The Israel Deception

Is the return of Israel in the 20th century truly a work of God, or is it a result of a cosmic chess move to deceive the elect by the adversary?

Thursday, April 26, 2018

U.S. economy along with the Fed desperately hoping on higher oil price so that returning Petrodollars will keep markets going

As bond markets in the West show signs that foreigners no longer want dollar denominated assets, an interesting thing is occurring that may just provide short-term salvation to economies that desperately need an infusion of liquidity.  And this surprising catalyst is the sudden rising of oil prices and the return of Petrodollar flows.

The recent surge in oil prices is poised to boost global assets as crude-producing states deploy replenished stashes of petrodollars, according to a growing chorus of analysts. 
It’s the potential reversal of part of the global "quantitative tightening" that was said to have occurred as oil prices dropped precipitously, and could amount to an extra shot of liquidity at a time when central banks are beginning to normalize monetary policy. 
"The increase in oil prices is generating a shift in flows and incomes across the world, effectively reversing the previous big shift seen between 2014 and 2016," wrote JPMorgan Chase & Co. analysts led by Nikolaos Panigirtzoglou. They estimate that energy producers stretching from the Middle East to Norway saw their oil-related revenues plunge from $1.6 trillion in 2014 -- when crude reached $115/bbl -- to less than $800 billion in 2016, when it fell to $27. 
The drop in oil-related proceeds roiled global markets by cutting off producers’ demand for imported goods and curtailing the ability of big sovereign wealth funds and central banks to buy foreign assets. Those funds and FX reserve managers may have purchased $160 billion less in public stocks and $80 billion less of bonds as a result of the slump in crude during the two year-period, JPMorgan said in research published on April 20. – World Oil
With central banks having to switch over from Quantitative Easing to Quantitative Tightening due to the fact that half a decade of lower oil prices have forced them to have to print tens of trillions of dollars to sustain a modicum of liquidity to stave off deflation, markets are cheering the return of higher oil while at the same time it becomes a Damocles Sword over consumers who are fully tapped out, and in more debt today than during the 2008 financial crisis. 

Bitcoin Milestone: 17th million Bitcoin could be mined as early as today which also means production costs will continue to grow exponentially

It is ironic that as more and more Bitcoin miners came online last year than ever before, the amount of cryptocurrency mined has actually declined year over year.  And as the next milestone for Bitcoin comes upon the markets, perhaps even as early as today, the result will mean that extracting the cryptocurrency will exponentially get harder, and much more expensive.

17th Million Bitcoin watch:

Barring an unforeseen event, the 17 millionth bitcoin is likely to be mined in the coming day, data from shows, a development that would mark yet another milestone for the world's first cryptocurrency. That's because as per bitcoin's current rules, only 21 million bitcoin can ever be created. 
Stepping back, the milestone, the first million-bitcoin marker to be crossed since mid-2016, is perhaps noteworthy as yet another reminder of the technology's core computer science achievement - digital scarcity created and enabled by shared software. – Coin Desk
However as noted above, an article we published just a few days ago shows that Bitcoin miners now need a minimum of $8600 per coin just to break even.  And with each subsequent coin being harder and harder to mine, this break even cost will only get higher.

Gold's favorite historical catalysts of inflation and higher oil prices appear to be signalling that higher metal prices may be just around the corner

While it is a given that price suppression and manipulation in the gold and silver markets is a fact of life, it is also correct to say that central and bullion banks cannot keep prices down forever.  And most often the biggest catalyst for gold moving higher is a rush by investors into the metal as a safe haven asset.

Which is why today it is more important to watch fundamental indicators in the markets more than it is to study technical trends.  And with the 10 year Treasury closing above 3% yesterday, and oil prices starting to break out of a six year bear market, the return of inflation appears to be very real, and is historically the launching pad for investors to suddenly rediscover gold as a primary safe haven.

When gold prices are high, major mining companies scramble for new discoveries.
Eventually when they start mining those deposits, though, the supply of gold increases, pushing prices down. 
As the price falls, the miners’ profit margins fall, which causes investors to lose interest and the miners to reduce production. 
This causes supply to fall, prices to increase, and the cycle starts all over again.
In a way it’s almost comical. And that brings us to today. Well, technically yesterday. 
We’ve been seeing for more than a year that interest rates have been rising. 
Yesterday afternoon the yield on the 10-year US Treasury note surpassed 3% for the first time since 2014. 
And oil prices have been rising steadily as well. 
Financial markets don’t like this combination– it means that inflation is coming. Big time. And stocks plummeted worldwide as a result. 
Now, that immediate reaction was probably a bit too panicky. 
But the deep concern that inflation is coming (or has already arrived) is completely valid.
Inflation is a HUGE problem. And the traditional hedge in times of inflation is GOLD. 
But remember– new gold discoveries have collapsed in the past 15 years. 
And, as Lassonde said above, there are few discoveries on the horizon to make up the difference. – Sovereign Man

Wednesday, April 25, 2018

The Daily Economist update for April 25 2018 - Financial market and economic wrapup

Interview with The Daily Coin regarding the the online Populist Movement and on my new book, A journey Distilled: The Narrow Road to Enlightenment

Below is an interview I did yesterday with Rory Hall of The Daily Coin regarding the frequency shifts that the world is experiencing today in politics, economics, and spirituality, and also on my new book, A Journey Distilled: The Narrow Road to Enlightenment.

The Book is about a process every believer in Christ needs to take in order to forge and create a lasting and intimate relationship with God.  It is about the steps one must take to change their 'old self' into the 'New Man' that Christ talked about, and where the church has failed in their first estate of training discipleship in new believers.

You can get a softback here at The Book Patch, or the E-Book over at Amazon.

Universal Basic Income, like Socialism, appears to only work until you run out of other people's money

It was the former Prime Minister of Britain who once said, 'Socialism works until you run out of other people's money'.  And ironically this appears to also be the case for the world's first Universal Basic Income experiment as the nation of Finland has decided to scrap the program just two years after implementation.

With high-profile champions such as Richard Branson, Facebook boss Mark Zuckerberg, and Tesla CEO Elon Musk, backing the idea of governments giving non-working people money (from working people) to do nothing - what could go wrong? 
Well, two years after enthusiastically beginning its experiment with a universal basic income - in which people are paid an unconditional salary by the state instead of benefits - Finland is abandoning the project as government enthusiasm wanes and additional funding requests are rejected. 
Proponents argue that: 
  • The lack of expensive means-testing leads to a higher proportion of the budget going to recipients. This would be more efficient
  • The transparency of universal payments would drastically reduce the need to detect benefits fraud
  • One scheme could replace the current complex arrangement of government benefits, rebates and tax rebates
  • Work will always benefit recipients of this welfare, rather than the ‘benefits trap’ that leaves part-time workers
Critics argue that: 
  • Universal income may be inflationary and, in attempting to move all individuals out of poverty, it may simply raise the level of the poverty line
  • It may reduce the incentive to work and studies have found some evidence to support this 
  • A reduction in taxable income would reduce the government’s ability to cover other expenses, such as healthcare -  Zerohedge

Forget tracking tech company stocks, Nasdaq now preparing to also become a cryptocurrency exchange

It appears that cryptocurrencies have truly become a viable asset class as on April 25, the CEO of Nasdaq announced in an interview that they were in the process of wanting to open their trading platform up to also become a cryptocurrency exchange.

Speaking to CNBC this morning, CEO Adena Friedman extolled the virtues of cryptocurrencies and said that the long-standing equity platform for tech stocks could also soon be trading in Bitcoin and other cryptocurrencies.

Once the space matures, Nasdaq is open to becoming a platform for trading cryptocurrencies like bitcoin, according to the company's CEO. 
"Certainly Nasdaq would consider becoming a crypto exchange over time," Nasdaq CEO Adena Friedman told CNBC's Squawk BoxWednesday. "If we do look at it and say 'it's time, people are ready for a more regulated market,' for something that provides a fair experience for investors." - CNBC
Nasdaq's pursuit of becoming a major hub for crypto trading follows recent commentary made by officials at the New York Stock Exchange who said that more Americans trust in Bitcoin than they do in the Federal Reserve.

As we near the end of the week, is today's down move for Bitcoin once again due to Friday's CME expiration date?

Going back to its origination on Dec. 17, every single time over the past three months that Bitcoin's CME futures contract came up for expiration, the price was summarily pushed lower leading into expiration.  And with the cryptocurrency having experienced two straight weeks of gains here in April for the first time in three months, was today's beatdown of the price below $9000 once again due to Friday's upcoming contract expiration?

No obvious catalyst for the big drop this morning - aside from perhaps Chinese police seizing mining equipment in Tianjin - but Bitcoin Cash is plunging and Bitcoin is back below $9,000 as the entire crypto space is getting hit... - Zerohedge

Tuesday, April 24, 2018

Recent moves in cryptocurrencies have once again brought the sector's market cap back above $400 billion

It is a very true axiom in the cryptocurrency sector that a rising tide lifts all boats.  And the recent moves up by Bitcoin in particular have raised the overall market cap for the cryptocurrency market back above $400 billion.

The bitcoin price has surged to $9,200 over the past 24 hours by recording an increase of around $400. It successfully maintained its momentum in the $9,000 region, which investors perceive as an important level that could lead the bitcoin price to enter the $10,000 in the short-term. 
Today, on April 24, some of the best performing altcoins include ICON (ICX), Ethos (BQX), EOS, and Kyber Network (KNC). All of these ERC20 tokens have recorded more than 10 percent gains against bitcoin which also recorded a solid gain of its own at around 3 percent. 
ICON’s daily trading volume has reached 15,500 BTC, with around 50 percent of that coming from the world’s largest cryptocurrency exchange Binance and the other 50 percent from South Korean cryptocurrency trading platforms Bithumb and Upbit. - CCN

China gets into the gold backed cryptocurrency game with two of their mining companies signing agreement with Macau Blockchain entity

A Macau blockchain company has signed a new agreement with two Chinese miners to backstop their gold backed cryptocurrency with physical metal.

Macau Quantum Gold Blockchain Technology Limited is looking to do what most cryptocurrencies have been unable to do, and that is act as an accepted crypto in China and across other parts of Asia.

Local company Macau Quantum Gold Blockchain Technology Limited announced this Tuesday that it has entered into an agreement with two Chinese mining groups to back its gold-value based cryptocurrency. 
The company registered in the Macau SAR last year developed and issued a cryptocurrency named ‘Quantum Gold Token’ (QTG Token), with the token value being backed by physical gold reserves. Shanghai-based mining group Zenda Gold Mining Co. was described as the largest partner, with the second being a smaller private company. Both companies manage mines in Africa. 
“Every time we get a mine partner our value will go up. We are not targeting an explosive increase; we are aiming at a stable price […]. In the future we will be able to collaborate with other gold industries such as jewellery” the company founder, Steve Pang, told Macau News Agency (MNA). – Macau Business

Cryptocurrency pump and dump? Bitcoin Cash miners destroying tokens to pump up price

When it comes to the 'Wild West' that is the cryptocurrency sector, never be fooled that fraud doesn't occur as much if not more than in the controlled manipulated markets of sovereign governments.  And in a new report out on April 24, it appears that one of the miners for the cryptocurrency Bitcoin Cash is purposely 'burning' (destroying) tokens it mines in order to cause the price to rise by artificially limiting supply.

The cryptocurrency market is hot again after more than three months of losses. The rally leader is bitcoin cash, which has more than doubled in price in April. 
The reason for the rise of bitcoin cash is reportedly that one of the largest mining groups, Antpool, has been “burning” the bitcoin cash coins it created to solve the mathematical problems in the network and also cut the supply, thus propping up the price. 
"Antpool has burned $12 worth” of bitcoin cash a day, Kyle Samani, managing partner at crypto hedge fund Multicoin Capital told Bloomberg. "This was purely a PR game so they could say ‘reducing supply.’” 
Another analyst says that it is hard to keep up projects such as bitcoin cash, and miners are burning the crypto-cash just to keep it going. – Russia Today

Russia accepts Iran into the EEU while also extending oil for goods program meant to bypass the dollar

On April 24, Russia's Prime Minister Dmitry Medvedev announced that they had accepted Iran's proposal to join the Eurasian Economic Union (EEU).  And this comes just a few days after Russia extended a program with the Middle Eastern power to facilitate their year old oil for goods trade which was created so that Iran could completely bypass the dollar.

Russian Prime Minister Dmitry Medvedev has approved a draft interim agreement establishing free-trade zone between the Russia-led Eurasian Economic Union (EEU) and Iran. 
The corresponding order was published on Tuesday on the website of the Russian government. The agreement provides for the formation of a free-trade zone for certain goods and is subject to ratification, as it contains rules different from those stipulated by the Russian law. 
Talks between the two countries on a free-trade deal started three years ago but were repeatedly postponed. According to Russian Energy Minister Aleksandr Novak, who is also co-head of the Russian-Iranian Intergovernmental Commission, the agreement “will obviously trigger further development of our bilateral trade and expansion of investment cooperation.”Russia Today
With Iran, Qatar, and Venezuela all conducting oil trading outside the dollar, and Saudi Arabia on the cusp of being willing to sell their oil to China in Yuan rather than the global reserve, the next big step towards ending the Petrodollar system appears to be in play as trade in goods and commodities outside of just energy is beginning to ramp up.

Monday, April 23, 2018

The Daily Economist update for April 23 2018 - Financial Markets and Economic Wrapup

Even as the manipulation continues, so too is inflation and it is making the inevitable fair value price for gold and silver even higher

Gold and silver investors know that the price will not truly move to their fair value levels until central and bullion bank manipulation stops, or the world enacts a global reset.  And while the powers that be over the banking system continue to be able to suppress the price in daily trading, what they cannot control is inflation and the inevitable explosion that will occur when the true value for gold and silver one day comes.

Just as the central banks were able to suppress the price back in 1980 when it had climbed from $35 per ounce to just under $850 (2400%) in less than a decade, so too did gold move in equivalent leaps between 2002 and 2011 ($240 - $1950) when they were unable to control the market following the 2008 financial crash.

Now however the environment is much different, and besides the tens of trillions of dollars in money printing that has taken place not just in the U.S. but around the world, global debt has reached a point where it is now 3.25 times annual GDP.  And like in the 1970's when the central banks could no longer control the inflation that emerged following money's removal from the gold standard, one day soon the inflation created from QE (money printing) will skyrocket gold and silver the same way it did in the 1970's and early 2000's.

So what should the real value of gold and silver be today if inflation were allowed to freely manifest itself in the global economy?  Long time and well respected analyst Egon Von Greyerz has done the research and the numbers point to $16,450 gold and $761 silver.

Today at $1,350, gold is as unloved and undervalued as it was when we bought in 2002 at $300. On an real inflation adjusted basis gold at $1,350 today is at the same level as in 2002. (see chart below) and also at a 300 year low. The 1980 gold peak at $850, adjusted for inflation, would be $16,450 in today’s money – 12x higher than currently. That price is more in line with our own targets.

Silver is even more undervalued. On the same inflation adjusted basis, silver is also at a 300 year low. At $17.20 today, inflation adjusted silver is the same as in 2000 at around $4. And the 1980 silver high of $50 would today be $761 – a 44x increase from here. - Silver Doctors

Unlike stocks today, gold and silver are truly a buy and hold investment.  And if you think they do not hold any real value or significance in the global financial system, just ask Russia, China, Germany, Austria, Holland, and Turkey what they feel as they continue to either accumulate more gold, or have it repatriated into their vaults.

Once the powers that be lose control over their debt and credit monster that they created following the 2008 financial crisis, gold and silver will in a very short amount of time recoil from the years it has been suppressed and manipulated.  And if history is any example (1980 and 2011), then the above price projections may actually be low, meaning gold and silver are both right now two of the best valued investments in history.

The Vampire Squid (Goldman Sachs) makes ready to try to become masters of the cryptocurrency universe

"Oh look!  The police have themselves an RV." - Die Hard

Similar to how JP Morgan's CEO Jamie Dimon tried to deceive the markets on what the bank thought of Bitcoin and other cryptocurrencies by vilifying them in public and buying them in private, Goldman Sachs' Lloyd Blankfein too was following in those same footsteps when he repeatedly tried to discount the asset class through the media.

But inevitably the truth always comes out and with Goldman's hiring of Justin Schmidt as their new head of their digital asset market desk, the Vampire Squid appears set to try to become the new masters of the Bitcoin universe.

Four months after we reported that Goldman Sachs is preparing to launch a cryptocurrency trading desk, an announcement which coincided with bitcoin trading near its all time highs just shy of $20,000, the bank announced that in its first official expansion to this (r)evolutionary new venture, Goldman has hired Justin Schmidt as head of digital asset markets to help it navigate client interest in trading bitcoin and other crypto assets, and to allow clients gain exposure to cryptocurrencies. 
Schmidt, 38, joined the securities division in New York as a VP and head of digital asset markets, said bank spokeswoman Tiffany Galvin-Cohen. He previously worked at quantitative trading firms Seven Eight Capital LLC and WorldQuant LLC and has computer science degrees from the Massachusetts Institute of Technology, according to his LinkedIn profile.- Zerohedge
Goldman already had exposure into cryptos as earlier this year they dipped their toes into the cryptocurrencies waters by having one of their partners (CIRCLE) enter into the sector as a cryptocurrency exchange.

Iran officially dumps the dollar to move onto the Euro standard

As more and more nations work towards divesting their financial systems of dollars... either through gold repatriation, selling of treasury reserves, or via bi-lateral trade agreements, the less power Washington is able to hold over these countries.  And now it appears that Iran may be at the point where economic sanctions imposed against them are for all intents and purposes moot as they have officially dumped the dollar for the Euro standard.

As part of its years-long effort to reduce reliance on US currency amid a deepening standoff with Washington, Tehran has announced it will start reporting foreign currency amounts in euros rather than dollars. 
The governor of Iran’s central bank (CBI) Valiollah Seif said that Supreme Leader Ayatollah Ali Khamenei had welcomed his suggestion of replacing the dollar with the euro in foreign trade, as the “dollar has no place in our transactions today.” The new policy could reportedly encourage government bodies and firms linked to the state to increase their use of the euro at the expense of the American currency. 
France will start offering euro-denominated credits to Iranian buyers of its goods later this year to keep its trade out of the reach of US sanctions, said the head of state-owned French investment bank Bpifrance. – Russia Today
Iran is the third nation to either fully or in part remove itself from the long-standing Petrodollar system.  And as America's influence in the Middle East continues to wane, coupled with China's new Yuan-denominated oil futures market, it is only a matter of time before the Petrodollar standard completely ceases to exist, and the U.S. loses its ability to use dollar hegemony as a weapon in its foreign policies.

Sunday, April 22, 2018

New analysis suggests that Bitcoin miners need a price of at least $8600 to be profitable

It is perhaps fortunate that Bitcoin has seen a resurgence in price this week because a new study done by Wall Street analysts suggests that the new cost of mining a single Bitcoin has ballooned to over $8600.

Mining bitcoin, the world's largest cryptocurrency by market capitalization, is not as profitable as once thought, according to one team of analysts on the Street who views this as a negative headwind for the price of the volatile digital asset.  
If bitcoin fails to break past $8,600 soon, analysts at Morgan Stanley expect cryptocurrency mining demand to fall significantly, weighing on component makers who have received a boost from the high-growth business amid the crypto frenzy, including Asian chipmaker Taiwan Semiconductor 
At a price of $8,507 at 4:37 p.m. UTC, BTC reflects an approximate 57% fall from highs reached near $20,000 in December, and a near 600% gain over the most recent 12 months. The digital coin's stellar run, compared to the benchmark S&P 500's 13.4% gain over a year, led many once on the sidelines to get into crypto investing due to fear of missing out on the next big thing in tech. While initial coin offerings (ICOs) in 2018 have already raked in more money than the entirety of last year, fears of heightened regulation on the red-hot cryptocurrency markets has put bitcoin's rally to a halt and drove a series of sell-offs this year. - Investopedia
Of course the cost of electricity and server farms to mine Bitcoin and other cryptocurrencies isn't the only pitfall being seen for this industry.  Accelerating taxation on local grids have even caused a few municipalities to ban mining rigs since it was causing the city to have to buy extra electricity at higher costs for their regular citizens.

Ironically, the future of cryptocurrencies do not appear to be tied to the need to mine said cryptos since most incoming ICO's simply sell a set amount of their tokens during their initial offering and then later increase the supply at future intervals.  This of course negates the perceived benefits that cryptocurrencies often promote in their ability to bypass inflationary moves, but in the end this became a fallacy when the cost of mining increased almost to the point where it is now becoming exponential.

Did the Feds pressure Coinbase to cut off Wikileaks from using their exchange?

An interesting thing occurred this week in the cryptocurrency sector that begs one to ask the question of whether the U.S. based exchange Coinbase is now being coerced into becoming a tool for Federal agencies.  And the reason for this is that Coinbase suddenly, and with little notice, cut off Wikileaks from using their exchange for cryptocurrency services.

This hasn't been the best week for WikiLeaks, to put it mildly. Coinbase has shut off the WikiLeaks Shop's account for allegedly violating the cryptocurrency exchange's terms of service. In other words, the leak site just lost its existing means of converting payments like bitcoin into conventional money. While Coinbase didn't give a specific reason (it declines to comment on specific accounts), it pointed to its legal requirement to honor "regulatory compliance mechanisms" under the US' Financial Crimes Enforcement Network. 
This doesn't prevent WikiLeaks from accepting cryptocurrency, but it will have to scramble to find an alternative if it wants to continue taking digital money from customers buying shirts and coffee cups. Unsurprisingly, the organization is less than thrilled -- it's calling for a "global blockade" of Coinbase, claiming that the exchange is reacting to a "concealed influence." - Engadget
The U.S. government has already put strong regulatory pressures on Coinbase to disclose trading activities on its exchange so that agencies such as the IRS can attempt to track down tax evaders.  And of course the so-called 'War on Terror' allows the Feds to intercede in any business or operation under the guise that they might aiding in the facilitation of money laundering or 'funding terrorism'.

While there is not yet any provable evidence that the Federal Government is involved in this action by Coinbase to cut off Wikileaks from using its services for cryptocurrency donations and product purchases, it is too much of a coincidence that this attack against Wikileaks comes just days after the New York Attorney General started an investigation into crypto exchanges.

Following the end of tax season, Bitcoin breaks four month trend and experiences two straight weeks of gains

It has been quite a while since Bitcoin was able to break out of a series of ranges that lead up to April 17 and the end of tax season the United States.  However since that time the cryptocurrency has done something the sector hasn't seen for nearly four months...

Two straight weeks of gains.

Bitcoin bulls are celebrating the virtues of the biggest cryptocurrency again.
The digital coin gained as much as 4 percent Friday, putting it on pace for its first back-to-back week of gains this year. The mini-rally is helping to ease the pain from the more than 50 percent loss in the first quarter that followed last year’s 1,400 percent surge. 
The increase has bought the gains over the two-week period to almost 29 percent. Other crypto tokens rallied Friday, with Ripple jumping as much as 19 percent, Ethereum climbing 7.5 percent and Litecoin adding 4 percent. - Bloomberg
What will be of interest in the coming days for Bitcoin is its price movement later in the week as the next CME Futures contract expiration comes due.

Friday, April 20, 2018

The Daily Economist update for April 20 2018 - Financial Markets and Economic Wrapup

Shanghai Gold Exchange expands reach over gold markets with new partnership with Moscow Exchange

In just a few short years the Shanghai Gold Exchange has become the world's largest physical gold market, with connections to Hong Kong, Dubai, and perhaps even soon with Malaysia.

But before the latter one happens, possibly as soon as later this year, China just announced a new and even bigger partnership on April 19 when the SGE signed an MOU agreement with the Moscow Exchange to facilitate direct trading in their respective gold markets.

On 19 April 2018, Moscow Exchange signed a Memorandum of Understanding (MOU) with Shanghai Gold Exchange (SGE). The agreement aims to promote cooperation between China and Russia in the sphere of gold exchange trading. 
The signing ceremony with Igor Marich, Managing Director of Money and Derivatives Markets, member of MOEX Executive Board, and Song Yuqin, Vice President of Shanghai Gold Exchange, took place as part of the third annual "Global Gold Market Summit 2018" in Xiamen (China) organized by SGE. 
MOU provides for Russian and Chinese precious metals markets and exchange products information sharing, organization of joint conferences concerning topics of gold market, training and staff exchange as well as seeking opportunities for business cooperation. 
Pursuing the provisions of the agreement on Cooperation in the sphere of gold exchange trading between the Central Bank of the Russian and the People’s Bank of China signed in September 2017 this MOU sets forth the next chapter in enhancing of cross-border gold exchange trading on Chinese and Russian financial markets and development of organized precious metals market. – Mondo Visione

European Union puts down the hammer on cryptocurrency traders by introducing identity requirements on exchanges

On April 19. the European Parliament voted overwhelmingly to introduce new rules for cryptocurrency trading on exchanges that will remove all facets of anonymity for investors.

Passing with the vote count of 574-13, the EU is now ready to begin implementation of tighter regulations over cryptocurrency exchanges which will include due diligence procedures, identity verification, and exchange registration.

Graphic courtesy of Coin Telegraph
Members of the European Parliament supported on Thursday an agreement reached with the European Council in December to bring cryptocurrencies under “closer regulation”. The decision was passed with 574 votes, 13 nays and 60 abstentions, the parliament’s press service announced. The agreement represents the fifth and latest update of the EU Anti-Money Laundering Directive. 
The amendments are intended to address “risks linked to virtual currencies”. To end the anonymity associated with them, cryptocurrency trading platforms and custodian wallet providers will be obliged to introduce customer due diligence controls, including identity verification procedures. In the future, these businesses will apply for registration in order to offer regulated exchange and payment services. - Bitcoin

Turkey becomes the next country to demand their gold back from the Fed as they continue to work towards ditching the dollar

Ever since 2008, a number of countries have called for repatriating their gold from central banks in France, Britain, and the U.S..  And now on April 20 we can Turkey to this list as officials in Ankara reported that they are calling for the remaining gold reserves they hold with the Fed to be returned.

Ankara has decided to bring back all its gold stored in the US Federal Reserve, according to Turkish media. In recent years, Turkey repatriated 220 tons of gold from abroad, and 28.7 tons was brought back from the US last year. 
Turkey’s gold reserves are estimated at 564 tons and are worth about $20 billion, Turkish newspaper Yeni Safak reported. This makes Ankara the 11th largest gold holder, behind the Netherlands and ahead of India. The reports come at a time when Turkish President Recep Tayyip Erdogan has taken a tough stance against the US currency. – Russia Today
Turkey has also joined in with Iran and a handful of other countries looking to divest themselves from dollar hegemony, and may soon join with Russia in the Eurasian Economic Union (EEU) where direct bi-lateral trade is the standard for this trade group.

Thursday, April 19, 2018

Cryptocurrency exchange Kraken gives middle finger to NY Attorney General on their demands for operational and IP data

The newest battle between cryptocurrencies and the hacks who function at the whims of Wall Street appears to be taking shape as the CEO of the cryptocurrency exchange Kraken has denied the state of New York's Attorney General access to their operations and IP data in the wake of the AG's office demanding access to this information.

The head of a major cryptocurrency exchange will not comply with the New York attorney general's request for information. 
"The resource diversion for this production is massive. This is going to completely blow up our roadmap!" Kraken co-founder and CEO Jesse Powell said Wednesday on Twitter. 
"Then I realized we made the wise decision to get the hell out of New York three years ago and that we can dodge this bullet," Powell said. "Ordinarily, we're happy to help government understand our business, however, this is not the way to go about it." 
Schneiderman's office asked 13 cryptocurrency exchanges on Tuesday to complete a questionnaire by May 1 to share details on areas such as ownership, fees, trading suspensions and money laundering. 
Powell said the last time exchanges complied with New York's request for information, they were encumbered with the BitLicense. "Kraken left New York because New York is hostile to crypto and this 'questionnaire' we received today proves that New York is not only hostile to crypto, it is hostile to business," he said. - CNBC

Next generation of cryptocurrencies want to use algorithms to mimic central banks

How quickly the cryptocurrency sphere is evolving.

Nine years ago, a mysterious individual or group using the name Satoshi Nakamoto created the first cryptocurrency on the blockchain which was meant to offer people a chance for decentralized money that was outside the control and purview of governments and central banks.  And over the next near decade over a thousand of these types of digital tokens have sprang up.

Then a new type of cryptocurrency came onto the scene which offered individuals tokens that were backed by physical resources such as gold, diamonds, coffee, and even donuts.  These cryptos would incur their own label known as Stablecoins because they promised less volatility than their unbacked cousins.

And now we can add a third category or evolution to this sector as a new form of crypto is being engineered which will offer a flexibility in supply, and would use an algorithm to mimic the functions of a central bank.

Stablecoins are their own category of cryptocurrency. They're designed to maintain a set peg, and avoid the volatility inherent to cryptocurrencies. Unsurprisingly, the most common peg is US$1. 
There have been three distinct generations of stablecoin so far, with new developments in distributed ledger technology and economic theory spurring new coins. 
The third generation is getting increasingly crowded and complex. This genre of coins is focused strongly on economic theory, to create stablecoin systems without any outside collateral. Basis is one of these coins, along with others like Havven and USDX. These cryptocurrencies are essentially designed to be self-sustaining economic systems, which can expand and contract as needed just like a central bank issued currency. Except in the case of these coins, the expansion and contraction is controlled by an algorithm, rather than by a central authority. - Finder

Gold mining output continues to decline as number one producer China reports 3% drop in first quarter 2018

We have written a few times that the potential for Peak Gold production may have occurred sometime back in 2016, and subsequently over the next two years the overall global output has been in a steady decline.  And here in the first quarter of 2018 this trend appears to be continuing as China, the world's largest gold producer, reported a 3% QoQ drop in gold output during this period.

GOLD MINING output in China fell almost 3% in the first 3 months of 2018 compared with the same period last year, according to new data. 
That extends the 6% annual drop recorded in 2017 according to the latest statistics from government-backed body the China Gold Association. 
The world's No.1 gold-mining nation produced 98.2 tonnes in the first quarter, the CGA said down from over 101 tonnes a year earlier.- Bullion Vault

Yield curve now virtually flat as difference between 10 year and 30 year below 20 bps

While the financial pundits continue to jawbone about the ongoing trade war, how great earnings are, and even that stocks have remained 'undervalued', very little is being said about the dwindling difference between the 10 and 30 year bond yields.  And perhaps it is because what this flattening forecasts is something the talking heads don't want to discuss in their narratives, and especially what they don't want their viewers to know.

As of April 19 the Yield Curve (difference between the 10 and 30 year bond yields) has fallen to less than 20 bps difference.  And in every instance in the economic cycle that the curve flattens completely or subsequently becomes inverted (10 year yields go higher than the 30 year yields), it has automatically meant a recession.

10 year U.S. Treasury:

30 year U.S. Treasury:

Difference:  19.4 bps
Peter Cecchini, chief market strategist at Cantor Fitzgerald, calls it “the most important thing to have a clear idea about now.” Billionaire fund manager Bill Gross says we’re rapidly approaching a point at which the trend will induce an economic slowdown. Others claim it’s only natural, with the Federal Reserve raising short-term interest rates in the face of stubbornly low inflation. 
No matter which theory of flattening you subscribe to, the world’s biggest bond market is sending a signal that traders can’t ignore. The longer the trend continues, the more likely its effects could spread to bank earnings and the real economy, while at the same time it would limit the Fed’s ability to respond when these risks emerge. - Bloomberg

Wednesday, April 18, 2018

The Daily Economist update for April 18 2018 - Financial markets and economics wrapup

Gold's consolidation above $1340 setting up for strong second quarter as weaker dollar and rising inflation bode well for metal

Gold rose sharply higher this morning to move above the $1350 level and validate its recent consolidation in the $1340's.  And now some analysts are forecasting that this consolidation will bode well for the yellow metal's prospects in the second quarter as dollar weakness continues and bond markets point towards rising inflation.

The second quarter expects to see another gold rally pushed by strong physical demand and the weaker US dollar, according to Boris Mikanikrezai, precious and base metals strategist at Metal Bulletin. 
“The resilience of gold prices in spite of the substantial wave of speculative selling since mid-March (~71 tones, corresponding to a 17 percent drop in net long spec positions) is encouraging insofar as it suggests the presence of buying pressure elsewhere in the market, e.g. physical demand,” the analyst wrote in his weekly report for Seeking Alpha. 
According to Mikanikrezai, exchange-traded fund (ETF) buying interest for gold is at its strongest since September 2017. “Once bullish speculative sentiment toward gold resumes, I expect a strong price reaction. I have a long position in IAU (iShares Gold Trust), expecting a fresh 2018 high in Q2,” the strategist said. 
The industry expert sees a weaker dollar and lower US real rates in the coming months on the back of three main drivers, with the US Federal Reserve the primary driver. Mikanikrezai expects “a dovish hiking cycle” in the next few months based on “[the] Federal Open Market Committee’s patience to see inflation moving back first toward its target of two percent.” 
Inflation is seen as the second driver pushing gold higher, with an expansionary path projected to move further, boosted by strong oil and a tight labor market. The third boosting element for the yellow metal is the US deficit rising due to this year’s fiscal stimulus. – Russia Today

Retail apocalypse continues as 2018 has seen almost more store closures in the first quarter than in all of last year

2017 was a horrific year for retailers as an estimated 105 million sq ft. of shopping space went vacant, and thousands of stores shuttered their doors.  But this may have been just the beginning as in just the first four months of 2018, another 77 million sq ft. of space has gone empty and the prospect of a retail apocalypse has been confirmed.

Retail real estate carnage is going to continue this year with no signs of slowing up, as Bloomberg reported this morning that over 77 million square feet of retail real estate has closed this year and that 2018 will easily pass 2017's record of 105 million square feet closed. The latest example was the fall of the once massive Toys 'R' Us name: 
The fall of the Toys “R” Us chain, with more than 700 U.S. stores, shows how much retail real estate has changed in just the last decade. When KKR & Co.Bain Capital, and Vornado Realty Trust took over the company in 2005, the buyers justified the $7.5 billion price, in part, because of the supposedly valuable properties that came with the deal. 
This pace of closings puts 2018 on pace to pass 2017's record of 105 million square feet of retail space closed: 
At last count, U.S. store closures announced this year reached a staggering 77 million square feet, according to data on national and regional chains compiled by CoStar Group Inc. That means retailers are well on their way to surpassing the record 105 million square feet announced for closure in all of 2017. - Zerohedge
It was perhaps inevitable that U.S. retail would eventually feel the consequences of the overproduction it engineered during the first decade of this century when the housing bubble was fueling growth at any cost.  And now that consumers are once again tapped out, and with historically high debt accumulation, the end for store closures appears nowhere in sight, and it will take many more years before the dust settles in the retail sector.

Facebook data miner had planned on turning your personal information into a cryptocurrency

In a shocking new report out this week, it appears that one of Facebook's primary data miners, Cambridge Analytica, was planning on take the personal information they had gleaned from the social media site and turn it into a cryptocurrency operation.

YOU are the cryptocurrency
Cambridge Analytica (CA) has become a huge name in the data analytics space for all the wrong reasons in recent times, most notably for scraping profile information on some 87 million Facebook users for targeting them with content to influence their voting decisions. 
Now, The New York Times reports that the company also had a cryptocurrency in the works. Its plans to launch an ICO and promote a virtual token to enable people to sell their personal data and profit from doing so have apparently been derailed by the recent Facebook scandal in which its data collection activities were exposed. 
The revelation comes from former CA employee Brittany Kaiser, who left the company in February. She also recently claimed that CA used more than one Facebook quiz to gather data on users, and that the number of people that the company profiled is higher than the previously claimed figure of 87 million. 
Kaiser was in charge of the coin offerings business at CA; the firm, which specializes in profiling people so their views can be influenced for political campaigns, is said to have offered its services to numerous companies building virtual currencies.  – The Next Web
The tokenization of everything is quickly evolving, even now into the esoteric.  And perhaps the biggest irony in this report is that CA's cryptocurrency platform would have been the antithesis of security and anonymity for an individual's private information. 

Silver price explodes upward 2.5% and over $17 per ounce as fears of inflation and flattening yield curve draw cash into safe haven

As a convergence of rising inflation, a flattening yield curve, and no end in sight for the global trade/currency wars continue, the precious metals are emerging as the beneficiaries of investors seeking safe haven assets.  And one in particular ripped much higher on April 18 as the silver price finally rose back up above $17 per ounce for the first time in two and a half months, and is already up over 2.5% for the day.

Now, if we can get above $17 and stay above $17 and close out the week above $17.50, this would be very bullish. On Monday I said I think that the sweet spot for the rally to begin in earnest is $18.50, and recall that in past updates, I have said that once we finally get back into the $17s and especially above $17.50, that we could be above $18 in a matter of days. – Silver Doctors

Tuesday, April 17, 2018

While the IRS wants to take money out of your pocket here on Tax Day, businesses have free stuff to put back in

With so many Americans waiting until April 17 (Tax Day) to file and pay their taxes... so much so that the IRS website has even crashed, it is good to know that there is a segment of the economy that wants to put something back into your pocket as Uncle Sam takes things out.

Here is a list of just a few of the businesses that are offering deals or outright free stuff here on Tax Day 2018.

Great American Cookies 
As it does every year, Great American Cookies is offering a free Cookies & Cream Cookie, which combines a vanilla cookie with premium chocolate sandwich cookie pieces and white chocolate chips, to all customers on Tuesday, April 17. No purchase is necessary for the Tax Day 2018 freebie. 
Kona Ice 
The weather might be a bit chilly in some areas, but Kona Ice will offer a free shaved iceto anyone who wants one on April 17. Just tweet your zip code to @konaice and the company will let you know where to find the closest truck to you, along with and where and when they will be serving the shaved ice up. 
Hot Dog on a Stick 
Pick up a free original turkey or veggie dog at Hot Dog on a Stick on Tax Day 2018. No purchase necessary and you don’t even have to prove you filed your taxes. 
If the tax bill was painful this year, Chili’s is offering a $5 Cuervo Blue Margarita to help wash away the pain on Tuesday, April 17. 
If the tax bill was especially painful this year, Applebee’s is in the midst of a month-long promotion where its house margarita is just $1. 
Chuck E. Cheese’s 
Buy one large cheese pizza, get one large cheese pizza free. Offer is good Tuesday through Thursday. 
Cici’s Pizza 
The price of the all-you-can-eat buffett drops to $4.17 today only. You’ll need this coupon to get the deal. 
Firehouse Subs 
Buy one full-priced combination of a sub, chips, and drink and get a second medium sub for free with this coupon on Tax Day 2018. 
Boston Market 
Participating Boston Market restaurants nationwide will offer a $10.40 Tax Day Special on April 17, which includes a half chicken individual meal with two sides, cornbread, and a regular fountain drink. 
After you file your 1040 tax form, head to Quiznos for a 10.40% deduction off any purchase on April 17. You’ll need to be a Toasty Points loyalty app member, but if you join specifically to take advantage of this Tax Day deal, you’ll also get a free 4-inch sub once you download the app. 
Buy a bag of chips and a medium drink and Schlotzsky’s will throw in the sandwich for free. Tax Day just got that much more appetizing because Schlotzsky’s is offering a free small original sandwich with the purchase of chips and a medium drink. This offer is only available on Tuesday, April 17 and is sure to delight the taste buds of many. 
Grimaldi’s Pizzeria 
Another pun on the most famous tax form works in your favor as Grimaldi’s Pizzerias is offering a traditional cheese pizza for only $10.40. 
Blue Point Brewing Co. 
Beyond launching their Tax Day IPA (8.0% ABV) today, Blue Point is offering free pints of the new beer to any CPA who visits the brewery’s tasting room between April 18 through April 20. And if you can prove you paid taxes this year, Blue Point will give you a free four-pack of Tax Day IPA when you buy a four-pack. 
Bruegger’s Bagels 
Grab a Bruegger’s famous Big Bagel Bundle — 13 bagels and 2 tubs of cream cheese — for just $10.40 from the chain through on April 17 (a $3.50 savings). You’ll need to first download this coupon
Sonny’s BBQ 
Every Tax Day, Sonny’s offers its “IRS” – Irresistible Rib Special. You’ll get half-price Sweet & Smokey or House Dry-Rubbed Rib Dinners (with two sidekicks and homemade bread). Sorry, no baby-backs. 
Planet Fitness 
Filing taxes take too much out of you? Planet Fitness is letting both members and non-members use its HydroMassage chairs for free on April 17 to relieve their Tax Day 2018 stress. (You’ll need this coupon to take advantage of the deal.) 
Office Depot/Office Max 
It’s not just for tax day, but if you’ve got documents you need to ensure are destroyed, whether it’s old tax forms or something more recent, the office supply stores are offering up to 5 pounds of free document shredding with this coupon. And the good news is the Office Depot coupon isn’t just good on Tax Day — you can use it through Apr. 28 to take advantage of the offer. 
The WayfarerOn the road for Tax Day 2018? Manhattan’s The Wayfarer is offering half off of all alcoholic beverages today from 7:00 a.m. – 11:00 p.m. 
W New York 
If it’s more convenient to drown your sorrows at the W New York Downtown, you can select from a special Tax Week cocktail menu. Among the offerings are Uncle Sam Took All My $$ ($4 beers); Wait, It’s Tax Day – I Need an Extension ($10 cocktails); and Uncle Sam Owes Me – Let it Rain (discounted bottle service). 
Hilton Fort Lauderdale Beach Resort 
On April 17, the first 17 people who call to book requesting the “Tax Day rate” will get a one-night stay for just $4.17. You’ll have to visit in September (not Labor Day weekend). And you’ll have to call 954.414.5131 after 4:17 p.m. E.T.
At Sonic, the annual tradition is half off cheeseburgers all day on Tax Day. Limit five per customer at participating locations.  
P.F. Chang's has a promo code (TAXDAY) that you can use to get 5 percent off takeout orders made online or by phone on Monday and Tuesday. 
Captain D's has a "1040 Deal" Monday and Tuesday that includes six pieces of fish, a family side and six hush puppies for $10.40.   
White Castle is offering a 15 percent discount on any "in-Castle" purchases on Tuesday.  
Firehouse Subs has a coupon on Facebook, which you can use Tuesday through Thursday to get a free medium sub when you buy a full-priced medium or large sub, chips and a drink.

The Daily Economist update for April 17 2018 - Tax Day for Gold, Bitcoin, and Cryptocurrencies

IMF flip-flop: Bank chief now says Bitcoin could be beneficial to the global financial system

Less than a month ago, IMF Chief Christine Lagarde had publicly called for a crackdown on Bitcoin and other cryptocurrencies, and even suggested that both governments and the banking cartel use the Blockchain against decentralized cryptos.

Now on April 17 it appears that Lagarde has flip-flopped when she wrote in a blog post that Bitcoin could actually be beneficial to the global financial system.

Bitcoin has received an unexpected boost from Christine Lagarde, after the head of the International Monetary Fund (IMF) detailed the global benefits of cryptocurrency. 
Ms Lagarde wrote in a blogpost that cryptocurrencies like bitcoin could enable fast and inexpensive transactions, while the underlying blockchain technology could make financial markets safer. 
The price of the world’s most valuable cryptocurrency returned above $8,000 following the publication of Ms Lagarde’s comments, though it is unclear if the gains are directly attributable to the news. 
“Just as a few technologies that emerged from the dot-com era have transformed our lives, the crypto assets that survive could have a significant impact on how we save, invest and pay our bills,” Ms Lagarde wrote in the blogpost. – UK Independent
As we at The Daily Economist have always advocated, when The Powers that Be cannot destroy something, their next step is always to try to co-opt it. 

Gold price has remained above $1300 for the longest stretch in five years

In opposition to many analysts who have predicted that gold would fall down to extreme levels of $1000, $600, and even $400 per ounce, and interesting trend has instead emerged which hasn't occurred since June of 2013.  And that is that the gold price has remained above the $1300 level for at least 105 days straight.

Since crossing over $1,300 an ounce on Dec. 29, 2017, gold hasn't looked back. It has been 105 days (and counting) since gold actively traded below $1,300 per ounce, which is the longest such streak since prior to June 2013. Make no mistake about it, gold has crossed over $1,300 an ounce on quite a few occasions since June 2013, but at no time had it stayed above this watermark for longer than 101 days (Jun. 24, 2016 – Oct, 3, 2016) -- until this past week. – Motley Fool
In addition to this trend, it also appears that the floor for gold has moved above $1310 to consolidate around the $1320's.  And this consolidation is making it much more difficult for the manipulators to be able to keep it from breaking through the $1355 resistance level in the near future.

Billionaire commodity trader Jim Rogers sees gold going through the roof as next market correction will be worst in our lifetime

On April 16, Kitco spoke with billionaire commodity trader Jim Rogers on what he sees for the markets in the coming months, and what asset classes one should move towards to protect themselves from the next inevitable correction.  And like what many central banks are doing right now in accumulating gold, Rogers sees this as the primary asset to buy as he expects the price to 'go through the roof' at a time when the next market correction will be the worst in our lifetimes.

Kitco: What kind of correction are you anticipating Jim? 
Jim Rogers: Well, it's been over 10 years since we've had a bear market, which is very, very unusual, so the next bear market is going to be the worst in your lifetime.  In MY lifetime, and I'm older than you. 
Kitco: So in quantifiable terms, are we talking over 50% correction? 
Jim Rogers: Absolutely. 
Also when people lose confidence in governments, and paper money, gold is going to go through the roof.

Showdown may be looming as less than one tenth of one percent appear to be filing taxes on Bitcoin profits

It's officially Tax Day this April 17, and an interesting dichotomy appears to be occurring that could potentially lead to a showdown between the IRS and cryptocurrency traders.

According to survey out from Credit Karma, less than one tenth of one percent of individuals claiming profit from the sale of Bitcoin are reporting the windfalls on their taxes.

With the US tax deadline just one day away, crypto investors who traded actively during the market's run-up and inevitable meltdown should have a lot of activity to report to the IRS. 
But according to a survey conducted by Credit Karma, only a handful of people who have filed their taxes using Credit Karma's tools have reported bitcoin holdings or holdings of some other cryptocurrency - fewer than 100 out of a total of 250,000 filers, or a whopping 0.04% in total. 
In all likelihood, this means that (tens of) thousands of bitcoin traders are refusing to pay the IRS, either betting on the anonymity of the blockchain to conceal their identities, or perhaps in some cases they simply don't have the money to pay, having lost most of their profits during the market's spectacular meltdown, as was the case for one anonymous trader who complained on Reddit that he owed the IRS $50,000 that he didn't have, according to CNBC
"If I had to guess, there's probably a lot of underreporting," said Elizabeth Crouse, a Seattle-based partner at law firm K&L Gates. "Most of the people in the cryptocurrency world tend to have a pretty high risk tolerance." - Zerohedge
There are two schools of thought when it comes to the question of needing to pay taxes on the buying and selling of cryptocurrencies.  The first of course is the reality that even the sector itself calls their tokens a currency, which means capital gains taxes are appropriate for any winning Forex transaction. On the other hand is the argument by anarcho-capitalists that as a decentralized and unregulated asset class, it should be exempted from taxation since owners trade it more along the lines of barter than they do an investment.

Either way, a showdown may be on the horizon between the IRS and crypto holders, and we know who usually wins those battles.

Monday, April 16, 2018

The Daily Economist update for April 16 2018 - Financial markets and economic Wrapup