....the Harder They Fall

A few weeks ago there were predictions that the bitcoin price was headed to $100k, even to a million dollars. Well, an odd thing happened on the way to the moon: the price of bitcoin collapsed by 50% this past month. It is now flirting with closing below its 100 day moving average. Probably not very positive for the bitcoin price.

Also, I see this article: https://www.investopedia.com/news/japans-biggest-bank-releasing-its-own-cryptocurrency-march/ about banks in Japan getting into the crypto currency game with their own. Such regularization and mainstreaming of crypto currencies is almost sure to reduce demand for rogue “currencies” such as bitcoin. Add to that the intense pressure that the IRS has been putting on bitcoin dealers for their client lists, and bitcoin is in trouble methinks. The IRS is like to apply the same pressure that the U.S. Treasury did to UBS and Credit Suisse some years back when they blackmailed those giant Swiss banks into providing client lists (give them up or we are shutting down your mammoth USA operations).

Turkey's Debt

Some readers probably don’t realize that Turkey is one of the larger economies in the world. The largest in the Muslim world, except for Indonesia, and that depends on which stats you read….they are neck in neck.   But Turkey has a problem, and it may soon be the world’s problem: debt.  Lots of it. A quarter trillion dollars in government debt, but almost 1.5 trillion dollars in corporate debt, most of which is owing externally. I don’t think it’s going to be paid. Turkey’s debt, not counting consumer debt, is over twice its GDP. The problem is compounded by Turkey’s aversion to accepting IMF help. From what I can see, the attitude seems to be “screw the west…they got us into this mess by lending to us.”  If Turkey defaults, the contagion will spread. Banks who lose will want to sell other assets….fast. There may not be buyers in some asset classes, and that will then freeze those markets so that the panic selling will spread even further. 

Bitcoiners To Get Bitten?

The IRS is casting a net to gather in those who have not reported gains. See https://www.theverge.com/platform/amp/2017/11/29/16717416/us-coinbase-irs-records.  Now that bitcoin values have gone to the moon, this potentially makes the move profitable for the IRS and very damaging for bitcoin users.