May 26, 2017 - Clif High
26:08
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| Okay, oops, okay, tea all over. | |
| I can't help it, guys. | |
| I drink hot tea all the time. | |
| In my formative years, I spent too much time among the the heathen, the British in the middle of summer hot tea, you know, so you go along with it. | |
| Anyway, um it's May 27th or 26th, excuse me, uh Friday. | |
| Uh it's probably around uh let's just say noonish. | |
| Um I don't check the time frequently. | |
| Um but uh this is a video on why I know cryptos are not in a bubble, and uh a few other bits and pieces of stuff. | |
| So uh there's several ways to know uh when a bubble is happening. | |
| Uh one of the ways is to be able to track money flows into it and uh watch them expand and see where they're coming from, and then you can determine sort of a why what's motivating them. | |
| Another way in my case is to watch the linguistics in this cloud that is associated with the temporally in time, associated with the rise in prices. | |
| And so uh when I do that and look at the linguistics, I'm able to get a little bit more discrimination on things than you might find just following the money in. | |
| But even so, even without the linguistic hints these days, people that follow the money into the cryptocurrencies understand what's going on. | |
| It's called capital flight, and it's where people with real wealth are tired of seeing a bunch of bozos manage the uh nominal currency that that wealth is stored in, in this case, dollars and euros and so on. | |
| And so the people that own the real wealth that have worked all their lives, um, and some really hard, tough sons of bitches, are tired of seeing a bunch of um uh know nothing, never had a job, academics uh mismanage everything, and so and they're somewhat concerned, these people with wealth, and so what they do, it's a natural sort of a thing. | |
| You know, you're Mr. Um Italy, uh, you know, several thousand years back. | |
| Uh you're sitting there with the wife in the um in the late afternoon, you've just had your dinner, it's nice, it's pleasant. | |
| Um all of a sudden there's this big noise, and um and your wife says, Well, hey dear, what's that? | |
| And so you get up, you're going over to the door, and you open up the door of the uh the house and look out past the um uh the little uh patio area there, and uh then come on back and tell her, well, yeah, it's nothing to be concerned about. | |
| Uh Rome just fell. | |
| And that's where we're at now. | |
| See, is there's this historical context to things that people with a lot of money are able to sit down and see, basically, because they're not trying to, or they don't have to bust their butt all day long just to stay alive. | |
| They've got the leisure to sit back and see with a far view as to what's developing. | |
| And so they're able to say, okay, Rome just fell. | |
| Now what do we do about it? | |
| Because you know, Rome's big, it takes a long time to actually crash. | |
| And so we're still in that long time, but the guys have seen that Rome has no more, the Roman Empire has no more legs under it. | |
| And so um one of the things that they do is they say, well, maybe I shouldn't be buying all of that uh those garlic futures for next year's crop. | |
| Maybe I should put my money into, you know, um uh long store stuff like wine, you know, or buy that that real estate in Pompeii that we always wanted. | |
| Uh get that get the money out of our debased currencies, and that's really what's happening uh now. | |
| It's called capital flight. | |
| It always occurs at the end of an empire. | |
| Uh we can go back and look at the um uh most recent easily tracked empire death, which would be the death of the British dominance of uh the global financial system through trade that persisted uh through the 1800s, established long ahead of that, actually was established um definitively with the uh sinking of the Spanish Armada, or the defeat, they didn't all get sunk. | |
| Um and uh that definitively established the British dominance, and then it lasted for uh well over a hundred years. | |
| Um I'm sure will tell me the exact number. | |
| And uh then the uh uh the uh British started debasing the currency uh via ill uh advised ventures in uh promoting opium into China, got themselves involved in the opium wars, um shifted their production off of other kinds of things, and then also meddled in this uh the colonies and caused this thing called called the civil war here or the war between the states, um depending on where you're located. | |
| And uh so uh the same kind of things happen repeatedly. | |
| In that period of time, uh the pound sterling um was silver was the denominational currency globally, and it didn't lose its value, the the actual sterling, uh, but because of the debasement and the trade and so on, that you were able to watch the capital inflows drain out of existing businesses and through a transition period uh come into new businesses, and that's where we're at now. | |
| And if you track the same kind of linguistics, the same language that was used then about money and about what's going on now, you can tell that the cryptos are not in a bubble yet. | |
| I agree that someday they may be in a bubble, but a bubble requires a very um a certain set of conditions to exist. | |
| One of those conditions is a level of what we have to call saturation, and we have zero saturation to speak of on cryptocurrencies uh across the planet. | |
| We also have to acknowledge that that saturation depends on the size of the market. | |
| So if you've got a market of you and your six friends, you can have a bubble with uh occur with four of your your the people in those six uh six other people. | |
| And so you uh so a bubble can form very rapidly in a small group. | |
| Uh we're in the situation though where our our total market or total audience for cryptos is the planet, and so most of the planet has never even heard of cryptocurrencies. | |
| Um yet a sizable chunk of the planet does not own a cell phone. | |
| So until the this latter condition is true, is not true anymore, until most of the planet actually, in terms of humans, uh uh until they actually own cell phones, we cannot possibly be in a crypto bubble because these are there are many people yet to hear of it. | |
| And so uh you define bubbles by how money flows into them, how the money reacts, and then sort of the pop and then the deflation. | |
| Uh we're still in the inflation of uh what is uh gonna be a very large traditional bull market, but it's also a wealth transfer that's occurring. | |
| The wealth transfer is occurring because the fiat currencies, the paper currencies, which are now all digital anyway, uh such as the dollar, you hardly ever touch a dollar, um, and you just deal with it as a digit on your PC or in your credit card. | |
| Uh so you're touching plastic the whole time and you never actually touch currency anymore. | |
| So basically we're in a a paperless system now, a currency-less system. | |
| And so our currencies being digital, uh, we now are at a point of demonstrating as we the people, we all of the populace, demonstrating Gresham's law. | |
| Gresham had this idea that well, if I got a sack of shit and I got a sack of gold, and I offer to pay you in either one of them, your choice, we know which one you're likely to choose. | |
| And uh he called it uh good money chases out bad. | |
| And so gold money chases out shit money. | |
| Uh manure is good, uh, but not for money. | |
| And so that's what we're finding. | |
| You know, dollars are probably good, but not for money. | |
| And so money requires something that you can store wealth in. | |
| Cryptos are going to grow over time as the entire planet becomes uh a digital hive, uh, insofar as our currency transactions between each other are concerned. | |
| The cryptos will continue to grow, and uh the uh process will cause or will be caused by the the flight of individuals out of their local currencies. | |
| So my local currency is the US dollar, and I don't trust the Federal Reserve as far as I can kick their ass. | |
| These people are stupid. | |
| And so not trusting them, I don't want to hold much of my money in the in the dollar, it's stupid. | |
| So I don't. | |
| I'm gonna get as much as I can into cryptos and just let it sit as money so I can use it. | |
| And it doesn't degrade. | |
| Now the fact that it grows, that's good, but it's not my goal. | |
| For other people, it is, for younger individuals, it is. | |
| For myself, it's just you know, um uh basically the fact that it doesn't degrade. | |
| I can still spend the stuff and still get get things for it the way I I expect to, not with the the dollar. | |
| For some older people who don't have time to save for retirement, small investments in in cryptos in individual cryptos could turn out to be um uh very profitable and perhaps um uh life-altering. | |
| But you gotta be careful and you gotta understand what you're doing, and if you don't understand it, don't do it. | |
| Uh there's no such thing as as doing cryptos half-assed. | |
| Okay, there's no such thing as doing cryptos casually. | |
| Uh so you just gotta understand what you're doing and and make sure that all of your stuff is backed up, that you print out your your public and private keys, and never share them with anybody. | |
| You keep those things and you store them. | |
| You put them out on good quality paper, not paper that's gonna rot. | |
| Or you can write them out on on paper with high quality ink and then store that paper in a bank if you want it, um, or some safe or a safety deposit box. | |
| It means nothing to anybody else, it's just a string of numbers. | |
| Now, you know, a savvy crook at some point might tumble to the fact that this is a um a crypto. | |
| Uh and some crooks are indeed savvy. | |
| But this is yet another reason I know we're not in a bubble, okay. | |
| Um in a bubble, everybody knows about what's going on. | |
| And so you get a bubble in stocks, and uh your barista is handing you your your morning drink and also trying to give you stock advice. | |
| That's when you know it's time to get out of the stock market. | |
| Everybody's got an opinion on it. | |
| It's in it, it's in its maximum point of saturation. | |
| We're nowhere near there. | |
| Uh you know, you can walk uh down a street in in the United States. | |
| Uh in some streets this wouldn't be true at certain times of the day, but in most streets it would probably be true if you just walk down those streets and ask the first hundred people you saw if they'd ever heard of cryptocurrencies or Bitcoin, they you'd probably be surprised at how few actually know anything about it, and how few know anything accurate about it. | |
| So, under the circumstances, no bubble. | |
| Uh just the beginning of what we're gonna call hyperinflation because the capital that's all now over here been stolen by all these asshole bad guys is gonna leak out of that into cryptos, and they don't control cryptos and they're freaking out over it. | |
| So things are gonna get a little weird as we get get moving. | |
| And so this is how I know we're not in a bubble. | |
| It's all the language about it, you know. | |
| My barista does not know about Bitcoin, my bankers didn't even know about Bitcoin. | |
| I had to tell them what it was. | |
| Uh, you know, these are the people that I write my checks on, that kind of thing, right? | |
| I take my um EM50, I'm out in the backyard now because the EM50's over in the shop. | |
| Uh I did well enough in the cryptos that I'm I may got a present for the EM50. | |
| I'm getting all that rid of all that 40-year-old running gear and replacing it with new cool stuff, new transmission, new uh front end, new steering, uh new pumps, um for the engine and all that kind of stuff, a tune-up on the old 50 uh 454, uh near new rear end, and I got new wheels for the whole thing, right? | |
| So it's all safe, it's gonna be scook them. | |
| And then as soon as it's done here, I'm gonna get in and uh redo all the electricity, replace all the wiring, and uh uh that sort of thing. | |
| Oh, I know why I got off on that. | |
| Uh I'm gonna use lithium ion by the way, and and do away with some aspects of the old design and put some solar panels. | |
| Gonna be really cool. | |
| Uh solar is good today, but usually it's not up here in the in the northwest. | |
| In any event, though, the reason I brought that up was I take the the EM50 uh over to the I mean just laterally if I in a direct uh shot here, it's probably uh I don't know, maybe three miles. | |
| But uh but it's on another one of these points out here in Puget Sound. | |
| I take it over to McClee's um autos, right? | |
| Uh it's a shop of uh motorhead kids. | |
| And I say kids because they're they're all under 40. | |
| Uh, but they've got a rack big enough to lift up the motor home and they're really really cool. | |
| Nice guys, they're you know, they're they're not gonna let their um uh ignorance of a particular procedure stop them, they go online, they learn, they talk to the people that uh did it the First time, etc. | |
| And so they're really good guys to have you to do your motor home. | |
| Um, or other work, I'm sure as well. | |
| Anyway, though, um my point was one guy in the shop of seven uh had heard of Bitcoin. | |
| One guy in a shop of seven had no knowledge of it, the word had passed, it had stuck, but he didn't have any real grasp or understanding of uh what it was. | |
| And and that's in my town here. | |
| Now I don't get out very much, so my experience is somewhat limited. | |
| But so far, I in the people I've asked in Olympia, uh I've encountered two people that knew what Bitcoin was, and this has been over the past couple of years. | |
| So uh now I'm I'm certain that's um accelerated somewhat because some of my relatives are involved with it, but I think they're involved with it because they saw me get involved with it. | |
| But uh in any event, so we're nowhere near the bubble stage yet. | |
| Yes, we will get there when uh horse dealers in Mongolia are trading uh crypto suggestions with their cousins in Kazakhstan. | |
| And uh when that happens, yeah, okay, I would agree that at that point the price uh appreciation levels are I mean, we're in a bubble. | |
| Until then I wouldn't worry about it. | |
| What I would worry about is things like people trying to steal my Bitcoin, uh, you know, make backups of my of my stuff electronically. | |
| Uh, you can back up uh onto a phone with the little uh memory cards that are really cheap you put in there, uh you know, copy over your Bitcoin wallet and then copy it, uh then take that little chip out and store somewhere safe and uh put another one in there to you know be active with so on. | |
| So be safe about it, you know. | |
| Practice smart crypto. | |
| It's uh you know, uh mean rough world out there, and you gotta know where your towel is. | |
| Okay, so uh that was the primary business today. | |
| It's hot. | |
| I'm gonna get done here real quick. | |
| Uh very rare for us to have hot. | |
| This is our ninth day without rain since last September. | |
| Nine days only without rain since last September. | |
| Uh really uh a tough winter on everybody around here. | |
| We've all got cabin fever uh all ready to bust out and you know and uh do something, and spring was two months ago. | |
| We should have had planting and that kind of stuff going on, and it was all slogging, miserable, wet. | |
| We're in an ice age, but that wasn't my point. | |
| What I wanted to bring up was these things called temporal markers. | |
| If you follow my stuff on uh Twitter, uh you'll see me use the uh TM. | |
| I don't mean transcendental meditation, I mean temporal marker. | |
| I usually put it in caps because I'm not referring to a trademark or anything, okay. | |
| I'm talking about a temporal marker. | |
| Now, in in my work, everything is done in sets. | |
| Uh, we use uh what's known as fuzzy set theory, it's a particular weird kind of mathematics. | |
| And so um in a fuzzy set uh there's associations within sets, and as the associations prove themselves valuable, then you in a tendency in my line of work to have more and more uh confidence in the other members of that same set. | |
| It's just the way that universe is played out here repeatedly, so I've learned this process actually works. | |
| So if I've got a set with a hundred items in it, and I see that um uh 15 or 20 of them pop up, boom, boom, boom, boom, boom, just as they did when they were appearing on model space, then I say, Oh, those 15 or 20 are pretty good indicators, they're pretty good temporal markers as we go along. | |
| Each one is a marker in time, they're pretty good temporal markers up for the rest of the stuff in the set to show up. | |
| And usually that's correct. | |
| Now, it's never ever a hundred percent. | |
| So if we had a hundred uh items in that set, and the first 15 pop up, maybe we'll get as high as 30 or 40 uh of those markers actually show of those items all actually showing up pretty much close to the time we we uh suggested, and uh and that's pretty good for us. | |
| So I say that at my in my line of work about 38 percent is my threshold for declaring something fulfilled, right? | |
| Um the language, most of the language that we were forecasting, or most of that hundred percent or hundred items uh for our viewpoint is 38% because we never achieve a hundred percent. | |
| Our realistic goal is down around in 70s or so forth. | |
| So if we get about half of 70, we're pretty good. | |
| Uh now here's the deal: a temporal marker uh is a a unique identifiable forecastable event in the future that is then associated with a larger set of other items, and so a temporal marker need not be within that set, but could be. | |
| So uh temporal marker for cryptocurrencies might be a particular price in Bitcoin. | |
| And we would say, okay, from this point on in our model space, as all these temporal markers appear, the price in Bitcoin, if it if it hits this point on this date, aha, good temporal marker, and then from that point the rest of these things ought to show up. | |
| But we don't usually get that kind of thing because we don't usually get numbers on specific dates. | |
| What we might get though is something that's really weird, okay, that which is why I call it woo-woo. | |
| It might be such that we have a set that shows Bitcoin and it shows a number, and we don't really have a date. | |
| But what we do have when we move model space along is some other stuff that's going to happen just ahead of that stuff with Bitcoin. | |
| And this other stuff could be really weird. | |
| It could be a crash of a dirigible. | |
| I'm just pulling this out of the air, right? | |
| Or it could be uh the sudden appearance of um uh you know some absolutely unknown thing relating to fashion or uh a different kind of new technology or something, totally unrelated to the Bitcoin, just for whatever reason, uh or rather for the reasons included in our processing, ends up associated with that within this this set of of um data elements that we're examining. | |
| And so the uh the processing dumps all this stuff in there, and then we go in and examine it, and we get to the point where we say, okay, we've had 15 or 20 out of this group of a hundred within this group of a hundred is bitcoin at this particular level of of um uh numeric value, | |
| and we think it's gonna be in this particular date range because of the way these things line out in model space, and thus we give you the date range, and and we're usually right there's a slop over, okay, about three days either way, because we're working with what we call immediacy data. | |
| Data that's gonna get here, uh pop into existence and then expire very rapidly. | |
| So this brings us back to temporal markers. | |
| I've had some personal temporal markers appear in reality, manifest, they were out of the blue kind of things, hadn't expected them, been looking for them for several months now, and they indeed have appeared. | |
| Um, and so that particular set, that group of sets uh that was associated with those temporal markers from about four or five months back, uh, with its first appearance about a year back, um, those sets are probably going to show up as being very valid. | |
| And um a couple of those sets include two of those insets include uh our plunge into the pool of hyperinflation from this point forward, from the appearance of all of these temporal markers forward. | |
| Well, we're in the hyperinflation now because we've got all of the money, your capital flight trying to leave all of the stolen areas in the 1% and go into cryptos or something they feel will be safe over time because they've seen the hyperinflation of um values within their own wealth. | |
| So, in other words, if you buy a painting for a hundred million dollars and you see some other painting that that was theoretically below yours in value being sold for higher amount, you're gonna start getting a little sketchy, not about what you can sell yours for, but about the worth of that stuff that you're gonna have to sell it for at that point. | |
| These people are more concerned with preserving purchasing power through time than numbers. | |
| And so the numbers I think are rather shocking to them. | |
| Um, and they're getting a little freaked out, and so we're seeing this uh acceleration of capital flight into the cryptocurrencies. | |
| Now, I have the temporal marker associated the temporal marker associations for these number of personal temporal markers. | |
| Now, by personal, I mean they're ones I don't share for any number of reasons. | |
| They may involve um celebrity names, they may involve uh personalities, they may involve people playing um or acting in particular roles that I don't want to intrude on their privacy, but I know that oh, this is gonna show up there for hey. | |
| I can use it as a temporal marker, and I put these things down as and just keep note of them. | |
| Uh, we've had these two very strong ones show up, um, totally uh unexpected to me. | |
| I'd basically forgotten about them. | |
| Uh the the triggers popped up on the database and flung them up to my attention. | |
| It's like, uh-oh, went back and checked the original sets, and there we go. | |
| We're now going to be officially into our hyperinflation period, and here's the rub. | |
| We're gonna have a um a really rough summer. | |
| Big crocodile teeth up and down in the in the cryptocurrencies as money flows in and out. | |
| Because it can't, it's like um uh there's a required oscillation for funds. | |
| It's like um uh AC current. | |
| It you can't shove all of the the the current electricity, that much electricity straight through the the copper because it gets resistance until it stops, and then the wire burns out and melts. | |
| Uh so you just go it in and let it back, go it in, let it back. | |
| And it's just this oscillating flow. | |
| That's the kind of thing we're gonna be um going into with the cryptocurrencies. | |
| That's what creates these crocodile teeth. | |
| I I keep talking about in the charts. | |
| I don't know their official term in chart talk. | |
| Um, but they look like crocodile teeth, especially if you look at it as a jawline that goes up with bigger teeth getting, you know, with the teeth getting larger and fiercer in the back. | |
| As that occurs with each and every tooth, there's gonna be a gap following behind the tooth, and that gap will also get bigger and slightly wider as we go along. | |
| By bigger, I mean deeper in the trading range, and by wider I mean it'll be a little bit longer, a few more days will be spent in that trading range as we go through each of these. | |
| And so some people that are new to cryptos uh thinking it's in a bubble are gonna think the bubble is popped. | |
| Them some people that are new to cryptos that have never been through this are gonna puke their guts out and fall over in a dead faint. | |
| Uh some people new to cryptos are um not going to understand what's going to happen here, and so we'll sell at the wrong times because they'll they'll panic and they'll sell when the price is dropping. | |
| Always sell into strength, okay? | |
| Never sell when the price is dropping, always sell when it's rising. | |
| Um and that'll that basically will sort of save you, I think. | |
| I mean, that little metric. | |
| Uh uh now, this is gonna happen to Bitcoin, this is gonna happen to Ethereum. | |
| Uh, it's gonna happen to all the cryptocurrencies. | |
| This business, the crocodile teeth. | |
| Some of the teeth on some of the other alts are gonna be a lot higher than we see on Bitcoin because of the uh FOMO, the FOMO, the fear of missing out. | |
| That factor is gonna play into this. | |
| That's why a lot of people think it's a bubble, is because of that anxiety, because of that uh building tension as we call it. | |
| Those emotions create a hardness in the gut. | |
| Oh, I can't miss out. | |
| Anxiety, you know, stress, that kind of thing, right? | |
| And so um that is very much associated with a bubble, but we don't have any of the other conditions for a bubble. | |
| We just have that one indicator, this anxiety, and it's all based on FOMO. | |
| I can't I can't miss out, I've got to get in on this. | |
| Uh so uh, under the circumstances, no worries, people, you know. | |
| That's why I was saying, you know, drink some tea, calm yourself, you know, back off on the caffeine, stay decaffed while you're doing this. | |
| Uh, you know, guard yourself against bad reactions as we go through this period, because we're at the very beginning of this huge influx of the capital out of one system into the new system as the old system dies. | |
| It's the greatest wealth transfer ever in history because it's planet wide. | |
| It's gonna be bigger than when uh Tamashin uh Zhengis Khan, the Mongol, swept down and conquered all of Arabia and took all of their gold and everything. | |
| It's gonna be bigger than then uh all of the gold being taken from the populace of Europe by the Germans and then taken by the US. | |
| Uh, this is bigger than any of that because it involves the entire planet. | |
| It'll it'll take a long time to go through. | |
| So patience is required uh in order for fortunes to be made. | |
| And this is probably the one time in history, the very one time in history that it will be true to say that we have great fortunes being made without their first being a great crime. |
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