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We Need Protection so Where to Next?

Watch on Youtube: https://youtu.be/tl-SAZho2Vc

 Over and over again I am finding that so-called financial experts are trying to work out what to do next because all hell is about to be let loose.

On the one hand we have the distinct possibility that the USA will slide into chaos and even civil war. Over the past three months we have seen the effective disappearance of the rule of law in that country. Unless that situation is rectified, and rectified very quickly, it is perfectly possible that the USA will turn into a no-go area. What will really happen is anybody's guess.

China is hell bent on ruling the planet. It's excursions into other territories as well as the South China Sea are well-known (and do have a listen to my update of the old Tom Lehrer song "Who's Next", you might find it amusing, or frightening, depending on your point of view).  Here's the link: https://youtu.be/mkks761WGow

The situation has already been called a Cold War. If that escalates, once again, who knows where that will ultimately lead, especially if some idiot goes nuclear.

So, right from the start you have the top two economies on the planet approaching meltdown.

Now just look across to Europe, where the whole continent is at sixes and sevens. I am getting dizzy just flicking through the online channels with the latest news of arguments, cock-ups, and social and economic chaos.

And I haven't even mentioned global debt levels. Put bluntly, the planet is in a mess.

Even the roll-out of covid-19 vaccines is not going quite as wonderfully as advertised. As of the beginning of this month (March 2021) here is the bad news from the USA.

"966 deaths have been reported after the patients received the two vaccines in the U.S. And thatís in addition to 749 life-threatening events, 2,280 hospitalizations, and more than 4,000 emergency room visits reported."

Excuse me but these figures are not trivial. Anyone have any stats on what is going on in Europe and the UK?

I don't want to extend the doom and gloom, but that is the background for the current panic about how to come through this. Where does one hide? How does one keep one's wealth if one has any? Alternatively, how, in the face of such a mess, does one invest for the future, and despite the bad news, we have to assume there will be a future, even if a couple of nuclear devices do get thrown around?

Several things are important. The main thrust of the latest industrial revolution is that the world is going digital at a considerable rate of knots. That means, if there are several routes forward, in all probability the best route to take is the digital route.

Let me just hit you with one more awful thought. If, and it is a big if, the next world war does go nuclear it would be foolish not to take seriously Einstein's thought on such an eventuality. "If the next war is fought with nuclear weapons, the one after that will be fought with sticks and stones."

I've put that in quotation marks, but I have to admit that I dont have access to the original, so I may well have paraphrased it. But I guess you get the message. A nuclear war will stop digitisation in its tracks, and all predictions will count for nothing.

Okay, let's put that aside. Let's assume things get bad but not a complete write-off. What's the best way to cope?

You will want some form of money that can't be controlled by the government. Digital currencies are on their way. Some time within the next five years such government controlled currencies will be in existence, and over that period cash will be phased out. That means you will lose all freedom and secrecy about how much money you have, and how you use it. That means you need to be able to take yourself off-grid if necessary. How can you do that?

First, you need control over your home, plus a good patch of land. If I needed to I could reduce my financial dealings with other people to less than £100 a week. And if I really wanted to I could halve that without too much distress. How about you?

Survival is going to be difficult for those of you living in a two bed apartment sixteen floors up a high rise, especially if you have kids. You have my deepest sympathy. I have to take the view that investing in any kind of high rise not a good idea. Centre city living is also going to take a hit.

That's the most important issue, survival. The second is a store of wealth. Land? Art? Gold?

I came across an interesting blog entry earlier this week. It was by the Winklevoss twins. I was not so keen on them, knowing that they helped found Facebook, but I read on with increasing interest. The blog is a very useful roadmap, very carefully argued.

I have taken their attempt to value bitcoin as a very useful indicator of where things might be going. Want to know how to value this extraordinary commodity? This is the best way I have yet seen. Let's see where it leads. The maths come out like this.

Back last summer when the blog was written one bitcoin was worth around $20,000. An ounce of gold was worth pretty much the same, but the total value of all the mined gold was about $9 trillion. You will note that the idea was to value bitcoin at least as similar to gold. In fact, there are copious reasons why it should be more valuable, but let's for the moment assume that bitcoin can reasonably catch up with gold, and even slightly surpass gold's value. That means that a rise of 50x is perfectly reasonable. That would take the value of all the existing bitcoins to about the same price as all the gold, and put one bitcoin's value at a million dollars.

My own belief is that bitcoin at $100,000 sometime this year is almost a certainty, and I would not be surprised to see twice that. I also think that a million dollars a coin is perfectly possible within the next five years. That isn't a prediction, predicting the future is, as I always say, a mug's game. What I am saying is that such a valuation is perfectly possible and reasonable.

Maybe you are a bit worried about buying something that has already gone parabolic, and is already hugely expensive. I dont blame you. I stopped buying bitcoin when it hit $2,000. (What an idiot I was!) And I was very unsure of myself when I bought some when the price was $9,000. Luckily I no longer need to buy bitcoin, but if you are not investing in some form of crypto, and not investing in blockchain companies, then you are missing the boat.

Those of you who have been following my writings for some time will recall that I first suggested buying bitcoin for your pension way back in 2015 when the price was around $280.

There are, of course, other ways to get in on the bitcoin ride. Whether I do any blogs on the subject depends on how many people are interested. Let me know.



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