Decoding the Bitcoin Conundrum
The journey to truth often involves considering tough questions that don’t fit the desired answers necessary to dismiss the question as insignificant. Decoding the bitcoin conundrum presents exactly such a challenge. Merely telling someone of the truth, even if the truth has mountains of supporting evidence, or at times, even indisputable evidence, is often insufficient to convince someone committed to the contrary view, of the truth. Furthermore, often people that are unwilling to consider the truth, simply because the truth opposes their false beliefs, will dismiss an opposition point of view by providing an ad hominem attack rather that ever attempting to logically deconstruct an opposition view. For example, in 2009 and 2010 when I was relentless about my insistence that gold and silver prices were being spoofed and manipulated in New York futures markets, the mainstream opposition view just as relentlessly dismissed my views as the views of a “conspiracy theorist” and their ad hominem attack was accepted by most, simply because their views fit the consensus views of the masses. The journey to truth is most often not an easy one, and because of this, most are unwilling to take it. Given this undeniable reality that every intellectual must confront and answer during his or her journey to truth, I present to you “The Bitcoin Conundrum.”
A financial conundrum often introduces massive cognitive dissonance when the best answer to a presented question is one that contradicts our beliefs. For example, ask a recent graduate from the MBA program (Wharton) of my alma mater whether he or she believes that the $200,000+ cost of his or her degree ($162,000 for two years of tuition plus room and board expenses) was worth the cost, and there is no one that just invested that amount of money in a two year academic degree that would answer “No”. Yet, because I am so far removed from my Master degrees and my undergraduate education at UPenn, I can unequivocally state that none of my multiple academic degrees were remotely worthy of the tuition costs and that I later concluded all to be of extremely low utility in contributing to a better quality of life overall. Likewise, if you ask someone that is heavily invested in oil prices moving higher whether one’s position is extremely vulnerable, even if crude prices rise to a hypothetical future price of $100 a barrel in the future, and explain that oil prices have always been extremely vulnerable to rapid price movements up and down because of manipulation in oil futures markets, the person/institution’s vested interest in a continued rise in oil prices will likely elicit a negative response in contradiction to reality. Even if one provided such people with multiple real world past historical cases in which it is nearly indisputable that oil prices were severely manipulated, like the summer of 2008 Goldman Sachs executed oil price squeeze against oil hedge fund Semgroup that eventually bankrupted Semgroup, we all retain a massive propensity to dismiss truth even when indisputable facts stare us in the face.
For example, when I predicted silver prices were going to be slammed at the end of this past January after prices reached $30 an ounce, and even stated in this article here, that it was “near guaranteed that the CME [would] be raising margins in gold, silver” to slam their prices just a few hours before it actually happened, because there were so many precious metal analysts that based their precious metals price predictions on the existence of increasing demand and shrinking supply fundamentals versus consideration of the much more significant and relevant ongoing price manipulation behavior, many analysts stated that my claims of falling prices throughout February would prove to be wrong and that silver prices would continue soaring into February and March simply because strong fundamentals aligned not with my pessimistic immediate forecast but with the much more optimistic one.
Even more inexplicable was the response of a few that questioned whether or not I was still an advocate of purchasing physical gold and silver as a pillar in one’s wealth preservation strategy moving forward. An issued prediction that an asset price is going to fall considerably or explode higher for a short period of time does not invalidate any of my previously issued opinions of that specific asset, and I don’t understand why people would believe that it does. For example, to provide another example of this type of irrational response, when I issued a prediction in late 2020 that I believed bitcoin prices would double from $20,000 to $40,000 at some point this year, some asked me if my price prediction meant that my opinions about bitcoin not fulfilling the necessary qualities for sound money had changed along with other opinions I had issued about bitcoin in the past that they viewed as “anti bitcoin”. No, they had not, and I don’t understand why anyone would think that issuance of a prediction of higher prices would invalidate unrelated opinions I provided about bitcoin in previous years.
When BTC reached the $53,000 level for the first time in, I issued another statement (to only my patrons this time) of my belief that BTC was vulnerable to a price pullback around 19 February because I believed that the risk-reward set up was weak (meaning downside risk outweigh upside potential in the immediate term), this did not mean that I was anti BTC any more than my higher price prediction meant I was pro BTC. At that point, BTC climbed higher to $58,000 before eventually falling to $43,000 just nine days later. And as we all now, BTC prices have once again climbed considerably higher again. Anyone with a basic foundation of critical thinking skills can understand that I am not flipflopping on my stance about gold and silver being sound money every time I issue a prediction of a price crash versus a prediction of a price spike and that likewise, I am not changing my stance about bitcoin not being sound money every time I state that prices will spike higher or prices will proceed lower. The bitcoin conundrum, as I have observed, has triggered the exact same irrational thought processes in many BTC HODLers.
In other words, my claims were dismissed by many, not because they were wrong, or not even because they were grounded in reality, but simply because my opinion conflicted with the opinions of others that dismissed my claims. This is a very dangerous way to proceed through life that all but ensures the inability to arrive at truth. Of course, I have no problem with anyone disagreeing with my opinions because everyone has been wrong about something in the past and no one can possibly be correct all the time when it comes to issued opinions about financial assets. I am only stating that it is a massive problem when people dismiss opposition views not based on a factual deconstruction of the argument that birthed the opposition view, but only because of the singular reason that the voiced opposition view disagrees with their own. And this happens all the time in today’s society in which schooling no longer graduates adults capable of logical and critical thought. Again, don’t twist my words. I am not stating that I have never fallen victim to a lapse in logical and critical thought. We all have. In fact, my last lapse in critical thought was fairly recent, when I accepted all the propaganda about the extreme danger of the virus emanating out of China, with no research conducted on my own to verify that stance, that led to politicians around the world locking economies down for no scientific based reason. However, after researching this topic thoroughly, my stance has changed 180 degrees to the point where I am strongly convinced that China executed the perfect propaganda blueprint of fear to troll the rest of the world into locking down and deliberately destroying their economies with no facts grounded in science or reason.
When cognitive dissonance levels skyrocket, we all tend to dismiss any information, factual or not, that is responsible for creating our internal state of dissonance. The financial overlords know this and are experts in creating perpetual states of cognitive dissonance that lead to masses of people dismissing truths about the financial system, whether about gold, silver, cryptocurrencies or fiat currencies, stock markets, bonds and other commoditiies, without doing a lick of research to confirm or dismiss the many truths to which they are exposed. In fact, there have been many historical instances in which gold and silver prices deviated for weeks, even for months, in a completely opposite direction from behavior that would be predicted by the supply and demand determinants of physical markets. In addition, the fact that I had predicted waterfall declines in silver prices during the month of February (and certainly a 17% price decline from the end of January to the start of March qualifies as a significant decline), but had also emphasized my bullishness for silver prices in the intermediate to long term provided a door to exit the realm of reality and to merely internalize opinions that supported one’s own while dismissing any others I simultaneously expressed that failed to meet such conditions. Often conditions of cognitive dissonance results in cherry picking the information we mark as valid and the dismissal of information we mark as invalid, irrespective of the robustness and validity of the information presented to us.
And this brings me to the bitcoin conundrum that is bound to create just as much cognitive dissonance as my February 2021 predictions for gold and silver prices. However, when immersed in the financial truth business, one cannot concern oneself with being loved by the majority of the people exposed to one’s presented information, simply because the majority of people rarely understand the truth. Consequently, the higher the number of “likes”, “reposts” and “retweets” one’s opinions receive in the financial world, the more likely that opinion is to be completely wrong and opposite to the behavior that will eventually manifest. Of course, this is not always the case, as there are always exceptions to the rule when exceptionally well-analyzed and intelligently constructed arguments go viral. But again, this is the exception, not the rule. Just as one is much more likely to have success by exercising the exact opposite actions to, rather than carrying out JP Morgan’s Top 10 investment ideas released at the start of every new year, one is far more likely to ferret out truth more frequently by seeking out underexposed opinions versus trending opinions and perhaps even seeking out articles with tons of dislikes given that the mob consensus is far more often wrong than right.
In the course of more than 16 years of writing and publishing financial articles, I have not been able to escape mob-expressed cognitive dissonance. When I wrote articles about an overbloated US stock market on the verge of a crash in 2008 literally just 18 trading days before the US stock market crashed, people hated on my opinion simply because they had been riding a solid wave higher for many years and did not want to see the wave crest and turn downward. When I wrote articles about clear algorithmic price patterns that manifested in daily gold and silver futures markets in 2009 that pointed to banker manipulation and suppression of prices, many that disagreed with the strong evidence I presented (including evidence I provided to US regulatory agencies) dismissed me as a conspiracy theorist simply because only a handful of us back then were willing to go on record with our claims while the overwhelming consensus back then were that all commodity markets traded freely. However, given admissions in court from Barclays, JP Morgan, and Deutsche Bank traders of spoofing gold and silver futures markets to artificially drive prices radically lower more than a decade later, our conspiracy theories have solidified into conspiracy facts. I know that often articles I write will be unpopular even before I publish them merely because they question the most accepted narrative. But one cannot expose truth in financial markets without being unpopular with mainstream financial analysts and the financial press, as the propaganda narratives they support uplift those that reside at the top of financial pyramids that pay their salaries, mortgages and bills and maintain the status quo.
So without further ado, I present to you the bitcoin conundrum, which goes a little like this, with more detail explained in the podcast above (just click the image at the top of the page). If Central Bankers have always expressed unanimous opposition to rising gold and silver prices as a real, viable threat to their house of cards fiat currency system, the documented evidence of which is overwhelming, including former US Central Banker Paul Volcker’s relentless campaign to uncouple any relation between the US dollar and gold that ushered in massive inflation of the US dollar, post Bretton Woods, and in light of a decades-long US Central Banker public relations campaign to always denigrate gold even to the point of public denials that gold is real money, why are US Central Bankers so threatened by rising gold (and silver) prices while continuously implying either unilateral support for rising Bitcoin prices or declaring zero concern about rising Bitcoin prices? If bitcoin and gold are supposed to be two alternatives that present a solid store of value to the perpetually devaluing US dollar, should not rising prices of both assets be a threat to the US dollar and falling prices in both assets be a welcome development to Central Bankers? What is the reason for the incongruence of publicly stated stances by many Central Bankers towards bitcoin and gold, because their expressed stance towards bitcoin and gold should always be the same. If bitcoin and gold both are viable alternatives to the Central Banker controlled global fiat currency system, then why did former US Central Bank Chairman Ben Bernanke make it abundantly clear, in as public a manner as possible that “gold is not money” while his successors, like US Central Banker James Bullard, vociferously make it abundantly clear that bitcoin is not a security, but money, and that it poses zero threat to the US dollar? One thing I know for certain is that when a message that should be congruous is delivered in an incongruent manner by Central Bankers, something stinks to high heaven about their message. And therein lies the bitcoin conundrum.