A link to an edited article I wrote about the inevitability of Facebook’s Libra

I continue to receive a lot of emails regarding Facebook’s Libra. I have attached a link to an edited article I wrote today for publication regarding my analysis and why I think the Libra is the only Hegelian dialectic alternative I see in the future. I think I am the only one with this conclusion.

https://knowyouradversary.com/the-libra-is-much-bigger-than-facebook-its-head-wants-to-work-with-the-central-banks-and-governments/

Clearly, there are many who do not agree, but their opinions are based on disbelief and the argument from incredulity. They cannot imagine how people would allow Facebook to control money. But I say that the Libra project is taking a thorough and well-thought approach to its roll out. There will be 2.5 billion people who will not care at all and as many as two billion potential users in lesser-developed nations who will eventually embrace this stable store of value. The price point of the technology required is low enough that even the poorest can participate.

Much of the material has already been discussed, but I add more research here. I also think that this has huge investment potential; not only for Facebook, but for all its major sponsors.

I think that most non-Christians will find all this hard to believe, but the plan of the new world order is to completely undermine all nation-state sovereignty and to place all government functions into corporate control. That includes the money supply.

We are getting closer every year and the agenda is speeding up.

Response to email; the Libra is much bigger than Facebook and was planned from Basel, Switzerland a long time ago

Sign of the Libra in plain sight

And when he had opened the third seal, I heard the third beast say, Come and see. And I beheld, and lo a black horse; and he that sat on him had a pair of balances in his hand.

And I heard a voice in the midst of the four beasts say, A measure of wheat for a penny, and three measures of barley for a penny; and see thou hurt not the oil and the wine.

Revelation 6: 5,6 KJV

Is Facebook just the front for Libra and the new global currency?

So true that the Libra is much bigger than Facebook. This was planned from Basel, Switzerland 🇨🇭 a long time ago. Just my two cents….

V – Canada

I know V’s comments were off the cuff, so to speak, but understanding the conspiracy for the global government and financial dictatorship can prove invaluable when we come across new and novel concepts like the Libra. Facebook, with its wide international acceptance, is the perfect vehicle for introducing any new global currency and monetary system.

Think about these questions; What would happen if the Libra becomes widely adopted and accepted as a means of payment? What would happen if the Libra effectively replaces the fiat currencies and paper money? Facebook and its messaging apps are actively used by about 3 billion people worldwide and that number grows by the quarter. I can see a scenario where this money becomes an accepted and secure form of payment for these app users. Furthermore, I see a scenario where Libra will eventually be used outside of Facebook at the grocery store via a swipe of a phone or a swipe of the hand. Credits will flow back and forth.

Now, picture a scenario where we hold views that are antithetical to the new world order, and we make them known on the major social media platforms. What happens if we get banned from the major social media platforms? Imagine over the next 10-15 years where businesses only accept the Libra, because it will be free of fraud, and you and I can not participate.  For instance, I see this outcome after some sort of protracted global conflict, currency collapse, or loss of confidence in the nation-state governments.

The Libra will be fully reversible and refundable as money is now, but in order to use this new global currency, we have to be good global citizens. No white supremacists, conspiracy theorists, nationalists, racists, abortion foes, or anti-homosexual activists will be allowed to use this new system. Christian pastors would have to tow the politically-correct party line or else they will all be banned from using this blockchain currency. The Christian Bible would be rejected for everything else.

And the ten horns which thou sawest are ten kings, which have received no kingdom as yet; but receive power as kings one hour with the beast.

These have one mind, and shall give their power and strength unto the beast.

Revelation 17: 12,13 KJV

Under this system, all the major nations will have to make an agreement to allow for the use of this Libra currency. It will transcend borders and all the major nations will have to come to some form of consensus on its use. There will be manufactured crises growing out of this and they will all result in a one way path towards global domain.

Furthermore, we see how the stories of fraud and deception under this current monetary system are legion. We are bombarded daily with fraud against the elderly and infirm. The media scares us to death about identity theft. We hear about debt consolidators swindling thousands from desperate people. We hear about how the decentralized blockchain currencies like bitcoin are used for blackmail, extortion, and embezzlement. Under the Libra currency regime, these scenarios would be impossible. All transactions will be traced to the source and to the penny. Every user would have to play nice as all the manufactured problems currently plaguing the existing monetary regime would be rendered academic. White collar crime would be an anachronism.

This is where the world is heading. I read it in the Bible.

The head of Facebook’s Libra says he’d love somebody with central banking experience to help lead it

Note: I have no opinion on these matters, at least to my analysis. If I were to establish a monetary system on a blockchain, I would establish a working rapport with the governing authorities. I certainly would not try to overturn the status quo (at least, not initially). So far, Libra has shown an aversion to relying on the large commercial banks, as their overt involvement would make many of Libra’s prospective users uncomfortable.

Decentralized currencies will not be allowed to replace the dollar
  • The latest price moves of btc show that it can never replace the current fiat transaction currencies for 90% of the population. Only stable coins will encourage spending, not speculation and hoarding.
  • David Marcus, the head of Facebook’s blockchain project, said he wants “someone who knows how economies tend to work” to lead the Libra Association.
  • Executives at Facebook’s Libra are taking the correct approach by soliciting its desire to work with the central banks.
  • Bitcoin can become the go-to for asset protection and its price may rise many fold from current levels, but its current structure preclude it ever being more than an asset.
  • Scarcity can never be an attribute for a proposed monetary system. The elites will never allow that.

“We need someone who knows how economies tend to work, who understands how to operate in a very complex, decentralized governance type of environment,” [David] Marcus told The Information in a Q&A published on Friday.

“And we need someone who has the gravitas to be able to carry the message on behalf of all the members — the hundred members and more of the association when this thing goes live — rather than have each and every one of us have piecemeal conversations left and right with all of the different governments and regulators that this whole network will be subject to.”

The executive in charge of Facebook’s currency says he’d love somebody with central banking experience to help lead it – CNBC, June 28th

David Marcus, the Facebook exec who helped hatch its Libra digital currency project, said a managing director with experience in government and central banking would be a great leader for the independent group that will actually oversee the currency.

As I stated previously, I believe that the major western governments and their network of central banks will ultimately have a say in Libra’s formation and may have already guided Facebook on how to approach its blockchain creation. It will ultimately win approval in some modified version. Libra is nothing more than a sovereign debt buying scheme and the average user is the ultimate buyer of that debt. It would make an effective global-based transaction currency that could theoretically replace the dollar.

Commercial banks will be involved, but they need to remain arms-length or risk impropriety

In his Q&A, Marcus also denied a Tuesday New York Times report that banks like Goldman Sachs and JPMorgan Chase had rejected Facebook’s invitation to join the Libra Association.

“I want to absolutely and strongly deny the fact that we’ve approached banks and banks have said no,” Marcus said. “We have had conversations with banks. We still have conversations with banks. And my expectation is that by the time this thing launches next year you will have banks that are going to be members of this.”

The executive in charge of Facebook’s currency says he’d love somebody with central banking experience to help lead it – CNBC, June 28th

I find all the conversation around Libra and its proposed association with the large money center banks interesting. I believe it all to be a red herring as the Libra association cannot overtly rely on commercial bank involvement. Goldman and JPM both see a huge opportunity to move the monetary system in a new, more profitable, direction. But they cannot come out as supporters now, since it would sully the Libra coin. Overt support of the large banks could jeopardize Libra’s popularity with its users.

It’s my conclusion that the executives at Libra are currently taking the right actions and saying the right things to make certain Libra becomes a powerful global transaction-based monetary system in the future. I am certain that Facebook has been working behind the scenes with the elites and these authorities have most likely been the ones who came up with the idea of Libra in the first place. It’s all part of the new world order. I see it all as a fait accompli.

The 47 million new residents in the U.S. since 2000 are mostly to blame for the housing shortage

The elephant in the room – The U.S. population has grown by 47 million since 2000

If the alt-financial media were bold enough to embrace these truths, they would be as sanguine on the prospects for residential rental real estate as I am. But they have been wrong on the results of Fed policy, the impact of government deficits, and demographics. – Chris Pirnak

The liberal establishment dances around the elephant in the room. Foreign-born residents have overwhelmed the affordable housing markets. It is permanent.

-The total U.S. population in the year 2000 was 281,983,000
-In 2010, there were 308.7 million residents of the United States
-According to the U.S. Census Bureau Population clock, the population of the United States is currently 329,126,000
-The U.S. population rose by 10,000 in the past 24 hours
-The population of the U.S. has grown by 47 million since the 2000 census
-A 2015 Census Bureau Report projects a 2060 population of 417 million.

First of all, No MSM writers and few alt-financial outlets will touch the real elephant in the room – Massive waves of immigration (mostly from lower demographics) over the past 20 years have placed a tremendous strain on the domestic housing market. These open borders policies have been encouraged by almost 50% of the population and are thus here to stay.

-In 2015, 14% of the United States’ population is foreign-born, compared to just 5% in 1965.
-2015 Census Report predicts the foreign-born US population will increase to 19% by 2060.
-This increase in the foreign-born population will account for most of the overall population growth.

If the alt-financial media were bold enough to embrace these truths, they would be as sanguine on the prospects for residential rental real estate as I am. But they have been wrong on the results of Fed policy, the impact of government deficits, and demographics. Of course, there will be cycles like any other market, but housing only has one way to go, especially when we analyze the lower half of housing. That direction is up.

The population of the US continues to grow today, driven by a high level of immigration. A 2015 Census Bureau Report projects a 2060 population of 417 million, with the country crossing the 400 million threshold in 2051.

Establishment garbage designed to redirect the issue

Here is some typical whitewash garbage put out by the housing “experts.” This article from Inman News (A real estate industry service with a paywall) is titled, NIMBYs, Regulatory Costs Caused Housing Shortage: Harvard Study

A shortfall in housing production is making homes ever more unaffordable for modest-income households, according to Harvard’s Joint Center for Housing Studies

shortfall in housing production is making homes ever more unaffordable for modest-income households and high land prices and regulatory constraints are to blame, according to an annual report from Harvard’s Joint Center for Housing Studies.

NIMBYs, Regulatory Costs Caused Housing Shortage: Harvard Study – Inman.com, June 25th

Of course, the open borders policies are never to blame when it comes to Harvard University and the establishment press (including the controlled alt-financial media). But this Harvard study actually would be laughable if the stakes weren’t so high. get this…

The [Harvard] report attributes the shortfall partially to builders wary of boosting the amount of housing supply too fast after the last boom and bust and partially to labor shortages as the number of native-born and foreign-born young men without college educations — the traditional labor pool for construction — declines.

NIMBYs, Regulatory Costs Caused Housing Shortage: Harvard Study – Inman.com, June 25th

So, let’s see. Harvard says that if we allowed more lower-end foreign-born young men into the country, that would help to alleviate the housing shortage. Now, that sounds just like the globalist narrative. Not only are these low-end demographics the very people who are overwhelming the government with massive deficit spending, but they are the same people who have helped to make working class housing unaffordable for the naturally-born citizen.

So, When it comes to the housing shortage, the MSM will routinely blame NIMBY as well as the growing list of zoning restrictions and building codes. The alt-financial media, of course, will blame the U.S. Fed for the higher housing prices, even though they believed all decade that housing was going to collapse. While all these reasons have merit, we need to see how low-end immigration has permanently repriced the housing market.

I know personally how the trends have change since 2001, when I first started investing in rental real estate. Anecdotally, about 5% of all my applicants in the early part of last decade spoke another primary language other than English. That percentage is now about 20%. The trends are unmistakable and while there may be nothing we can do to stop this intentional agenda of overwhelming national resources, we would be foolish not to take action.

I have taken action to stay ahead of this full-frontal globalist assault. I have bought a portfolio of working-class housing that are in high demand. I think we all could benefit by profiting from the globalist agenda to degrade the United States.

The liberals can call us xenophobes and racists, but at the end of the day, there is no denying the huge impact these waves of humanity have had on the economics of our necessities. The lower half of the housing market has been permanently repriced. There will be no collapses in working class real estate and any drops in prices need to be seen as buying opportunities.

6/23 Market Update – Why the Libra will succeed; Higher house prices coming; Basing equities ready to move; Gold has firepower; Cryptos exploded as we predicted last week with more to come.

To download the podcast – Right mouse click here

-The major stock averages have been basing for 18 months with a bullish tilt.  Unless we get world war, the next breakout will be higher. S&P 3,000 is a done deal with a 28,500 year-end Dow target. How about Dow 30k in the intermediate term?

-I certainly do not support open borders, as that is a defacto loss of national sovereignty. But I would be misguided not to plan for this new world order plan. Despite the overwhelmingly bearish proclamations to the contrary, I predict much higher housing costs and home prices in the intermediate future. Lower mortgage rates will greatly enhance affordability at each price point, while the uncontrolled immigration is laying the working class lifestyle to waste. The massive deficit spending required to support these people will continue to levitate asset prices higher.
-The U.S. population has grown by 30 million since the 2008 recession, more than the entire population of Australia. I see a Soylent Green scenario where overcrowding will be of epic proportions. The recent immigrants come from 3rd world nations, are not encouraged to learn English, and have no problem remaining lower class. Working class housing will benefit more than any other segment.
-The least risky way to profit in cryptos is to buy the alt-currency-equivalents after a move up in BTC. Bitcoin always leads the way (e.g. eth, dash, xmr, zec, bch, ltc, xrp, xlm, bsv, etc.)
-Bond yields continue to fall as predicted; laying the strong groundwork for my investment theses. There is 13 trillion in negative-yielding global debt and that is just a taste of what’s to come.

 

-Despite gold’s explosive take out of 1,362, there is still some firepower left as the COT report is not as stretched as in the Summer 2016. I am a buyer of dips.


-UST 10-year briefly fell below 2.00% as bonds prices have exploded higher. More to come eventually.
-Facebook Libra is the future of money and will work well within the central bank structure. Governments and central banks see asset-backed cryptos and private money as another way for the average person to buy sovereign debt (though the currency user won’t know this). There will be no runs on the banks as the central banks could easily support any sanctioned coins.
-Libra privacy will never be a problem as Facebook’s current privacy woes have done little to impede its explosive user growth. Most users will freely embrace Libra like they embrace PayPal and debit cards.
For China’s Yuan, the Path Toward 7 Per Dollar Is Now Wide Open

This new-age economy can expand, while the state of society falters; both are neither conditional nor mutually exclusive

We don’t need to see our society progress in order to expand the economy

Note: I am just writing down some simple concepts that for some reason do not register with many in the alt-financial media. But this is an important idea to grasp; most believe society must evolve to a higher level  in order for the economy to grow. But I say, don’t get too caught up in the depravity around us. If we do, we will most likely overreact and make poor investment choices.

According to Wikipedia, two events (or propositions) are mutually exclusive if they cannot both occur at the same time. Furthermore, the conditional probability is a measure of the probability of an event occurring given that another event has occurred.

Not mutually exclusive and not conditional; The economy can grow and evolve, while humanity degrades morally. The more corrupt the citizenry, the more they seek a financial system that reflects this corruption. The shaded portion demonstrates what we are currently experiencing; a growing economy and a rapidly debasing humanity.

I agree with your more moderate view of the economic situation at present, which is different from the Armstrong Crash and Burn vision. In fact it is helpful to observe the markets.

Contrary to what Armstrong says, the world is far more interwoven economically than what he preaches.

There is so much correlation between world stock markets that the divergence between the emerging markets and the US and European markets does not really exist as much as he wants us to believe with his clockwork universe model. The entire world has to collapse in order for some of Armstrong’s predictions to come true. That is not going to happen.

So there is plenty of hope…Human civilization is a process of refinement in the way people live together. I think we have a fair chance to continue on that path.

B

Here was my response:

I take the realistic [and objective] view as it has been the correct way for decades. Plus, it is clear the central banks have everything under control, and that the bad press is just for show opposition. They control the yield curve and are all working together to get the agenda pushed forward. So, as I have been saying all along, they have the power to drop yields if they choose (which they are) and they will continue to fall and that will enhance asset values, ceteris paribus.

Armstrong was [misguided] with most things priced off the yield curve, especially real estate and bonds. When the Fed came out late last year and turned dovish, I knew TPTB intended to keep this going. It can be kept going for years. I have been writing for a couple years to brace for negative yields if the [central] banks wanted that.

With that said, I am not a fan of this system. I outline it on my blog, and I am not optimistic for humanity [in general]. But that mindset doesn’t have to be mutually exclusive to the contemplation of economic growth. But if things collapse it will be by intent, though it won’t appear that way. If things fall apart now the central banks will get the blame and that is not something they want to have pinned on them. TPTB have much more to gain by keeping things intact for now.

I walked out of the 2015 conference and began to realize he [Armstrong] was incorrect with many of his assumptions… I had confidence that the central banks were in control.

Here’s the thing about Armstrong. He has knowledge, so if someone like myself is going to criticize him, he better know what he is saying. This is why we don’t hear all too much [negatively about him] in the alt-financial media. I think most do not have the background to argue. You see past it.

Anyone who reads my blog knows that the economic system and the human condition go hand in hand. Most Godly people observe what is going on in the economy with horror, but keep in mind that this monetary system is not what the vast majority of people deserve, but what they choose.

A degraded humanity prefers this current system. People enjoy spending other people’s money and they also find the concept of free money appealing. They don’t want to understand how borrowed social spending and budget deficits ultimately reduce their standard of living. Most voters possess an egosyntonic mindset and don’t want know how this works. Most believe truth to be relative. They are short-term, linear thinkers and only care about themselves. Why am I correct? Just look at the massive government deficits for a clue to that answer.

This is why I have been advising my readers for years about how to stay ahead of a floundering humanity. People prefer free money, but that comes with the cost of massive deflationary deficit spending. I think you get the picture.

Response to an email; Facebook’s Libra is not anonymous and is nothing like the SDR

Libra sounds to me like a new version of the SDR. Pegged to a basket of  World top traded currencies. The original name Libra comes from the Roman Empire for a pound minting gold coins. Welcome to the future new Rome (Saturnalia).

The concept looks great if they can get the security and privacy stuff working flawlessly. 2.6 billion people with a new Swiss bank account. I didn’t know I could get a Swiss bank account with $ 100 dollars.  Lol

V – Canada

In astrology; according to Wikipedia, Libra is the only zodiac constellation in the sky represented by an inanimate object. The other eleven signs are represented either as an animal or mythological characters throughout history.

Libra is one of the three zodiac air signs, the others being Gemini and Aquarius. The sign of Libra is symbolized by the scales. The Moon was said to be in Libra when Rome was founded. Everything was balanced under this righteous sign. The Roman writer Manilius once said that Libra was the sign “in which the seasons are balanced”. Both the hours of the day and the hours of the night match each other. Thus why the Romans put so much trust in the “balanced sign”.

In weights and measures; according to Wiktionary, libra can refer to a Roman unit of weight equal to about 327 grams, any of various units of weight in Spanish- and Portuguese-speaking countries approximately equal to 460 grams, or as libbra, an Italian unit of weight.

With Facebook’s Libra, there is no anonymity. All transactions will be instantly verifiable and permanently recorded. Transactions can be reversed as well.

With respect to Libra’s anonymity, there is none. With regard to the blockchain underpinning Libra, there are important differences between Libra and bitcoin. The important differences of the Libra coin lie in its construction and characteristics. First and foremost, the blockchain is centralized and there are very few players who determine any changes. Thus it is a blockchain asset that is tightly controlled and can evolve over time. In addition, it is highly regulated and all of the transactions will be instantly verifiable and permanently recorded. This is a lot different than with other crypto assets, which can often be effectively transacted in anonymity.

How the Libra coin differs from the SDR

The differences between Libra and the SDR are fundamental and basic.

First, the Special Drawing Right (SDR) isn’t regarded as a currency or a claim against the IMF assets. Instead, it is a prospective claim against the freely usable currencies that belong to the IMF member states and comprise the SDR. In contrast, the Libra coin may be regarded as a currency, since it is a claim on the coin itself, not the nation-states. Perhaps we can think of it in terms of how a  money market fund operates. In a money market fund, the claim is not against the underlying assets, but against the fund itself. I can think of the Libra in some similar fashion. The claim is not against the underlying currencies and the Securities that make up the Libra portfolio, rather it is against the Libra.

Second, the SDR was never designed to be a transaction-based “currency.” Rather it was meant to be a national reserve alternative and designed to assist the nation-states with balance of payments issues and such. It also helped national governments to obtain financing. The average person or business would never buy or sell in SDRs. It was never designed to be a replacement for transactions at the consumer and business level.

 

 

We may have a viable alternative to the US dollar

Not by accident; Libra is the first concept that addresses all the requirements necessary to be a viable alternative to the U.S. dollar

Note: I want to preface this discussion by saying that I believe Facebook’s CEO, Mark Zuckerberg, is most likely just a front-man for the world’s biggest personal data gathering and psychological conditioning firm. There is no way that Facebook could grow its active user base to almost 2.5 billion people unless it was officially created and sanctioned by the globalists.

I will not delve in much on this topic as I am sure the reader already has some familiarity on this subject. But if Facebook creates a defacto alternative to the U.S. dollar, I can guarantee that it was not Mr. Zuckerberg’s idea. So, if Facebook’s Libra project gets traction, it was meant to receive it.

Facebook’s Libra Project is the most likely answer to the U.S. dollar
Facebook’s wide audience makes it the perfect firm to develop a private currency. Here’s a full list of the Libra Association founding members. The largest globalist-controlled payments firms must be  included if we are talking about developing a replacement to the U.S. dollar

The globalists are in the process of unveiling their replacement to the U.S. dollar (and perhaps the concept of the national fiat currency as we know it). That replacement is the Facebook Libra cryptocurrency. In one bold move, Facebook has developed a cryptocurrency that addresses most, if not all, of the shortcomings of all the previously theorized alternatives to the Federal Reserve note. It hopes that Libra will one day trade on a global scale much like the U.S. dollar.

Libra is a new cryptocurrency that will launch as soon as next year and be what’s known as a stablecoin — a digital currency that’s supported by established government-backed currencies and securities. The goal is to avoid massive fluctuations in value so Libra can be used for everyday transactions in a way that more volatile crypotcurrencies, like Bitcoin, haven’t been able to achieve.

Facebook left few stones unturned and if I were unaware of the conspiracy for the one-world financial dictatorship, I would have concluded that Libra is a groundbreaking and exciting transformation to the global monetary and payments system. If the Libra coin gains wide acceptance, Facebook has the potential to become the most powerful company on earth; which, of course is why I have to conclude this project has the express, written consent of the new world order.

It makes perfect sense to have a replacement to the dollar appear in this incredible and unique way. The Libra transaction coin will not replace national currencies, per se (at least not initially), but will instead work with them to weight the coin to a basket of them.  The best part of this plan is that many of the potential critics of the central banking cartel will embrace Libra as a clear alternative.

We may see a lot of political grandstanding against the Libra coin, but I submit this is just for show. The globalists need to stir up controversy and control the opposition, so that its unveiling and construction do not come across as a fait accompli. In the ensuing months, we will be confronted with many news stories that will ostensibly throw Libra’s roll-out in doubt. But at the end of the day, its promulgation is just the next logical step in the evolution of the monetary system and it makes sense. Based on this logic, I have to conclude that the creation of bitcoin was a necessary step in the evolution of money. It isn’t the answer. The naive programmers who think they are creating the answer to the privately run central banks are actually building their shackles.

The disadvantages to all previous dollar alternatives

Before I state the reasons why I believe that Facebook’s Libra project has a high probability of being the eventual replacement to the dollar, let me briefly discuss why all the other previous alternatives were never going to replace the greenback.

IMF’s Special Drawing Right – 50 years and still not viable

The Special Drawing Right (SDR) isn’t regarded as a currency or a claim against the IMF assets. Instead, it is a prospective claim against the freely usable currencies that belong to the IMF member states.

An SDR is essentially an artificial currency instrument used by the IMF, and is built from a basket of important national currencies. The IMF uses SDRs for internal accounting purposes. SDRs are allocated by the IMF to its member countries and are backed by the full faith and credit of the member countries’ governments. The makeup of the SDR is re-evaluated every five years. The current makeup on the SDR is represented by the following table:

 

The Special drawing rights provided by the IMF to its members is based on their subscription quota. As the shares of developed countries are higher, the major portion of SDRs are available to them. The share of the less developed countries is comparatively lower. So, the IMF effectively restricts the borrowing capacity of less developed countries.

The need for development finance is keenly felt in developing countries. They suffer from chronic BOP deficits, external debt burdens, shortage of domestic capital, internal inflation, limited access to private banking and capital markets, and variability in export earnings etc.  In this context, it becomes necessary to create more SDRs for less developed countries. But presently, SDRs are not need based and the distribution system of the SDR is not equitable. Moreover, the developed nations whose currencies comprise the SDR, have no incentive to make these SDRs available to those who need them the most.

Chinese yuan

I have analyzed the shortcomings of the yuan in the past. Although the Chinese economy may be growing at a rapid clip and could overtake the U.S. economy soon, this does not mean that the yuan will or can replace the dollar. The Chinese monetary and financial system is still highly managed and controlled by its authorities, and its high level of international distrust as well as its lack of transparency, liquidity, and scrutability  do not foster much international confidence in its currency. Some may disagree, but despite the size of China’s economic output, there is a reason why the yuan only accounts for a few percent of international transactions.

Bottom line; the yuan in its present form will never be a large-scale global  transaction currency. China needs to drastically reform its economic and monetary system first, and I believe that these reforms are actually not yet in the best interest of China and the ChiCom government. They are still too reliant on exports and a tightly controlled currency.

Gold

Governments will never willingly accept a gold standard as it limits their power to cause price inflation, while it tends to force a fixed pattern of exchange rates.

Gold’s disadvantages are (1) it cannot provide a sufficiently flexible supply of money, because the supply of newly mined gold is not closely related to the growing needs of the world economy for a commensurate supply of money. (2) a country may not be able to isolate its economy from depression or inflation in the rest of the world. (3) if the world went to a gold standard, the economy would immediately collapse without a debt repudiation. Under a debt-backed currency system, the central banks continue printing the needed money to service the outstanding and growing debt pile. Under a gold back system, the amount of currency that can be printed is severely limited. While reverting to a gold standard after a long period of fiat money may sound appealing, we would need to determine how to handle the high rate of debt repudiation, since there would not be enough currency to pay interest on existing debt without much higher interest rates.

Bitcoin

Please note that I am analyzing this through the lens of how a global payments system must operate in order for it to be widely accepted.

Although your typical crypto enthusiast will insist that bitcoin’s decentralized nature and scarcity render it the perfect currency and the answer to the central banking cartel, I submit that these are its biggest weaknesses in making it a global transaction currency. In addition, achieving consensus with bitcoin in a timely manner is impossible. Here are a few more disadvantages with bitcoin and most other cryptocurrencies.

  • Exposure to scams and fraud
  • Black market activity may damage reputation and usefulness
  • Susceptible to high price volatility
  • No chargebacks or refunds
  • Potential to be replaced by a superior cryptocurrency
  • Environmental ills of mining.

Bitcoin may still move much higher over time and may be viewed as a replacement to gold, but that does not make it a currency in the true sense.

The advantages of Facebook Libra

With this said, here are the main reasons why I believe that Libra can supplant all other alternative to the U.S. dollar, including the dollar itself eventually:

  • Facebook: 2.38 billion monthly active users as of March 31, 2019
  • Whatsapp and Facebook Messenger: 1.6  billion and 1.3 billion monthly active users, respectively.
  • Receiving the full backing of the major payments firms, Visa, MasterCard, and PayPal.
  • Its centralized nature gives it the flexibility to grow and evolve over time as necessary.
  • To come anywhere close to matching the U.S. dollar for utility and acceptance, Libra will need to be widely trusted. So Facebook and its partners are mimicking how other currencies have been introduced in the past.
  • It will be backed by a collection of low-volatility assets, such as bank deposits and short-term government securities in currencies from stable and reputable central banks. Since it will maintain a stable asset value, it will be a natural choice for financial transactions.
  • The total number of Libra can change, and new digital coins can be issued whenever someone wants to exchange their Libra for an existing fiat currency, so the price shouldn’t fluctuate any more than other stable currencies.
  • Libra will also be audited and held fully accountable, which is an important step in an industry with limited transparency.
  • Facebook plans to build a new digital wallet that will exist inside Messenger and its other standalone messaging service, WhatsApp. Once Libra is up and running, the currency and the digital wallet should make it easier for people to send money to friends, family and businesses through the apps.
  • Libra will run on blockchain, eliminating risks that come with information being held centrally by a single entity. Facebook created a new subsidiary, called Calibra, to build the new wallet and focus on the company’s blockchain efforts.
  • It is well designed to serve those around the world who lack access to proper banking services and who are held captive to weak and inflationary currencies.

I am not an advocate of any type of payment system, but I have to comprehend that Facebook did their homework when putting together their Libra project. It seems that it is the next step in the evolution of the global monetary and payments system. It also goes a long way in addressing the needs of the two billion people who lack access to proper banking services. It could eventually make a fully capable one-world currency and payments system. It has the advantages of blockchain without its drawbacks.

June 15th Market Update – Trading most assets from the long side; Housing stabilizing and moving higher; Explosive set up for BTC?

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Commentary as of June 15; 4:00 pm

-Keep in mind that the central banks and governments need higher asset prices, as this will help foster sovereign debt demand. Thus, their policies will all be geared to increasing asset values.
-Dow and S&P futures holding above 50-day mva. Nasdaq just below the 50 day mva. The only yellow light continues to be the struggling Dow Transports.

Dow futures holding the 50-day mva. My year-end price target of 28,500 is still in effect. The central banks and the governments need higher asset prices as this will result in higher demand for sovereign debt.
A good sign for the stock indexes; The IPO market looks strong and the S&P 500 futures are holding above the 50-day mva.
The Trannies look to be lagging, which gives me pause for an immediate stock market break out. Perhaps we are range bound until the late Summer?
The ten year 10-year UST chart. I see the next levels of resistance for yields to be 1.90% and 1.80% on the 10-year UST. Housing around the world will move higher.
A bullish pennant is forming. Higher bond prices and lower yields on the horizon? The likelihood looks good.
Despite the volatility, gold ended the week virtually unchanged. Hard to deny the power of gold. Another attempt at the 1,362 looks likely. We called the test of 1362 correctly. It was rejected, but it came about with a quick punch, so I believe we will see another attempt soon. If it breaks out, 1400 could be next. My only concern is the stretched COT report
Gold COT is stretched, but there is still some more fire power. This weekly chart shows what we are up against.

The ECB is having a lot of problems with low inflation. This will support the USD and help to accelerate the worldwide dovish monetary policy timeline.
-Housing is showing renewed strength around the world. This will undermine affordability even more. I have to believe that there will be some higher-than-expected growth as low rates will provide some substantial firepower to home values.
-Since Amazon announced plans to build HQ2 in Northern Virginia, the median home price in Arlington has soared 17.3% to $750,000 in April, up from $640,000 in November 2018, when HQ2 was announced, according to Realtor.com. The national median list price increased 5.5%, or $17,000, over the same time frame.

Amazon donates $3 million to Virginia homeless groups as HQ2 pushes home prices up 17%
Why Americans should get into the housing market now
Housing market rebounded in May from record lows earlier in the year, CREA says
Canada Housing Market Begins to Shake Off Slump – WSJ

-Bitcoin and the altcoins look to be setting up for an explosive upside

Overcoming the alt-financial non sequiturs to get ahead; Some important advice

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-An analysis of a CNBC article about how more Americans are falling further behind. The mainstream economists are at a loss for words, while the alt-financial gurus say the monetary system that is the cause is about to collapse.
-Alt-financial non-sequitur; The alt-media analysts say the system was designed 100 years ago to level the wealth around the world and that the 1st-world nations will be knocked down to 2nd world status. Now that it is happening, they are all claiming that it can’t continue and that it’s about to blow up (alt-media from the early 1990’s proclaimed this same inconsistency). The alt-media personalities are either working for other people or actually believe their advice. Either way they were the system’s victims.
-How can a so-called expert in the alt-financial media claim to know so much about the monetary system, yet lose his shirt and get involved in losing investments?
-Some timely advice on how to get ahead, regardless of talent level.
-Imagine how much money some of Trump’s buddies must make if they know he will send out bearish or bullish tweets over a weekend. For instance, if I knew on a Friday that Trump was going to bash China over the weekend, I would have sold off dozens of S&P emini’s prior to market close. This stuff goes on all the time.
-Never listen to anyone in the business media. Ray Dalio has business to gain in China, so he gushes all over the ChiCom government. Jeff Gundlach tells the world he is long gold, so he can shill it while he dumps his profitable position. Cramer talks stocks that his buddies want him to shill. Gold shills promote collapse, so they sell you gold at high markups.