If you wanted to design a perfect currency for the farce that our financial system has become, you couldn’t do better than Dogecoin. It was created as a joke, it has no real value, but investors are feverishly gobbling it up as if it was the greatest investment that any of us have ever seen. A lot of people talk about the “Bitcoin bubble”, but Bitcoin is only up about 600 percent over the last 12 months. Dogecoin is up about 18,000 percent over the past year even though there is no restriction on how many Dogecoins can eventually be created. There is absolutely no reason why any rational investor should be putting a single red cent into Dogecoin, and yet it just keeps going up. In fact, at one point this week Dogecoin had a total market value “of almost $42 billion”…
Initially started as a joke in 2013, dogecoin is now the sixth-largest digital coin with a total market value of almost $42 billion, according to CoinGecko. It takes its name and branding from the “Doge” meme, which depicts a Shiba Inu dog alongside nonsensical phrases in multicolored text.
It is hard for me to believe that “investors” are being so incredibly stupid.
Dogecoin was just supposed to be a meme, but thanks to relentless promotion by the “Dogefather”, one “investor” has seen the value of his Dogecoin holdings rise to 11 billion dollars…
THE world’s first dogecoin billionaire watched their stock soar to $11 BILLION as the “joke” cryptocurrency boomed after Elon Musk dubbed himself the “Dogefather”.
Its value rocketed after the Tesla tycoon spoke out ahead of a much-hyped appearance on SNL suggesting he might talk about it on the hit show watched by millions.
This explosion in interest in Dogecoin is obviously going to spur Dogecoin miners to work harder than ever before.
And unlike Bitcoin, Dogecoin miners can keep creating more tokens forever and ever…
Originally, Dogecoin had a hard limit of 100 billion tokens, similar to Bitcoin’s cap of 21 million tokens. However, the developers changed their plans in 2014, eliminating the supply constraints. In other words, as long as miners continue to build the blockchain, more Dogecoin will continue to wink into existence.
In fact, each time a block is verified, the miner receives a fixed reward of 10,000 Dogecoin tokens. Unless the code is rewritten, this will go on forever.
That’s a critical flaw.
“A critical flaw”?
That is quite an understatement.
But of course what is happening to Dogecoin is the same thing that is happening to our financial system as a whole. Our leaders in Washington have been creating, borrowing and spending money at an absolutely insane pace, and the numbers that we are now witnessing would have been unimaginable at one time…
On the fiscal side, Congress has allocated some $5.3 trillion toward enhanced unemployment compensation along with a variety of other spending programs that helped push the federal budget deficit to $1.7 trillion in the first half of fiscal 2021 and has sent the national debt soaring to $28.1 trillion. Congress also is considering a $1.8 trillion infrastructure plan from the White House.
The Fed also has come through, cutting its benchmark short-term borrowing rate to near zero and buying nearly $4 trillion worth of bonds, pushing its balance sheet to just shy of $8 trillion.
Almost everyone is cheering the fact that the Fed balance sheet is ballooning dramatically.
And almost everyone is cheering all of the “free money” that the federal government is handing out.
But the truth is that we are going down the same road that so many other troubled nations have gone down throughout history, and there is no way that this story is going to end well.
As I have been detailing in recent articles, we are already starting to see very painful inflation, and major corporations are now warning that even more inflation is on the way…
Toilet paper, baby care products, soft drinks and many other everyday products are about to get more expensive.
Procter & Gamble, Kimberly-Clark and Coca-Cola have all warned that they’ll raise prices on many of their products as raw material costs rise. Plastic, paper, sugar, grain and other commodities are all getting more expensive as demand outpaces supply. Companies are also paying more for shipping as fuel costs rise and ports experience longer delays because of congestion.
Yes, you may cheer when you get a check for a few thousand dollars in the mail from the government, but that is just a temporary sugar high.
Unfortunately, the dramatic increase in the cost of living that we are starting to experience will be permanent.
Of course it isn’t just the U.S. government that is engaging in this sort of behavior. Governments all over the globe have been flooding their financial systems with money, and this is setting the stage for much higher food prices and “periods of social unrest”…
Today, DB’s Jim Reid picked that chart as his “Chart of the day”, repeating what readers already know, namely that Bloomberg’s agriculture spot index has risen by c.76% year-on-year, noting that “that’s the biggest annual rise in nearly a decade, and there are only a couple of other comparable episodes since the index begins back in 1991.”
Like us, Reid then patiently tries to explain to all the idiots – like those employed in the Marriner Eccles building – that the importance of this record surge “extends far beyond your weekly shop, as there’s an extensive literature connecting higher food prices to periods of social unrest.”
Needless to say, the scenario that we are seeing play out right in front of our eyes is perfectly in line with warnings that I issued in my most recent book.
At this point, the powers that be have shown no indications that they plan to reverse course, and so that means that we will be steamrolling into a future of much higher prices, growing global hunger and widespread civil unrest.
That is what is real.
What isn’t real are all of the absolutely ridiculous bubbles that we are witnessing in the financial markets.
Dogecoin may be the most absurd of them all, but every single one of them will end up bursting by the time it is all said and done.
Article posted with permission from Michael Snyder
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