“The inner meaning of alchemy is simply all-composition, implying the relation of the all of the creation to the parts that compose it. Thus alchemy, when properly understood, deals with the conscious power of controlling mutations and transmutations within matter and energy and even within life itself. It is the science of the mystic and it is the forte of the self-realized man who, having sought, has found himself to be one with God and is willing to play his part.”
St Germain on Alchemy
ATTENTION: All Aspiring Market Wizards!
Welcome to The Academy of Market Alchemy. Our own Peter Pham is here to enlighten you about how to use your mind to decipher markets and perform an alchemy of consciousness to manifest capital gains without the need for indicators, media, or reports.
The market miracles already performed are ‘countless’ and timestamped:
In the following you will understand:
1) Mind over Matter: Holy Grail, Market War
Why the mind has exceeded beyond the physical (Gold), yet manifest into the physical in the form of units of energy (calories and oil) and can be captured as capital gains (capital markets).
2) Free Markets and opportunities for the populous - an Elixir to Exponential Growth
Why a profound interest in market liberation and market controls speak ‘volumes’(!).
3) Success Through Failure: Fly in the Face of Saving Face
Why risk is a reward and why it is better to be ‘sorry’ than safe.
Let’s begin, shall we….
There is much debate about the origins of the word ‘alchemy’. One tale is that the word ‘alchemy’ comes from the Chinese word ‘Kim’ - which refers to the production of gold - migrated to the Middle East where it became the word `kem` and later `al-khimia`.
1) Mind over Matter: Holy Grail, Market War
GOLD has been recognized, treasured, and hoarded as a symbol of wealth over thousands of years. The natural scarcity, radiant beauty, and unique properties have helped the precious metal stay consistently loved by the power elite and masses alike.
However, gold’s abilities have been embellished and turned to legend in recent years. Cited by gold bugs and ‘reasonable’ investors (holding low percentages) as being THE safe-haven asset to get you through hyperinflation and the next omega point. We reluctantly bear the bad news that gold may not actually live up to its reputed magical status when passing through the final days of the current US empire.
The Gold Story
Explanation: Gold is going to the moon. Gold will be $_______.
Rationale: Governments and central banks are using massive amounts of money printing to artificially stimulate the economy and paper over the fundamental flaws in the economy. This will only worsen the problems and result in inflation, followed by hyperinflation and ultimately in an all-consuming economic crash that could destroy the civilized world as we know it.In such a crash all artificial wealth will be destroyed and there will be a massive wealth transfer from fake investments into tangible assets, with gold being the cream of the crop. This reallocation of capital will be based on increasing numbers of people realizing the emperor has no clothes and that gold will stand tall because it is grounded in physical reality. The price of gold will also increase to match the currency in circulation, because the currency should be backed by gold for citizens to believe in it.
Reality: gold has never reached $3000 or $5000, let alone made exponential price moves. The trouble with the gold thesis is that it’s based on a lot of truth from well meaning people with integrity. We can agree that: governments, banks and zombie populaces are all economically dangerous. The monetary systems of zero reserves, fractional reserves, QE, ZIRP, bail ins, bail outs etc are all toxic and unstable. The end of the world is coming with the end of the US empire. Keeping wealth outside the system is prudent.
“So what can we learn?”
”Is it time to question our assumptions about gold?”
We examine gold across 3 empires:
1) The Roman Empire
2) The British Empire
3) The American Empire
A) The Golden Empire - Back in Time
Let’s explore the reality of gold’s track record of performance, starting with a look at the beginning - the Roman Empire.
The Roman empire experienced inflation and calamity. Although, price limits (more on that later) were introduced and the currency was debased. We examine Rome’s inflation by looking at how gold faired first:
1oz gold = 45 coins (31BC-14 AD)
1oz = 50 coins (211-217 AD)
1oz = 60 coins (284-305 AD)
1oz = 70 coins (306-337 AD)
A 40% gain over a 300 year period.
Sounds like a great inflation right?
Maybe not.
Why?
Because gold and most hard assets can never be the key resource of a functioning civilization. Market Wizards, pay attention!
The most important asset throughout all of human history is the primary energy source of the time.
How do you know what is the primary energy source of the time?
Ask yourself what was the most traded commodity of the time. You will likely find an energy source at the top of the list.
We asked, what was the primary energy source for the Roman Empire? To our delight, the primary energy source was linked to state expansion (as always) and that was grains.
Grains, to fuel the soldiers.
Grains, to fuel the labor.
Grains, to provide calories and calories = ‘energy’.
Energy as a resource has always been much more desirable to keep the real economy going. In the latter days of the Roman Empire, it was grains, greens, and bread that were subject to the most inflation. Grain is the oil of the time and the main source of food energy for fueling wars.
Note, that grains were also subject to price limits yet we have an idea of how much grains were really worth which was over 4X that of the price in the capital of Rome.
What’s even more fascinating is that the Roman Empires’s military-industrial complex was fueled by grains alone. The following shows the soldier salary:
Average roman soldier’s pay 1800
Annual grain allotment 12,600
TOTAL 15,400 Sestertius
Other commodities were inline or outperforming gold even during hyperinflation. Soldiers were highly paid at the time as they secured the routes from which all grains flowed to feed the empire.
We often hear about the gold and silver paid to Roman soldiers, but in a context that might have been only around 9% of their income, with the majority being paid in grains.
Paid in energy to protect the energy.
Our Take: During what many cite as one of the biggest case studies for gold’s value during hyperinflation. We direct the market wizard to focus on:
1) The energy of the time ‘grains’ as demonstrated by his high volume of trade and his usage within the most vital sector the military-industrial complex.
2) We benchmark the currency debasement and observe a 40% gain. This is compared to the 4X gain to be had by grains (energy) in a free market around the world.
B) God Save the Queen not the Gold
In the Roman empire, there was minimum growth despite a population of 56 million. With the average citizen living at the poverty line. There were no opportunities for exponential growth for citizens at the time.
The UK by comparison became a global empire through the exponential growth opportunities that arose from industrialization and stock markets.
a) We examine gold’s historical performance
b) We examine the 2 major energies (provender & coal) of the British Empire and its historical performance.
c) We examine the stock market relative to gold’s performance.
a) In 928, the pound sterling (one pound of silver) was established as the national currency by the first king of England, Athelstan. In pre-empire Britain, we see slow and steady inflation of gold prices over the 400 year period:
1257 £0.89 (per oz)
1351 £1.34
1465 £2.01
1546 £3.02
1664 £4.05
b) As the industrial revolution came about the primary energy supply switched from provender (animal feed) to coal. Below one can observe how vital provender was and it price prices up to the transition into coal within the late 1700’s.
Coal prices (below) also outperformed gold, at a time of increased demand, despite massive influxes of supply brought about with improved technology.
c) Besides outperforming gold, the stock market is conducive to the general population participating in exponential wealth creation. In this way, Britain was the first empire to grow its power and wealth by enriching its citizens, albeit the higher classes.
In contrast to previous empires that had the vast majority of citizens living in abject poverty with no access to exponential growth opportunities and the rulers centralizing wealth with a top-heavy society.
Our Take:
The energies of the time (provender & coal) were a superior inflation hedge.
Stock markets within economies that promote a relatively high GDP per capita will vastly outperform gold.
3)The United States of Gold?
The US Dollar was once backed by gold and that has since decoupled. What matters is that the more important energy source of our time (Oil) is pegged with the dollar - petrodollar.
Going back to the Roman Empire and British Empire, then comparing it with the US Empire, the core commonality you see is that wages or currencies have a much greater link to the energy of the time (grains, provender, and oil) than they do gold.
Observe (below), the manipulation and suppression of precious metal prices have been well documented. The US empire is declining, but the stock market is up 50,000%. If we look back to the end of the British empire, we saw a gradual fizzle out and decline of power and wealth.
Our Take: We have seen that in periods of inflation, gold has not kept pace. Although buying a commodity that is not inflated feels good as a buyer, as an investor looking for growth, gold delivers less ‘bang for your buck’, when looking at its behavior in relation to commodities cycles and market demand. At moments when gold has spiked, there has been blatant malpractice to limit the upside and problems with access to delivery.
As holders of precious metals ourselves, we recognize there are good reasons for owning gold. Going all in or expecting astronomical gains after a reset might not be your best option. It offers a return of investment, but not much in terms of returns on investment. It’s good to consider how much to hold, how you hold it, the reasons for doing so and how you expect it to perform.
There is something deeply satisfying about holding a coin or bar in your hand, direct ownership, and being outside the system. Gold itself is a beautiful material and can be appreciated aesthetically as a sexy investment, full of history, and symbolism.
However, expecting it to behave like a silver bullet could be missing the mark. Gold is not the best inflation hedge. Stock markets with invisible assets are fantastic inflation hedges because they’re operating companies that can adjust accordingly. Particularly the bigger companies can adjust to inflationary pressure. That’s what the establishments and bureaucracy of big tech are all about.
2) Free Markets and opportunities for the populous - an Elixir to Exponential Growth
When we examine the price of gold throughout space and time we see that the currency/commodity has been stunted by both the haves & have nots and also more importantly subject to a lot of price-fixing or limitations.
We note environments with exponential growth, such as ones that may be attractive if the populous has the ability to participate (opportunity) and capture its gains.
We will now examine the fool's gold of the content space which is showing a lot of features that represent artifice supply (distortion) which may not lead to exponential growth as it hinders the ability to find a free market equilibrium.
NFTs (Non Fungible Tokens) Not For Today
There is something concerning about artificial low supply with 1/1 NFTs. There are no royalties that you could extract from being an owner of the content.
Any fake limited scarcity like licenses, sports cards issued is not free market, there is no cost issue for these social or cultural licenses or assets.
Lost economic efficiency occurs when the socially optimal quantity of goods or a service is not produced. Non-optimal production can be caused by monopoly pricing in the case of artificial scarcity, a positive or negative externality, a tax or subsidy, or a binding price ceiling or price floor (gold or some stock market)such as a minimum wage. When everything is LIMIT UP and LIMIT DOWN it becomes weak - like Gold .
One of the key takeaways is a difference between artificially suppressed supply based on no valid reason, particularly if the cost of production of these new assets costs very little to produce, like printed cards or digital JPEGs. An Autographed 1/1 is different as there is a tangible obstacle to getting it authentically. An NFT is all digital with no “tangible limitation”. A 1/1 Mona Lisa has some limitations, the artist could never paint the exact same one each time. Whereas ink on paper or a digital creation don’t warrant a 1/1 asset.
Content assets that are able to derive some kind of earnings through yield are the goal. In this case the scarcity is with the people that are the benefactors of collecting a yield that would be similar to owning shares of a company. The reason is there is some volume to stock, but that volume is also controlled because the company is providing an earnings yield that the benefactor or the shareholder gets. Music, movie or content ownership exists in line with its creators, typically due to the physical limitations or demand for the ownership of the content.
If NFTs can evolve to become yield or cash flow producing, this will be an interesting asset class. When NFTs can link to rights and publishing of the content to honor the royalties, that’s the only time to get in.
Decimalization is Inflation:
The decimalization of cryptocurrencies and currencies allows you to infinitely expand the currency base. Decimalization and even negative decimalization gives more leeway and the reason that functions but will also have inflation embedded into it is because of the fact that it works towards an expanding user base. Therefore that decimalization allows more users to participate without necessarily having to appear as if you’re increasing the supply because more people are using it and you’ve really decimalized the unit they are using. Bitcoin and cryptos function like a pyramid, in which it goes up the more people chase price and it can get very fractional or decimal based like currency (which adjusts to supply demand).
3) Success Through Failure: Fly in the Face of Saving Face
Protection Against What?
The UK and the US became a global empire through the exponential growth opportunities that arose from industrialization and stock markets. The stock markets which are part of the capital markets have traditionally provided a lot of opportunities for the people.
One of the features of markets is that of risk and volatility. Volatility in the stock market is conceivably one of investing’s most misunderstood factors. Over a given time period, the range of price and price security indicates volatility.
Stable prices have low volatility (Gold or protected markets)
Low volume is low volatility (NFT’s)
New highs and lows, prices moving rapidly and erratically all signal high volatility (UK and US stock markets)
Economic Volatility (hedged through energy)
The risk from volatile stocks goes both ways. To the market wizard high volatility affords the chance to make gains when the market goes either way. For the average risk-averse person who associates the fear of loss with pain, the idea of a volatile market is unsettling.
This fear is used to create a protected market that is lower volatility - yet offers no exponential gains (the Chinese stock market).
Degrees of Alchemy
Both gold and NFTs are reactions against fakery and control. The distinction between assets, including gold which have real supply and demand factors versus assets using the concept of artificial scarcity which is now being created in the realm of content is notable. We want to segment out of these assets and be focused on content that could be 1/1, but that implies actual legal standing with the bigger governments in the world. Which ensures that you’re able to derive appropriate income and monetization of it just like if you were a content creator on Google for example.
What about the limits of human imagination? A look at our evolutionary history would suggest we are just getting warmed up. Intangible assets have the ability to match the scale that will come from fiat. Beyond the fake fiat, we get the forbidden, so fake it’s real. Continuing until the omega point. This is why we see record level stock market highs whilst the real economy is crashing.
The exponential growth we will continue to see around the world in asset prices is a break from the real, the tangible and hard assets. Not even the crony model of using cheap fiat to buy up real assets will work going forward. The next step is growth from the intangible. The invisible economy, it has existed all along. To rise on the tide of exponential growth, the anchors from the real must be lifted.
Throughout this piece you got to see the real implications of an unrestricted functioning market as opposed to a distorted one and how it can impair your gains in that market. This requires no chart, report or guru and is now permanently imparted into your mind within your investing toolbox. You are witnessing the fact that nothing is truly free. Freeing our minds beyond matter is the holy grail in the market war.
This is a cost to safety and the cost is mostly seen on the limitations of exponentialism, which is essential for true wealth creation. The proverbial 10X bagger or the grand slam. This is why we participate in markets, not for small gains but for outsized gains beyond the realm of imagination, which has as much to do with the features of the product and conditions of the market than anything else. This is why free markets are an elixir to exponential growth.
Finally, you have been exposed to the 'fool's gold' of the mind and that is to believe that hard assets are superior to assets of the mind and civilization. This is an outright lie, as we only gravitate to hard assets when all our growth avenues are restricted. The only tool the controllers are truly interested in is the management of power and pushing that centrical force to obtain more power. We have to be willing to face failure in the process of success and not in saving face with artificial safety and limitations.
1) You now know that if a market isn’t designed for the populace it will not allow for exponential growth. (Refer to the charts of artificial markets vs exponential)
2) Gold is fixed and therefore is less volatile and therefore doesn’t go up as much.
3) If you want a real hedge against economic inflation, choose the energy source of the time.
We are diligently building an Arc with cultural assets to sail the seas of fiat. Get in touch if you’re interested in joining us.