mardi 16 janvier 2018

Not a bubble (3)

Investors buying a stock at a price of 333 years of benefits...
"Market capitalization" larger than all cryptos together!...
Caveat emptor...

Someone is wrong there... (click to enlarge)

lundi 8 janvier 2018

Not a bubble (2)

A "Big, Fat, Ugly bubble" (Trump 2016) ?
It's "Highest Stock Market EVER" !
"Record Setting Stock Prices" (Trump 2018) !

mercredi 3 janvier 2018

Not a bubble

This is not a bubble. This is not a bubble. This is not a bubble.
If you repeat it enough, you'll believe it: This Is Not A Bubble.

  • Cryptocurrency market capitalization: $732 Billion (yesterday: $600 Billion).

  • NASDAQ: 7000+ points.

  • Artificial Intelligence at work: an iced tea maker adds "Blockchain" (the technology behind Bitcoin and other cryptocurrencies) in its name, the share price triples thanks to trading algos (for 8 days now)!

samedi 16 décembre 2017

La dégringolade des taux réels

Le gonflement de la dette mondiale amène les banques centrales à toujours plus d'expansion et de taux bas. Jusqu'ici, j'ai montré la descente les taux nominaux de placements dits "sans risque". On pourrait dire que ce n'est pas si grave, vu qu'il y avait plus d'inflation "avant" et qu'il y en a moins maintenant.
La question est alors: quels sont les taux si on tient compte de l'inflation ?
Voici donc les taux réels (pour le Franc Suisse (CHF); je laisse en exercice les calculs équivalents pour l'EUR, USD, GBP, ...).
On voit que les taux réels descendent doucement, aussi, depuis trente ans, et qu'ils sont passés, depuis cette année, confortablement en-dessous de zéro.

Avec cela, étonnez-vous des bulles spéculatives et du succès des crypto-monnaies...

vendredi 15 décembre 2017

Largest bubble in history?

According to a study cited by Marketwatch, the current Bitcoin bubble is the largest bubble in history, with a x64 factor in three years ("Bitcoin bubble" meaning: "Bitcoin is in a bubble", not "Bitcoin is a bubble").

Is it the largest one? If you follow Bitcoin for long, there was already a mania in 2013 (red rectangle). Let's zoom on it.

The factor is around x4600 on 3 years.
Oh, but there is more  (another red rectangle zoomed):

Factor is around x2000 on 3 years for the early 2013 bubble. And again:

Factor for the 2011 peak is infinite since the initial value in USD was 0 (and there was no Bitcoin in activity in 2008).
Interactive chart from is visible here.

To summarize, the hit-parade of bubbles would be rather:
  1. Bitcoin 2011
  2. Bitcoin end 2013
  3. Bitcoin early 2013
  4. Bitcoin 2017 (ongoing...)
  5. Tulip-mania 1637

mardi 12 décembre 2017

Bitcoin (and Swiss Franc) manias

Currently there is a crypto-mania (mostly around Bitcoin), no doubt about it.
But let's put things into perspective.

The following chart compares two monetary bubbles - the central money bubble of the Swiss Franc (CHF) and the Bitcoin, represented by its market capitalization in US Dollars (USD). Since currently 1 CHF is almost 1 USD, we can put both market capitalizations on the same chart:

Click to enlarge

Let's compare some similarities and differences between Bitcoins and Central bank francs.


- Counterparty: none for both - only fame and trust. Both are purely virtual!

- Why hoarding Bitcoins or Swiss francs ? Because other people do! If speculators begin to spend or sell BTC's or CHF's, their value will collapse.

- The trigger to inflate those bubbles is the mistrust about EUR, USD and other currencies following different crises of the last decade, ballooning government debt, currency debasing, negative real interest rates (ironically the buyers of CHF are naive enough to ignore that, for the two last points, the same is happening with the CHF!).


- Money creation:
  • BTC: Bitcoins are "mined" on computers, using lots of electricity
  • M0 CHF: Central bank francs need a mouse click and a few keystrokes for ~95% of them; ~5% are printed. So the effort of creating money is minimal compared to Bitcoin (a bit scary if you are living in Switzerland...)
- Storage:
  • BTC: 100% electronic
  • M0 CHF: ~95% electronic, ~5% paper
- Control of money supply:
  • BTC: Limited by design to 21 Million; but forks (Bitcoin Cash, Bitcoin Gold) and creation of other cryptocurrencies (1340 currencies so far) challenge that limit.
  • M0 CHF: Unlimited, but reversible: theoretically the Swiss National Bank (SNB) could repurchase the extra 450 Billion francs by selling its reserves in foreign currency stocks and bonds, and could "destroy" those francs. However, now that the SNB reserve fund has the size of a massive worldwide hedge fund, such a selling would have a significant downward effect on prices, or could even trigger a selloff. That could complicate the reduction of money supply: finally, the SNB could be left with a disturbing gap between reserves and money supply...
- How the bubbles inflate:
  • BTC: due to limited supply, the exchange rates soar explosively
  • CHF: the SNB augment the supply explosively in order to control the exchange rate

dimanche 10 décembre 2017

Not a bubble (3)

Investors buying a stock at a price of 333 years of benefits... "Market capitalization" larger than all cryptos together!... ...