Friday is the new CPI Inflation announcement. Biden has already tweeted that the new number won’t include energy price decreases. That is negligible. The administration is trying to get in front of this bad news! CPI may come in at 7 or higher. We will know tomorrow. Short term we expect Bitcoin to dump again! Sorry, that is what we expect. This dump will print a W though. So it could be bullish for late December. Click here to read.
CPI is a major part of real earnings yield as well. Real yields are way below 2000 and 2008 levels right before those two major crashes:
CPI is subtracted from yields to get real earnings yields. There is no doubt the stock market will crash big. It’s only a matter of when. CPI cratering real yields hurts bonds, and pushes all institutional investors further out the risk curve. Eventually, this will come to Bitcoin. See this chart below, the value of the dollar on the left, the value of Bitcoin on the right. Get the picture?:
Even Will Clemente is bearish right now, click here to view on twitter.
Sweep the low’s means Bitcoin may drop below $41K. Sell? Absolutely not! It could easily be a bump and run pattern to the upside. Bitcoin needs to get close to $59K or higher by year end. With inflation being the future elephant in the room, we see no way for Bitcoin not to pump and if the bull run survives into 2022, it will have to get close to $60K by 12/31/2021! Time is ticking! We believe Bitcoin will pump by year end.
It is also helpful to look out further into the future. The economies of the world still run on fossil fuel. Even batteries for EV cars, wind turbines, solar panels, they are all built from materials made from fossil fuel. Fiberglass, lithium and cobalt mining, plastic, FRC (fiberglass reinforced plastic) are all fossil fuel based. We have 28 years of oil and gas experience. Chemical plants produce these products and rare earth mining requires massive diesel engines to run the equipment used for that type of mining. Without fossil fuels, there is no alternative energy market! Therefore, this next chart is significant for CPI inflation:
With the recent administration change in the US. Oil companies are seeing massive pressure to drop their capex spend. This spend must increase by 35% in order to meet fuel demands by 2030. If that does not happen. Gasoline, Diesel, and Jet Fuel prices will explode for the next 10 years! Fuel being that high will explode all inflation, due to the need to transport items around the world. That kind of inflation will spike the value of Bitcoin over time! Remember, there is nothing more scarce than Bitcoin. The blockchain cannot be separated from Bitcoin. The 21 million production limit of Bitcoin will not change, central banks cannot print more Bitcoin. It is truly decentralized. Mining hash rate just hit a new all time high. Miners are doing great financially right now, despite China banning all mining in their country! The long term outlook for Bitcoin could not be more bullish.
What then, is the alternative? CBDC (central bank digital currency). They plan to implant chips inside people’s skin for this CBDC to transact. Health records will be stored on these chips so if you scan in, and your short a booster shot. You’re kicked out of the store, restaurant, etc. We discussed how resolute the public is against these policies. Protests are raging all over the world against lockdowns. How bad will they be against CBDC? Chip implants? This next slide shows how the social credit monetary system will work:
We hope it never comes to this. We certainly hope not. But if it does. Won’t you be glad you have been HODLing Bitcoin even through dumps for years and years? No central bank or government can seize your Bitcoin if it is stored offline. Store all Bitcoin offline, not online!
Inflation is NOT transitory. Bitcoin is under attack. Bitcoin is still winning! Zoom out, see the big picture. Don’t sell your Bitcoin.
Neutral ATM buys and sells Bitcoin as little as $20 at a time! You do NOT have to buy an entire Bitcoin. Neutral ATM is here to get everyone off of zero Bitcoin.