Transformation Blog

Currency transformation?

We’re at an historic point in history. Cryptocurrencies appear to be (early) in the process of replacing sovereign currencies around the world. Think about it: the dollar has been widely forecast to fall in purchasing power. Against what? The renmimbi, yen, pound, deutschmark? They are also all fiat currencies, with their own problems, and backed by nothing. And so disenchanted individuals (and organizations) are seizing on cryptocurrencies, led by bitcoin, as a means for escaping the deteriorating purchasing power associated with their official money.

Bitcoin’s blockchain success has spawned over 750 imitators, and a few of them seem likely to join Btc and head much, much higher—potentially over decades of time. Clif High has been describing this phenomenon from its beginning; here is his latest excellent interview (one hour, with USAWatchdog). And Jeff Berwick was an early adopter and is a great and nearly constant source of information.

There’s obviously MUCH MORE to this story.

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Seeking a way out. Illinois is a poster child for government mismanagement and a harbinger for the agony that seems likely for retired Americans. The state is currently $2 billion behind in its payments to Medicaid providers. The Illinois Comptroller would like to reduce pension payments to make up the deficit, but the courts have already ruled against that. Since the state is unable to print money, its next recourse will be to borrow and raise taxes. But taxes are already high enough to result in accelerating migration out of the state. And so eventually there will be one more option: declare bankruptcy and default on all pension promises!

Within the next few years, we are going to witness state bankruptcies and the impoverishment of millions of Americans who thought they had an assured retirement income. The time to prepare for this is NOW.

Deep state insiders and their minions continue making fools of themselves. Revelations from the Comey hearing included: (1) Trump was not under FBI investigation; (2) Comey leaked documents to the media; (3) Loretta Lynch meddled in the Clinton investigation; and (4) the New York Times published fake news. Bottom line, there was no collusion. But it’s not over: bought-and-paid-for politicians who want him out of office will now shift their attacks to an attempt to show obstruction of justice—which is what Robert Mueller is investigating. That will be another colossal waste of time.

Jim Rogers, the billionaire commodity guru, repeated in a Henry Blodget interview his warning that a global collapse is coming that will be “the biggest in my lifetime.” He expects an unexpected event—perhaps a collapsing pension plan or “some country we’re not watching”—to trigger a spiral of destructive consequences, similar to but more deadly than the events of 2008-09.

EU going bye-bye. Catalonia—one of many European regions which doesn’t identify with its sovereign master—announced an October independence vote. Losing the Catalonian region would be a strong blow to Spain’s already faltering economy. If successful, Catalans will then have to battle the Spanish government, which has refused to acknowledge Catalonia’s right to secede.

Theresa May’s gambit to win an early reelection backfired, so with a stiff upper lip she approached the Queen to perform the ridiculous rite of asking permission to form a government. Her Conservative Party will be able to reach a majority by allying with the hard-line Northern Irish, pro-British DUP party. BREXIT is going to happen, but DUP is asking that Nigel Farage—Mr BREXIT himself—be brought onboard the negotiating team. “If by the end of March 2019, nothing has been agreed,” Britain leaves “with all their money, laws and border controls, and the ability to trade with the EU” the way it does with everyone else.

Global cooling, NOT global warming, is here—heralded by the sun slumping to its lowest level of activity in 100 years. 58 scientific papers posted this year confirm that man-made “global warming” is a myth!

Good deed for the week. U.S. Attorney General Jeff Sessions announced the DOJ will no longer ask corporations to make donations to political cronies as a means of escaping prosecution for crimes. Instead, corporations will be prosecuted and the hundreds of billions in assessed fines will go “first to the victims and then to the American people.”

MARKETS – for the week ending June 9

Real money followed Comey down: gold fell from the $1290’s, but still closed the week up $3 at $1271.40, while silver dropped 10 cents to $17.22/oz. London whistle-blower Andrew Maguire told King World News that a “significant gold surge leading to an inevitable price reset” will occur on or before July 5th. Visual Capitalist put together an easy-to-follow graphic on why four famous money managers buy precious metals.

US stocks continued their advance: the Dow rose 0.9% to 21272 and the S&P gained 0.7% to 2432. But FANG (Facebook/Amazon/Netflix/Google) stocks took a 3% dive on Friday.

Mining stocks (the XAU Index) eased 0.3% lower to 84.37.

Crude oil (the WTIC Index) plunged $4 to $45.83/bbl. With U.S. shale production continuing to rise, elevated inventories and a decreasing impact from OPEC production cuts, skepticism is on the rise regarding the potential for crude to climb back to $50.

Commodities (GCC Index) slid 0.8% to 18.78.

Currencies. The Federal Reserve Note (= dollar, via USD Index) dropped 0.7% to 96.90.

Cryptocurrencies. Bitcoin shot $400 higher to $2854. See lead story above… And buy the dips!

US Treasury bonds gained, as 10-year and 30-year yields fell 4 and 6 basis points to 2.21% and 2.86%. The Fed is expected to hike its base rate by another ¼% Wednesday. It will probably have to field questions on its longer term plan regarding rates and its bloated balance sheet—but is totally unlikely to expose its real reason for hiking (to weaken the U.S. economy).


About the Author

Wayne Peterson is an independent Registered Investment Advisor and principal of Family Business Office, a comprehensive financial planning and asset management firm he founded in 1991. He has been publisher of the Transformation Watch newsletter since 2005. A U.S. Air Force Academy graduate, Peterson spent five years with the U.S. Marine Corps as a fighter pilot, followed by 20 years in aerospace management. For free weekly receipt of these financial blogs, subscribe here.

Peterson’s book, “But What If I’m Right?”, outlines the factors contributing to the impending global financial transformation and provides readers with recommendations to safeguard their families and their assets.

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