Bitcoiin (B2G), the second generation, is going to launch in little over a month. None other than Steven Seagal is involved. The action star and Zen Master has dived into the cryptocurrency world. They actually have a ‘whitepaper’ on Bitcoiin, which is nothing more than a power point presentation that details almost nothing.
During the ICO, investors can purchase the new cryptocurrency for $5. Developers wrote in their whitepaper that they expect its value to reach $388 by December of this year. They provide no justification for this price target. They don’t need too. Amateur investors love being fed fantasies about getting rich quick. So far they raised almost 27 million dollars.
From their website we read the following:
“…Bitcoiin 2Gen is addressing issues with relation to speed of transactions, security, mining and costs of transactions.”
This was always a major problem with cryptocurrencies in my view. They do not solve any problem. I can transfer dollars around the world at the speed of light for next to nothing.
Category: General
Fiscal Insanity
The Office of Management and Budget just released the fiscal year 2019 budget details. Here is my summary (some dollar amounts are excluding mandatory spending).
| Department | Request | Increase/Decrease from the 2017 Enacted Level |
| Department of Agriculture | $19 Billion | -16% |
| Department of Commerce | $9.8 billion | +6% |
| Department of Defense | $686 billion | +13% |
| Department of Education | $59.9 billion | -10.5% |
| Department of Energy | $29 billion | -3% |
| Department of HHS | $68.4 billion | -21% |
| Department of Homeland Security | $46 billion | +8% |
| Department of HUD | $39.2 billion | -18.3% |
| Department of Interior | $11.3 billion | -16% |
| Department of Justice | $28 billion | -1.2% |
| Department of Labor | $9.4 billion | -21% |
| Department of State | $25.8 billion | -26% |
| Department of Transportation | $15.6 billion | -19% |
| Department of the Treasury | $12.3 billion | -3% |
| Department of Veterans Affairs | $83.1 billion | +11.7% |
| Corps of Engineers | $4.8 billion | -20% |
| EPA | $5.4 billion | -34% |
| National Aeronautics and Space Administration | $19.6 billion | +2.6% |
| Small business Administration | $834 million | -5.9% |
All of these departments represent a minor cost to the US government, besides the DOD. The elephant in the room is the sacred cows of entitlements. No one talks about those.
The left is going to go into overdrive about this. Expect it to be the media talking point for the next few days:
“Critical investments include $1.6 billion for construction of the border wall and $782 million to hire and support 2,750 additional law enforcement officers and agents at U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs Enforcement (ICE). The Budget also requests $2.5 billion for detaining up to 47,000 illegal aliens on a daily basis.”
Now on to the projected deficits.
Back to trillion dollar deficits, which have not been seen since the 2008 recession. Notice the deficits start to decrease 4 years out. How convenient.
Now for the projection of total US debt, which is based on a lot of optimistic assumptions. Low interest rates, no recession, etc.
Browsing the internet we find that conservative web sites are silent on this issue. The left, rightly, is pounding on the hypocrisy of this silence.
Note to Trumpbots: Nothing has changed.
Entrepreneurship and Being in the Minority
Airbnb sends along the following message to its users (my bold):
I am absurdly lucky even to be writing this email. Ten years ago we started Airbnb. Joe and I couldn’t pay rent, so we created the first AirBed & Breakfast and invited three people we’d never met to stay in our home. People said our idea would never work – “Strangers will never trust one another!” A decade later, people have checked into an Airbnb nearly 300 million times.
People told Mick Jagger that he couldn’t sing. He didn’t have the voice for rock and roll. Rodney Dangerfield was doing aluminum siding. He told people he was going to go back to comedy. “You are to old!” people told him. “Let it go”.
The times I made the most money in my life is when I was in the minority. When everyone told me how wrong I was or how this or that would not work. All traders should have a set of rules. One of my trading rules is this:
Being profitable usually means being in the minority.
People tend to reflect their failures in life onto others when they give advice. I don’t believe this is malicious in most cases, just the way most people work. There is nothing wrong with asking for advice. Just know who you are talking too. Always seek advice from successful people.
Conclusion
If you have an idea and everyone doesn’t laugh at you or tell you how wrong you are than you should reevaluate the idea.
Times of a Mania
How am I so confident we are living through one of the greatest manias of all time? Considering that Long Island Iced Tea Crop just put the word “Block Chain” in their name and it is now up over 300%. I repeat:
This is a top. If you are an owner of bitcoin get out while you can.
Tom, Dick and Harry Call a Top
There is a book called “Extraordinary Popular Delusions and the Madness of Crowds”, written by Charles MacKay in 1841. The thesis of the book is that the majority is mostly wrong. When it comes to investing, there are always wrong. If they ever rewrite this book, there will be a special chapter dedicated to bitcoin called “Digital Tulip Mania”.
The number one investment rule is this:
“Parabolic moves end in tears”
Below is the monthly price of bitcoin for your consideration.
Print it out. Now compare it to the NASDAQ in 2001. Silver in 2011. Tulips in the 1600’s.
Can bitcoin go to 15K? 20K? 50K? Sure why not. Never underestimate the madness of people. However, the folks buying it now will never get out in time. They will hold on to it all the way to zero. Idiotic celebrities are tweeting about it. Everyone I know is asking me about it. When every Tom, Dick and Harry is telling you to buy, it’s not. It’s time to sell. When they say “This time is different”. It’s not. It’s just another top.