BTC Caution

This month has seen huge swings in the Bitcoin price. Up to $5000 per BTC, then down to $3000 and now up to $4000.  The dip probably had to do with the revelation of North Korea hacking South Korean bitcoin sites and stealing the coins to buy military goods.

Bitcoin is not an investment. It performs the role of money and the price is the exchange rate against the dollar. That rate has shot up in the past several months. Either the value of BTC is inflated or the dollar has collapsed. The dollar is holding well against other money (Euro, Yen, Gold, etc.), so it isn’t a matter of a collapsing dollar. BTC prices seem to have a lot of air in them.

Yes, I get that it is a matter of psychology. Prices are a function of people’s greed and fear --- the hope of rising prices versus the fear of falling prices --- and maybe I am just one of the fearful. Yet, as governments seek to control the cryptocurrency trade, I think more people will become afraid. And you know what will really stoke the fear?  A big power outage.  Try accessing your bitcoins when you have no electricity.  

All Those E-Currencies....

Here is a site that tracks scores of e-currencies. Charts, capitalizations, etc.  https://coinmarketcap.com/

My impression of Bitcoin is that it is in a blow-off stage. I expect the air to come out of the current high price.

How to Lose Friends

I see that Russia is developing an alternative to the SWIFT system of international bank wire transfers. Other nations are interested in this, particularly ones that have companies and banks blacklisted by the USA on the SWIFT system.

It seems to me that the USA has become this giant bully throwing its weight around the world, and this is one of the results. Before the Second World War, the USA had a smaller army than Romania’s, but then grew it to the size needed to defeat Hitler. After that threat, there was concern about the USSR. Reagan defeated that coalition by defense spending that the USSR could not match, though it did try so hard that it bankrupted itself. After that, one might think that the USA could have scaled back its forces to pre WWII levels, but international business needs muscle.

As the only super-power remaining in the world, the USA does what it pleases, but I will not be surprised to see a lot of push-back by normally friendly allies: Germany, Mexico, Australia, Canada……not to exclude those with even more reason: China, Russia and others.

There could be a lot of turbulence in various economies as these forces increasingly clash.