Bitcoin Bros Never Learn

Where’s the Lamborghini?? [Morning Reckoning] September 12, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Bitcoin Bros Never Learn - Grizzled vets are much better suited for today’s environment — especially crypto - Meanwhile, the young guns who survived last year’s bust are hopefully learning some valuable lessons. - Bitcoin price action has been uncharacteristically tame lately. [There is MASSIVE change happening within our company]( And I want you to [hear about this – from me]( – otherwise this new policy could blindside you. This has gone into effect immeditaly, so I want you to understand exactly what it will mean for you. [So please, watch this video for my full announcement.]( [LEARN MORE]( Baltimore, Maryland September 12, 2023 [Greg Guenthner] GREG GUENTHNER Good Morning Reader, I was mindlessly scrolling on my phone waiting for my turn at the barber shop when the kid started talking about crypto. I popped my head up from my screen and the barber and I exchanged annoyed glances. Like most old-school barber shops, this was a safe space for old men to complain about taxes and enjoy politically incorrect conversations without fear of cancellation. It was not a place to speak enthusiastically about pretend money. But the young lad didn’t seem to care. He went on to explain he just graduated college and was in the process of moving out of his apartment to head to California, where he was going to work at a crypto startup. Now, this particular barber was an old-school, motorcycle riding rock-and-roller who kept a loaded .38 by his beard trimmer and liked to collect silver coins. But he was polite enough to tell the kid he didn’t know jack about crypto, brushed off his neck, and wished him luck with his cross-country move. No one else in the shop said a word. It’s important to note this event took place well before Bitcoin’s first full-fledged rocketship ride to $18,000 in 2017. But Bitcoin was gaining traction. And normal folks (including a few old men who sit around in barber shops) were vaguely aware of its existence. But by my calculations, this occurred almost ten years ago. At the time, there was no reason to view crypto as a viable career path, trading vehicle, or money-maker in any capacity. Which is why the young crypto scholar received nothing but cockeyed stares when he revealed his master plan. [An $85 Trillion Gold Shock Is Coming]( [Click here to learn more]( A [massive $85 trillion shock]( is set to hit the gold market in the next few days. Because of that, I predict anyone who gets in today could see the chance to make a potential fortune. Hurry, though. Once this event begins, you’ll be too late. [Click here right away for the urgent details](. [LEARN MORE]( All the Wrong Moves I still think about this encounter whenever something “big” happens in the crypto space. I wonder if he hit it rich, bought a Lamborghini, and lived the high life of a young mogul during the post-Covid crypto bubble… I wonder if his crypto startup ever got off the ground and cashed in on the alt-coin boom… And as Bitcoin knifes below support at $25K early this week, I wonder if the barber shop crypto savant ever had a moment of clarity and took some profits off the table during the boom times. As much as I hope he cashed out and rode off into the sunset with a few suitcases of US Dollars, a more realistic prediction is that he crashed and burned alongside so many other crypto believers. I wish this wasn’t true. But I’ve spent my entire career studying the bizarre habits of the investing masses. While I’ve encountered some smart (or lucky) folks who were able to break the spell and take profits near the top, most of us possess an inescapable urge to double-down or hold tight when the charts go parabolic. I suspect our young, inexperienced crypto bro did the same. After all, he had only known a world where the line goes up. Buy the dip! Any dip! It will always snap back! This strategy can lead to spectacular results in roaring bull markets. That’s why savvy fund managers love to lean on young, inexperienced traders during frothy markets. Older traders who’ve lived through a crash or two can hardly ever rake in the wildest gains due to their annoying reliance on risk management. But don’t worry — these grizzled vets are much better suited for today’s environment. Meanwhile, the young guns who survived last year’s bust are hopefully learning some valuable lessons. Crypto Reset vs. “Echo Boom” [Back in February]( we discussed the 2022 post-boom cleanse in crypto. Bitcoin was in the earlier stages of its rally off the November lows below $16,000, and had gained more than 40% thanks in part to the January tech-growth snapback. At the time, I asked if the previous year’s drawdown was enough pain to effectively reset the market and help launch a new rally. “My main concern with this crypto rally is that it’s happened too soon,” I wrote. “Yes, we’ve witnessed bankruptcies and scandals throughout the crypto world. The NFT market completely collapsed. The worst of the froth has evaporated. But was it enough?” In March, the market decided it was enough when Bitcoin broke above my line in the sand at $25,000. For reference, this is an important pivot as it also marks the relief rally highs from summer 2022. Six months later, we’re right back where we started. Yes, Bitcoin broke above $25K and rallied above $30K into the summer. But it failed to extend higher, and the rally is now losing stream. [chart] More importantly, Bitcoin price action has been uncharacteristically tame lately. Huge price swings and weekend volatility used to be crypto hallmarks. Now, Bitcoin barely budges. The most excitement we’ve enjoyed recently came after the Grayscale ruling snapped the coins out of their funk — but only for a hot second. The fact that Bitcoin and Ethereum posted big rallies on the news, then immediately gave back the gains speaks volumes. It’s beginning to feel like this year’s rally is turning into an echo boom — a temporary pop form a formerly hot asset that fails to kickstart a move to new highs. I’m also starting to see signs of some other Covid-era trends that are quietly dying off. We’ll talk more about these ideas next week. What do you think? Am I right about Bitcoin? Is this the end of the boom? Or just another long crypto winter we must endure before the inevitable march higher? Let me know [here](mailto:feedback@dailyreckoning.com). Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com [Reserve Your Seat Now: Jim Is Going LIVE This Friday!]( Jim Rickards is hosting a LIVE Zoom call on Friday morning… where he’ll break down his critical predictions for 2023. To see how to reserve your seat, [click here now](. [LEARN MORE]( In Case You Missed It… The Frightening Fall of the F*cking French Sean Ring, Editor [Sean Ring] SEAN RING Dear Reader, Happy Thursday from a lovely Il Piemonte. I use Il Piemonte more often now because Piedmont is French for saying “the foothills.” The French are accustomed to being disliked, and for good reason. Take their AirBnBs, for example. On my recent jaunt around Europe with my wife’s family, my dear sister-in-law booked us an exquisitely located apartment. Rue de Rivoli runs along the north side of the Louvre, so it was perfect for sightseeing. Although the staircase to the second floor was perpendicular to the ground, I let that slide. It wasn’t until I had to drop a deuce that I got angry. This smooth-brained AirBnB owner decided to take one bathroom and split it into two. There was room for a toilet in each. That’s it. This owner clearly forgot that a person is supposed to sit comfortably on the toilet. I was in trouble from the moment I sat down. I couldn’t “Johnny Bench” it. Yes, I like to manspread maximally on the throne. No dice. But the problem really happened when I tried to wipe myself. As I leaned forward, I smashed my head into the bathroom door. Quite the conundrum, and one that never happened to me before. I’m not a gymnast. How was I going to do this? Luckily, no one else was home. So, I opened the door, constructed some advanced toilet paper origami, and prepared myself for a game of three-wall Twister. But buff my bottom, I did! I'm sure it looked something like this: And then, I hated the French just that little bit more. But my incident is nothing like what Western and Central Africa have suffered under French rule. Imagine your rich, domineering, sadistic mother-in-law stopping over to make a few changes… and never leaving! If you’re wondering why Africans have had enough of the Frogs, wonder no more. In this edition of the Morning Reckoning, we’ll examine why Africans don’t want the door hitting France in its effete ass on its way out. A Bit of History… French colonialism in Africa began in the 17th century with the establishment of trading posts in Senegal. But it wasn’t until the 19th century, during the Scramble for Africa, that France began to colonize the continent actively. By the end of that century, France had control over a vast empire in Africa, stretching from the Maghreb to the Congo River. [Map of Francophone Africa] Map of Francophone Africa; Credit: [The Exchange]( The French colonial policy in Africa was based on assimilation. This meant the French intended to transform their African subjects into French citizens with the same rights and responsibilities. However, assimilation never really worked. Africans were often excluded from the political process and denied access to education and other opportunities. French rule in Africa was harsh and exploitative. The French extracted vast wealth from their colonies and often used forced labor. This led to widespread poverty and suffering among the African population. There were many rebellions against French rule in Africa. The most famous of these was the Algerian War of Independence (1954-1962), which resulted in the withdrawal of French forces from Algeria. The last French colony in Africa, Niger, gained independence in 1960. However, through economic and military cooperation - some might call it “coercion” - France has maintained close ties to many of its former colonies. The Colonial Act From 1900 until Niger’s independence, The Colonial Act was in effect. It was a significant source of resentment among Africans. It was seen as a way for France to exploit its colonies legally. Here are the colonies’ obligations under the Colonial Act and some details about each of them: - Paying taxes to France: African countries were required to pay taxes to France, even though they didn’t have representation in the French government. These taxes were used to fund the French colonial administration and military. - Providing forced labor to France: African countries were required to provide forced labor to France, typically for public works projects. This labor was often unpaid or poorly paid, leading to widespread exploitation and abuse. - Exporting their raw materials to France: African countries were required to ship their raw materials to France at prices often set by the French government. This meant that African countries didn’t benefit from the total value of their natural resources. - Importing French goods: African countries were required to import French goods, even if these goods were more expensive than goods from other countries. This helped protect French businesses and ensure France maintained control of the African economy. - Using the French franc as their currency: African countries were required to use the French franc as their currency. This made it difficult for them to control their economies and made them more reliant on France. - Sending their children to French schools: African children were required to attend French schools, where they were taught French culture and values. This was seen as a way to assimilate Africans into French society and make them more loyal to France. - Adopting French culture and values: African countries were encouraged to adopt French culture. This was seen to make them more civilized and compatible with France. All of these are bad, but some are worse than others. And while the Colonial Act no longer exists, at least one shocking legacy remains: the CFA franc. No Monetary Policy For You! As Nathan Rothschild may have commented, “I care not what puppet is placed upon the throne of England to rule the empire on which the sun never sets. The man who controls the British money supply controls the British Empire, and I control the British money supply.” The conclusion is simple: if you want to control a country, control its currency. France controls fourteen countries in Central and West Africa with the CFA franc. CFA stands for Communauté Financière Africaine (African Financial Community). The CFA franc was created in 1945, during the French colonial period, to tie the economies of these countries to the French franc. It still exists and is pegged to the euro at a fixed rate of 1 euro = 655.957 CFA francs. This means that the value of the CFA franc is always the same as the value of the euro, regardless of what happens in the global economy. And by extension, these African countries have no control over their country. Because if you don’t control your currency, you don’t control your country. Just ask Germany, France, Italy, Spain, or any other member of Euroland. The West African Economic and Monetary Union (WAEMU) and the Central African Economic and Monetary Community (CEMAC) manage the CFA franc. These organizations are responsible for setting the exchange rate and ensuring the currency's stability. The CFA franc has been criticized for constraining African development in several ways. First, the peg to the euro makes it damn near impossible for African countries to devalue their currencies in times of economic crisis. This makes it more difficult for them to export goods and services and attract foreign investment. Second, the CFA franc is not freely convertible and cannot be freely traded on the open market. This makes it difficult for African businesses to operate internationally or get a credit line. Third, the French government manages the CFA franc, not those African countries. This gives France control over the economies of the CFA franc countries. This control prevents these countries from developing their economies independently. Wrap Up As you well know, your money is essential. It’s the medium of exchange you use every day. It’s the unit of account you use to measure value. It’s the store of value for most people to save their earnings. When your government controls your money, it’s bad enough. But when foreigners control your money, you’re not free. It’s that simple. The surprise isn’t that there’s a revolution going on in Africa. The wonder is how it took so long to start. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Greg Guenthner] [Greg Guenthner, CMT,]( is chief strategist at Forge Research Group. He has spent the better part of the past two decades developing long-term and short-term strategies with a single goal in mind: to help everyday investors generate outstanding returns and control their financial futures. Greg’s charts, analysis, and insights have appeared in Marketwatch, Forbes, Yahoo Finance, and many other financial publications. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. 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