to embrace.  The masses are not even aware that Gold was once considered money, and most will rebel at the notion of returning to the Gold standard. The Gold standard did not prevent theft and outright robbery; bankers were known for shaving gold coins and other shenanigans. There is a better alternative, and we will address that shortly.

The Dirty Truth: America’s Vanishing Gold Supply

The U.S. is supposed to have the largest reserves of Gold, yet no one is allowed to examine them.  Many experts claim that Fort Knox is empty and that there is no Gold there.  Hence, even if we did revert to a Gold standard, there would be nothing preventing the government or banks from stating there was more gold than they had.  By fudging the data, they would be in a position to increase the supply of money or decrease the supply of money.

Hence, the problem then is governments and bankers. Why not devise a solution that addresses those two issues and one that the masses would gladly embrace? No one wants to run around with a heavy sack of gold or silver coins to purchase the things they desire or need. We live in a world where if it’s not convenient, it’s not embraced. The crowd rarely welcomes something it does not understand, and the education system has done a marvellous job of convincing the masses that Fiat is money.

Breaking the Mold: Why Investing in Digital Assets Could Outshine Gold

The keywords to focus on are one day and possible; the road to hell is paved with good intentions. One never knows when this day might or might not transpire.  However, what might unfold one day is that individual governments could decide it’s time to back their money with a basket of commodities, say oil, gold, silver, timber, palladium, etc.

From a strategic perspective, China is probably the nation best positioned to implement this strategy. In approximately 30 years, they have achieved more than most countries have in 90 years, and they continue to progress at a rapid-fire rate. They understand the fact that real democracy is nothing but a fallacy whereby idiots are elected into power, and these idiots then have to cater to the morons that elected them in the first place. Thus, a perfectly prosperous country gradually becomes nothing but one huge welfare state.

Shifting Gears: Why China is Not Rushing to Gold Anymore?

China is not going to rush into the Gold Standard; if there was even a hint that they were going to back their currency with Gold bullion, what do you think would happen? Yes, that is right; their currency would soar to the moon. Remember what happened when the Franc started to rise at an incredible pace; Swiss central bankers came in and knocked it down.

We are in the midst of a massive currency war, otherwise known as the “devalue or die era.  Nations are competitively devaluing their currencies to maintain a trading edge.   Hence, despite the romantic notion circulating that China is ready to back its currency with Gold, it’s more of a delusion than reality. Note, also, as China and Russia are busy buying up Gold, why would they want prices to soar now? They will allow the manipulators to keep the price lower to purchase more of this metal.

The Fed has done the impossible; they have increased the money supply, destroyed the commodity market and simultaneously managed to keep the dollar strong.  Imagine that, and it’s taking place right now. The dollar is getting ready to trend higher again.  You still think the masses are prepared to embrace a Gold or hard money standard. An entire generation would have to be financially wiped out before this concept becomes embedded in the mental psyche of the masses.

Smoke and Mirrors: The Fed’s Illusionary Tactics Revealed

Until then the best way to preserve one’s wealth is to invest in assets that inflate faster than the governments are inflating the money supply.  One of the options, but it’s not the only option, is to invest in precious metals such as Gold and Silver. We cast a more favourable eye on silver, also known as the poor man’s Gold.

We stated earlier that there was a better solution, one that many hard-money followers and the masses, in general, would find palatable.  What is the problem?

  • Bankers are allowed to boost the money supply due to the evils of fractional reserve banking.
  • We have a private entity known as the Fed that controls the money supply
  • We have a government that continues to raise the debt to pay for programs it deems necessary, even though many of them are not.

Solving the Money Puzzle: Do Digital Assets Offer a Way Out?

The power central banks have of creating money out of thin air should be revoked permanently.  The entire fractional reserve banking system should be eliminated. Via the fractional banking system, banks can create nine new dollars for every dollar of deposit they have. This outright theft, they are making money they don’t have and charging a fortune for it. The Federal Reserve conveniently explains this theft with the following statement.

The fact that banks are required to keep on hand only a fraction of the funds deposited with them is a function of the banking business. Banks borrow funds from their depositors and in turn, lend those funds to the bank’s borrowers. Banks make money by charging borrowers more for a loan than is paid to depositors for use of their money.

If banks did not lend out their available funds after meeting their reserve requirements, depositors might have to pay banks to provide safekeeping services for their money. For the economy and the banking system as a whole, the practice of keeping only a fraction of deposits on hand has an important cumulative effect. Referred to as the fractional reserve system, it permits the banking system to “create” money.

The Rise of Cryptocurrencies: A Modern Addition to Your Investment Portfolio

Governments should be banned from creating debt. If you don’t have the money, the program must be shelved.  Billions of dollars are wasted annually on totally useless and in many cases corrupt programs, because of this ability to create new debt.

Other minor refinements can be added, but with the enforcement of these two simple mandates, we won’t need the Gold standard.  We have inflation and artificial boom and bust cycles because bankers control the money supply. Cut their supply, and the dirty game comes to an end.

The masses are a lot more likely to support something like this, and this system would essentially provide almost the same benefits as those provided by a Gold standard. In the meantime, as we have to focus on reality; governments are not going to give up this tool anytime soon, and neither are bankers.

Negate the effects of inflation by investing in digital assets

There is a secret benefit to inflation; certain assets overcompensate for the rate of inflation by a considerable factor. Thus, for example, the government might inflate the money supply, say by 10% a year, but particular assets could rise by 30%-100% a year. It is for this reason, we have been stating for the past several years on end, that this bull market has a lot more upside than most experts envision and that’s why it’s still the most hated bull market in history.

Hot money is driving this bull market, and there is no sign of revolt from the masses, so the hot money will continue to flow. More importantly, the sentiment is far from bullish, and bull markets never end on uncertainty. They end when the masses are euphoric.

Investing in Cryptocurrencies: An Attractive Alternative to Gold.

New notes  added Feb 2023

In today’s ever-evolving economy, investing in digital assets has gained significant momentum, and cryptocurrencies are emerging as a viable alternative to traditional investments, such as gold. In this essay, we will explore why cryptocurrencies may be an attractive addition to an investor’s portfolio and compare their benefits to those of gold.

Investing in digital assets, such as cryptocurrencies, has become increasingly popular in recent years. With ease of access and decentralization, they offer investors more control over their assets. Unlike gold, which must be physically transported and stored, cryptocurrencies can be bought and sold with a few clicks of a button, making them more convenient for investors.

One of the primary advantages of cryptocurrencies over gold is their potential for higher returns. Cryptocurrencies, such as Bitcoin and Ethereum, have experienced significant price fluctuations, which can lead to higher profits. However, it’s important to note that this also means that cryptocurrencies can be more volatile and carry a higher risk.

Assessing the Risks and Opportunities of Investing in Digital Assets

Moreover, cryptocurrencies’ decentralization offers more resistance to market manipulation, making them more attractive to investors. Gold, on the other hand, is subject to central bank policies and government regulations, making it more susceptible to market manipulation.

Investing in digital assets smoothly, specifically, cryptocurrencies, may be a worthwhile addition to an investment portfolio. With their accessibility, decentralization, and potential for higher returns, cryptocurrencies may be an excellent alternative to traditional investments, such as gold. However, it is crucial to do your research and understand the risks before investing. By assessing the opportunities and risks of digital assets and diversifying their investment portfolios, investors can potentially reap substantial rewards in this rapidly growing market.

I think, therefore, I am is the statement of an intellectual who underrates toothaches.
Milan Kundera

Other articles of Interest 

A clear Illustration of the Mass Mindset In Action

Mass Psychology Introduction

Inductive Versus Deductive reasoning

Mass Psychology Part I 

Why market crashes are buying opportunities

Mass Psychology III 

Comic Strip Illustrating Mass Mindset

Mass Psychology II,