Speculation Vs Investment - 01-03-2023

Hello, humans. Hello humans.

Some early in the morning, a few minutes after eight, starting to rush into town. I'm running a little bit late here, and I've got a. Got to go get blood drawn. Have an appointment for that.

As you're an old guy, you got all these medical things, right? Mostly I don't fuck with doctors at all. So I have a concierge doctor and I'm just doing monitoring, right, because I've had the cancer and so on. So I want to keep track of what the hell is going on inside my body in an objective fashion of actual reports of what's going on, blood wise and so on. So anyway, I got to get in and get that done.

I'm running a little bit late. I was doing some organization and planning and getting things going for the house remodel for the house extension. And that cut into my time. I just sort of lost track of what was going on. Now I got to beat feet and get it in there anyway, though.

Crap. Shit. Okay. Giant road blockages here. Oh, they're hauling material down to the beach.

Bunch of the four of the dump trucks with the pups on the back.

Anyway, so I wanted to talk about some of the non considered. So people just don't think about it. Effects of the difference between fiat currency and hard currency. And I want to talk about it because we're going to be coming up to a point of a reemergence of hard currency. In fact, it is reemerging now in the form of the BRICS currencies, okay?

Because the BRICS currencies are going to, even though they're fiat, they're being backed by resources from those countries, okay?

And we know that we're on the move to a hard resource backed currency from literally, literally millions of little indicators, right? But there's a bunch of giant big ones. One of the big ones is that China, the government of the country, is buying gold and silver as fast as it is able to obtain it without altering prices. And on top of that, they are facilitating, not just allowing, but they're actually facilitating the introduction of gold and silver, less silver, but more gold, through their population in as wide a possible manner. So in the past, it would be rich people.

So in a fiat currency, rich people would buy and hoard gold for the long term capital gains as the fiat currencies inflate their way to worthlessness. And so you just see a lot of the rich guys have gold, right? China is not taking that approach. China has come up with this. Beans, gold beans, like they're the size of a small red bean, right?

So we're talking little tiny droplets, so to speak, of gold. They're not formed, they're not flattened, they're not made into little coins. They're just left as a bean, a bean of gold. And so all of the kids in China, they know this shit's coming. They see what their government's doing, they're suffering under the oppression of it, and they're dealing with all of the problems of a very poorly managed global fiat currency scheme.

And so they know what's coming. They're not stupid. And they're buying these little gold beans as fast as they can accumulate wan. And then they'll go and buy another little bean and they're starting to stash it, right? And so China, in terms of the population, China pop is becoming gold bugs, gold hoarders, and pretty soon they'll be using gold for transactions.

Actually, it's already happening now in an unofficial capacity. The scheme that is thought that China is working on is that it wouldn't be a gold back, it would not be convertible, so you wouldn't be able to take the fiat currency and convert it into gold, but there would be an official structure for gold used as currency. So they would be able to say to you, you'd be able to dial in, so to speak, the daily price in won or whatever currency of that little gold bean that you've bought. And so you'd be able to know in a relatively objective fashion, what it was worth in the economy in terms of its trading value for goods, right? Very much like the fiats that we have now, where they put so many fiat numbers on a price of a good in a store.

So here you would go on in and it would say, okay, these big bags of rice and all of this other stuff here would be equal to one gold bean. And so you would have it that way as opposed to having each item so they may be marked with their fractional cost in gold beans. Right. So I don't know how we're actually going to end up doing the signage aspect of the transformation to a hard money economy, but we're heading there now. Now this comes up for a lot of different reasons.

Right? So here's the thing we have now bull runs. So we have booms and busts in a fiat economy. It can only always be this way. You'll always have booms and busts within an economy that is based on fiat currency, which is printed for extremely low cost and then supposedly is valuable just because of its creation.

Now, what we're coming into is a hard money system. And you don't have speculative boom and bust cycles, because that's all it is. All right? So the boom and bust cycles are entirely emotional driven events. There's maybe a core of rationality at the beginning of it, like, oh, hey, look, this bitcoin stuff is pretty cool.

It can't be lost. I mean, you can lose it, you can lose the wallet, but I mean, it can't be stolen. It's on the blockchain, so you know that it's there. You can access it from all over the planet. These are good things to have.

There is only going to be 21 million of them. So it's a restricted supply, so it can't be inflated artificially, unlike ripple and all these other fuckers, the XRP and such. And so bitcoin is a good thing. So there is that understanding at a solid level that there is an objective reality to the operation and use of the bitcoin, right? And then thereafter, it's an emotional thing.

You get an emotional attachment to a particular view of the world unfolding around you, and you get an emotional attachment that says that, oh, as the fiat currency continues to inflate itself, continues to create more and more and more and more and more and more and more, then the bitcoin will be worth more in those digits. And if I need to convert to those digits, I will have shitloads of them, right? I'll just have buckets of the fuckers, which I don't have at the moment. The same thing is true with gold or silver. If you bought gold and silver.

And then we get into another one of these boom and bust cycles, this would happen as the currency hyperinflates itself, right? Which it is hyperinflating now, okay? So when Nixon took us off the gold standard in 1971, there was not a billion dollars in circulation. So just think about that. There were no billionaires.

There were millionaires that had managed to accumulate wealth, but there were no billionaires. Then we get into 100% fiat currency in 1971, and now we're scaling to where our debt for the nation requires interest payments of a trillion dollars a year, okay? And it's scaling up two years from now. So the projection is that if at the end of the Biden regime here and swearing in of Trump in 2025, we would have close to a $2 trillion annual debt payment. And we can't make that.

We won't make it that far. Okay? So we're at the extreme limit of the ability of the system to hold itself together. That's why they're trying to get us into this central bank digital currency scheme where they think they've got the problems worked out in terms of how could they sustain it. Right?

I won't go into all of the reasons that they think they can sustain a CBDC where they can't sustain fiat currency. No, fiat currency has survived more than 75 years from its introduction. And no, the United States didn't have fiat currency until 1971, when it was no longer backed by anything because it had been backed by gold. If you were a foreigner, and I know american citizens that were outside the country, that participated in that through the banking arrangements that they had, where they were converting american dollars into gold in 1971, before they shut the window, these were the gold speculators that temporarily caused us to get off of the gold window. Yeah, a bunch of horseshit.

It's permanent. They've got to go fiat. It's the death of the fiat, blah, blah, blah. So here's the thing. We have had boom cycles in sound money economies, okay?

So we've had boom cycles when we were working on a gold and silver based sound money economy. Those boom cycles are not bull runs. Okay? So they're not an investment. Okay, let's be clear in the language then.

So when you have fiat currency, there's no such thing as investment. There's only speculation. So you're speculating that there will be an emotional response to a particular level of assets that will incentivize people with that emotional attachment to put their fiat currency into that asset, and it has no relation to the underlying value of that asset. In an overall general scheme, it is entirely an emotional response. That's why we get these huge bull runs that scale the way the fuck up and then crash.

Okay? It has to do with the amount of fiat currency available, how fast they're creating it, and where the emotions are running.

In a sound money economy, we have booms, but those booms occur because we have new sources of gold or something else that gooses the economy. And so if you had a gold based economy and you could go on out here in the west and go to a stream and pan gold, then you are basically converting your daily calories of energy into directly working for gold without doing it in a stepped fashion. So one guy might use his energy to go out and spend eight or 9 hours speculating that he can get gold out of a stream, whereas another guy said, that's too much risk or whatever. So I'm going to use my eight or 9 hours today, and I'm going to go and hammer nails in two x fours and get gold in exchange. Now, the amount of gold I'm going to get is fixed because it's being paid out on a per hour basis sort of thing.

Unlike the guy who goes and speculates by putting his feet in the stream and kicking up the dirt and then getting some and seeing if he's got any gold in it, right? Okay, so in a sound money economy, you can have booms. And this would be where a bunch of people go out and they discover a bunch of gold. And now you've got more money in circulation because they've introduced it by discovering it, right? And getting it in there.

It would be in a raw form. It would have costs to become a coin and become actual money. But those costs are trivial relative to the continual store of value that is represented by the gold. Now, the other form of things for booms we've seen, I think it was like in the 1870s. We'll take it up from the 1880s.

Okay, so from the 1880s, we had a couple of booms. These booms were related to gold supplies in the west, out here in Alaska and California, coming online and being mined and so on. Right? Now, in a sound money economy, you can have fantastic deflation, right? Because if we discovered a giant mountain of gold that you can just scrape two inches of dirt off the mountain and hack out a big chunk, then the amount of effort to get the gold relative to the rest of the currency deflates the purchasing power of the rest of that gold, just because there's so much of this shit.

So it's truly a supply and demand kind of a thing, right? It is scarcity that creates value under those circumstances. If gold is not scarce, then we're looking at an entirely different level of valuation for it. All right? Now, there are other things that will create booms in a sound money economy.

And some of them are like in the 1880s, we had an invention period where people were making inventions. Bear in mind, that was a couple of hundred years after the end of the Kali yuga. We're thinking better. We're getting more thoughts in our heads. We're able to speculate and put it all together.

So we started inventing shit. And so the all aluminum electric car was invented in 1889. It took them, I think, about 14 years to really start producing them. But nonetheless, we started having all of these inventions. And then along comes Henry Ford, and he invents on the process of inventing to create the assembly line, and that creates.

So all of these inventions introduced new sources of value into the sound money economy. And those new sources of value brought booms in that economy as we were able to do things. All of this is energy related people. So it was much better energy to be able to put a gallon of this fluid into your car and go 500 miles or on a tank than having to stoke your horse up with hay. Take the three days or four days to get the 500 miles, however much it would take, probably be more like ten or twelve, et cetera.

Right? So it was the ability to do things faster with less dense forms of energy that propels forward those booms. And then when Henry Ford came on, even though we were starting to work with a dual economy where we had a fiat in circulation, but we were still on sound money because the fiat could be converted at any bank. So if you had $20 in fiat, you could get a $20 gold piece anyway. So Ford creates the assembly line and all of that.

We have another boom period. And so it was that boom period, not so much the fiat currency, but that boom period that created the 1920s thing here in the US, because Ford was bringing on all of the manufacturing. We were industrializing at that stage and altering our lives through the use of energy. Now, bear in mind, we've always known about this. So in those 18 hundreds, in the 18 hundreds where you see the people that are on the trains just shooting the buffalo, right?

Just shooting buffalo out in the planes. Just shooting and shooting. They were paid to do that by the american government, because the american government wanted to deprive the millions of Indians of their source of energy. They got their energy out of the buffalo, not only eating the buffalo, not only the buffalo hides, but also the buffalo fat. And so that was the source of their energy in their economy.

We were using coal, okay? So a denser form of energy, and they wanted to take over the country and get rid of all the Indians. And so they killed, like, 1.5 million buffalo in extremely short period of time. Like, maybe it was just a year and totally collapsed the economy of the native tribes. And it started the long, great suffering for these people, right?

And a mass die off. Millions died. Millions died, maybe tens of millions. There's estimates that are just. There were people that were saying there were 60 million Native Americans on this continent when the white people came from Spain, right?

When the Christians showed up. So there were millions that died in this process. And it was ethnic cleansing, as are all immigrations, as are all invasions, and that's what's going on now is America is being ethnically cleansed, top to bottom at the instructions of the mother wefers. Now it's my. Okay, so getting back to the boom and bust stuff here.

So, in a sound money economy, you don't have bull runs and you don't have crashes, you don't have market crashes other than through speculation at any given time. Even in a sound money economy, you can get conditions that will cause a crash in a particular stock as it becomes understood that it's not really a sound investment, that it was all hype or whatever. Right?

But the thing is here that I have to pay attention to driving. Okay, so in the sound money economy, an investment is not a speculation. Yes. An individual is speculating that this particular company is going to be sound and will return his money with some level of profit, but there is no expectation under those circumstances of having the underlying asset, the share of stock, which they would print out the paper and say, you had this and so on. It was an actual legal contract, unlike now.

But the share of stock would not escalate in value simply because of printing of money, which is what's going on with our stock market now. There has to be someplace for this money to go. And so they shovel it into these fake assets, and the rehypothecation, et cetera, et cetera. The rehypothecation is where they sell the same share of stock to hundreds and hundreds, thousands of people because they know they're not all going to want, or they're hoping that they don't all want to sell it at the same time, and thus they're never going to get caught at this game. That's coming to a point here where they will get caught at it as we get into the crack up boom, because in the crack up boom, the price of all the asset, all the fake paper assets, all the fiat driven bull run stuff, will scale way the fuck up, and then everybody will try and get out at the same time, and nobody will be able to get out, and so no one will be able to recover.

Well, maybe the first few people that at that early part of that wave, they'll get some portion of their fiat return to them, but it'll still be fiat, and the fiat itself will be crashing at that point anyway. So in the sound economy, we have investments, not speculation. In fiat money, you have speculation. So there's no point really in looking for soundness in an underlying company or whatever that you might buy stock in during a fiat money time. Rather, you should be a much more effective personal strategy would be to try and suss out where the emotions are going on these stocks.

And that was my original goal back in 2000 when I'd come across this. I'd started working on it in the. Had my webbot stuff going, and I was actually looking for being able to trade, so to speak, to have an edge in trading where I would know where the emotions were going relative to speculations. And thus I could get there ahead of time and sell ahead of time. Right?

So I'd beat the hordes, and so I would accumulate just because of basically the inflation of the money, would inflate the relative value, the nominal notional value of the asset I am purchasing or the speculation I'm purchasing, because it's not an asset. I don't actually own a share of stock. If I buy that on Wall street, they will do everything they can to not ever send you a share of stock, try and convince you in any number of ways not to do that, because then it's outside their control, they can't resell it, blah, blah, blah. Anyway, so the.

The ability to make a profit in a sound money economy is entirely different than in a fiat economy. And so this is all brought to a head by my buddy Joe's dream, right? So Joe had the dream. The dream showed him that he's interpreted it this way. The dream showed him that at 38,000, he should sell off all of his cryptos, because there was going to be a giant crash in all assets, not just cryptos, but gold and silver, et cetera, shortly thereafter.

Now, he had his dream. He sold at 38,000, and he has had a crash. Okay? It was not the crash of the cryptos or any of that. It was not this huge, devastating crash where silver would go from whatever, currently at something around 20, down to $6 or eight.

I don't remember the actual particulars, but it was a big amount of fiat currency numbers relative to gold and silver. So they would drop to less than a quarter of their value, current notional value. And so, in my opinion, the only way that that can happen is that we revert to a sound money economy. And I could see silver costing $6 an ounce in a sound money economy, right, where the money was basically gold and silver, or was a basket of resources, but nonetheless, the money itself would be much more valuable than our current fiat under those circumstances. I can see Joe's prices, but here's the problem with that.

If that were to occur, then Joe's dream is useless. The reason it's useless is because it would do him no good to buy any of these assets at that point. Why buy silver at $6 and hoard it, or gold, for that matter, or bitcoin, on those kind of sound money economies, because there will be no speculative inflation of the numbers within those assets. So in a sound money economy, silver might stay $6, nominally $6, for fucking decades, as has happened in the past. So an ounce of gold was $20 here in the US long before the Fed came in.

So an ounce of gold was $20 basically from 1812 to 1912. And actually it was even more than that. I mean, it was down to 1920 when they started creeping up on the value of gold relative to the fiat. It took them a number of years to start fucking over the system. So during that 100 year period of time, there was maybe a three or 4% increase in the overall amount of money available due to new gold supplies.

Because bear in mind, you got to get people up there, you got to harvest the gold and all of this kind of stuff, so there's real energy put out for it. And so we had maybe over 100 years, three or 4% inflation. Totally. Maybe it's not even that big. I'd have to go and actually look at the numbers.

But that's what we can expect with a sound money economy. So why buy those assets at that kind of an economy? People will buy those simply because they're going to be all freaked out about the death of the fiat, and they'll remember the death of the fiat. They'll not only be freaked out about it, they'll be living with it for 30, 40 years as the ripples go through the social order. And so they'll want to hoard gold and silver, but it won't be appreciating in value, it'll just not be falling in value.

I got to chug some coffee here for the blood work.

It's not the best fluid for getting blood out of you, but it does give you a little bit of hydration. Anyway, I've got some water here and I'll chug some of that as I head in.

Anyway, in my sense, my understanding, Joe had a prophetic dream. It was accurate. We hit the 38,000 and damn, did he have a crash. Right? It was not the crash of the system.

And as I pointed out, I've been fighting with Joe for a long time because he's got, in my opinion, he's hardened an emotional attitude about his interpretation of the dream, not about the dream, which I don't disagree with him. Right? I don't disagree with him that the dream was prophetic. I'm just saying that his interpretation of it is really fucked and he's going to fuck himself over by selling and then not getting back in. So my expectation is that there's going to be a giant wealth transfer in the form of the failure of the fiat, and we'll go through the crack up boom.

And at that stage we might really see 100,000, 150,000, $200,000 bitcoin. It could scale to fantastically huge numbers, but it's the currency that's worthless, not the bitcoin being worth more. There is an emotional attachment to it. Yeah. More people would want it, so it would have some extra value that way, but it's really the deterioration of the currency that's driving it all.

And so in my way of thinking, Joe has got an attachment to the. He's fixated his emotions on his interpretation, not on the dream itself.

And so I think he'll be wrong. I'm hoping and I'm praying that he's wrong, okay. That there is no giant crash. And he should pray that as well, because if there was a giant crash, he wouldn't recover. He could buy all these assets he wanted, but they're not going back up because we would have swapped over to a sound money system in that process, and there wouldn't be this level of recovery.

There's going to be chaos. There's going to be some level of speculation in assets during this frothy period of time, but it'll all settle out and go back to the investment cycle. In the investment cycle, you choose, based on hard analysis of what a company is doing or what some kind of an asset is doing, and then you invest on that and your return comes from them actually performing. So you could pick a company that says, well, we've got a good flying car here, blah, blah, blah, blah, blah, invest with us, and they could crap out because they could be a bunch of fucktards and not be doing the flying car thing well. Whereas some other car company could do a flying car thing well.

And if you invested in that, that company would be worth more because they would be on the invention edge. So now we're coming up in 2024 through to fuck, no. Maybe, who knows? Not even going to speculate on that. But for decades, we're coming up into a huge invention cycle that is going to just totally floor everybody.

Now, of course, now they're going to release a lot of the secret technology that's been reverse engineered from space aliens, blah, blah, blah. And so we're going to have all of that kind of stuff impacting us, and we will do it in a sound money economy. So it's going to be the best of all possible worlds.

It's going to be huge. The sound money economy itself, even if we didn't have the invention cycle, the sound money economy itself, is going to fuck over Joe's idea of speculative investment yielding results, okay? Because it's just not going to happen because we won't have the fiat and the underlying dynamic that causes speculation. Speculation. So there were speculative booms, and there are speculative booms in a sound money economy, right?

They're not bull runs and they're not crashes. We don't have those. But booms do occur, and then they gradually fade away in the process of those booms. So you could buy way back before we went 100% fiat, so before 1971. And really, I'm talking about in the early 19 hundreds up through, say, 1930s, if you bought into Henry Ford's operation, you would have been rewarded, even if we had never gone full fiat, simply because there was a demand for these machines that Ford's plants were producing.

And so the company was more valuable. They hired more employees, they had more of the species, the currency flowing through their hands, so they could get more of it to stick to them. And so that was how the mechanism worked. And you'd end up with more value because you had bought the stock at the appropriate time. But it was not due to a flood of speculators getting an emotional hard on about it later.

It was people that were hard headed analysts that are saying, yeah, these cars sell. This company has got a good management program, yada, yada, yada. And so we get into return on investment. So in a sound money economy, you have return on investment. Here we have return on speculation.

And that's all it is, is to be able to emotionally front run this. And we can see how powerful these emotions are. And once one of these emotions sticks in your head, it's really difficult to get it shed right. And so this is basically, we're coming up to a period of time here in this year in which we will see one of these scenarios go forward. Either Joe's mega crash will happen, and hundreds, perhaps billions of people will die.

Okay? So bear in mind, if Joe's crash were to happen and we had $6 silver and we had all the cryptos crash, and he's talking about, I don't know what it would be but maybe bitcoin comes down to a couple of thousand or 600 or something like that. I don't remember the numbers that he had said in his dream. Right. Just that everything was way the fuck down at that level of about $6 silver.

Taking that as our metric and using today's fiat prices and just assuming that we're staying in fiat, okay, just assuming that we don't go to a sound money currency as a result of the crash or in the process of the crash, but we were theoretically going to recover in fiat currency. Still, still use the fiat fern dollar, if that were the case, then at that level, $6 silver, we're looking at less than $30 for a barrel of oil. And nobody makes money at $30 for a barrel of oil, and they won't even bother. So it costs us a dollar per 40 gallon barrel to lift oil out of the ground in Saudi Arabia, which has one of the cheapest lift costs anywhere on the planet. Then it costs us $4 a barrel to deliver that 40 gallon barrel anywhere else around the planet, right.

Just the transport costs. And so we've got $5 involved in there. Refining costs, et cetera, et cetera. And the handling of the, what do they call it? The inline transport to the ships.

From the ships to tanker trucks. From tanker trucks. The investment in that infrastructure eats up a bunch of money. So at about $30 a barrel, if we had a sound money economy, you could still maybe get people to do oil, right, to go and do all of the oil. But in a fiat economy, they're not going to bother because they can't make more fiat doing it.

They can't recover their costs. So instantly, everybody would stop producing oil. There would be no more goods shipment. All of the grocery stores would dry up. You wouldn't have any gas refined or diesel refined unless it was done at the point of a gun, basically being mandated by the government with military behind it saying, get that refinery working, get those trucks filled, get them out there to the gas stations, right?

Because there would be no economic incentive to do it, so they'd have to do it some other way. So you're talking about a really mad max kind of a situation relative to the prices that Joe's talking about in his dream. So I'm going to barely make it in time here anyway. So under those circumstances, billions of people would die because there wouldn't be any food shipments and there wouldn't be medicine, and we'd see all the children and all the at risk people would die really quick because there would be absolutely no fucking support, right? No one would go and take care of the elderly because they weren't being paid for it and there was no food there to feed them.

And the elderly are pain in the ass in the nursing homes anyway, and there wouldn't be medicines for them and everybody would be suffering greatly. And so this is the vision that would be produced should we have a situation of the prices that Joe's talking about in this crash. So I hope he's not right, because I don't want to die in that kind of a world. I don't want to go into that kind of a mad Max world. It's bad enough with what we got now we're at this period of time and all this shit's coming unglued, and you can really see where people's minds are and who's controlled and all of this sort of thing if you really look at it.

Anyway, so our situation here this year, I think, will mark this transition. How many years the transition will take, I don't know. It's just going to depend on how long it takes to start actually creating a sound money economy. Once we start creating that and speculation disappears, or it'll take maybe a year for speculation to go away just because we've been habituated to it emotionally for all these.

So basically that's my problem with Joe's vision, is that it kills us all off. And even he does not under. I don't think he grasps that. If his vision is accurate, if his interpretation is accurate, and there is going to be this giant crash of assets there, that if that is the case, then he's in a world of hurt. He's fucked over as well.

So like I say, I just don't think he grasped that. People don't understand. Well, he's a kid, he's under 50, so nobody's ever lived in a hard money economy. I actually have, because we spent time, because in Europe we'd go travel around to various different countries that were hard money economies at those times with communism and so on. Anyway, guys, I got to go and do this, so I will pick this up later.