7/17 ANDY HOFFMAN (CryptoGoldCentral.com): Refuting Peter Schiff – The Politics, And Economics, Of Bitcoin And Gold
Rapidly approaching my 50th birthday, I have been reflecting on my personal and professional experiences – including a 30-year financial market career in in trading, research, marketing, and investing.
During this time, I have become an expert in four separate industries – oilfield service, metals mining, bullion marketing, and cryptocurrency – for most of the time, a public figure who believed strongly in everything he marketed; and equally importantly, put his money where his mouth was.
I’m proud to say I’ve spent the past 18 years publicly promoting sound money – and prouder still to have not only embraced Bitcoin when still a leader of the Precious Metals community (working as Marketing Director of a major bullion dealer), but helping many others to find it, too.
Like everyone in the crypto space, I have a story of how I first found Bitcoin (in 2013), and got to where I am today. I wrote of it extensively in May, and am proud to say it started 100% in Bitcoin, and ended that way, too. To that end, I could write a pretty entertaining, and educational, book about my crypto journey – but frankly, I’d rather fade into the background, write when I have something important to say (like today), and provide consultations via CryptoGoldCentral.com. That said, if Caitlin Long wants to recruit me to market Avanti Bank, I’ll enthusiastically consider it!
Upon deep reflection, it occurs to me that the reason I was able to maintain such a high profile in the Precious Metals community for so long (2002-17) was because there was so little growth in the Metals and mining industries…and thus, “competition” for investor attention.
The early days were fun – as gold and silver were $325 and $4.50 when I first started investing in Spring 2002; whilst the mining stocks were dotcom-like until peaking in early 2007. However, for the last decade of my Precious Metal life (2008-17), as Bitcoin was rising from zero to a $350 billion market cap, Precious Metals stagnated and the mining industry slowly died.
Each year, the strong money story was validated, but due to the increasing level of government price suppression, Precious Metals were decimated relative to most, if not all markets – and even today, large cap miners are down nearly 50% from their 2011 highs, and small cap miners 80% from their 2007 highs (closer to 90% when one considers how many went bankrupt).
Moreover, gold still hasn’t challenged its September 2011 high of $1,920 - whilst silver is more than 60% below its January 1980 and May 2011 highs of $50, which ONLY occurred due to hoarding first by the Hunt Brothers, and then the Sprott Silver Trust (PSLV).
Today, the mining industry is in shambles – albeit, better off at $1,800/oz than the $1,300 or so average of the past decade. From my experience, owning miners from 2002-11 and working in the mining industry from 2006-11, it is one of the world’s worst businesses – worse today than ever due to increasing technological challenges, political environments, and taxation regimes…and I ASSURE you, if the collapsing fiat currency trade takes off, mines will again be expropriated in the name of national security, both here and abroad.
As for bullion itself, before Bitcoin it was as close to the definition of money as one could find. However, the paper dilution of the physical market that started the day the COMEX opened in 1975 (“coincidentally,” the day after bullion ownership became legal for the first time since the 1933 confiscation) destroyed whatever remained of gold and silver price discovery.
And, now that Bitcoin exists, it’s fairly easy to see that while better than fiat currency, gold (and even more so, silver) is not particularly liquid, portable, divisible, fungible, or scarce – the latter, because higher prices ALWAYS yield increased exploration. Moreover, one MUST go through the system to acquire and sell it – and store it, unless you want to “midnight garden” or hold large, heavy, vulnerable safes in your home (before I sold in 2017-18, I had nine!).
In the Bitcoin community, I rose to prominence in early 2016 – when, from my perch as Marketing Director of Miles Franklin Precious Metals, I started to aggressively recommend Bitcoin. I very publicly sold my silver in summer 2017 (when SegWit locked in), and started CGC after a falling out with Miles Franklin’s management due to, ultimately, too much focus on its “enemy,” Bitcoin…and in early 2018, sold my gold for Bitcoin, too.
My journey from “maximalist” to open-minded altcoin marketer, and back to maximalist is well-documented - and ultimately I spread a lot of wisdom in the process of converting many people to Bitcoin before it became big. Not to mention, I helped many people become very wealthy by claiming the FREE BTC airdrop BTC…which now, I am helping people to cash out on, as I no longer believe it has a future.
This process has largely reduced my relevance in the Bitcoin community – but equally so, because (unlike Precious Metals) the BTC community is exploding in size, to the point that even many of the most famous early OGs are no longer very relevant…like, for instance, Andreas Antonopoulos, who at one point was the world’s leading Bitcoin educator (who I cannot thank enough for all he did for me), but today is just another voice in the BTC crowd.
Today, Millennials and Gen Z’s are taking over the development and marketing of Bitcoin, and that suits me, a Gen Xer, just fine. That said, the unquestioned “leader” of today’s Bitcoin movement is Max Keiser, a late Baby Boomer whose wisdom, and charisma, is doing more for global adoption than anyone else.
To that end, I too have a lot of knowledge and experience in the financial markets, too -particularly in Precious Metals and cryptocurrency. And thus, I’m happy to share it when it seems relevant, as it does today…in the case of Peter Schiff’s endless, mindless anti-Bitcoin rants.
For many years, he was a peer in the Precious Metal community – who I never cared for personally, but always recognized his brilliance as an economist and political strategist. Like myself, his spot-on macro views were largely ignored, but he tirelessly promoted them because he strongly believed in them. The only problem being, that as the owner of a bullion dealer, he fell into the trap of viewing Bitcoin as the enemy, brainwashing himself into believing it would disappear. This, and the fact that as progressive as he tries to appear, sometimes you simply can’t teach an old dog new tricks. This is why he continues to bet his empire on the dying mining industry, and convincing himself that nothing could possibly go wrong with gold – and that even at a $10 trillion market cap, it has limitless upside potential.
I, too, believe gold will thrive in the upcoming fiat Armageddon – however, I believe silver has been entire demonetized. And when this environment takes hold, I expect Bitcoin to not only be the “fastest horse in the race,” as Paul Tudor Jones describes it, but ultimately “flippen” gold and become more valuable in what will unquestionably be a Digital Age.
The reasons for my belief are that Bitcoin is dramatically scarcer - and more fungible, portable, private, liquid, efficient, and useful…and oh yeah, unconfiscatable. Not to mention, governments own essentially none (for now), so they can’t control or manipulate the price as they have done, and continue to do, with gold; and even if they try, the Bitcoin community could counter any such efforts by simply taking delivery…which in the physical bullion markets rarely occurs; and, even when desired, entails huge risks and costs.
The fact is, that aside from the massive asymmetry of buying Bitcoin at such a low market cap relative to its limitless upside potential (versus gold, where you are buying something with limited upside potential at a high market cap), the political and economic risks of buying and holding gold (personally, or with custodians) are vastly higher than Bitcoin, on essentially all metrics.
Back to Peter Schiff, if you want to learn from a political and economic expert, please listen to his podcasts – like the brilliant three-hour show he just did with Joe Rogan. However, if your goal is to maximize your long-term profits (by many multiples) whilst minimizing your long-term risks, do NOT take his long-time losing advice to buy mining stocks, and do NOT believe the increasingly invalidated fallacy that gold is superior to Bitcoin. It ALREADY is inferior - and ten years from now, his silly 2020 anti-Bitcoin rants will look even dumber than the ones he made from the previous ten years (like this one, from 2014).
https://twitter.com/maxkeiser/status/1279494653876867072
Quite honestly, he understands less about Bitcoin than the vast majority of the cryptocurrency community – and due to blatant conflict of interest, is the LAST person you should listen to about it.