Sunday, February 18, 2018

Bitcoin: joy, joy and taste for risk :


It's again the joy and good mood on the financial markets. And the taste of risk resurfaced with bitcoin.

But "at the same time", as the President of the Republic would say, our article on the crash of Monday, February 5 attracted many readers.

Bill Bonner concluded:
"Overall, over the last 30 years, debt has grown twice as fast as the economy that supports it. This makes correction much more dangerous than routine market retreat. According to our estimates, between $ 30,000 and $ 35,000 billion worth of assets - stocks, bonds, collectibles, private companies and real estate - are "outstanding" over the economy instead of being supported by the actual production. "
The danger rode all the more as long rates rise, the burden of debt is increased.
But we must have a canonical age to have experienced the effects of a sustainable increase in long-term rates. The Americans have not experienced such a situation since 1981 and the French since 1985.
In fact, no active portfolio manager has such experience.
For 37 years, we have been living in a world where interest rates are falling. To say that this trend is reversed also means that the risk - taking a loan - will cost more.

Bitcoin and taste of risk
For many newcomers the bitcoin phenomenon is assimilated to the "taste of risk".
In the short term, the similarity between the trajectory of bitcoin and that of the S & P 500 gives them reason.
But that's to forget the fundamentals of bitcoin: a system of fiduciary money independent of central bankers and independent of debt.
Whatever the future of bitcoin and cryptocurrencies, such a system corresponds to a need (if we consider that many debts will never be repaid) and the technology that underlies it.
But this weekend, let's move investments to lighter entertainment.
Nicolas Perrin has examined the recent movements of some of our Parasitocrates politicians and, rest assured, it is not serious!
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