Martin Armstrong examines gold versus Bitcoin in these challenging times.
Investors have been greedy for traditional and not-so-traditional safe-haven assets as escalating wars and spiralling debts continue to spook investors in 2024.
Precious metals have historically done well during periods of geopolitical uncertainties, war and the ongoing debasement of currencies.Years of unchecked fiscal spending facilitated by endless currency creation have triggered a debt crisis and an inevitable crisis of confidence in currencies as a store of wealth.
“Precious metals have historically done well during periods of geopolitical uncertainties, war and the ongoing debasement of currencies”
MARTIN ARMSTRONG
Martin Armstrong examines gold versus Bitcoin as a store of wealth in times of war, persistent inflation, and shortages due to supply disruptions
When trust in policymaking is spent the only thing left to stabilise a failing currency is for it to be anchored to something finite of value.
Gold and then oil were the two main commodities giving backbone to the US dollar.
But with the rise of BRICS, China and India, both forecasted to overtake the US economy in a decade, are increasingly trading in oil outside the dollar. The Yuan-priced Oil contracts were discussed by Saudi Arabia in 2022. Moreover, the Ruble oil contracts with India are another example of oil being traded outside the dollar.
A weakening petrodollar and an imbalance in the supply and demand of treasury bonds, in the wake of the 2023 bond crash, could have increased the need for the dollar and its derivative currencies to be anchored.
So it comes as no surprise that central banks’ gold buying was at a record high in 2023, according to the World Gold Council.
“Gold and then oil were the two main commodities giving backbone to the US dollar”
WEALTH TRAINING COMPANY
Martin Armstrong examines gold versus Bitcoin believing both assets as being neutral assets
“Central banks are buying gold because the Neocons have weaponized the dollar,” he wrote.
Neoconservatives advocate interventionism, which often leads to military intervention or war in international affairs.
The Neocon philosophy believes in peace through strength and supports going to war to enforce a world order which upholds unilateralism, a type of imperialism. Neocons stretch along the political divide, with conservative neocons on one end of the political spectrum to the progressive LGBT rainbow flag movement on the other.
The hegemon’s henchmen are the Neocons odd bunch who occupy all the corridors of power in the West, which could explain the escalation of multi-front wars.
A unilateral world order keeps the US dollar and its derivatives on the throne.
“The West has become extremely aggressive in its geopolitics”
– Martin Armstrong
Martin Armstrong examines gold and the likelihood of the gold standard being reinstated
“We are not going back to a Bretton Woods-type situation, and that is not the issue. You must understand that gold is neutral,” he wrote.
Russia was removed from the SWIFT system, and private citizens’ assets were confiscated. When Russian assets were removed from SWIFT, a threat to the world was issued to say, “Hey, if you don’t do what we tell you to do, we will take you out of SWIFT,” he wrote.
Is the sun setting on the US dollar?
“This is not the end of the dollar. Money continues to pour into US equities, particularly the Dow. Why? When the drum of war is beating, major institutions rush to move their money into a safe haven, which happens to be the US at this point. The big money is not purchasing start-up equities on the Nasdaq, for example, as they will not take that risk. Our computer model indicates the Dow will continue rising into 2032 as it remains one of the last safe havens,” he wrote.
Martin Armstrong examines gold versus Bitcoin in a world at war
“The West has become extremely aggressive in its geopolitics. You simply do not buy the debt of your enemy. Central banks are buying gold because the USD is political.
There is a stark difference between short-term and long-term bonds. The central banks have zero control over the short-term and that is how this whole QE fiasco began as central banks began purchasing long-term debt in an attempt to reduce long-term interest. Why would you buy long-term when war, the primary driver of inflation, is looming? This is a serious situation that the neocons who have weaponized the dollar simply do not understand,” he wrote.
“BITCOIN has different cycles from gold. When gold finally breaks out, that will not necessarily be good for BITCOIN” – Martin Armstrong
Martin Armstrong examines gold versus Bitcoin; which asset could replace the world reserve currency, the USD?
Both assets are perceived to be a store of value.
But a store of value, by its very definition, is an asset investors hold as a protection against inflation. They don’t use it to carry out daily transactions.
“My best indicator is a crypto bug that says you are wrong, and it will replace the dollar to go to 100,000 any day now. He is always the kiss of death in trading. Never look at charts. Only the propaganda. Socrates says we are forming a major high. Interestingly, gold has not broken out,” he wrote.
Do you think the false move comes with the prelude of war?
“Gold is still not breaking out, and that is good. We Do not want to make highs for May 7th. April appears to be a turning point, so watch the Daily Bearish Reversals. As far as a false move, we should expect that with the prospect of war. The knee-jerk reaction is typically down. Then capital regroups.
BITCOIN has different cycles from gold. When gold finally breaks out, that will not necessarily be good for BITCOIN,” he wrote.
But if Europe is about to enter a protracted war, the millions of people migrating from Ukraine could be just the beginning of a mass migration trend. Mass migrations due to natural disasters and war, impact capital flows.
If you are in a warzone desperate to flee death, destruction and misery with heavily armed checkpoints, holding physical gold could do you more harm than good.
A vehicle to move wealth across borders in times of war is where Bitcoin could continue outshining gold. When the infrastructure and buildings are destroyed by artillery shells, digital wealth that can shelter from a hellhole at the speed of light with a few taps of your finger is a guardian angel.
