Welcome to the Friday mailbag edition of The Daily Cut.
Longtime readers know about the battle over money that’s raging right now.
On one side are “soft currencies,” like the dollar. The supply of soft currencies is essentially infinite. They can be created with mere keystrokes at computer terminals in central banks.
On the other side are “hard currencies,” like bitcoin and gold, which both have relatively fixed supplies.
And as the coronavirus prompts governments and central banks to debase their soft currencies to prop up growth, we believe the hard currencies will win out.
That idea prompted some crypto-related questions from your fellow readers.
But before we get to that, I want to shine a spotlight on some of the amazing trading wins our readers are racking up.
Let’s hear from a paid-up subscriber to master trader Jeff Clark’s Delta Report and Jeff Clark Trader, who just made a killing…
I recorded a profit of $15k each on the SMH puts [bearish bets that semiconductor stocks would fall in price] and the XLK puts [bearish bets that tech stocks would fall in price] you recommended within three trading days. Another $10k in profits trading your TA [technical analysis] support and resistance levels on the S&P this week using triple ETFs (last week I made $50k). Thank you so much for all your hard work.
– Brad K.
Kudos to you, Brad, for acting on Jeff’s recommendations.
Jeff isn’t the only trader who’s been making money for his readers…
Over at our Alpha Edge advisory, former hedge fund manager Teeka Tiwari has closed out on 19 successful trade recommendations since the crisis began.
The average gain for these trades is 62%. And individual returns have been as high as 350%… and even 380%.
And over at Andy Krieger’s Big Trades, legendary currency trader Andy Krieger has closed out 16 successful trade recommendations over the past two months.
The average gain for these trades has been 52%. And Andy has given his readers the opportunity to make gains as high as 114% and 299%.
These wins are a testament to how powerful trading strategies can be… especially when volatility (aka market swings) is so high.
Now, back to the world of crypto investing…
This week, we got a lot of questions about a certain type of cryptocurrency known as a stablecoin.
In theory, stablecoins are less volatile than regular cryptos because they’re pegged to a national currency, such as the dollar. But stablecoins still allow easy transfer and holding outside of the banking system, like bitcoin.
And that’s made them hugely popular with investors.
Online crypto exchange Coinbase reports that the total stablecoin market cap (the sum value of all outstanding stablecoins) has risen to an all-time high of over $9 billion.
But news just broke that the feds have stablecoins in their crosshairs.
The G20’s Financial Stability Board (FSB) advises on how to regulate the international financial system. It just recommended a raft of new rules about stablecoins.
And it’s gotten some readers worried about the fate of the crypto market…
The new recommendations by the Financial Stability Board to ban stablecoins seem very worrisome. We are coming closer to governments making cryptos illegal. I know that cryptos cannot be closed down. But if they are made illegal, then 98% of the people will let them drop, and cryptos will be practically dead. Is now the time to sell them? Before this becomes official and everyone sells at once and the price goes to zero… Thank you.
– Guido W.
For an answer, we reached out to world-renowned crypto investor Teeka Tiwari…
Hi Guido, thanks for writing in… First, let’s address what the FSB said. It’s calling for regulatory supervision and oversight, not an outright ban. It even mentioned that “stablecoins, like other crypto-assets, have the potential to enhance the efficiency of the provision of financial services.”
So there’s no talk of an outright ban. The regulators just want to ensure stablecoins won’t create any financial instability in global markets.
This is actually a good thing… You see, additional clarity provides a set of rules and guidelines entrepreneurs and innovators can work within. This creates an environment with more predictability.
Imagine you are a blockchain engineer wanting to put together a product that may require several million dollars and a couple years of your life. Having clarity from the government around the future of that project makes this endeavor more likely. In turn, it gives investors and large corporations more comfort investing in a crypto product.
Switching gears… on Wednesday we shared an update from Bonner-Denning Letter coauthor Dan Denning about how the coronavirus will usher in a new era of surveillance in America.
Dan is particularly worried about apps governments are creating for your smartphone that will track not only where you are in the world… but who you’ve come into contact with.
The idea is that they will help track and trace folks infected with COVID-19.
One reader got in touch with a grim vision from California…
I agree with Dan Denning completely. And I imagine he will be interested to hear about this development in Riverside County, California…
Recently, the county released a notice of a new app that allows anonymous reporting of businesses that violate the lockdown order. The headline read, “Riverside County launches mobile app to report nonessential businesses.” The subhead said, “This feature will provide data to public health officials tracking the source of COVID-19 outbreaks.”
Now the bureaucrats on government payrolls are able to enlist citizens to spy on their neighbors and report “violations.” How did this happen? Not only did we allow it, we also voted for it!
I’m looking in and seeing a wholly North American version of bureaucracy in Germany in the late 1930s. It’s sickening, especially when asking myself one of the two most important questions any free person can ask, “What will I do?” In the age of the virus, the relevant decision involves escape and security versus choice and risk-taking; flight versus fight.
The other question, “What CAN I do?,” seems irrelevant; it seems answered. Will I go through the looking glass and escape from comfort? If I won’t, then what will I do? Is it even possible to escape to freedom? Interesting times.
– Cheryl R.
At the Cut, we’ve been urging you to take steps to protect your privacy by “going dark.”
That means opting out of self-reporting surveillance platforms such as Facebook and Google. But that’s not so easy for everyone…
I don’t have much wealth to protect, but I am concerned about privacy. The overreach of almost every government agency and politician in this “crisis” has been epic.
Can it be reversed? That is our hope, but is it a blind hope?
I have a business that gets pretty much all its leads from Facebook. I would love to divorce FB completely, but I would starve without the sales leads. I can’t get free of FB while it is my lifeline to an income.
– Barry B.
Do you struggle, like Barry, to opt out of Facebook? Do you agree with Cheryl that we’ve taken the notion of “security” too far?
Let us know your thoughts. Write us at [email protected].
Have a great weekend!
Regards,
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Chris Lowe
April 24, 2020
Dublin, Ireland
Like what you’re reading? Send your thoughts to [email protected].