Bitcoin

"Gold is the world’s most persistent bubble: 6,000 years old and going strong" - Citigroup's Willem Buiter.

Dear Willem, thank you for that valiant effort. After reading a few thousands words of shallow propaganda we understand your "confusion": our advice, if you want to understand what gold really is, read the following from Kyle Bass: "Buying gold is just buying a put against the idiocy of the political cycle. It's That Simple." Because if there is a bubble that is even bigger and longer than the "6000-year-old gold bubble" it is that of human corruption, greed, and idiocy. And that doesn't even include the stupidity of those who don't grasp this simple truth.

• National Guard, police curb Ferguson unrest as protests swell across U.S. (Reuters)
• Ferguson Reaction Across U.S. Shows Complex Racial Split (BBG)
• Democratic senator Schumer: Democrats Screwed Up By Passing Obamacare In 2010 (TPM)
• Veto threat derails Reid tax deal (Hill)
• Justice Department Investigating Possible HSBC Leak to Hedge Fund (WSJ)
• Merkel hits diplomatic dead-end with Putin (Reuters), and yet...
• Merkel Said to Reject Ukraine NATO Bid as Rousing Tension (BBG)
• HSBC, Goldman Rigged Metals’ Prices for Years, Suit Says (BBG)

Why is Bitcoin dangerous and of little intrinsic value? Because my local Central Banker Told Me So! - OR - The lasting message from the highly Centralized, Centrally Planned, Central Banks of the World? "We think, so you don't have to!"

There's always more than one way to skin a cat. Follow me as I raise a war chest of cash from the establishment... To disintermediate the... Establishment!

"My premise hasn’t really changed since I published my paper explaining why I had become more constructive towards risk assets this time last year. That is to say, the structural deficiency of global demand continues to radicalise the central banking community. I believe they are terrified: the system is so leveraged and vulnerable to potentially systemic price reversals that the monetary authorities find themselves beholden to long only investors and obliged to support asset prices. However, I clearly confused everyone with my choice of language. What I should have said is that investors are perhaps misconstruing rising equity prices as a traditional bull market spurred on by revenue and earnings growth, and becoming fearful of a reversal, when instead the persistent upwards drift in stock markets is more a reflection of the steady erosion of the soundness of the global monetary system and therefore the rise in stock prices is something that is likely to prevail for some time."

The Hryvnia has collapsed to new record lows near 15/USD this morning. The Central Bank and bankers "agreed to keep UAH at 15-16/USD" but are "not planning on new FX market restrictions." However, there is one terrifying 'currency' that needs to be curtailed... Bitcoin. As The National Bank of Ukraine explains, "In order to protect consumers' rights," the virtual currency Bitcoin cannot be used in Ukraine as a means of payment.

• Fed set to end one crisis chapter even as global risks rise (Reuters)... you mean, for the third time?
• Insider-Trading Probe Focuses on Medicare Agency (WSJ)
• He's sorry: Rajoy Apologizes as New Wave of Graft Allegations Hits Spain (BBG)
• China could 'punish' Hong Kong over protests, says ex-HK central bank chief (Reuters)
• Dubai Insists the Boom is Not a Bubble This Time Around (BBG)
• Bank-Data Sharing Accord Expands Push to Find Tax Cheats (BBG)
• Deutsche Bank Sinks to Third-Quarter Loss on Legal Costs (BBG)
• Kim Jong Un Executes 10 Officials for Watching Soap Operas (BBG)
• French drugmaker Sanofi sacks CEO Viehbacher (Reuters)

When stock prices go all wonky, as they have in recent days, it pays to think a little about what really moves asset prices and determines long term business success.  For ConvergEx's Nick Colas, the key driver has been – and always will be – return on capital.  What investment analysts know as the DuPont model is now 100 years old, but its lessons and applications still drive innovation today.

Once again it's Sell Side Wall Street vs the Contrarian - Reggie Middleton! Pull the RDF (Reality Distortion Field) off of Apple's new payment system (or even their new phones) and you see revealed overpriced products and services nestled in dated technology and sparse distribution relative to its competitors.

• Stick to tapering and rates pledge, says Boston Fed chief (FT)
• Turkey to let Iraqi Kurds reinforce Kobani as U.S. drops arms to defenders (Reuters)
• Obama makes rare campaign trail appearance, some leave early (Reuters)
• Japan GPIF to Boost Share Allocation to About 25%, Nikkei Says (BBG)... or three months of POMO
• Japan Stocks Surge on Report GPIF to Boost Local Shares (BBG)
• China Growth Seen Slowing Sharply Over Decade (WSJ)
• Russia, Ukraine Edge Closer to Natural-Gas Deal (WSJ)
• Leveraged Money Spurs Selloff as Record Treasuries Trade (BBG)
• After clashes, Hong Kong students, government stand their ground before talks (Reuters)

From Bitcoin to the Swiss gold referendum, and from Chinese trade and North Korean leadership, Jim Rogers covers a lot of ground in this excellent interview with Boom-Bust's Erin Ade. Rogers reflects on the end of the US bull market. citing a number of factors from breadth to the end of QE, adding that he agrees with Albert Edwards' perspective that now is the time to "sell everything and run for your lives," as the "consequences of [The Fed] are now being felt." Most notably though, Rogers believes the de-dollarization is here to stay as Western sanctions force many nations to find alternatives. Simply put, Rogers concludes, "we are all going to pay a terrible price for all this money-printing and debt."

This week has seen some market volatility (see VIX Chart) reminiscent of the functioning market from days of old. The markets are spooked, bad news is overtaking good news and bearish views are becoming vogue. We are seeing a titanic battle taking place between the various bull and bear camps and they are starting to unleash some serious firepower. 

"Even though bitcoin is volatile, it's still safer than the national currency," said one young 'tech-savvy' Venezuelan, who as Reuters reports, is looking to bypass President Maduro's dysfunctional economic controls. "I'm teaching people to use bitcoin to bypass the exchange controls," said Gerardo Mogollon, a business professor who styles himself as 'Dr. Bitcoin Venezuela,' speaks at conferences and appears in online videos to urge Venezuelans to adopt the crypto-currency..."Bitcoin is a way of rebelling against the system."

Almost everyone is expecting much higher yields in the near term, but a 30-year drop in yield toward 2.5% should be considered as a possibility for these 8 reasons...