WARNING: crypto-currencies are very likely going to experience a crash soon

[TPTB_need_war]

Those who have followed me over the years know that I have made some prescient predictions such as the Bitcoin crash from $1000, even the collapse to $150, and even the precise timing and $320 top of the bounce before the current one. In addition the following silver prediction I made:

http://www.marketoracle.co.uk/Article23786.html

I have also stated that I thought that when gold crashes below $1000 (and likely below $850) this year, then Bitcoin would also likely get caught up in the contagion and sell off to below $150 perhaps back to double-digits. I had explained my reasoning in the past and the current indicators are:

https://www.armstrongeconomics.com/markets-by-sector/precious-metals/precious-metals-march-4th-2016/

https://www.armstrongeconomics.com/international-news/europes-current-economy/the-eu-going-quietly-into-the-light/

https://www.armstrongeconomics.com/international-news/north_america/americas-current-economy/moodys-warns-of-30-rise-in-commodity-based-company-bankruptcies-in-2016/

https://www.armstrongeconomics.com/international-news/east_asia/moodys-lowers-credit-rating-of-china-to-negative-from-stable/

It is not certain that gold will elect the March 13/14 turning point to begin its collapse to the final bottom of the correction that began 2011. And it is not certain that crypto-currencies will follow.

But the level of irrational pumping of altcoins tells me that we are very near to a 2013 top in crypto-currencies. The irrational speculation is off the charts again and not based in any sense of reality just as was the case for those arguing for Bitcoin to go to $1 million per BTC back in 2013. For example, Ethereum has 0 users, 0 working, scaled apps, no consensus algorithm after $18 million expended. Yet the market cap is heading towards $1 billion.

I am sniffing a big collapse in the making. Not sure if it is this March or later in the summer, but I am warning you.

Take some profits into US dollars. The Euro, Pound, Yuan, and other currencies will also collapse relative to the US dollar due to the carry trades and pegs to the dollars which put the rest of the world bet short against the dollar.

You will need some dry powder to buy when there is blood in the streets.

You've been warned.

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[watashi-kokoto]

well its's halving year, Bitcoin needs a strong support or face a supply-side consolidation. It all depends on the way Ethereum bursts. Slowly over time, or abruptly.

[The Sceptical Chymist]

I'm not sure if I've trolled you in the past OP, but I have to say you're most likely right.  I think I don't agree with some of your politics but I agree with your analysis of these shitcoins.  However the timeframe might be a bit longer before the crash.  As they say, the market can remain irrational longer than you can stay solvent.

[TPTB_need_war]

Seems quite plausible that Bitcoin will implode this coming March 13/14 or shortly thereafter, and when Bitcoin gets a flu, the altcoins go no bid and collapse.

Still, the digital currency experienced sharp gyrations this week amid news that the network was exceeding its capacity for transactions, a development that resulted in users paying sometimes substantially higher fees.

Bear in mind this revelation (click the link in the quote below) which I had predicted as well was the motivation for 51% attack of the Chinese mining cartel which blocked any block size increase:

If we don't have decentralization, then the entire plot has been lost.

Do you need an example? Here you go (remember the Chinese mining cartel allegedly controls 65% of the Bitcoin hashrate):

https://www.reddit.com/r/btc/comments/48nnaw/the_truth_comes_out_core_devs_have_convinced/

[newb4now]

I am sniffing a big collapse in the making. Not sure if it is this March or later in the summer, but I am warning you.

Take some profits into US dollars. The Euro, Pound, Yuan, and other currencies will also collapse relative to the US dollar due to the carry trades and pegs to the dollars which put the rest of the world bet short against the dollar.

What other asset classes do you consider safe for those that value diversification? How about real estate? Which countries do you like right now from a macroeconomic standpoint?

[CryptocurrencyNetwork]

I am sniffing a big collapse in the making. Not sure if it is this March or later in the summer, but I am warning you.

Take some profits into US dollars. The Euro, Pound, Yuan, and other currencies will also collapse relative to the US dollar due to the carry trades and pegs to the dollars which put the rest of the world bet short against the dollar.

What other asset classes do you consider safe for those that value diversification? How about real estate? Which countries do you like right now from a macroeconomic standpoint?

Real estate is a tool of governments, you rent it from them

[TPTB_need_war]

I believe Martin Armstrong has the correct model of what will transpire over the next few years.

His model is basically that the entire world is short the dollar ($10 trillion in international corporate bonds denominated in US dollars, various currencies pegged to the dollar, e.g. the Hong Kong dollar and Chinese Yuan, which enabled China to undercut the world's manufacturing and become a highly imbalanced economy with 65% share being for factories and only a miniscule consumer share, which leaves China with overcapacity and negative profit margins, etc)..

So basically what will happen now is the entire world will go into collapse mode as the US dollar goes higher and the world's wealthy flee into the US stock market as the final safe haven. This will cause the US dollar and US stock market to sky rocket until about 2017.9, after which the US will collapse due to a strong dollar overheating the US consumer economy and collapsing exports. From 2018 to 2020, will be "an over the cliff" collapse for the entire world, since the US economy was the last one still standing up in 2017. Asia will bottom in 2020, because fundamentally Asia has the youth and the growth potential without the retirees that will fight for Socialism. Asia's debt can be cleared out by debt defaults, but the West's debt is cultural and can't be cleared out, because the boomers will fight politically for their retirements and demand the government tax everyone to pay their retirements.

So March 13/14 is the turning point that should see crisis accelerate outside the USA. Just this past week China announced laying off 1.9 million steel workers. The exodus of capital from China going to the USA for safe haven has radically accelerated, some even saying China's reserves will be threatened as this accelerates.

The dead-cat bounce in gold is because the USA Fed did not aggressively raise rates yet, which enabled Europe and China to buy a little bit of time. This also enabled Bitcoin (and the altcoins) to get a bid. But this is a dead-cat bounce and  the final lows for the speculative assets is coming. Again I am reasonably confident of < $850 for gold and < $100 for Bitcoin. I am thinking perhaps $50 for Bitcoin, but it is also possible the block size issue and Blockstream totally fuck up Bitcoin and we sell off to $10. I think perhaps that is extreme, but I don't place it outside the realm of possibility. Again I don't know if this selloff will be in March or later in the summer, but in either case I am reasonably confident it is coming.

So for the interim time the safe parking asset is the US dollar. After gold bottoms, then gold is a go to asset but as a diversification not as a core holding. As for crypto currency, it is too murky to know yet, because currently it is difficult to know whether Bitcoin is heading for total failure (slap yourself, it is possible <--- click this link!).

For a core holding, appears the US stock market once the current correction has bottomed. Expect a double by roughly 2017.9.

For a speculative holding, find the best crypto currency after the washout.

For a core holding after 2017.9, purchase a Bible and pray. Seriously, nothing may survive. Even if you buy real estate in Asia, you may not be able to hang on to it, as the governments are going to cooperate to make sure we white guys pay all our taxes back home (don't expect the European policy of not taxes expatriates to hold). I guess try to diversify and put things in other people's name? Bury gold? (I don't like these ideas)

If you want more information, I suggest reading the Martin Armstrong thread in the Economics forum. There I have defended against the trolls such as sloanf, and I think explained why Martin Armstrong's record is superior to any other analyst on earth. You might be skeptical of his ability to predict the macro economic future by tracking 1000s of financial and other variables along with his $1 billion of historic data in an A.I. computer model that employs multi-dimensional cycle correlation.

Edit: if you think Asia will be a great place to migrate too, read this:

Btw, even I have been coming to and living in the Philippines perhaps half of my years on earth, I am still shocked how rampant the corruption is here. It is built into the culture that the people use each other. I guess it comes from the Spanish occupation and perhaps even before that the tribes probably captured each other for slavery. For example, the brother of my ex holds a tourist visa to go Brunei (will look around for a job), but he doesn't want to fly directly from Manila to Brunei, because the immigration officials are likely to deny his exit if he doesn't bribe them. Whereas, if he flies from Manila to Hong Kong they may not suspect he is seeking employment abroad and thus may not extort him.

[hashtag101]

Can you explain more about the strong US dollar overheating the US consumer economy and collapsing exports causing the US to fall?

This is where I'm most confused.

[r0ach]

I agree with you on most things, but not really this idea.  On this subject (concerning gold), you're either in or out of the Harry Dent camp.  The idea is that a debt implosion creates a liquidity crunch along with a deflationary collapse causing the price of everything to go down since it's hard to sell things at all if say, 90% of the money supply just disappears from people's wallets.  As a business owner, you're required to slash prices to nothingness to do business at all.

Highly liquid assets such as commonly accepted currency retain value the best in these scenarios, while everything else implodes.  Who is to say debt based fiat would even have value after such a market implosion though?  A vast majority of the money supply simply disappearing might cause a switch to a new currency because the economy would come to a halt, or helicopter money would be required to jump start it, which then causes the value to go to nothing anyway.  Fiat is in no way a safe haven.  Besides short term valuations, Bitcoin and gold are isolated entirely from those issues.

Dent seems to classify gold as a commodity and not a currency, which is why he claims it will implode.  Since the vast majority of gold's value is it's network effect, and not it's industrial value, and it's long history of being used as currency, it seems to currently have far more attributes of a currency than commodity to me.  Gold acted as a currency in the past but failed to work due to lack of granularity and high friction in use, so the money changers exploited this deficiency and gold IOU notes were born to make gold usable in a modern civilization.  Bitcoin solves both the granularity and high friction issues of gold.

The limited network capacity does not make Bitcoin a commodity, it makes it a network where only high value purchases or bundled low value purchases can be made.  The fact that it seems like I can spend Bitcoin in far more places than I can spend gold right now means the market could even value the two objects completely differently and have Bitcoin going up while gold goes down.  When is the last time you saw a Subway restaurant where you can buy a sandwich with gold?  I can do so with Bitcoin already, even in it's infancy.  For the common man in day to day use, gold has next to zero liquidity while Bitcoin acceptance just keeps increasing.  

Due to it's granularity and friction issues, gold is a useless trinket for a modern society.  I see the value prospects of gold vs bitcoin being more opposed to each other than linked.  Meaning buy gold if you think a market collapse will send us back to the dark ages, and buy Bitcoin if you think the shit hitting the fan will not cause the fan blades to decapitate everyone in the room and there will be at least one guy to keep the electricity running afterwards.

[TPTB_need_war]

On this subject, you're either in or out of the Harry Dent camp.

Note Harry Dent entirely fucked up and missed the 2007/2008 collapse (which cost me dearly as I had to try to liquidate physical silver during a collapse ... because I had moved back to the Philippines and couldn't leave my physical at the bezerk jhmint ... and at the time I thought US capital controls were imminent due to the collapse ... I was inexperienced and panicked ... but then learned a lot from Martin Armstrong hence). Dent has totally changed his long-term predictions for the future from hyperinflationary to deflationary collapse. I was buying his service back in 2006/7. He fucked me over. The only guy who has always been correct (on the macro economics, not short-term trading) since I started following him in 2010 or so, is MA (Martin Armstrong). I learned my lessons the hard way, by losing all of my former wealth (18,000oz of silver). Not just Harry Dent but also Graham Summers premature prediction of China collapse, silver dealers fucking me over (you see jhmint.com, tulving.com and the silver dealer I dealt with in Manila are all bankrupt!), etc..

Highly liquid assets such as commonly accepted currency retain value the best in these scenarios, while everything else implodes.  Who is to say debt based fiat would even have value after such a market implosion though?  A vast majority of the money supply simply disappearing might cause a switch to a new currency because the economy would come to a halt, or helicopter money would be required to jump start it, which then causes the value to go to nothing anyway.  Fiat is in no way a safe haven.  Besides short term valuations, Bitcoin and gold are isolated entirely from that contagion.

The mistake you and many (most) people make is that an implosion is a slow motion train wreck that goes through several stages. The next stage is the international capital escapes the collapsing peripheral economies to the main reserve economy. This is the way it always goes, ditto in the collapse of the Roman and the Athenian empires. We are actually in the midst of the collapse of the US empire, but the paradox is that the core of the empire becomes stronger before the end collapse.

After 2018, the rest of the world will complain about the strong dollar as being the source of the problem, so there will be a monetary reorganization of the reserve currency to enable power sharing with EU and AU (Asian Union). Some say this is the 10 Kings stage which precedes the final one world global currency stage at the end game of Revelations:



So yes cash would be a premium, except we have a problem. The governments routinely cancel the fiat cash and thus force cash out-of-hiding. And in the past, you could hop on a boat with gold, but now your gold will be confiscated at transit hubs and checkpoints.

No this is a empire type collapse where nothing survives. The governments are going to hunt down everything. So until 2017.9, the mainstream wealthy will move to the US dollar and US stocks. Then the USA will trap (confiscate?) all that money with capital controls as FATCA comes into full force in 2017. And the global economy will implode. We likely go into war too as a result of this economic frustration.

The limited network capacity does not make Bitcoin a commodity, it makes it a network where only high value purchases or bundled low value purchases can be made.

No it means the Chinese mining cartel owns your Bitcoin. They can block any transaction they want once we go into war. You are not Chinese, they block your transactions. They control 65% of the hashrate and on the next halving the marginal miners go, which means Chinese ASIC miners will gain greater percentage. They can then extort high transaction fees or in any case some big mess, same as what (well intentioned) top-down control did to China's arable land.

If you don't think China can't require KYC identification on every Bitcoin transaction, then think again:

https://www.aclu.org/blog/free-future/chinas-nightmarish-citizen-scores-are-warning-americans
http://theantimedia.org/china-just-launched-the-most-frightening-game-ever-and-soon-it-will-be-mandatory/

We don't have a solution for cypto currency yet.

[r0ach]

No it means the Chinese mining cartel owns your Bitcoin. They can block any transaction they want once we go into war. You are not Chinese, they block your transactions.

Yea, they could do so if they chose to embrace the famous Larimer "captive audience" fallacy.  The part where Larimer thought he could increase transaction fees to be uncompetitive with other current cryptocurrency offerings to subsidize some ridiculous referral system.  Blocking transactions or other schemes is not a valid strategy from a profit orientated entity.  If the Chinese government conspired to do it, it would just cause a nuclear option fork.  This is just a potential short term problem that could happen, but probably won't, and would not be the death of Bitcoin even if it did.

I do not see China as the future as a lot of people seem to be claming.  I see China as the sick man of Asia that could collapse at any time never to be heard from again.  Hilariously, any negative stereotype you see about Jews, Chinese culture openly embraces them as positive features.  There is no honor or virtue to be seen in China.  The concept of face in China means it's ok to screw over anyone that's not an immediate family member if any financial gain is possible.  The stereotype of Asians being smarter than the west is also obviously false.  Look at any math competition for youth nowadays.  Out of the top 10 contestents, 7 of them will be Chinese, but they're always the bottom 7, while the top 3 are autistic white guys every time who are operating on another level the Chinese contestents can't even comprehend.

Unfortunately for Marxists, the death of the west, which is just a metaphor for the white race extending from ancient Greek civilization, has been slightly exaggerated.  We did invent electricity, the car, the airplane, the transistor, the internet, and just about everything else on earth after all.

[TPTB_need_war]

No it means the Chinese mining cartel owns your Bitcoin. They can block any transaction they want once we go into war. You are not Chinese, they block your transactions.

Yea, they could do so if they chose to embrace the famous Larimer "captive audience" fallacy.  The part where Larimer thought he could increase transaction fees to be uncompetitive with other current cryptocurrency offerings to subsidize some ridiculous referral system.  Blocking transactions or other schemes is not a valid strategy from a profit orientated entity.  If the Chinese government conspired to do it, it would just cause a nuclear option fork.  This is just a potential short term problem that could happen, but probably won't, and would not be the death of Bitcoin even if it did.

We can't fork, because China has more hashrate than we do.

Even if we change the hash algorithm (and you will never get political agreement on this), China can produce new ASICs faster than we can. And they have the Three Gorges Dam for free electricity and an iron grip control over the collective to charge the costs to.

(Btw, I think I have a solution to this)

The mistake you make is they can simply sell out to the USA and the EU to require KYC on every transaction and only block the transactions that have a tax lien from the G20 (or whatever). This will be capital controls fuck fest.

The big profit for China is on being part of the planned global 666 Technocracy (while pretending to be an adversary ... the global elite cooperate while creating pretend wars between nations).

You are not seeing the Big Picture. This is a $200 trillion gambit.

[freshman777]

What if the Fed doesn't raise rates in March, in 2016?

[TPTB_need_war]

What if the Fed doesn't raise rates in March, in 2016?

I haven't been following this closely, but it seems I remember that everyone thought they would raise by now, then the Fed backed off (and made some mention of negative interest rates, or perhaps that was Larry Summers again) because Europe and China were complaining (EU bonds spreads were starting to spread apart and China was seeing an exodus stampede of capital).

Remember market expectations drive markets, not fundamentals. It is the loss of CONFIDENCE that breaks markets, not fundamentals. So it seems the exhale from that unexpected delay has pretty much run its course and by March 13/14, the renewed reality of Europe and China's collapse will begin to drive expectations again.

Again I am not following this very closely and perhaps it would be better to ask Martin Armstrong directly.

[TPTB_need_war]

Can you explain more about the strong US dollar overheating the US consumer economy and collapsing exports causing the US to fall?

This is where I'm most confused.

The USA imports a lot, so a strong dollar will be an infusion in the consumer's arm because imported products (including oil) will be cheaper. So this will be more money that can be spent on for example a renewed subprime real estate bubble.

So this will artificially inflate the consumption/debt side of the economy which is already disproportionate, then it will shrink the export sector due to the strong dollar (costs more for other nations to import) and the collapsing demand of other nations.

So the economy goes into a terminal bubble, that once it loses momentum can't sustain itself and collapses. Realize this stampede into the US dollar (which eventually decelerates) will create a momentum for people to take on new debt in the USA. It will be rapid and very short lived boom right before the horrific Minsky Moment collapse. Note this is exactly what happened in the booming 1920s (right before the 1929 collapse), as all of Europe's gold was escaping to the USA.

The markets have a way of head faking people who not paying attention to capital flows.

[Ayers]

i'm also in agreement, the increase was too fast, and when there is an increase like that you can almost be sure about a possible strong decrease as well
not so sure about this month though, i think we can see a collapse before the bitcoin halving, or when the summer begin, for the time being we have at least another 1-2 months of profit

[TPTB_need_war]

[...]for the time being we have at least another 1-2 months of profit

In the case of Ethereum (not saying you bought it), that isn't 'profit' but rather a zero-sum game of stealing from our fellow speculators with the insiders taking the lion's share of the cash off the table all during the pump.

When the music stops playing, there is going to be 1 chair for a 1000 speculators to fight over. The other 999 chairs left the building and are in the whale's BTC accounts.

[bakedrice]

[...]for the time being we have at least another 1-2 months of profit

In the case of Ethereum (not saying you bought it), that isn't 'profit' but rather a zero-sum game of stealing from our fellow speculators with the insiders taking the lion's share of the cash off the table all during the pump.

When the music stops playing, there is going to be 1 chair for a 1000 speculators to fight over. The other 999 chairs left the building and are in the whale's BTC accounts.

Agree we got at least 2 months of BTC's rising and leading the crypto pump ahead of us.. sure it'll eventually top out and die.. just be sure to be ready to sell everything when the time comes.

[TPTB_need_war]

...just be sure to be ready to sell everything when the time comes.

In the case of altcoins which go into cardiac arrest when Bitcoin dumps, how does one get ready to fight with 1000 speculators over 1 remaining chair?

Seems to me it is Russian roulette. You pick an exit price and hope you get out.

There is no fundamental value in Ethereum, MaidSafe, Factom, StorJ. I analyzed them all, and they are all so flawed that they can't be used for anything. They have 0 usership, thus it is purely P&D. No demand for the coins otherwise.

Monero has some fundamental value. It has usership (not a lot but it has). Its hash function is also one of the least likely to be put on an ASIC of all those that are currently released (I think mine is better, but it is not released). Its anonymity isn't perfect, but it is the best that exists at least until Zcash is a reality (and capital controls are coming). That doesn't mean I think it won't sell off when other alts do, but it should have some firm support at roughly $5 million market cap or thereabouts.

In this climate as of now, I have pseudo-endorsed Monero FWIW:

https://bitcointalk.org/index.php?topic=1387214.msg14112660#msg14112660

Can you elaborate on the "firm support at roughly $5 million market cap or thereabouts"?

My understanding is that Monero is reasonably widely held by many people who believe in crypto currency and decided that Monero represented a best open source effort amongst altcoins. And so I don't think they are in it for a short-term speculation, nor are they holding so much that they need to sell.

The hot money may rush out, but the faithful will probably scoop up coins at roughly that price level. Okay maybe $1 - 5 million. I am just saying it can't totally collapse. Whereas, those coins which are hype which is so technologically flawed that they are useless and have 0 adoption such as Ethereum, Factom, MaidSafe, Storj, etc, could go to ~0. Ethereum perhaps not if they raised some $millions during this pump, so they can probably keep the hope alive for a while ($200,000+ per month burn rate  ).

Let's say there are 1000 long-term investors holding (invested) $5000 each on average. That is $5 million. And the market cap is usually much larger than the actual capital invested (although that might not be the case for Monero since apparently it was so fairly mined and widely held and not pumped because the price can't be manipulated by buying from yourselves, because it isn't primarily held by a few whales).

[hv_]

well its's halving year, Bitcoin needs a strong support or face a supply-side consolidation. It all depends on the way Ethereum bursts. Slowly over time, or abruptly.

Markets normally do what majority NOT expect, its already priced in.