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Showing posts with label bitcoin. Show all posts
Showing posts with label bitcoin. Show all posts

Saturday, March 18, 2017

Bitcoin crashes down to near $1000 as China sets new parameters to monitor identities of users

As we have mentioned numerous times in previous articles here at The Daily Economist, Bitcoin's primary kryptonite is not in the digital currency itself, but in the third parties that would seek to manipulate its original scope for their own benefits.

By this I refer to the supplemental constructs that have emerged to help facilitate Bitcoin use such as with currency exchanges, or the introduction of capital controls by sovereign entities that countermand the crypto-currencies benefits of transparency and security.

Recently Bitcoin has experienced massive volatility over the past couple of months, intrinsically tied to one of the above mechanisms.   First there was a price spike due to Chinese investors using the crypto-currency as a way to get their wealth out of the Yuan and into something else, and this was then followed by a just as severe a drop in price when the Chinese government halted their local Bitcoin exchanges because the facilities were re-hypothicating customer accounts for pooled transactions.

A few weeks later the price once again soared to a new all-time in the speculation that the SEC might approve of a Bitcoin ETF that would financialize the digital currency on U.S. exchanges.

And now on March 18, the newest intrusion on Bitcoin has emerged when the Chinese government announced they were instituting identity monitoring to their Bitcoin exchanges which in part led to the crypto-currency falling more than $100 USD.

China's central bank is moving to regulate its domestic bitcoin industry, circulating new guidelines that, if enacted, would require exchanges to identify clients and adhere to banking regulations. 
Recent scrutiny by the central bank has already led exchanges to impose trading fees and suspend withdrawals of bitcoin from their platforms. Chinese investors have fled the market. 
A draft of the guidelines says Chinese bitcoin exchanges would be subject to current banking and anti-money-laundering laws, and required to collect information to identify their clients, according to people familiar with the matter. They say the rules, if implemented, would require exchanges to install systems for collecting and reporting suspicious trading activity to authorities. The People's Bank of China would be in charge of handling violations by the exchanges. - Marketwatch

Wednesday, March 15, 2017

Bitcoin is no longer the only crypto on the block as Etherium's currency Ether crosses over a $2 billion market cap

Ever since the creation of the crypto-currency Bitcoin came into the public sphere in 2009, dozens of other alternative digital currencies have attempted to follow Bitcoin's success.  But only one of course has made that critical leap into widespread confidence and acceptance, causing governments, markets, and even retailers to adapt to its growth.

Until now.

On March 14, just one day before the U.S. government faces a new debt limit crisis and the Federal Reserve is to decide upon whether to raise interest rates, a crypto-currency other than Bitcoin has reached a milestone by becoming only the second digital currency to achieve a market cap of over $2 billion.

Image result for bitcoin and ether coin
A digital currency called ether has hit a record high market capitalization of more than $2 billion, a milestone only bitcoin has managed to pass. 
One ether currently trades for around $29, hitting a high of over $30 on Monday, according to price tracking website CryptoCompare. 
The figure marks an increase of nearly 20 percent from a week ago. The market cap of the cryptocurrency has surged from $1.8 billion to more than $2.57 billion in the same period. 
Ether was introduced in 2013 and runs on the Ethereum blockchain through the use of an underlying technology that is different to the one that powers bitcoin. - Russia Today

Monday, March 13, 2017

New report shows that Bitcoin is not a primary currency for terrorist funding and money laundering

As a modern day axiom likes to say, 'Don't steal, the government hates competition.'.  And this is exactly why both governments and central banks despise monetary forms and systems that are outside their control.

Bitcoin of course was created to be a completely de-centralized form of money through which governments and central banks could not destroy using their well oiled processes of monetary expansion, devaluation, and inflation.  And now that it has become an ever growing part of the mainstream, one of their new fears is that because they cannot control its price in the open markets, Bitcoin is acting in the aspect that gold used to by revealing how insolvent the dollar and other world currencies really are.

So if governments and central banks are unable to control, regulate, manipulate, or even co-opt the crypto-currency, this leaves one final arrow in their quiver to try to dissuade the masses from moving into it.  And that of course is propaganda.

Over the past few years governments have used their controlled mainstream press to try to label Bitcoin as the currency of drug dealers, money launderers, and of course, terrorist groups.  But a new report out on March 2 shows that in fact the use of Bitcoin in financing terrorism or in laundering money for illicit groups is nothing more than a canard.

Image result for bitcoin is freedom
Ever since bitcoin started gaining popularity, claims have been made as to how this “anonymous” currency facilitates terrorist financing. That has always been a very disturbing claim, even though there was never any solid evidence to back up these claims by any means. In fact, this particular UK report goes to show how cryptocurrency is not used by terrorists, and most likely never will. 
It is evident government officials overreact when they are greeted with new and innovative technologies. Particularly when these innovations take place in the financial sector. Terrorist financing has been a thorn in the side of government officials for quite some time now, yet they are no step closer to finding out where the money is coming from. Blaming bitcoin and other cryptocurrencies for this issue is a logical conclusion, even though officials are incapable of providing this is happening. - The Merkel
Ironically over the past few years, it has been proven that it is more likely that highly regulated global banks participate in money laundering, illicit activities, and aiding in terrorist funding far more than any other type of alternative banking or currency mechanisms.  And there is even one report that suggests that the major Western banks would have gone insolvent if it weren't for their participation in laundering money for the drug cartels during the 2008 financial crisis.

The rise of Bitcoin has almost moved in tandem with the rise of populism and the growing rejection of fascist government controls and central bank monetary destruction.  And when you include the growing rebellion coming against the mainstream media, who are today seen as little more than a propaganda arm of each, the labeling of Bitcoin as a currency for criminals by governments no longer holds any water, and the facts are now coming out to prove it.

Friday, March 10, 2017

Bitcoin price flash crashes as SEC rejects application for a Bitcoin ETF

In a move that should have seen holders of Bitcoin rejoice rather than panic, the SEC on March 10 rejected the Winklevoss twins application to create a Bitcoin ETF, which would have seriously harmed the crypto-currency by financializing it under Wall Street control.

Yet because Bitcoin has become the primary crypto-currency of choice, easily winning out over other digital forms such as Etherium, Dash, and Monero, its volatility is extraordinary since it has already become partially financialized via Bitcoin exchanges.

And thus when the news broke we saw the price in USD fall nearly $300 down to $978.


After much anticipation (and a spike to record highs earlier today), The SEC has decided to reject the Winklevoss application for a Bitcoin ETF. 
The SEC premise appears to be the unregulated natuire of the underlying: 
Based on the record before it, the Commission believes that the significant markets for bitcoin are unregulated. 
Therefore, as the Exchange has not entered into, and would currently be unable to enter into, the type of surveillance-sharing agreement that has been in place with respect to all previously approved commodity-trust ETPs—agreements that help address concerns about the potential for fraudulent or manipulative acts and practices in this market - the Commission does not find the proposed rule change to be consistent with the Exchange Act. - Zerohedge
The irony is that Bitcoin should have gone higher rather than flash crash because supporters of the crypto-currency desperately want to keep it out of the hands of Wall Street, banks, and government regulators.  However, when we look at how activities taken by the Chinese government last month could cause the same type of volatility to the price of Bitcoin as today's ruling did, the question needs to be asked if the digital money has not already been corrupted to the point in centralization that it no longer provides the wealth protection and security that were the platforms that made Bitcoin unique.

The Live Free or Die state of New Hampshire looking at passing bill to de-regulate Bitcoin

Out of all the states in the Union, New Hampshire has long been known as the Northern rebel to the Federalization of the country that came following the end of the Civil War.  And with a state of motto of 'Live free or die', pockets of capitalists and anarcho-capitalists have flourished in New Hampshire as the state's laissez-faire mindset has allowed for more economic freedom than most.

So perhaps it is not surprising that the locale that was one of the original 'primordial soups' around the world for Bitcoin expansion is now pushing through legislation that would completely de-regulate the crypto-currency, and in essence promote its use in banking, commerce, and peer-to-peer financial transactions.

Image result for porcfest bitcoin
Graphic use courtesy of Coin Telegraph
HB 436 was introduced, drafted and proposed by Keith Ammon, Barbara Biggie and John Hunt, who are early adopters and supporters of Bitcoin. In fact, Keith Ammon introduced many people to Bitcoin as early as May 2011, when Bitcoin wasn’t legal. 
Hunt played an important role in getting the bill passed by the House of Representatives, as he brought the bill out of committee, defended it with Ammon and ultimately convinced the House to pass the bill. Ammon is particularly dedicated to passing the bill in the state of New Hampshire due to his involvement with the New Hampshire Liberty Alliance, a nonpartisan coalition formed to increase individual freedom. 
One of the main arguments presented by Hunt and Ammon when defending the bill was that if the US government doesn’t consider Bitcoin as legal tender, it shouldn’t fall under the regulatory guidance designed for money transmission services or products. The bill read: 
“‘Virtual currency’” means a digital representation of value that can be digitally traded and functions as a medium of exchange, a unit of account, or a store of value but does not have legal tender status as recognized by the United States government.” 
If the bill is passed by the Senate within 60 days, or two months, New Hampshire residents will be able to utilize Bitcoin without being subjected to tight money transmission regulations or policies. While it is still unclear if this would allow businesses to refrain from collecting user identity and data for KYC regulations and AML purposes, it will grant users in New Hampshire financial freedom and privacy. - Coin Telegraph

Monday, March 6, 2017

Bitcoin vs. gold? How about a new crypto-currency that will be backed by gold

As the USD price of Bitcoin reached and then surpassed the USD value of gold last week, there has been a great deal of discussion over which is a better form of wealth protection to own.  In fact, both Bitcoin advocates and gold bugs alike agree at the foundation that both are better alternatives to holding one's money in fiat currencies like the dollar or euro, and in financial institutions that are only solvent because central banks have been printing money to prop them up.

But this is where the similarities end as at their core, one is no different than all sovereign based fiat currencies created and backed by nothing while the other is a physical tangible asset that has a 5000 year track record of being used as both money, and a globally recognized store of wealth.

So the questions that have to be addressed regarding the rise of Bitcoin at the present are; is Bitcoin actual money, is it a viable medium of exchange, does it function as a store of wealth, and lastly, does its volatility make it more of a speculative investment rather than a currency able to be used in all types of commerce?

Yet rather than try to argue and debate each of these points regarding the future use and acceptance of Bitcoin, what if the future of crypto-currencies was to actually back them with something tangible?  And that is exactly what is now emerging between a U.S. and Australian company as the two have created a new crypto-currency called OZcoinGold that provides all the decentralized and secure features that are intrinsic with most other forms of digital money on the Blockchain, but it is also being backed by physical gold at a ratio of 1 oz to every 100 OZcoins.


A US company, in partnership with an Australian publicly listed mining company, will launch the world's first crypto-currency backed by gold. www.ozgld.comThe launch will be at the South By Southwest (SXSW) on March 10th, 2017 in Austin, Texas. 
The creation of OZcoinGold, a crypto-currency developed on the 3rd Gen. blockchain, was conceived by CTO Joh Breytenbach when he realized that capital intensive public listed commodity and resource companies experience excessive expenses when raising capital for expansion as well as high regulatory restrictions and high loan costs. 
Further Ira stated "An advantage to the owner of OZcoinGold is that gold is purchased at the regular Gold price Benchmark, thus ignoring the Bid - Ask variation, which can be significant." 
The value proposition is that the gold mining company has a proven reserve of 600,000 ounces of gold under the international geocode which is sufficient as a security over any financial instrument. Further "assayed reserves" are estimated at more than 10 million ounces of gold. The mine has given OZcoinGold security over 100,000 ounces of this gold reserve. 
The OZcoinGold is issued in the ratio of 100 OZcoinGold per one ounce of 24 karat gold. So each ounce of Gold backs one hundred OZcoinGold coins. - Yahoo Finance

Thursday, March 2, 2017

As global currencies roil in turmoil, Bitcoin has now officially reached parity with the price of gold

After shifting Westward since the beginning of the year, when Bitcoin's price movements were primarily tied to Chinese influence, the crypto-currency has not only reached a new all-time high on March 2, but it has also achieved parity with the current price of gold.

Diverging together at $1236 apiece just minutes ago, the alternative choices to holding fiat currencies are now justifiably vying for the market share of individuals around the world who experiencing severe crises in their own economies and local currencies.

Bitcoin Chart:


Gold Chart:

Live New York Gold Chart [Kitco Inc.]

Global currency troubles:

Venezuela: The Central Bank of Venezuela says the country is down to just $10.5 billion in foreign reserves. At the same time, Caracas has to meet debt obligations of $7.2 billion this year.

Greece: Now, fresh tensions over the country’s bailout are putting that progress at risk. About 1.3 percent of deposits were pulled from the banks in January, while bad loans crept higher, an increase Bank of Greece Governor Yannis Stournaras blamed on borrowers using the deadlock with creditors as an excuse to avoid making their payments.

Greek officials are meeting in Athens this week with representatives of the euro area and International Monetary Fund to set out the policies Greece must undertake to unlock more loans. The government foresees an accord in March or early April, but the scale of pending issues raises concerns they may be politically hard to sell at home.

U.S.: On March 15, the latest suspension expires and the debt limit will likely reset a little north of $20 trillion.

If Congress has not voted by mid-March to either extend the suspension or raise the ceiling, Mnuchin will have to start using special accounting measures just to keep paying the country's bills without violating the borrowing limit.

With the gold price currently being held down through the Comex and London derivatives markets, the likelihood of Bitcoin's price soaring well past that of the yellow metal is very real, especially as the Federal Reserve has come out in recent days almost assuring the markets of another rate hike.  And this will only add more fuel to the crypto-currency's legacy as it officially becomes one of the world's most popular alternatives to holding one's wealth in any sovereign currency.

Tuesday, February 28, 2017

After years of vilifying Bitcoin, now the Mainstream Media sees it as a savior for China's monetary system

First they ignore you, then they laugh at you, then they fight you, then you win.  These were the words of a famous revolutionary who used non-violent protest as the means to overthrow the British Empire from its hold over India.

Now in 2017 there is another revolution going on that is for the future of the world's money.  And where even as recently as three years ago the mainstream establishment media was both scoffing at and vilifying the advent of crypto-currencies and those who embraced them, on Feb. 27 that same mainstream media is now hailing Bitcoin as the potential savior for the monetary system of the world's second largest economy.

China’s new bank regulator, Guo Shuqing, is by all reports the reformer the second-biggest economy desperately needs. His 17 months as stock market watchdog served up so many directives so rapidly that traders called him “Whirlwind Guo.” 
He arrives on the banking scene at a moment when China’s financial system is in a whirl of its own. The immediate challenge - murky, debt-laden banks threatening China’s economic outlook - is well known. But a longer-term threat, an existential one, is landing along with Guo: a Chinese government version of Bitcoin that makes you wonder if the nation will even need banks in 10 years. 
In creating its own cryptocurrency, Beijing is taking the whole if-you-can’t-beat-them-join-them concept to new heights. Earlier this month, the People’s Bank of China sent shockwaves through Bitcoin circles by halting withdrawals and bringing the heads of cryptocurrency exchanges in for a good talking-to. Then last week, the PBoC announced it’s going digital in a big way. As China mints its own block-chain medium, will it ban Bitcoin transactions? Given the tight correlation between zigs in the yuan and zags in Bitcoin values, the PBoC’s entry could be a game changer - and not necessarily for the worse. - Barron's

Saturday, February 25, 2017

As Bitcoin and gold converge at $1250, which asset is the best to buy with your money?

On Friday Feb. 24 we saw the price of gold end the week over $1250, and bitcoin near its own all-time high of nearly $1230 begging the question of which asset of the two is the best to buy if you have the money.

Followers of either gold or bitcoin have strong arguments both for and against each asset, while there are also a number of investors who are in favor of owning both as a means of wealth protection.  However, if an individual only had $1250 to spend on one or the other, what parameters would separate the two to make one stand out more than the other.


Bitcoin has the potential for much bigger growth, and in this it acts as both a form of currency and type of investment.  But Bitcoin relies upon many factors such as widespread public acceptance to function in commerce, and the hope that governments do not criminalize the crypto-currency as being a threat to their monetary systems.

Additionally however, Bitcoin is completely portable and transferable, and can be taken across borders without anyone having knowledge of its existence.

But perhaps it's biggest failing is that it is not tangible in the physical sense, and has as much emotional value to an individual as their plastic debit card, or even as poker chips do while gambling in a casino.

Live New York Gold Chart [Kitco Inc.]

Gold on the other hand has a history stretching back to the beginning of mankind, and has been both money and a store of wealth of over 5000 years.  And while it is much more difficult to store in larger quantities than Bitcoin, and much more difficult to transfer across borders and customs than if someone simply carried a pen drive with them in their carry-on luggage, gold is easily the most recognizable form of money and could be used for commerce in just about every city, nation, or village on the planet.

As fiat currencies show their age and their accelerating decline in value, assets like gold and Bitcoin will both reign as strong alternatives for people to transfer their wealth into for the distant future.  And the question of which one to choose will become a real issue in the days ahead now that both have reached virtual equilibrium in both price and desirability.


Friday, February 24, 2017

Is South Africa looking to become the next BRICS nation to go cashless?

Over the past four months we have seen India begin the difficult process of weaning her people off of physical cash, as Prime Minister Modi has officially called for the implementation of a digital monetary system.  Then earlier this week we began to hear word that Russia was investigating the taxing of individuals who chose to use cash in transactions and other commerce.

Now on Feb. 24 we can add South Africa to the growing list of BRICS nations who might be setting the stage for eliminating physical cash in their economies and creating a completely digital monetary system.

Image result for africans want digital currency
Globally, cash, as a means of transaction, has been on the decline for decades.
First World countries are leading the transition. 
In emerging market countries, such as China, South Africa and India, for example, more than 90% of payments are still cash based. 
We have also seen how quickly, thanks to our almost complete mobile penetration, blockchain technology, such as Bitcoin has taken off in South Africa across all strata of our economy. 
These are signs that South Africa’s transition to a cashless environment could happen very quickly indeed. - Biz Community
Unlike the forced banning of cash which we have seen in India, and may soon see in Russia, the move towards digital money in South Africa may instead come from a voluntary push as citizens trust less and less in the nation's primary sovereign currency.

Wednesday, February 15, 2017

Bitcoin use surging in countries who have bad monetary systems, or large outdoor market environments

The tale of Bitcoin and other crypto-currencies has become two-fold.  First, it is a potent medium of exchange for high net worth individuals who want to transfer wealth from one currency to another. And secondly, it has functioned as originally intended in places like Venezuela and Morocco, where governments have either destroyed their own sovereign currencies through bad monetary policies, or where large outdoor markets facilitate the use of cash in the majority of their transactions.
On February 2, Venezuela's leading bitcoin exchange, SurBitcoin, was forced to suspend operations when its bank account was revoked. According to Rodrigo Souza, who runs SurBitcoin's trading platform, the bank closed the account in anticipation of a nationwide crackdown on bitcoin use in Venezuela after the police raided a warehouse with 11,000 mining computers. SurBitcoin is in talks with other banks, and hopefully it will be operating again soon. 
As he predicted, SurBitcoin's closure has led to a surge in peer-to-peer trading. LocalBitcoins, a site where users connect to buy and sell bitcoins, makes its trade volume public through an API. (See the chart below.) Last week, 464 bitcoins were exchanged in Venezuela on LocalBitcoins, the equivalent of nearly $470,000 dollars based on today's price. That's close to a 50 percent increase in volume since SurBitcoin stopped operating. (LocalBitcoins' previous trading volume peak was 377 bitcoins the week of October 15, 2016, but, at the time, bitcoin was worth almost 40 percent less than it is today.) - Reason
LocalBitcoins Venezuelan volume (BTC) |||

Bitcoin and other cryptocurrencies use are spreading rapidly in the Kingdom of Morocco on the blind side of the global Satoshi community. Professional crypto trader and developer, Aziz Elmi estimates that more than $200,000 of Bitcoin trading is done daily under the radar in his native Morocco. 
Elmi is a leading member of the crypto community in his country with a huge following and the main developer of AtlasCoin, one of Africa's only two cryptocurrencies. He is positive Morocco has a lot to offer to the digital currency world.
Morocco's unwillingness to open up enough to the rest of the world may account for the silent revolution that is going on there. Some pundits think Morocco might be ahead of some of the countries in Africa. Morocco is perceived as leaders in Bitcoin adoption, like Kenya, Ghana and even Nigeria. 
There is the general confidence in the Moroccan cryptocurrency community that there is great potential in their IT arena, especially in cryptocurrency coding and trading. This combined with the huge investments they are making will advance the Kingdom to be at the forefront of adoption in Africa, if the government will regulate the sector fairly. 
“More people and merchants are gradually integrating Bitcoin and other altcoins in their daily lives by accepting payments via Bitcoin. We believe the government should, therefore, intervene accordingly so as to regulate the circulation of Bitcoin reasonably," Elmi proposed. - Coin Telegraph
Bitcoin was created as a way for individuals to function in the global financial system without having to deal with devaluing sovereign currencies, or centralized control over money by governments and central banks.  And in the end crypto-currencies like Bitcoin and others will flourish more in most non-G20 economies, and most likely could have aided individuals in places like Cyprus and Greece when their own banking systems and economies collapsed over the past seven years.

Tuesday, February 14, 2017

South Korea is the newest country seeking to eliminate cash and wants to do so by 2020

First it was Sweden, who's people are so intoxicated by technology that it was not very difficult to get them to give up their cash to run on an entirely electronic financial system.  Then in November India decided to jump on the Cashless Society bandwagon, only unlike their counterparts living in the Northern part of Europe, their citizens are the exact opposite and do not trust their government or banking system to take away physical cash from the economy.

Thus when it comes to creating a world without physical money it is on par with how half the world is content to be as sheep and follow the globalists desire to control every aspect of their spending, saving, and investing, while the other half is infused with the frequency of Populism, and realize that without the ability to control your own money in a physical form, then nearly all freedoms are permanently lost to the whims of elected and un-elected officials.


As we are now well into the first quarter of 2017, and living in the aftermath of Brexit and the election of Donald Trump, the battle is on for the establishment to hold onto the status quo, while at the same time fighting a populist movement that seeks to tear down their power base built upon a foundation of debt, credit, and privately owned central banks.  And at the fore are two more major economies push strongly towards a cashless monetary system.

And those two entities are the European Union, and South Korea.
“Hand over your money.” That’s what the Financial Times newspaper called it. But it might as well be rephrased as “Stick ’em up!”

It appears that the Central Bank of Korea, South Korea’s central bank, plans to withdraw all coins by 2020, followed by removing all bank notes soon afterwards. No feedback has been requested from the public.

South Korea is determined to become a cashless society, exclusively using T-Money and other electronic payment cards. This goal may make sense to South Korea’s banks and government, but it is not without obstacles or resistance. - Numismaster
The ball is already rolling down the path towards a completely cashless society, where physical money is eliminated and your freedom to choose to spend, save, and invest as you see fit is at stake.  Which means that the clock is now ticking for anyone who is awake to transition their wealth out of this parasitic system before it is too late, and find alternatives in hard assets that act as money (gold, silver), or in a financial construct such as Bitcoin and Goldmoney, that allow you to keep your wealth in a structure that is outside the control of banks and government.

Monday, February 13, 2017

As Iran moves away from dollar completely, the Islamic state could provide unlimited potential for gold and Bitcoin

Almost from the moment that President Barack Obama shipped Iran over $100 billion worth of cash, gold, and other frozen assets that the U.S. had controlled during their decade's long sanctions against the Islamic State, the Middle Eastern oil power began fomenting a new policy in which they would completely divest themselves from the dollar, and protect themselves from any future attempts by the U.S. in using the reserve currency as an economic weapon.

Additionally, Iran has been none too keen on transitioning towards the Euro as a full time replacement, and this has opened the door for the government to find alternative mediums of exchange that are outside the dominion of Western central banks.

Image result for sharia law gold
As Iran moves away from using the US dollar, bitcoin has emerged as a potential replacement. The cryptocurrency could thrive in a country where more than 50 million people are connected to the internet, financial experts claim. 
In the wake of US President Donald Trump’s travel restrictions on seven countries including Iran, the governor of the Central Bank of Iran announced last month that the US dollar will be replaced with a stable reserve currency more frequently used in foreign trades. 
Two possible replacements are being explored such as using one currency, potentially the euro, or allowing Iranians to select from multiple currencies, reported the Coin Telegraph. 
The announcement has caught the attention of the country’s first bitcoin exchange, BTXCapital, which sees Iran as a market with potential to grow. “The market is massive. A large population with a high proportion connected to the internet means there is a lot of completely untapped market potential,” Ganesh Jung, CEO of Draglet who develop an exchange platform used by BTXCapital, told IBTimes UK. - Russia Today
Yet because Iranian and Islamic law designates currency as being only physical money and coins, the use of Bitcoin would most probably be limited to official government and bank settlements, which are allowed now in a digital capacity through SWIFT.

This leaves backing their domestic currency with a much different form of money, and following December's ruling by the Council on Sharia Finance regarding investment and ownership of gold, we could soon see Iran become the first nation in 46 years to back their currency with a precious metal to protect it from the effects of the dollar.

Eurasian Golden Triangle
“We’re seeing the emergence of a true Eurasian Golden Triangle with China, Russia and Iran as the three key points,” Engdahl underscores. 
“With the stated plan to route the Silk Road rail infrastructure to assist the mining of new gold for currency backing of the Eurasian member states, including now Iran with its significant own unexploited gold, the hyper-inflated, debt-bloated dollar system is gaining a formidable positive alternative, one committed to peace and development,” the researcher concludes. - Hang The Bankers
In the past year foreigners have been selling more dollar reserves than they have been buying, with Japan and China dumping nearly $1 trillion over the past 12 months.  And with all signals pointing towards the Euro collapsing once elections in France, Italy, and Holland take place, Iran is looking to be well prepared for the next monetary system to emerge, whether it be with gold, Bitcoin, or a combination of both.


Thursday, February 9, 2017

Bitcoin goes mainstream as Japan legalizes the crypto-currency and designates it as legal tender

As major world currencies such as the Yen, Yuan, and Euro struggle to remain viable in an eroding global monetary system, some governments are slowly coming to accept the advent of alternative mediums of exchange that their citizens can use to protect their purchasing power.

Since 2009, dozens of central banks have embarked on a currency war following the 2008 global financial crisis in order to protect their economies and especially their exports.  And ironically it was this same year that Bitcoin came onto the scene as the world's first crypto-currency.

And over the past eight years governments have struggled with how to deal with a form of currency that they could not control, tax, or regulate, and Bitcoin inevitably followed the path laid out by Mahatma Gandhi when he used a non-violent method of rebellion to eventually secure India's freedom from Britain.
"First they ignore you, then they laugh at you, then they fight you, then you win."
And on Feb. 9 we may have just seen the first real victory for Bitcoin acceptance in the mainstream as the Japanese government has officially decreed Bitcoin to now be considered as legal tender, and welcomed it for use by individuals and businesses.
Embracing cryptocurrency, Japan has a new law that will make bitcoins usable as legal tender. Companies hoping to deal in the new currency, however, must submit to a long list of regulations to ensure that the ‘coins’ are not being used for criminal activity. 
Among the regulations, a company is required to have at least $100,000 in reserve currency, report their activities to the government regularly, and undergo routine external audits by the Japanese National Tax Agency. 
Japanese companies wishing to use bitcoins will be expected to pay the equivalent of some $300,000 to adopt bitcoin, and there is no guarantee that they will receive a license, even if they abide by government edicts. The steep price tag will likely discourage smaller Japanese companies from adopting the cryptocurrency. 
The measures have been put in place, according to reports, to protect the rights of consumers, as bitcoins have been involved in several notorious scams. The most famous of these was the Mt. Gox scandal, in which a bitcoin exchange company was found to be artificially inflating their holdings. At its 2013 peak, Mt. Gox handled about 70 percent of bitcoin transactions in Japan, but the scandal shuttered them. - Sputnik News
Image result for bitcoin yen

There are of course many upsides and downsides to this new initiative by Japan embracing Bitcoin.  First, centralized regulation by a government is the antithesis of what the original creators of Bitcoin desired when they created the crypto-currency almost a decade ago, and it threatens to impart a growing loss of confidence in the digital currency as people begin to see Bitcoin simply as another fiat medium of exchange subject to the whims of government.  However, acceptance by that same government could be the catalyst necessary for reaching a point of critical mass, where retailers will rush into accepting the currency as it explodes in recognition locally, and elsewhere around the world.

Additionally, and like what we have seen recently over in China, the legalizing of Bitcoin as a viable form of currency could see a massive rush by the Japanese people into exchanging their Yen or Dollars for Bitcoin, causing the price to skyrocket even higher than it is today, while also removing supply out from the general marketplace.  Because according to the original programmers, only 21 million Bitcoin will ever be created (mined), and the Japanese population could easily co-opt the entire supply if just 20% purchased just one Bitcoin apiece.

Tuesday, February 7, 2017

As India's Reserve Bank works to create a cashless society using the blockchain, they are also looking to outlaw Bitcoin

There is a famous axiom that goes, don't steal as the government hates competition.  And this appears very much to be in play in the country of India where the Reserve Bank of India (RBI), or the nation's central bank, is working hard to bring about a cashless society using blockchain technology while at the same time issuing edicts to try to outlaw Bitcoin.

Last November, India's Prime Minister suddenly and without warning started to redeem currency bills from the public and the country's monetary system.  And in a speech given during his monthly address to the nation, he explicitly said his end goal was to bring everyone under a cashless or near cashless monetary system.

Image result for ban bitcoin
"I want to tell my small merchant brothers and sisters, this is the chance for you to enter the digital world," Modi said speaking in Hindi, urging them to use mobile banking applications and credit-card swipe machines. 
"It's correct that a 100 percent cashless society is not possible. But why don't we make a beginning for a less-cash society in India?," Modi said. "We can gradually move from a less-cash society to a cashless society." 
More than 90 percent of consumer purchases in India are transacted in cash, Credit Suisse estimates. While a smartphone boom and falling mobile data prices have led to a surge in digital payments in recent years, the base still remains low. 
Modi urged technology-savvy young people to spare some time teaching others how to use digital payment platforms. - Zerohedge
Fast forward to Feb. 5...

The RBI issued a statement and a warning on Sunday where the central bank acknowledged that they, along with member banks, are pursuing a digital monetary system to replace the cash economy with a digital system primarily using blockchain technology.  And one of their largest points of emphasis was to severely admonish the use of Bitcoin, which is in line with a similar warning they issued on the crypto-currency back in 2013.
“The RBI advises that it has not given any license/authorization to any entity/company to operate such schemes or deal with Bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc., dealing with virtual currencies will be doing so at their own risk.”
The Indian government, as well as the central bank, are fighting a populist rebellion against their war on cash, and their push towards an all digital cashless society.  And Prime Minister Modi has continually issued policy edicts over the past few months in an attempt to try to halt citizens from dispensing of their currency in the forms of gold, jewelry, and even Bitcoin.

And although governments around the world for the most part have tried benign capital controls to slow down the use of Bitcoin, none as yet have actually considered the crypto-currency a threat, and have attempted to ban or outlaw its use by the people.

Until now.  And this should tell you that India's push to ban cash from the hands of the people is more a battle against freedom than it is a battle against corruption, money laundering, or even the spurious claim of 'fighting terrorism'.

Tuesday, January 17, 2017

The threat of the U.S. banning cash is not over as it becomes a topic at the Davos Economic Forum

Just when Americans thought they might be out of the woods from their government seeking to ban cash, a Nobel-Laureate economist participating at this year's Davos World Economic Forum has proven that to be incorrect.  In fact, the topic of banning cash in the U.S. as well as elsewhere around the world is on the menu of this week's forum, and Joseph Stiglitz is the chef serving that main course.

Indian Prime Minister Narendra Modi has already removed 86% of his country's currency from circulation in an attempt to curb tax evasion, tackle corruption and shut down the shadow economy.
Should the US follow suit? 
Joseph Stiglitz, Nobel Prize-winning economist, thinks so. Phasing out currency and moving towards a digital economy would, over the long term, have “benefits that outweigh the cost,” the Columbia University professor said on day one of the World Economic Forum's Annual Meeting in Davos. 
Stiglitz was speaking in the session Ending Corruption alongside Mark Pieth from the Basel Institute of Governance and APCO Worldwide Founder and Executive Chairman Margery Kraus. Stiglitz and Pieth co-authored a report, Overcoming the Shadow Economy, in November last year. 
Quantifying the scale of the problem, Stiglitz said: “You can put it into the context of one of the big issues being discussed in Davos this year - the backlash against globalization, the darker side of globalization ... The lack of transparency in global financial markets, the secrecy havens that the Panama Papers exposed, just reinforced what we already knew ... There is a global framework for both corruption and tax evasion and tax avoidance. 
“The fact that you can hide ill-gotten gains so easily in these secrecy havens really provides incentives for people to engage in this activity as they can get the economic returns and then enjoy the benefits of those returns. If there were not these secrecy havens then the benefits from engaging in these kinds of illicit activity would be much diminished.” 
One of the countries that has not done enough to fight corruption is the US, Stiglitz went on to say, and one remedy could be to phase out cash and embrace digital currencies. - World Economic Forum
Stiglitz, like two other economists (Larry Summers and Ken Rogoff) who spent 2016 promoting the end of cash to protect the failures of the central banks, sees taking away the freedoms that physical money provides all individuals as the only alternative to allow the Fed to begin negative interest rates.  However, like with nearly all Keynesian economists running Western monetary systems today, they ignore the real culprits behind the use of cash in illegal activities, and refuse to call out the very banks they wish to protect from when they were tightly involved in money laundering, and helping fund terrorism and the drug war.

As we have seen in India, the European Union, and Venezuela these past few months, governments are not afraid to eliminate currencies or formulate policies meant to ban cash entirely from an economy.  And this leaves the only recourse for the common man to simply opt out of the system, and get their wealth into physical gold, silver, or bitcoin, and offshore as much of it as possible so that it is outside the hands of the financiers who want to take it from you.

Monday, January 16, 2017

World Gold Council official sees Chinese investment in metal soaring from depositors who have ¥22 trillion to spend

One of the primary reasons that Bitcoin saw a roller coaster ride over the past month was in large part due to Chinese depositors and investors using the crypto-currency as a mechanism to divest some of their Yuan denominated holdings to exchange them for assets in other currencies.  But even as the Chinese government starts to crack down on Bitcoin exchanges, a representative for China at the World Gold Council believes that this money could eventually funnel its way into physical gold.

The Chinese Have A Jaw-Dropping $22 Trillion In Bank Deposits – What This Means For Gold & China Bears

Chinese depositors have an estimated ¥22 trillion in cash held inside banks, and are looking for avenues to both invest and exchange out of in light of capital controls meant to keep the currency from offshore capital flight.  And with the Shanghai Gold Exchange emerging last year as the world's largest physical gold market, acquisition of gold by the Chinese people is not a very difficult concept to fathom at all.

It’s inevitable that fairly soon - possibly even by the end of the year - the renminbi will be a floating currency. Moreover, either on its own or as part of a basket of currencies, a floating renminbi will be at least partially backed by gold. In other words, China is on an inexorable course to exert an economic stranglehold on the East. The world will then likely have two reserve currencies, one for the East and one for the West. - Stephen Leeb via King World News

Wednesday, January 11, 2017

Forget Bitcoin, Swift may soon put the dollar itself on the blockchain

As financial institutions and think tanks work overtime to create new financial platforms using blockchain technology, one of the most unlikely of these announced on Jan. 12 that it is in the planning stages of creating a process to function in cross-border payments using the global reserve currency.

Known as SWIFT, or the Society for Worldwide Interbank Financial Telecommunications, it is the network that facilitates the exchanging of the world's currencies for dollars to aid in the function of global trade and commerce.  And in a release made on Wednesday the institution reported that they are planning on using blockchain technology to replace older infrastructures in their processes of servicing the global reserve currency.

Image result for blockchain dollar
A global platform that connects the vast majority of the world's banks has begun building a blockchain application to simplify cross-border payments. 
Announced today, The Society for Worldwide Interbank Financial Telecommunication (Swift) is integrating open-source blockchain technology with its own products to build a proof-of-concept that might one day replace the so-called "nostro" accounts it keeps filled with cash all over the world - just in case they need it. 
If successful, the blockchain application has the potential to finally achieve a longstanding dream of Swift, to free up the cash stored in those accounts so it can be invested in more profitable measures. - Coindesk

Saturday, January 7, 2017

War on cash in Greece, Australia, India, China, and Venezuela opening door for need to have gold and Bitcoin

2016 was the year where economic 'experts' dropped hints in newspaper op-ed's and university white papers on how governments needed to eliminate cash to sustain the debt bubbles central banks had created through their absurd monetary policies following the 2008 financial crisis.  And while many individuals pushed off the idea of banning physical cash as hyperbole and 'ivory tower' nonsense, by the end of the year at least three countries had begun testing this option, with two more implementing capital controls to achieve the same thing here in early 2017.

Image result for war on cash

In late November, India's Prime Minister Modi issued a sudden mandate where the largest two denominations of currency were being completely absolved, and that the people had until December 15 to turn in their bank notes for new script.  This led to an economic revolt where most people tried to exchange their money for gold or gold jewelry, shooting up the price in some cases to around $3600 per ounce.

This move in India was soon followed by the country of Venezuela, where President Maduro called for the elimination of the $100 Bolivar note to try to keep the Venezuelan people from using their near worthless money to buy food and other goods from neighboring Columbia.

Yet the questions one has to ask are, were these moves independent of one another, or were these nations being used as test cases to see how the public would react to restrictions on owning and using cash?

If we put these inquiries on the back shelf for the moment to look at two other nations instituting restrictions on cash through differing forms of capital controls, the most important focus should be on the reactions of the people to their governments restricting their ability to do as they please with their money, and in what assets they are moving into to escape those restrictions.

That answer of course is the movement of wealth into both gold and Bitcoin.

Image result for gold and bitcoin

In the case of India, people looked towards their long-standing tradition of physical gold, and helped created shortages as they lost nearly all confidence in their fiat money itself.  But over in China, where the government instituted capital controls restricting the offshoring of money in an attempt to counteract growing liquidity problems in their banking system, investors and individuals looked to Bitcoin as the quickest and most liquid way of transferring their Yuan into some other currency or asset outside their borders.

Heading into the second week of the new year, two additional countries are preparing to join in the war on cash and put their own peoples to the test on whether they will accept the elimination of cash, or if they will rebel en masse to this loss of economic freedom.  And for both Greeks and Australians, the coming days will see what their reactions will be and if they too will seek solace in alternative forms of money, or if they will simply accept the inevitable and quietly cede their personal sovereignty to function under a digital system run at the political whims of their governments.

Wednesday, January 4, 2017

Bitcoin price could surpass gold in dollars by the end of the week

As the price of Bitcoin crushed through the $1100 resistance level with great gusto last evening, it appears to only be a matter of time before the crypto-currency reaches and surpasses its all-time high of $1165.

But perhaps what is even more astonishing is that Bitcoin is now only $20 from equaling the dollar price for gold, which currently stands at the same all-time high price that Bitcoin achieved back in 2013.
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Bitcoin prices are up $100 on the day, having already shot past the $1,100 mark. 
Markets have risen nearly 10% over the course of the day’s trading, according to data from the CoinDesk Bitcoin Price Index (BPI), which hit a high of $1,141 at time of writing before falling back. 
With the move, global exchange averages have inched closer to the BPI's all-time high of $1,165.89, set on 30th November, 2013, leaving them roughly $25 below that level. 
The digital currency's price appreciated sharply after crossing the $1,100 line, quickly spiking to a high of $1,129.28, before meeting some resistance. - Coindesk
This anomaly in price between gold and Bitcoin is centered around a two-fold dichotomy, where manipulation of one is much easier for the banks to accomplish since they can do so simply by dumping thousands of bogus paper contracts.  And at the other end of the spectrum is the ongoing global currency crisis that is occurring from Venezuela to China, making it much easier for individuals and investors to move their money around using Bitcoin rather than through purchasing gold or silver and trying to utilize them as a medium of exchange.

While there may some short-term resistance for Bitcoin to reach and surpass its all-time high price of $1165, the chances are very good we could see this happen before the market close on Friday in Asia.  But either way, with Bitcoin, gold, or silver, all three have quickly become the money of choice for people seeking to protect themselves from the cash bans, capital controls, and overall destruction of the sovereign money they primarily use.