We have a couple of milestones occurring today. First is the U.S. national debt which just surpassed $34T, that's $34 Trillion or $34,000,000,000,000! Take a moment and let that sink in. These trillion dollar increases are happening in higher frequency, to the point where I sound repetitious with my posts but I've realized my posts have some importance after all since they show how quickly this debt has been rising.
I published this post on February 2, 2022, 'U.S. Debt $30 Trillion / Debt to GDP 134%'.
This post was published on June 19, 2023, '$32 Trillion And Counting'.
And this post was published on September 19, 2023, 'U.S. National Debt Surpasses $33 Trillion'.
Now, with this latest post, the ante has been upped by $1T in just over 3 months. At this rate, we should see an increase of at least $4 trillion over the course of the next 12 months and probably probably higher. I've mentioned in previous posts that the velocity of money and the M2 money supply has contracted to such a degree that the entire financial system, based on debt creation, is in serious trouble. They must print and lend or hand out money or the banking system collapses. With all this talk of universal basic income coming to Canada, this might give you an understanding of why it's happening.
You'd think with the debt hitting $34T that it would be detrimental to the dollar. Interestingly, the dollar has been rising and fast since the December 28, 2023 low of 100.625 (a quarterly low) on the DXY. The dollar has since shot up to 102.631 at time of writing. A full two points in just a few days, to me is a sharp increase.
Looking at oil, both Brent ($78.25) and WTI ($72.74) Crude are up more than 2% but both remain below $80. I had predicted back in September that oil prices would go up because of all the OPEC production cuts. I was wrong (for the time being). It turns out that the USA has had record production this year which helped keep prices down. OilPrice.com reported on it yesterday with this article, '2023 may have been the U.S. Oil Industry's best year yet'.
Yet, at the same time, the strategic oil reserves were tapped into and need to be refilled. On top of that, more and more oil is being traded directly between sovereign trading partners (BRICS). I've said before that things are a little wonky and here's a great example. A strong dollar usually means high oil prices. If oil doesn't maintain high prices, I don't see how it can be good for the dollar.
Gold, which ended 2023 at a year end historical high of $2067, saw selling pressure as a result of the stronger dollar but remains near $2,040 which I believe is gold's new bottom. From here on in, gold should perform positively. There's enough going on around the world to back me up on this. $34 trillion is one of them. Are we to see wild price moves soon, as we're seeing with Bitcoin?
(Courstesy Kitco and TradingView)
And finally, Bitcoin mini-flash crashed between 4 am and 8 am this morning from a high of $45,468 to a low of $41,804, about a $3,600 drop. Bitcoin has done exceptionally well in the last 9 months or so. These so-called crashes shouldn't be surprising anymore. Obviously, the rising dollar had something to do with it. Still, you can't keep a good man down. Bitcoin has already recovered to $42,798 as I write this.
Earlier, I mentioned there were two milestones today with, of course, the $34T timebomb and this milestone, the 15th anniversary of the very first block created on the Bitcoin blockchain, hard coded into the blockchain by the mysterious Nakamoto Satoshi himself. The first block is named the 'Genesis Block', of which all future blocks refer to. The first block 'minted' 50 Bitcoins. At present, each new block pays out 6.5 Bitcoin. A 'halving' event, which occurs every 4 years will next occur in April. Over the next 4 years, each new block registered onto the blockchain will pay out half that amount or 3.25 Bitcoin. As a result, the last bit will be 'mined' around the year 2040. It is for this reason that Bitcoin remains scarce and therefore, valuable. So while there might have been a flash crash on this day that we celebrate this 15 year anniversary of the first block (Coincidence?), knowing this should give you confidence in owning Bitcoin as a viable investment for the long term.
Moving forward, it shouldn't be long before I post , 'U.S. Debt Hits $35 Trillion'. I give it 3 months or less. Who wants to bet with me? Oh, and who want to bet that interest rates are about to come down and probably faster than when they went up in the last year and three quarters?
And finally, this is the first picture I took in 2024 at the small dam and rail bridge near downtown Paris, Ontario along the Grand River. Cloudy overcast and light snow cover. Best wishes for 2024!
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Peace and love to everyone!
Previous Posts:
Gold closes at record year end high.
Gold on track for a record yearly close.
Argentina now accepts Bitcoin to settle contracts.
Your P.C.: Good airflow and fire prevention.
Kitco News experiences 'cyber incident'.
Have you seen PublishOx's stats lately?
Bank of England + ECB hold rates steady.
FED holds rates for third consecutive month.
New Milestone: Surpassing 400 Followers!
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