It’s a Game of Musical Chairs

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By James Rickards

The world was recently mesmerized by the ability of the Bros (short for “brothers”), a crowd of like-minded, mostly male millennials, to increase the price of GameStop from $20 per share to $400 per share in a matter of days.

The fact that the Bros did this using stimulus check money and the Robinhood trading app did not diminish the sky-rocketing numbers behind the frenzy. The stock later collapsed by 80% (as bubbles do), but not before inflicting an estimated $20 billion of losses on hedge funds that were short GameStop when the ascent began.

That decentralized (but legal) pump-and-dump scheme came dangerously close to destabilizing the U.S. financial system. If hedge funds had failed (several almost did), those losses would have fallen on bank dealers and other hedge funds, which could have triggered a cascade of failing banks and funds worse than what happened in 2008.

Who’s to Blame for the Texas Power Crisis?

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What ERCOT planners got colossally wrong was the availability of their fossil fleet: gas and coal plants failed. Even a nuclear reactor tripped offline.

By Leonard Hyman and William Tilles for Oilprice.com:

Our last report focused on the uniqueness of the Texas wholesale electricity market, ERCOT, and how it was specifically designed to evade federal utility regulation. And as if he were our paid spokesperson, former Texas governor Rick Perry stated publicly that Texans were happy to suffer blackouts and other hardships if it meant evading federal regulatory scrutiny. Whether the good (and shivering) citizens of the Lone Star State agree is another matter. But today, instead of dealing with politics, we’ll take a closer look at ERCOT as a state planning agency.

First the good news. One of the hardest parts of every planning agency’s job is correctly estimating future demand. This is doubly hard in a dynamic, fast growing economy like Texas. Consequently we were surprised at how good their planning estimate was for this winter’s electrical load of about 67,000 megawatts.

SLV is Stealing Earning Power from You! Here’s How

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By Jeff Clark

Do you own the “junk bond” fund of the silver industry?

You know, the fund that has numerous structural risks that could easily blow up in a crisis…The one that admits it may be unable to acquire sufficient physical silver for the fund…

Concedes its share price may not always match the silver price…

And altered its prospectus in numerous ways in response to the silver short squeeze movement, all of which protect the fund and not investors?

As bad as all that is, there’s something else you need to know about SLV and other bullion ETFs…

It’s something few investors are aware of, but if you’re an investor who wants to maximize their profit you need to know.

Because it will, without a doubt, reduce how much you’ve earned by the time you sell…

Bitcoin Is the New Reserve Asset

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By Andrey Dashkov, analyst, Casey Research

Nick Giambruno

Bitcoin’s meteoric rise is on.

It finished up 305% in 2020.

That’s good enough to make it the best-performing asset of last year.

And just yesterday, bitcoin’s price climbed above $50,000 for the first time.

Here at Casey Research, we’ve seen this move coming. Our goal is to help you find ways to protect – and grow – your wealth… in any sector.

That’s why my colleague Nick Giambruno has been pounding the table on bitcoin for years.

In fact, he recommended it back in the summer of 2018 to his Casey Report subscribers. And as recently as October last year, Nick again urged readers to take a close look at bitcoin. He said, “right now is a great time to take a serious look at Bitcoin.”

Coinbase, Readying for Public Listing, Gets $77B Valuation From Nasdaq Private Market

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Cryptocurrency exchange Coinbase, which is preparing to trade publicly in the next few months, is being valued at $77 billion, based on trading of the company’s privately held shares on a secondary market. 

Those shares in the largest crypto exchange in the U.S. are changing hands on the Nasdaq Private Market at $303 a piece, according to two people with knowledge of the auction. That implies a total company value of about $77 billion – greater than Intercontinental Exchange Inc., the owner of the New York Stock Exchange.

“The third weekly transaction closed on Friday and the clearing price was $303 a share,” said a source. “The first week it was 200 bucks a share, the second week it was $301 a share, and the third week it was $303 a share. So you can kind of see price discovery happening.”

Coinbase declined to comment.

Why I’m Worried About You During This Melt Up

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For me, 2021 marks 28 years of being an investment professional. That's a lot of years...

I experienced my first Melt Up back in late 1993. And I experienced my first "Melt Down" soon after in early 1994.

The way up in 1993 was euphoric. The market rose 123% that year. But the way down was devastating, with stocks falling around 30% in under three months.

That particular Melt Up was in Hong Kong. I was a broker back then, specializing in foreign stocks and bonds. And I decided at that moment that I never wanted to go through an up-and-down ride the same way again.

In 1996, my childhood friend Porter Stansberry and I started writing investment letters together. And I traveled to China for work for the first time that year – a quarter century ago.

I thought about all of this experience recently, after I had a long talk with a brilliant young man in his early 20s. Despite his young age, he's already teaching master's level classes at a university. I love talking with him... He will succeed at whatever he chooses – without a doubt.

MicroStrategy raising $600M…. no, $900M to buy more Bitcoin

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Should the purchase go as planned, the business intelligence firm will hold more than $3.5 billion in Bitcoin as a reserve asset.

Following a Tuesday announcement that MicroStrategy would be planning to buy $600 million in Bitcoin (BTC) through a sale of convertible notes, the business intelligence firm has upped the ante by another $300 million.

MicroStrategy said on Wednesday it would be selling $900 million in convertible senior notes due in 2027 in a private offering to qualified institutional buyers. According to the firm’s estimates, the proceeds of the sale will be roughly $879 million. It added, however, that it could be as high as $1 billion “if the initial purchasers exercise in full their option to purchase additional notes.”

The business intelligence firm said it expected to close the offering on Friday, at which time it would “acquire additional Bitcoin.” With the price of Bitcoin reaching an all-time high of more than $51,000 on Wednesday, MicroStrategy could soon have an additional 19,000 BTC in its coffers.

Income Investors Need to Think Outside the Box

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Not so long ago, retiring with a comfortable nest egg took some time, but it wasn’t impossible.

That’s because from the late 1960s to 2007, the average interest paid on a 10-year government bond was 7%.

If you worked hard, put money away in a bond portfolio, and reinvested your interest, $100,000 in bonds would become worth $750,000 in 30 years. That would have thrown off a comfortable $52,500 a year.

Not champagne and caviar money… But certainly enough to have a dignified retirement.

All of that ended when the Federal Reserve decided to wage a “war” against declining stock prices during the 2008 Financial Crisis.

In its frantic efforts to save the stock market, the Fed cut interest rates to near zero. Then, it printed $3.6 trillion in new cash to buy back distressed bonds from its banker buddies.

This was not a victimless crime.

You – the American saver and future retiree – got screwed.

How? Remember how $750,000 in bonds would give you $52,500 a year in income?