Bitcoin

Sentiment towards gold is as bad as we have seen it since the 2003/2004 period. Bitcoin is the more sexy thing. People want to talk about bitcoin and anything with “bit” in the name seems to be doing very well. Whereas gold is very much less sexy ... for now ...

The Economist is a quintessential establishment publication. Keynesian shibboleths about “market failure” and the need to prevent it, as well as the alleged need for governments to provide “public goods” and to steer the economy in directions desired by the ruling elite with a variety of taxation and spending schemes as well as monetary interventionism, are dripping from its pages in generous dollops.  The magazine has one of the very best records as a contrary indicator whenever it comments on markets. While gold hasn’t yet made it to the front page, but the Economist has sacrificed some ink in order to declare it “dead” (or rather, “buried”).

As innovation ouptaces regulation, a few pointers on how to manage risk in the search for funding and revenue

• Obama, McConnell missteps undercut trade pact in U.S. Senate (Reuters)
• Bears Beware: Rout Puts Investors on Wrong Side of Central Banks (BBG)
• U.S. Set to Rip Up UBS Libor Accord, Seek Conviction (BBG)
• Greece’s Creditors Said to Seek EU3 Billion in Budget Cuts (BBG)
• Amtrak train derails in Philadelphia, killing at least five (Reuters)
• Oil glut worsens as OPEC market-share battle just beginning (Reuters)
• China Stimulus Aims at Restructuring Trillions in Local-Government Debt (WSJ)

• Full picture of Clinton charities' foreign government funding remains elusive (Reuters)
• Greece Readies for Another Week of Deadlines (BBG)
• Greece says deal will be 'difficult' at Eurogroup meeting (Reuters)
• Saudi Arabia’s Rulers Snub Arab Summit, Clouding U.S. Bid for Iran Deal (WSJ)
• Saudi Aramco Said to Plan Spending $80 Billion Overseas (BBG)
• The $900 Billion Influx That’s Wreaking Havoc in U.S. Bills (BBG)
• Cameron rules out another Scottish independence vote (Reuters)
• Banks Prep Defense for Anti-Wall Street Campaigns (WSJ)

"Bitcoin represents a monumental paradigm shift that will transform the social, political and economic landscape," according to Paul Vigna and Michael J. Casey in this presentation. Since its advent, Bitcoin has gained a reputation for instability and illicit business; naysayers fear its power to eliminate jobs and upend the concept of a nation-state. Vigna and Casey show that cryptocurrencies can also bring good. For one, they remove the middleman from the financial system, giving the power to the people and safeguarding from the devastation of a 2008-type crash. They also promote financial equality; Bitcoin has already given the world’s unbanked - those marginalized billions who’ve never had a bank account - unprecedented access to the global economy.

In a remarkably unbalanced and lazy article on gold this month the Economist magazine attempts to dismantle the case for investors and others to own gold. Both from an investment point of view and also from an ethical point of view. The article is so laughably one sided that it resembles propaganda rather than journalism. Therefore, we take pleasure in dissecting the article misleading sentence by misleading sentence.

Systematic Corruption Has Metastasized throughout the U.S.  ... Making Our Once-Great Nation Deathly Ill

By going after Ripple (a major player in the industry), FinCEN is trying to scare all the smaller players into ratting out their customers. You don’t see rich, stable countries doing this sort of thing. In fact, the exact opposite. An official from HK Treasury recently stated that: “the Government does not consider it necessary to introduce at the moment new legislation to regulate trading in such virtual commodities or prohibit people from participating in such activities.”

"China’s capital account might be closed—but it’s not that closed. Between 2003 and 2012, $1.3 trillion slipped out of mainland China—more than any other developing country... GFI says the most common way money leaks out in the developing world is through fake trade invoices. The other big culprit is “hot money,” likely due to corruption—which GFI gleans from inconsistencies in balance of payments data. In China, both activities have picked up since 2009." Just like in the U.S., the so-called government “stimulus” in China achieved nothing more than to stimulate an oligarch crime spree. Hence the global boom in $100 million real estate, art and everything extremely high-end. As intended, the bailouts and stimulus on a global basis went directly to the 0.0001%.

First it was Blythe Masters (and the Fed). Now, the most important FDIC-insured hedge fund in the world, Goldman Sachs, adds its name to a growing list of Wall Street institutions exploring digital-currency technology’s potential to provide faster and cheaper financial transactions and payments.

• Marchers protest police violence in Baltimore, New York (Reuters)
• Majority of Financial Pros Now Say Greece Is Headed for Euro Exit (BBG)
• Greece signals concessions in crunch talks with lenders (Reuters)
• Greece, Euro-Area Partners Target Deal by Sunday (BBG)
• Iglesias Says EU Risking Right-Wing Backlash With Greek Pressure (BBG)
• Student-Loan Surge Undercuts Millennials’ Place in U.S. Economy (BBG)
• Majors’ Quandary: Why Drill for Oil When They Can Buy Somebody Else’s? (WSJ)

Just as very few realize the dollar and the euro are digital currencies, very few realize that those dollars and euros that they own quite possibly being hacked right now. Here's how easy it is to do so...

This may take you the entire weekend to digest, but if you are an unsecured creditor/lender (have a checking, savings or demand deposit account) to a euro zone bank, I would consider it your fiduciary responsibility to yourself to sit down and parse this piece with care and aplomb!

With nearly $1B invested in blockchain related startups even the luddites are taking notice, but most still have no idea what this tech is capable of. Here's a shocker for the Gold crowd!