This post will have haters and lovers. All I’m asking for is for you to hear me out. In this, I plan on laying out the macro underlying conditions to look at gold and combine this with the technology adaptation curves to show why Kinesis will be the next “big thing” for crypto lovers who thought they were investing in digital gold. Now they can. I outline what cryptos actually are (non-asset backed digital currencies) and discuss what Kinesis is (asset backed digital currencies) and I apply this to the macro environment we are in and examine them in the technology adaptation curves.
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Background – understanding where we are, first
I have done videos on gold pegs, and I also agree with the masses that a “peg” doesn’t necessarily work. Meaning, “$20 for an oz of gold pegged”. Why? Governments tend to keep spending, regardless of what is in the piggy bank – by selling bonds. Essentially, instead of using what limited resources are in the treasury based on gold, they hit the credit card to buy now with the intention of paying later with tax money.
At issue here is there can’t really be a gold “peg” to a dollar if they just simply continue to run up the credit card. Rather – it makes sense to have a floating gold backing in a free market system based more on money in the system than a futures price. Meaning, you should be able to take dollars and buy as much gold as you want. At issue, is there are a lot more dollars than gold in dollars. This is solved by simply moving the price of gold higher as more dollars are entered into the system. So it seems. However, that’s not what our overlords are allowing.
I can spend a few paragraphs here doing the math and working out how much money is in the world and how many tons of gold there are (173,000 tons), and then extrapolate that out – but I’ll give you a quick summary. But this gets kind of hinky when you consider there is perhaps $40T in USD in circulation, but $1.3 quadrillion in investments, derivatives, and a bunch of other stuff. Do you base the gold on the dollars that exist? If you just do the USD, you are looking at about $7,191 per troy oz. If you want to try and count the quadrillion in investments with this, I’m going to multiple this by 30 to get a rough ballpark of $210,000 per oz. I’ll round it down to $200k per oz.
With it being just under $1,700 per oz, you can see that the creation of money over the last 100 or so years was based almost exclusively on credit – as the creation of unicorn money has outpaced the price of gold by about a factor of 118x. Meaning, if we had remained on a gold peg from over 100 years ago, a lot of really cool shit could not have happened. The “banking engineering” that happened has been a modern marvel. We are angry at greedy bankers, but it has advanced civilization light years in such a short time. So that is an argument against a “gold peg”. The root cause against the gold peg mostly is the need and desire to advance civilization at much more rapid pace than a 1.25% expansion in the gold supply allows. I get it. So let’s not do a “peg” to a dollar, shall we?
I did a video with RTD earlier this year, where I discussed a loose gold-backed free-floating system that the Russians appeared to throw out there for the world to see. The design of it was VERY interesting to me as I designed a chart on how it COULD work – it’s not a “gold window” but an energy window with gold linking.
This was fundamentally based on Gromen’s thoughts of a gold-backed system in grams of gold per barrel. With this, they seemed to peg gold to barrels of energy equivalent of sorts. To me, this is a ridiculously smart way of having gold in the system for settlement. Perhaps we don’t trust the ruble. The Russians may not trust the dollar. Both trust gold. Meaning – it was a way of re-introducing gold as the universal translator of currencies. Almost all central banks hold it – why? Ask yourself why central banks are gold collectors. To me, it is a hedge on their currencies, which are constantly being depreciated against assets.
When you look closely at a gold/oil ratio, I did a study on this where it is more or less oscillating in a relatively tight range going back like 60 years. This is a form of relativism, where on item is based on another. I have heard guys much smarter than me say, “energy is the economy, stupid”. And it seems they can teach an old dog new tricks – as you can see how this is playing out not only in Europe, but in the USA. Consider me 1000% converted to this camp. As energy prices go up based on scarcity, it can destroy economies and businesses as costs need to be passed on and margins dry up. This is ultimately what the Biden admin and the Fed are missing with raising rates. If energy is scarce, raising rates won’t do shit to address this root cause of inflation. The idea, potentially, is a demand destruction of sorts. However, it’s inelastic and with this, people still need to heat their houses and drive to work – so raising rates may have a much stronger effect at damaging the overall economy as whole rather than creating the demand destruction in energy consumption they think it will. Along with ESG that is causing rising costs of producing – this is showing our governments at the top are essentially ignoring the root causes of addressing inflation and using a circuitous way to address it – causing much more damaging long term effects to the economy. One can say, “drop sanctions” or “pump more oil from the US” to address inflation concerns. They aren’t. So the beatings will continue until the morale improves.
This also leads us to a potential cataclysmic implosion of the world financial systems – leading to a fear trade in gold. OR, perhaps the situation gets so dire that gold investors sniff out a reversal and front-run this policy. Either way – as the pain becomes more acute, so do the prospects of a gold run much higher – either through a fear trade or a super-inflation explosion in MMT to happen.
So if energy IS the economy, gold seems to be the universal translator to trade for this energy. And if the peg of oil to gold is perhaps at 1g of gold per barrel (example) – what that means then is your currencies will have a FLOATING gold peg.
Let’s do a quick example – if it was 1g of gold per barrel, a few years ago oil was $60 per barrel. That would be 1g of gold. Recently, it hit $120 per barrel. This is 2g of gold if the price of gold doesn’t change if you peg gold to a dollar. But what Russia was more or less saying was – “oil is 1g of gold per barrel”. This then would have the price of gold, in USD, doubling to buy that energy. It creates an arbitrage that effectively moves the price of gold, in USD, to oil. Not immediate, but effective. And more of that to come, I believe.
Really stew over that for a few minutes. I mean really let it cook. If we are then using this gold as the universal translator – all currencies (mostly Western), measured in gold, become extremely important overnight as a universal FX metric. You no longer have the futures markets of paper traders pushing the price of gold down in USD. You have those who produce energy setting the price of gold as it relates to their costs of producing energy.
Whoa. A LOT to unpack there and really stew over. This is one of those things you should re-read a few times to understand the implications.
I can suggest this is the ultimate reason the West is fighting the East right now in multiple theatres. There’s some 4D chess going on here behind the scenes. You see rhetoric for either side. You pick sides on a person being evil or another person being good, depending on what form of propaganda, ummm…I mean news – you are consuming. I’m agnostic to the rhetoric here, but following the money. What I’m seeing is Russia’s economy is simply producing energy, and the West’s economy is based on Magic Money Trees where the price of gold is outpaced by credit at 100:1. This allows the West to build hospitals, bridges, and roads – but more important, to fund the militaries. Russia cannot defeat our military, but they can undermine and replace our financial system IF they get enough people on their side of this. You have a lot of Russian Grandmasters of chess who probably did a lot of game theory in the 60s-80s to come up with this plan. You have a rather large BRICS+ contingent now that seem to be eager to move away from MMT and move to a system where the economy is based off of energy and commodities.
This has implications on who sets the price, and who is taking the price.
I want you to consider a big picture here. We have vast resources in this country in energy and minerals. Yet our “environmental” concerns from our governments essentially ban production of any of these resources. Instead, our “green” policies STILL NEED these resources, but we then try and put a gun to the head of OPEC for them to produce more oil for us, cheaper. We push the price of gold into dirt and tell people in Papua New Guinea to go deep into mines for a few nickels an hour to get us shiny metals. It is no longer in their best interests to sell energy or commodities cheaper to us. And this is why you potentially see World War 3 playing out in proxy wars at the moment using finance and energy as the weapons of the 21st century battlefields – there are huge concerns with energy and monetary policy on the chessboard none of you are looking at.
With this, I can see the BRICS+ currency basket being created – with gold as a float to energy or commodities, or some combination thereof. When Russia did their thing with requiring rubles (or gold) to buy energy from them, it was a perfectly reasonable response to being pushed out of SWIFT. Putin has energy. The world needs energy. Putin was blocked from dollar access. How the hell did the think tanks NOT see that he would then push for energy in rubles or gold? Or – they did see it, and those in power just completely ignored them. What you saw was the ruble JUMP quickly in value – and becoming stronger than before the Ukrainian conflict.
Now I want you to imagine how all of these currencies then act against the dollar when this BRICS+ basket officially exists, and recognizes a gold peg to energy and/or commodities. For example, they could peg gold to silver at 15:1. Instantly, there’s an arbitrage. OR – this can be a market driven item, but base everything on perhaps 1g of gold to 1 barrel of oil – or use a BOE measure for things like nat gas.
The big issue the crypto guys pointed out 12 years ago WAS true THEN, but not now. They said, “gold is nice and all, but who is walking around carrying gold coins in their pocket? IF gold was perhaps ACTUALLY worth $8,000 or $200,000 per oz, how can you buy a loaf of bread with it? How can you produce change? They make EXTREMELY valid points – TWELVE years ago. Things have changed. They didn’t get the memo. Saylor has laser-eyed them into a cult, unable to see what came up in the rearview mirror and passed them.
Us gold bugs point out that 100 years ago, no one walked around with gold coins in their pockets – as paper became a better way to transport that value. At any given time, you could exchange that paper for $20 in gold. This piece of paper was a RECEIPT for gold. The value of the money was the gold, this was a paper currency ticket for that gold that was more portable.
Once that gold PEG was removed, the paper then seemed to float much lower in value to that underlying gold coin based on the amount of credit/money introduced into the system far outnumbered the amount of gold produced. That same ounce of yellow metal 100 years later now takes $1,700 in currency units to purchase. Did that lump of gold appreciate in value, or did the paper shit depreciate in value? That’s what argument many people have a hard time understanding. Your house did not APPRECIATE in value. It’s the same structure you bought 20 years ago. But you need more paper currency units to buy it. This is an effect of the dollar losing value because it is printed into infinity.
The overlords then tried to gaslight you into thinking CREDIT was money.
They then tried to suggest THIS was now money, and NOT the gold that used to underly it. You see that trick they did?
The crypto guys then take that one step further and say, well, you don’t need dollars – you can use digital tokens that can express those dollars. Where they mess up is that most of this is not necessary, as in the past 5 years, I barely have carried cash at all. So our electronic banking has made digital dollars on a keyboard the equivalent of tokenized units of money. Essentially, making the blockchain unnecessary as a ledger to buy something at the store. Where they then try and get points is bitcoin, where the SCARCITY of bitcoin having a fixed amount – ever – will then be a superior store of wealth. The equivalent, perhaps, of buying a gold coin in 1915 with $20 and now having that gold coin worth 85x what you put into it. AND – because it is tokenized, you can SPEND IT!! Unlike the gold coin you try and buy a loaf of bread with, you can buy a loaf of bread with .0031 bitcoin (or whatever, I just made up a number).
The bitcoin people try to say there is bitcoin…and everything else – the main marketing point is that “scarcity”. Smart people talk about the Proof of Work to create. But they don’t understand what it is, at its root. I’ll get into that in a second.
With Kinesis – it is a BETTER digital representation of hard money than bitcoin. Why? This is what bitcoin TRIES to tell you it is…
In reality, it is NOT digital gold. The idea was to create a token that has a fixed amount, and as more dollars/credit are added to the system, the fixed unit amount of this goes up in value. The problem is, this is ACTUALLY what BTC is below. It’s an empty parking spot on the block chain with your name on it.
Above is a more accurate representation of what bitcoin ACTUALLY is. Not as sexy, right? Here’s the thing. I want you to pay me $1m to change my name to your name in that parking spot. Any day now this should happen, right? No.
The problem is – the blockchain people got it half right. They bought into the Betamax before VHS and DVD came around. Meaning, the blockchain/BTC people were EARLY ADOPTERS in technology, and were rewarded handsomely for it. But every bitcoin person out there that wants to throw a shoe at me right now also doesn’t have 35 years in tech like I do. Yes, I’m 46 years old and I took my first college programming class at 11 years old. Proof at bottom of piece. I understand technology, and have a bachelors in IT, and have a master’s in cybersecurity – which means that I understand a lot of this at the bit and byte level, where you drink Kool Aid from laser eyes people. I spent a few hours trying to read through the Saylor Academy – and found so many holes, inconsistencies, and straight up lies that I stopped in fury, wanting to pound my keyboard as if I was trying to go viral in a meme. I could not believe these people convinced so many people to get into this. Someone needs to go to jail over it. What I saw, truthfully, was people at a late stage in technology innovation trying to sell what they had to bag holders. There’s a lot of ponzi shit there, and I’ll take the Pepsi challenge with any of you on this. You simply need to keep reading to understand where this shit hole is going. I lay out how this “technology” you speak of has a shelf life. Yes…keep reading through the searing anger at me, I promise you will see the light.
I do NOT mean to disparage you. I really don’t. Only to convince you that you were MOSTLY right, but not all the way right. Later people have been straight up duped. Your adaptation to blockchain was terrific. Had you bought in at $100 for BTC and sold at $69k – you would have been a legendary speculative investor. But you missed something the last few years.
People made a better mouse trap. Instead of you rolling profits into the new thing, you and your kin are doubling down AGAINST the new technology. You are fighting format wars here against a 5,000 year old money. That is, you are clinging on to your Betamax as I am using BluRay.
What Kinesis did was take your empty parking spot with your name on it and improve it.
What this means now is in this parking spot, Nate now owns x grams of gold. Now, to buy a loaf of bread with an oz of gold, you are essentially using micrometer salami slices of a gold brick, digitally, to buy this bread. No change needed. Kinesis measures their units of gold in KAU (Kinesis gold), which equal 1g.
So – the blockchain people came up with an idea to not use cash, which essentially was beaten with the debit card/credit card and also no longer needs cash. The blockchain people created a ledger, and put nothing in it except your name – and Kinesis beat that by placing something of value in that ledger. We may soon see a US “digital dollar” which can then trap you into a form of blockchain system which prevents paper cash. So all of that “it’s on the blockchain” then means you cannot do ANYTHING with financial transactions without the government getting its beak wet on the transaction. And those of you who think governments cannot stop Bitcoin, I do have a bridge to sell you. You can simply black hole all of these sites, block access to onions/TORs, and make it a crime to use it. So yeah. Good luck with that.
Meaning, crypto tokens that have nothing backing it are essentially now worthless. What speculators of this missed, which they teach in college for IT grads, is the technology adaptation curve. With my mining investor friends, you are familiar with the Lassonde Curve. When I saw this, it brought back memories of the technology adaptation curve.
Below is a crude picture I found of this – and not what I had learned, exactly, but gives you a good idea of what you are looking at.
Bitcoin is a technology – those people who bought in to bitcoin at $1 were early innovators. BECAUSE of the scarcity, and the potential, people then bought into this – with the idea that later others would buy in and drive the price up. They were correct. But what then happened was the laggards got in at $60k+ and at this point, a lot of the early innovators, early adopters, and early majority sold to laggards at $69k. One could say the multiple 90% draw downs they had in bitcoin cycles was this cycle playing over and over again. I’d tell you, no – that this is the cycle from 2009 or so and we are in the last stage here now. Those cycles every few years was just a lot of fib technical trading on an asset that has no peg to anything tangible. The tech trading aspect of this was how Garreth Soloway was able to nail just about every major move on this. It’s not magic – it’s probably the one thing out there that runs purely on human psychology with greed and fear – BECAUSE there is no underlying utility to the product. It’s just pure speculation, and this is why technical trading CAN work at times.
Those of you professing to say BTC is going to $1m, simply don’t understand the technology adaptation curve. You are bag holders at $69k projecting and hyping an empty parking spot – thinking you are an early adapter to a technology that is now ready to be sunset.
When you also learn programming and business analysis in respect to software development (waterfall, spiral etc), you also understand how new software comes in, people adapt, sales grow – but then the product becomes stale as other newer software comes about. Your software or technology is then “sunset” for a newer product or version.
Meaning – with BTC now being 12-13 years in, from a tech/adaptation standpoint – it is easy to make the case that other items have replaced it. Some can say, “But the lightning network” as a utility to pay for things. But they are still missing the underlying issue of the empty parking space.
Which leads back to Kinesis.
IF we have the ability to then use the blockchain to buy and sell gold – and we have the ability to use this to spend gold on things, then BTC and all other tokenized items are irrelevant. It doesn’t mean Kinesis is the end state either – other newer tech could replace it. The US and other countries could also come after it for regulation purposes. The US simply doesn’t want a gold standard. However, this proxy war that is going on now may be a fight for what currency/money looks like in a few years, and my bet here is that with $31T and rising interest rates which could lead to an effective default without printing more money – it stands to reason that the East/BRICS+ has leverage with energy/commodities they are fully exploiting now, and the powers that be that are anti-mining, anti-energy, and ESG may be voted out of the West in the next few years. This tells me that momentum is moving towards energy/commodity producer nations as price MAKERS rather than price TAKERS – which has gold being thrust back on to the global stage with the West powerless to do much against it. Their only means of combating this? Tap the oil wells, dig for gold, explore for uranium, and exploit national resources. We have a SHITLOAD. Which is why there will be pain first, then a lot of prosperity later. Canada could also become a major force with all of their natural resources. But all of this doesn’t look great for Europe, which isn’t known to have a ton of natural resources. Which is why Europe and USA are hellbent on defending the MMT system. Ultimately, they will lose due to Europe not being able to get affordable energy and the USA being locked out of a ton of commodities we need in our supply chains.
But for now – I can see how a new BRICS+ currency basket can lead to the adoption of the Kinesis Monetary System.
Application of Kinesis
I want you to imagine a day 6-24 months from now, where not only is Russia off of SWIFT – but so is China and a bunch of other countries – either by sanction or by choice. The US sanctioned themselves out of trade partners by using the dollar reserve currency as a weapon, and with this, the new trade partners went to a BRICS+ currency basket. If I am Germany and want to buy Russian oil – Russia said they could use rubles. However, there may be issue acquiring rubles. What Germany CAN do is buy KAU in Euros. They can then SEND those KAU to a Russian bank. Russians can then hold this gold on account, or perhaps they can take delivery of it from a Kinesis vault.
Now I want you to imagine you are a US-based company, perhaps a small company, and you want to buy Chinese goods. They aren’t accepting dollars and you have no clue how to get Yuan. You can then buy KAU in USD and send them gold. Since the BRICS+ countries would be able to settle debts in gold – the KAU could then be spent within the BRICS+ system easily.
What I have done to capitalize on this POSSIBILITY is to SPECULATE on this TECHNOLOGY by buying KVTs. This is the Kinesis Velocity Token. There is a friction with the KMS that has transaction fees for anything to be done – which is how they keep the lights on. Where a Visa/Mastercard may be 3%, KMS is .45% on some things I have seen. These transaction fees then are split into a lot of different pools. The KVT holders are sort of like shareholders. Sort of. There were only 300,000 of these created.
With more usage of the system, the more fees collected, and with this, this is how a tech speculator gets rich on KMS by buying KVTs. You are not buying gold and silver in KAU/KAG and expecting a 40x. It could stand to reason that if everything does go into a smoking heap of shit, it’s POSSIBLE that there is a fiat collapse worldwide and a return to gold. This could be 5 years away or 200 years away. No one knows. So I would not invest in buying a KAG token and thinking it will do a BTC 700x move. I would buy KAG as a layer to my physical buys.
It IS POSSIBLE in the next 10 years we see $300-600 silver and $8,000 – $50,000 gold. Not likely, but possible. The three leading factors in this are:
- Mine supply is a joke at the moment, versus demand. Supply squeezes – mostly in silver – could usher in vast jumps higher in the metals prices.
- Worldwide issues with USD as reserve currency leads to a semi-hyperinflation of assets as $17T in offshored dollars finds its way into hard assets. This pushes the price of gold up significantly
- Energy prices may be expressed in terms of gold – meaning price of gold is expressed by energy scarcity and not by futures. This removes all of the algo spec shorts that depress the price.
IF we have a move where gold starts to moon – and retail cannot source any – it is also reasonable to assume that many may buy KAU and take delivery of 100g bars. It is also reasonable that as gold starts to move up, as more people exchange paper dollars for gold, and as more nation-states/companies hold gold as a hedge against the fiat currency – it is REASONABLE to suggest that the KVT payouts will go vertical.
There are critics of Kinesis, and it falls into a few categories. Here is where you have to manage your risk. Understand the upsides that I have been talking about, but also understand the downsides that currently exist in the FinTwit spaces.
- The blockchain and security – most of these people are bitcoin people who do not have a better argument on applicability, but they want to debate the nuances of the security of the blockchain. While this argument is slightly above my pay grade, Kinesis was born from a vaulting company – where security is essentially their business. When you talk about defeating this type of security, you are probably in discussions of quantum computing. I find all of their security measures to sign in at the front end of available technology.
- KVTs worthless – not to name some of the more popular FinTwit people on this, but the big thing here is that the KVT is not paying out – yet. You can see the fee pools are nowhere near what they thought they would be. While this is a fair critique, you have to understand where we are in the technology adaptation curve. It’s still very early in the technology adaptation curve from above. If you understand this curve – and have dry powder – it stands to reason that a better speculation exists with buying into Kinesis (early adapter) versus bitcoin (laggards)
- Regulation – when you discuss this, you see they have HQ in Lichtenstein. They were out of Australia. They have vaults all over the world in 9 places. These guys are a VAULTING company with a front-end exchange. And exchanges and securities and all of that starts to get sticky at nation-state levels. Many crypto exchanges are in weird jurisdictions for this reason. I LOVE the product – but at this point I have to say it is a relatively safe “speculation” due to it not necessarily being regulated by things like the SEC. Just understand this is out there.
- ACH – I have been a fierce critic of this, but I hear this isn’t as much of a problem now as it used to be. I just checked now and it now seems to have a US bank I can send to using my bank transfer out function. Prior to this, I had to send a wire to a bank in Australia for thousands of dollars. My bank had no idea who the recipient was and I had to sign my life away that once sent, the bank is not responsible for where it goes. It was a nail biting few days as I could have lost thousands of dollars into the banking ether. Looks like that might be fixed.
I would also say to the critics – they have fair points when it comes to adaptation. This is why it is a SPECULATION with regards to the KVT, but in respects to the KAG/KAU, it is simply buying gold/silver in a different format.
In some of my writings, I talk about layering gold and silver investments. You would start with physical in your possession, but then you have layers on that. For example, if you had $50,000 to bet against the dollar, it makes sense to put that into PMs. But if you buy 25 oz of gold and put it in your house, and you are robbed, there goes your investment. Likewise, if you were to buy 100 tubes of silver eagles (2,000 oz) you might have problems taking that with you if you had to flee your house on a moment’s notice. I have suggested maybe a shoebox size at most of PMs in your personal possession – and with that, other layers you can add could be OneGold, PSLV, Kinesis, vaults (check out Bob Coleman’s, who has been awesome for the Gold/Silver community), futures, and miners – among other ideas. How you layer these depends a lot on your risk appetite, and you should talk to a licensed financial adviser about any of this. I’m not that guy. Simply giving you ideas to discuss with that guy (or gal).
It is fair to say the East values gold – far more than the West. It is a “fact” that the US has 8,100 tons of gold they hold as “tradition”, according to our former fed chair Ben Bernanke. One has to ask that if the US no longer values gold, there should be no reason to hold it. Yet, here we are. Obviously it has value that many in leadership do not want you to look at. It’s perhaps almost like the US might hold this as a hedge in case the USD loses too much value on the world stage. To admit this, could then signal the actual importance gold has as a hedge against a falling dollar. To also be fair, the government acquired a lot of this at $35-$40 an ounce, so they are sitting on perhaps 260m oz worth today at about $442b. If, for argument’s sake, the dollar hits the shitter and gold runs to $10k, you could see the government selling some of this gold that would then be worth almost $2.6T. Which actually would only cover a fraction of the national debt – but would be a good start to settle markets if needed.
It is also fair to say the BRICS+ is fed up with dollar hegemony and have been actively finding ways to fight this going back decades. IF that’s the case, it would thus stand to reason that the dollar against these items can falter in the years ahead IF the BRICS currency basket deals with gold/energy/commodities in some way. We have seen how the ruble gained serious strength against the dollar at the whisper of a gold window with oil. We have seen how the Saudis have turned their back on the Biden admin – and we have seen how a country (cough cough) destroyed Nord stream 1 and 2 – thus creating a semi-permanent natural gas shortage in Europe. We have seen Russia take action against Ukraine to stop a move of NATO, and with it, use energy as the main weapon with pinpoint accuracy of effectiveness.
All of this can lead a reader down a logical path where you have a declining US reserve currency pit against a rising BRICS+ alliance/currency which suggests it will be backed by gold/oil/commodities in some way. Consider a bond now with US treasuries – you put in dollars, you get an interest payment, and at the end you get your dollars back. Could one see BRICS+ bonds using gold/oil etc as payouts and what they can get at the end? It seems that it would be a way to forward finance projects yet still use “things” as your currencies to pay off these debts.
IF this is the case, one can see the price of gold to rise in USD over the next few years. It can also be seen that countries and companies MAY use gold as a means of settlement as the universal translator in currencies. In that scenario – it is easy to see Western currencies falling more against the dollar than Eastern currencies. Likewise, it is easy to see energy producers and commodity producers be a PRICE MAKER in gold and energy, and strip this from a Western-based paper futures exchange. It is apparent to anyone following this that a lot of these futures prices are algo-driven events, and with this, are not necessarily reflecting physical supply of any of these underlying assets. This is leading to a derivatives implosion of some sorts. Whether it is a nickel-like blip in the LME or a black hole implosion of the entire COMEX system, no one can tell for sure.
What you are clearly seeing is a war for energy, gold, and commodity pricing based on BRICS+ powers as price setters rather than continuing on as price takers. The other war here appears to be to strangle the USD out of the market share of world reserve currency held. While I’m not of the mind set that the dollar will go away, the current 60% of holdings is down from 65% over the last few years and you could see this moving to 55%, then 50%, then 40%. As this moves down – these dollars are probably being re-patriated from offshore – which also causes localized monetary inflation here and would drive up the gold price in USD. So as the reserve percent goes lower – assets in USD could go much higher. One does not need the dollar to collapse by 95%. Only perhaps see the market share drop from 60% to 25% to drive asset prices up multiples of what they are now. The US also continues an environment-friendly policy of restricting energy and mineral exploration, and with this – creates monopoly money out of thin air to then give this to 3rd world nations for their “stuff” which is artificially rigged lower on Western-based commodities exchanges.
One can see the war being fought at the root level is one of sound money. And with this, gold becomes part of this conversation. As an early adapter in technology – Kinesis KVTs offer a tremendous upside as a bet against the USD in terms of gold. Additionally, it presents a means of exchange for all nations – regardless of affiliation, to settle debts in gold. As an upside, Kinesis PAYS you to store your gold or silver in their vaults and offers a means of paying for anything in gold or silver. With this new technology, it is presenting a new speculation for those who made a fortune in the crypto space who understand the possibilities of the blockchain and are looking for a new technology to adapt as the existing crypto space is in a technology laggard space, looking for bag holders.
Kinesis KVT offers an investor a potential for a stream of income (paid in gold) for years to come, IF the technology gets widespread adaptation. In my humble opinion, it’s a matter of WHEN, but not IF. Today, you can use a Kinesis card and pay for gas at the pump or items in a Home Depot like Jim Forsythe has documented. It stands to reason that gold and silver will come back into fashion as a fear play as the global economy starts to present more cracks to the casual observer. You can hoard your gold and silver in their vaults, at no cost to you, and as the prices rise, you can spend some as needed – if you choose. Consider a concept if I had bought silver 3 years ago in Kinesis at $17, and then at $29 silver was able to use that silver at the gas pump. While inflation has gone up – silver had outperformed. During periods of outperformance, you can spend it. During periods of underperformance, you can reload.
I am responsible for coining the term “Asset Backed Digital Currencies” in regards to Kinesis, and to an extent other competitors like LOAD and Cache. I believe Kinesis marketing needs to pound the table with this phrase at every marketing event they have to nail home what this product is, and how it differentiates itself from “cryptos”. To me, these products may be the future MasterCard, Visa, Discover, and AMEX. Some may buy each other out. Some may lower transaction fees to be more competitive. As time goes on – pure competition here may breed best in class. Today, Kinesis is the largest. They all will serve similar purposes, and they all may have varied rewards and bonuses. I BELIEVE that with the potential for bank BAIL INs, that people may eventually understand this and move a portion of their cash into a Kinesis gold product, where the gold and silver are audited 1:1. I could see some speculating with buying a KVT or 10, depending on their wealth and risk appetites. With my experiences with this, the 1:1 ratio has to do with “minting” gold or sending it to the vault is the point at which a product is added to the vaults, and when you want to take your gold or silver out, is when it leaves the vaults. Meaning, there will always be a 1:1 relationship with metals to owner’s shares. The “friction” of transactions also produces gold buying – where the owner of KVTs, minters, savers, etc – all get rewards from this pool.
Asset Backed Digital Currencies are the next evolution of the blockchain. Some of you are holding on to bitcoin for dear life, and I get it. Most of you holding on for dear life might be down 50-75% and cannot sell. But the issue is you are holding a non-asset backed digital currency. The empty parking lot. Why would you not exchange an empty parking lot for one with gold in it? Obviously, you THOUGHT bitcoin was digital gold. You now have the ability to buy digital gold that you could hold in your hands or spend it. Why wouldn’t you do it? Better yet, why wouldn’t you take a portion of your investments and look into it? Obviously, you like to speculate on technology innovations. But you also need to know with technology when the music stops.
It also stands to reason based on the items at the top, that if a true free market gold system existed where the price was more reflective of dollars in the system – perhaps based on scarcity of energy, that the free-floating price of gold, as expressed in USD, could be somewhere between $8,000 and $200,000. While that is a VERY wide gap – it’s possible to at least see a path for $10,000 to $20,000 gold inside of 10-20-30 years. That means, as a form of longer term hold, you may have a 5x-10x-15x in the KAU holdings within Kinesis, and with this, your KVT yearly payouts could be stupid high. While this is pure conjecture, this is where the speculative part of investing comes in. You have to look at what are the crazy upsides versus downsides. Even crazier is to think of a possible situation where there is a full dollar collapse inside of that 20 year window Weimar-style where gold does go to $200,000 per oz. With this kind of upside projections and WILD speculation, you can see how perhaps a $1,700 investment in one KAU to squirrel away for 20 years could wind up with sky high upside of a 100x. Likewise, taking a floater on one KVT at $1,400 or so could net you $4,000-$30,000 per year upside forever IF the technology is widely adapted and utilized. Over a 10-20 year period, those are bitcoin-like returns. Obviously – this can go to zero, but you have to understand the speculative upside here. Then, you have to understand the probability of this. Is it highly likely? Not likely? Very much not likely? Where it’s very easy for me to spend $2,000 on a miner exploration company for a possible 5-10x upside, it’s also easy for me to spend $2,000 in KVT to speculate on that upside for a 10 year hold. Imagine a scenario where you can get $20k a year for 10 years from a KVT – or $200,000 on a $2,000 investment? There’s a 100x paid in GOLD. It is SPECULATIVE. So you have to understand sky high rationales as part of the investment thesis for a speculative product.
With non-asset backed digital currencies – many people bought a lot of cryptos on margin on exchanges and got wiped out, liquidated, and perhaps owed thousands of dollars. With KVT, you do have a potential to go to zero if this technology is never adapted. I own 7, and want to get a to a place where I own 10 and call it a day and let it sit for 10-20 years. With the KAG/KAU, you do have the ability to convert these to USD and/or take delivery of a portion. The counterparty here is the company of Kinesis. What happens to these tokens if the company goes out of business? Short of a total company failure, your investments in KAG/KAU are 1:1 to metals.
I am long KAG, KAU, and KVT via Kinesis. I am long just about everything in precious metals including miners and like you, have had my ass handed to me over the last 2 years. I have a vested interest in you buying PMs, Kinesis, miners, etc. However, I’m merely trying to show you the logic and business case I used to buy into KMS rather than cryptos. I have a bachelors in IT (minor in physical security), master’s in cybersecurity, MBA, and 11 IT certifications (including CISSP and Security+) spanning 28 years of working in IT (15 in leadership/management) at the world’s largest institutions in industries such as energy, education, finance, manufacturing, technology, and defense. I understand technology at the bit and byte level and manage this in extremely gargantuan sized organizations managing large teams in all areas of IT – desktop support, server support, networking, cybersecurity, telecommunications, systems administration, database administration, and programming.
I also have nearly 35 years participating in the advancement/usage of technology dating back to a college class on programming BASIC in 1987 at 11 years old. My opinions here are of my own, and I have not been compensated to make any of these statements, as much as I wish I was. Kinesis – feel free to reach out to me. If I ever leave my corporate job in IT management, it would be to work with you guys telling your story all over the world.