Safety in Precious Metals? - The Wizard Behind the Curtain
Sometimes, I hate being right. I always hate being late. It's a shame we just started here, but find me another site that told you this was going to happen. Look, the market is falling. Part of it is a much-needed adjustment. Part of it is panic. But one feeds the other.
I never told you what actually precipitated the .com crash. Yes, it was a balloon. Balloons will sit waiting for the first pinprick. It was coincidentally the same time of the year as today that happened. The first pin was stuck in the balloon was when the schoolteacher I mentioned discovered that he needed $40,000 to pay short term capital gains. What happened, he sold and so did millions of others at the same time. They soon discovered that taking billions out of the market at the same time dried up all the buyers. Prices fell so fast that people had no choice but to panic sell. The IRS didn't care if you lost everything in 2001 that you'd made in 2000. You owed $40,000 from 2000 and they were going to have their money. The reason they call it a Ballon, because when it pops it POPS it's just air.
We have similar tax issues right now and at the same time of year. People who bought and sold last year or took money out for vacations now find that they owe thousands in taxes. Add to that a couple exchanges closing this week for probably the same reasons and POP! This market is going to fall and rebound and fall some more until it weeds out a lot of the suckers. The good news, if history is any indicator, this market will fall until the good coins are seriously undervalued. During the Savings & Loan crash in the 80s a Boston Bank stock lost about 90% of it's value. Not for any reason other than that all banks were poison. It dropped from roughly $90 to $5. We bought it. It took less than a year for a larger bank to come in and buy it for it's original price. The junk was still junk, but the real stuff was simply grossly undervalued.
The truths are still the truth. BTC, ETH, LTC, EXP and the other top 20 (NOT top 20 by marketcap) are real coins with real utility and perhaps the only safe play today. (BITUSD/BITCNY/BITBTC) Yes, you might buy and they might fall, but they are far more likely to recover than anything else. If you have a bit of kamikaze in you buy now. If not, and you are not afraid to leave some money on the table, wait until the Market cap of all CRYPTO has risen for a few days in a row and then buy.
When the .com bubble burst the good fell with the bad. The smart money bought the good on the falls. Those were the ones that recovered.
This is not a bad time to be in cash either. Unless you are pretty sophisticated at trading and hedging, that’s where I would be. Remember, NO SHORTS IN CRYTO. So there is no way to make money on the falls. The only way to capitalize on the market is go to cash or buy the good coins and sell them on the bumps our buy and ride it out. The good ones will recover.
Here’s what not to do. Do not run to the precious metal coins. Don’t do it. When markets crash gold rises. That has been true for as long as people have traded stock. Gold is the unshakable store of value against inflation. So if that’s true, and it is, then all the supposedly GOLD BACKED CRYPTOs should be rising if they were gold backed. Right? Makes sense. So why are they falling? Because they are bullshit. Read the white papers. They use fancy words like “Emitted”. Emitted in this case means issued. So you all think that your money is protected by Gold right? It is not. The white papers say, “all the coin emitted” is backed by gold. So you think every time you buy a coin you are protected. BULLSHIT. Most are telling a selective truth that is misleading. However, they are/may be telling the absolute truth, from a point of view.
The Company has no control over how far their coins rise. If you buy a coin from me for $1.00 how can the company cover that value in gold? I got the money. They did not get any of that dollar. Remember what we preach. Use Common Sense. The Company does not own the coin after the ICOs. The only gold, therefore they hold, if they actually hold any, is based on the ICO price. So GOLDSCAMCOIN sells 100,000,000 coins @ $.001 in the ICO = $100,000 (one hundred thousand dollars) total sale. Thats how much gold they are obliged to hold because that’s the value of the coins that they “Emitted”. So on day one their market cap is $100,000.00 and they might have $100,000 in gold. Everyone reads the “Backed by Gold” bullshit and says, “this makes sense to me.” “It’s safe.” Then the coins rises to $1.00 because you and everyone else thinks they are safe. Your dollar is really only worth the original $.001. That’s it. So DO NOT RUN TO GOLD/SILVER backed coins today. As a matter of fact, In my opinion they may all be scams.
Examples: BullionCoin, BitGold, GoldMob, EPlatinum
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