7/22 ANDY HOFFMAN (CryptoGoldCentral.com): Why Precious Metals Bore Me To Tears In The Bitcoin Age

Ignore me if you wish, but if you want to understand the “Bitcoin vs gold” debate, I am one of the best resources you’ll find.

I started buying gold, silver, and mining stocks in 2002, and by 2003 was one of the most well-known GATA contributors – close friends with Bill Murphy, Eric Sprott, and the entire who’s who of the Precious Metal community. After leaving Wall Street in 2005, I proceeded to work six years marketing mining stocks, and six as Marketing Director of a major bullion dealer – during which, I became one of the world’s leading experts on Precious Metal market manipulation.

As for Bitcoin, it came to my attention in 2013 - at which point, I made my first purchase at Mt Gox. In early 2016, I started aggressively acquiring Bitcoin, and recommending it despite the waves it created with my employer – which ultimately, resulted in my departure from the business in 2017, to start Cryptogoldcentral.com. I then became a well-known personality on the World Crypto Network – after which, circumstances led me to explore numerous facets of the crypto community; where I learned many lessons, the most important of which was the validation of my original premise – that for all intents and purposes, only Bitcoin matters.

As early as early 2017, I angered my employer by saying (in so many words) that due to Bitcoin, silver’s capacity as a “transactional metal” was forever dead – and thus, that “junk silver” was useless. Then, in mid-2017, when SegWit locked in, I sold all my silver for Bitcoin (hence, CryptoGoldCentral instead of CryptoMetalCentral); and in early 2018, sold my gold for Bitcoin, too.

The reason being, that after observing Bitcoin for nearly five years, I realized it was superior to Precious Metals in all aspects. I needed to see the scaling debate won – i.e., what would happen after BCash hard-forked. So, when it came through unscathed, I realized Precious Metals’ days of monetary leadership were ending – and after three more years of Bitcoin ossification, I am not just convinced, but certain.

It’s funny that even now, with gold on the verge of finally breaking its 2011 highs (in U.S. dollars), there are few people talking about it. This is why Peter Schiff is using every ounce of his considerable marketing presence to hype Precious Metals, claiming gold is about to take over the world.

Yes, it will perform well in an accelerating inflation environment – likely, more than nearly all asset classes. However, it is NOT going to regain its position of global monetary dominance – as in the Bitcoin Age, it truly is a barbarous relic.

First off, gold’s “market cap” (if anyone knew how much actually exists above ground) is roughly $11 trillion already. This is why it takes so much effort for this year’s “explosive” 20% move to occur – which LOL, Bitcoin has done many times in a few hours’ time. So, assuming gold mine supply doesn’t materially increase (which no doubt it will, in a rising price environment), a ten-bagger would take gold to a $100+ trillion market cap…which in the Digital Age, seems highly unlikely for a pile of yellow rocks.

Second, gold is a political asset – of which, the vast majority is owned by the same thieving Central banks that have destroyed the world. Moreover, they’ll never tell you EXACTLY what they have – or more importantly, how much is unencumbered; and I assure you, they’ll never let foreign Central banks – like from, say, CHINA – see it. Furthermore, as 99% PM trading is in the paper derivative markets, very little of it actually leaves Central bank vaults.

In other words, the same banks that have destroyed the world – and reneged on every gold standard ever attempted – are not about to save the world with an honest gold standard. Not to mention, Central banks that have lent, leased, or swapped out their gold reserves – like the U.S.’s – would rather start World War III than let those that haven’t – like China and Russia – rule the financial world.

Additionally, if the fiat system collapses so terribly that a gold standard would even become a topic of discussion, take a guess what the Central banks/governments would do first…shut the bullion dealers, and confiscate all gold! To that end, nearly all significant amounts of gold are held via known third parties (like GLD, CEF, and storage companies like Brinks), so confiscation would be like taking candy from a baby.

As for the rest of the gold – that is, the portion not locked up in illiquid jewelry, statues, and the like – it is nearly all held in basement safes of the goldbug community.

I assure you, there will be no way to sell it in such a scenario – let alone, carry it around in size safely. To that end, it’s almost laughable to believe silver could ever have material value – as even at today’s “six year high” of $22, $1 million worth of silver (assuming you are not holding generic coins or large-sized bars, which trade at discounts) weighs nearly 3,000 pounds.

As for mining stocks, they remain dramatically off their 2007-11 highs for good reason. The business is horrible, and will only get worse if governments decide they are “national security” interests. The market will quickly recognize this if gold and silver prices rise enough – so no, they will not “moonshot” and bail Peter Schiff from a decade of miserable underperformance. Sure, they’ll rise with PM prices until that point – but at some point, the game will end abruptly…not to mention, the negative impact of the likely explosion of capital gains taxes in the coming years.

Even with gold approaching the 2011 high (whilst LOL, silver is still 60% lower), I am bored to tears thinking about it. At this point in time, gold is no longer a “store of value” because governments own most if it – with the investing public principally using ETFs for exposure, with not even a remote possibility of trying to take delivery; and even if they did, the evil entities that hold it may not give it to them. No, gold and silver are merely trading vehicles Wall Street will for a time consider “inflation hedges,” even though essentially no one actually holds physical metal.

Bitcoin is vastly better than gold (and LOL, silver) in every aspect – which is why I believe that in the coming fiat crash, it will eventually flippen both metals…and be HELD by people not only seeking a store of value, but the money of the future. THAT is what excites me!