Update for March 01, 2021
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Hello Friend,
I hope this message finds you well. Let's dive right into it: |
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Let’s start out looking at the Macro picture:
As you know, the Federal Reserve is printing dollars into oblivion with the ridiculous Covid ‘stimulus’ packages passed by Congress and they’ve been doing so with QE (Quantitative Easing) policies over the last several years, all in an effort to hide the fact that their fiat currency system is at the breaking point. In fact, just this year alone, 2021, two months, the Fed has created an amount of fiat money equal to all the dollars in existence prior to this point in history.
The result has been the inevitable decline in the value of the dollar and the respective rise in value in all things against the USD, i.e. Bitcoin and gold, other currencies, etc. Those same dollars have been going into the stock market giving those markets a false sense of stability and euphoria when in fact the underlying economies have been dying respectively. Figure that one out. This is a complete disconnect from the reality of free markets.
For this reason, among others, the world is uncoupling from the USD and it is fast losing its standing as the world’s reserve currency. This means demand for USD is lessening. From the US government’s perspective this makes selling their debt, to finance all the entitlement programs and wasted budgets, more difficult. Amazingly, it’s the hedge funds, the pension funds and other governments who still rely on traditional thinking and historical mindset that ‘US debt is as good as gold’ which props the dollar up to any degree at all. When things go bad this gives them plausible deniability when making an accounting to their investors or constituents.
Amid this global situation, the Fed and US gov are raising interest rates in order to attract debt buyers and overcome the dollar devaluation. What the investors don’t seem to realize is that they are getting paid interest in dollars which are worth less and less each month. Again, it looks good on paper.
When the curtain is pulled back for the world to see the reality of this situation, we can expect a total dollar collapse and other commodities and currencies to skyrocket compared to the USD. This is one reason BTC has done so well.
There is much talk of the ‘Great Reset’ which is intended to bail out the failed central banking fiat currency system but the timing and effects and machinations of how all that will work are purely speculative at this point and not worthy of consideration at this time.
Gold XAU/USD
So in view of increased interest rates and the apparent superficial ‘normalcy’ in the world money has been flowing out of gold into the fake markets and higher interest rates. Our gold positions are hedged so further downward pressure is not hurting us (more than it already has) and we look to close those shorts at a nice profit if we can time the reversal properly when it starts coming back up. We have to be watching closely to get the timing right.
Cycles
As you are aware, everything in life moves in cycles. There are cycles of the seasons, cycles of life, cycles of business and the sales process and so on. The markets are no different. You can see how the price action moves in waves in their own cycles. Look up Bo Polny on YouTube and he discusses with amazing accuracy the cycles identified in the Bible time and again and how those overlay on not only history and current events but even the markets themselves. It’s an amazing study.
The point being that our delay in waiting for gold to come around to recover the equity currently blocked in the account, is subject to those same cycles. This leads us to the point that, as painful as it might be at this moment, patience is required to let these cycles play out.
BTC and Current Positions
As the market was diving early last week I was able to close our BTC positions at a still decent profit before they went negative on us. We are currently letting the dust settle from this pullback before re-entering. You might recall me making reference on several occasions about the propensity for BTC to have pullbacks of up to 30% which are quite dramatic. This was a perfect example.
We were not so fortunate on our ETH positions and we closed those taking a hit which set us back a bit on the equity.
Outlook
The markets have dealt us challenges which have delayed us in attaining our objectives. You may recall me saying that it’s much easier to be gaining in larger chunks with a good buffer of equity. We are not in that position right now. I have to work on gaining a little bit every day to get that equity back up while we wait on the gold positions to mature in their cycle. It’s going to take some time. That’s the reality of it so please make your plans accordingly.
Q & A
I still owe you my ‘Follow Up #4’ with the Q & A which I’ll get out this week when time allows.
This project is very important to us all and others who will benefit secondarily.
Keep the prayers coming!
Thanks
Mark
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