NEW MONEY is a recap of the week in ₿itcoin. Everything you need to know, right to the point. New Money, is published by Adam Pokornicky of DAIM Digital, a Registered Investment Advisor for ₿itcoin and Digital Assets. Twitter: @callmethebear
Infinite Cash & Unlimited Quantities of Money
After weeks of credit markets seizing up and equity markets dropping violently, the Federal Reserve announced it would take whatever actions needed to restore stability in the markets, as well as the economy. After dropping rates to zero in the week prior, the Federal Reserve suggested it could print unlimited money in response to worries over the stock market collapse.
And sure enough, between the unlimited money printing by the Fed combined with a $2 Trillion rescue package/fiscal stimulus passed by both houses of congress that were nothing more then corporate welfare and socialism for the rich, the stock market began rocketing upwards on Tuesday with the Dow up 11.4%, its greatest single day since 1933 and a total of 20% from its lows by Thursday.
But what exactly happened here and why should you, the individual be concerned and paying attention.
Fed Balance Sheet: When Central Banks drop interest rates to zero, print money to buy up assets on their balance sheet and lend to institutions, they create inflation through the explosion in the price of financial assets relative to GDP that only a select few financial institutions can take advantage of. The financiers are making so much money that depends on our everyday debt and expenses.
Fed balance sheet moves up to $5.254 trillion, a new high. In the last week it increased $586 billion, the largest weekly increase ever (prior record was $356 billion last week, and before that $292 billion from Sept/Oct 2008). I expect the Fed balance sheet to reach $10 trillion before the crisis ends as the markets continue to pressure lower forcing the Fed to add high yield and equities to its balance sheet. Keep in mind, the riskier the Fed balance sheet, the riskier the underlying integrity of the fiat based regime it backs.
Fed Powers: When you examine the text of the final bill passed by the House and Senate, you realize the breadth of new powers bestowed on the Federal Reserve, including the Fed’s ability to conduct secret meetings with no minutes provided to the American people is simply stunning. This is nothing more than kleptocracy unencumbered by democracy. Be alarmed at this vast power grab.
Now that the Fed has taken control with its power grab, let’s take a step back and review the breathtaking quotes and rhetoric from our central bankers, who mind you are UNELECTED OFFICIALS with complete and utter control over our money supply and economy with absolutely no check on power or accountability.
"We have infinite cash" - Neil Kashkari, Minneapolis Federal Reserve
“When it comes to this lending, we’re not going to run out of ammunition.” -Jerome Powell
"Unlimited quantities of money" - Bank of England
"There are no limits" - European Central Bank
These are direct quotes from the three largest central banks in the world, and they are exactly why ₿itcoin was created.
“The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.” – Satoshi Nakamoto
Even the President Trump, who has long measured the success of his Presidency by the performance of the stock market above human life and really anything else, sees money printing as the panacea to solving our problems.
Most bizarrely, one of the most outspoken Fed Presidents, Neil Kashkari, brazenly said the following just over a month ago at an event hosted by the Bureau of Business and Economic Research in Kalispell Montana:
"The ₿itcoin and cryptocurrency, it's basically like a giant garbage dumpster. The reason that the dollar has value is because the US government has a legal monopoly on producing the dollar. If you go into your basement and start photocopying your dollar bills, the Secret Service will come and knock on your door and arrest you. Only the US government has the authority to produce dollars. That scarcity is in part what makes them valuable."
And then just last Sunday in an interview with 60 Minutes had the following to say:
"You don't need to. Your ATM is safe. Your banks are safe. There's enough cash in the financial system and there's an infinite amount of cash at the Federal Reserve. We will do whatever we need to do to make sure that there's enough cash in the banking system."
Bottom line, Fiat money is getting more plentiful. ₿itcoin is getting more scarce.
What is Money?!?!?
When I speak to people about ₿itcoin, one of the main things I realize is most people do not understand what money is. At its core, money is a social construct that people in society agree to give it importance/value. One of the main reasons ₿itcoin was created was to counter the notion that money is infinite and inexhaustible.
Unlike fiat currencies like dollars, euros and yen that can be printed and created out of thin air by bankers and unelected officials, ₿itcoin has a hard capped fix supply of 21 million units. In fact as money, ₿itcoin is the most scarce unit of value on earth.
Who controls the issuance of ₿itcoin?
The source code of ₿itcoin’s network controls the issuance of ₿itcoins, derived by consensus through all ₿itcoin participants. Ever since ₿itcoin was first designed and the very first ₿itcoin were minted in the genesis block, the following consensus rules have been in place:
21,000,000 ₿itcoins to ever be produced
Target of 10-minute block intervals
Halving event occurring every 210,000 blocks (approximately every 4 years)
Block reward which starts at 50 and halves continually every halving event until it reaches 0 (approximately by year 2140)
As of now, the block reward is 12.5 coins per block and will decrease to 6.25 coins per block post halving event this May. This fundamental event built in to the source code decreases the rate of ₿itcoin supply in a time when fiat currency is being printed infinitely. To recap:
₿itcoin = 21mm units USD = Infinity ♾
In this chart below, the blue line represents ₿itcoin’s monetary supply curve and the total number of ₿itcoins issued. The orange line is ₿itcoin's inflation rate during a given period. Each halving lowers ₿itcoin's inflation rate.
Why was this done?
₿itcoin was designed as a deflationary currency, specifically to act as a Store of Value.. In Satoshi Nakamoto’s own words:
"In this sense, it's more typical of a precious metal. Instead of the supply changing to keep the value the same, the supply is predetermined and the value changes. As the number of users grows, the value per coin increases” – Satoshi Nakamoto
Like gold, the premise is that over time, the issuance of ₿itcoins will decrease and thus become scarcer over time. As ₿itcoins become scarcer and if demand for them increases over time, ₿itcoin can be used as a hedge against inflation as the price, guided by price equilibrium is bound to increase. On the flip side, fiat currencies (like the US dollar), inflate over time as its monetary supply increases, leading to a decrease in purchasing power. This is known as monetary debasement by inflation.
Predictable monetary supply
Since we know ₿itcoin's issuance over time, people can rely on programmed and controlled supply. This is helpful to understand what the current inflation rate of ₿itcoin is, what the future inflation rate will be at a specific point in time, how many ₿itcoins are in circulation and how many remain left to be mined.
Every American(and individual around the world) should be considering the following:
This is Why We ₿itcoin
Our central bankers (and politicians by proxy of doing nothing), have admitted that the money they control is worthless in the long run. They will print an INFINITE amount of it because it’s the only way they can keep the system afloat because of all the debt and leverage that we’ve accrued. With the $6 trillion rescue package, do you think any of it was for the benefit of the average American?
Ha. Of course not. Everything that was done, was for the benefit of keeping those in power afloat. Capitalism? Please. Capitalism died in 2008-2009 when we bailed out banks, mortgage insurers and Automobile OEMs under the guise of Too Big to Fail and eliminating the risk of the market running its course and punishing powerful people for the terrible risks they’ve taken. Capitalism doesn’t work by privatizing profits and socializing losses, it works through free markets, business cycles, bankruptcies and market corrections.
The best advice I can offer today is to begin thinking about leaving these sociopaths and toxic people and system behind. Covid-19 and the forced quarantine, should give you ample time to look within, ask how you can better your own life, get yourself on stable footing when possible and help those around you in and outside of your community move forward.
Our entire system and the money that is is built on is at a crossroads. Our government is not going to solve this problem. The Fed is not going to solve this problem. It’s going to take a collection of sovereign individuals making individual decisions to walk away from this madness to better our lives and fix the problem.
And this is why we ₿itcoin. ₿itcoin provides a peaceful way to opt out and build towards a new parallel, reliable financial system which is functional, open, and independent of governments or unaccountable corporations. It allows us build a future and a form of money, without any reliance on the state or centralized authorities. While ₿itcoin isn’t the cure to all our woes, it’s a good start and if this doesn’t inspire you or interest you then I guess I’m just going to have to work harder to get you there.
On that note, let’s flip to some fun.
For Fun, earn $25 in ₿itcoin:
The answers on this tweet thread made me laugh. Reply to me at [email protected] with your quarantine nickname. I will send $25 in ₿itcoin to the best answer.
Earning Free ₿itcoin || Stacking Sats
***Stacking Sats is a term for saving micro units of ₿itcoins. A “Satoshi” or a “Sats” is one hundred millionth of a single ₿itcoin (0.00000001 BTC). The unit has been named in collective homage to the original creator of ₿itcoin, Satoshi Nakamoto.
Not everyone is ready to get off zero and buy a little ₿itcoin but did you know there are ways you can earn ₿itcoin for free? Two of my favorite tools are:
Lolli 🍭 - Earn Free ₿itcoin when you shop. My partner and I love Lolli. It’s a browser extension for Chrome that is like eBates and Rakuten for ₿itcoin. Just add the Lolli browser extension and shop like you normally do. Lolli will add a code at checkout, and gift you FREE ₿itcoin for every purchase. We used it for our bed last year and got $135 back in ₿itcoin that is now worth $275. ChaChing!!! Use my reference link and get $10 in ₿itcoin with your first purchase. https://lolli.com/ref/rARrx5WzNE
FOLD App - Earn ₿itcoin cashback rewards when you shop. The Fold App is like Lolli except you earn ₿itcoin cashback rewards when you buy prepaid cards for retailers you shop at like Amazon, Uber, Starbucks, Target and more. The Fold App requires an extra step to buy a Starbucks, Uber or Target card in advance but the free ₿itcoin is free ₿itcoin.. Like Lolli, use my reference link and get up 20,000 sats free: https://use.foldapp.com/r/OCs5bQsB
Pei - Earn cash back in ₿itcoin using your debit or credit card. Pei is a free mobile application that lets you shop and earn up to 20% cashback in ₿itcoin (BTC), USD and gift cards. Just connect your existing credit/debit card to your Pei account and spend as you would at any store in the Pei merchant community of over 60,000+ partner stores. Download PEI and use my code: g77uv5 for $5
Best Podcasts of the Week:
Most recent bailout
Why Michael is still bullish on ₿itcoin
What I am Reading:
Things that make me go hmmmmm….
Read this whole thread if you can. If you don’t have twitter, you can catch the entire Tweetstorm here: https://threadreaderapp.com/thread/1242969820762484736.html
₿itcoin Technical Analysis
I know I said I would do technical analysis on ₿itcoin price but I am going to wait until next week after the monthly close so I can give a more in depth, big picture analysis of ₿itcoin. The monthly along with the weekly should give us a clear picture of months ahead.
Next Week in New Money:
What is Hodling
A discussion on Digital Dollars
Spread the Word 🗣
If you know anyone interested in ₿itcoin, that might want to keep up on the news, learn or stay in the loop, please share this newsletter with them. I appreciate your support.