4/2/2013 Portland, Oregon – Pop in your mints…
If you haven’t paid attention, there is nothing short of a seismic event occurring in the world’s monetary base. It started with the threat of government confiscation of savings accounts in Cyprus and is transmitting itself not through the ordinary channels of the financial and commodity markets, but into what is one of the least recognized developing markets on the globe:
Decentralized digital currency.
For those in Cyprus with an internet connection and a reasonable amount of technical savvy, the Bitcoin represents an escape hatch from the government’s currency grab.
Again, while we personally have reservations about keeping too many eggs in any form of digital currency, be it bank accounts, fiat currency, or Bitcoins, the utility of Bitcoins as a temporary store of value cannot be overlooked.
While we do not classify anything as money, rather, we recognize various things or concepts tend to carry a monetary premium, it is quickly becoming clear that Bitcoins and similar digital currencies which will no doubt emerge must be considered by any serious monetary theorist, amongst which we count ourselves and few others.
As such, the price of Bitcoins as it appears on Mt. Gox, the most established exchange of the digital medium, will be listed amongst our Key Indicators.
It will be quite a ride, for we suspect many senators and those in government whom the public suppose are caring for monetary matters are just now getting briefed on what it is, and why it threatens their hammer lock on the money supply.
At some point, the Central Banks of the world will intervene in the market the way they do with the rest of the markets in our Key Indicators, either directly or indirectly.
Until then, it will be quite a ride, and mostly upward sloping, as the two elements of the Bitcoin/USD ratio are on nearly opposite trajectories. Should confidence in the Bitcoin go mainstream, the action could get downright silly. Not just in the Bitcoin price, but on main street, where banking as we know it will be publicly executed by a lifeless logarithm.
It is a form of poetic justice that Mark Twain would have loved. We invite you to join us in enjoying it for him.
Stay tuned and Trust Jesus.
Key Indicators for April 2, 2013
Copper Price per Lb: $3.38
Oil Price per Barrel: $96.89
Corn Price per Bushel: $6.40
10 Yr US Treasury Bond: 1.86%
Mt Gox Bitcoin price in US: $115.29
FED Target Rate: 0.16% ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce: $1,576 THE GOLD RUSH IS STILL ON!
MINT Perceived Target Rate*: 0.25%
Unemployment Rate: 7.7%
Inflation Rate (CPI): 0.7%
Dow Jones Industrial Average: 14,662
M1 Monetary Base: $2,425,000,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base: $10,547,600,000,000