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Showing posts with label money. Show all posts
Showing posts with label money. Show all posts

Sunday, August 20, 2017

Freedom or something nefarious? Members of Congress want to make Bitcoin equivalent legal tender to the Dollar

The biggest attribute of cryptocurrencies is their de-centralization from government and central banks.  And of course at the top of the mountain in digital currency land is without a doubt Bitcoin.

So with this being said, what if some members of Congress suddenly claimed that they had 'seen the light', and want to pass legislation to protect Bitcoin and other cryptocurrencies from government intrusion, and make it legal tender on par with the U.S. dollar?

Would you jump for joy in seeing this as a victory, or would you be extremely cautious knowing that the government does nothing without ensuring it benefits itself?

Based on a reliable source, at least one Republican senator and two Republican congressmen are working on the draft legislation. 
The legislators, however, have requested that should not be identified due to the sensitivity of the issue and the complexity of the proposed solution.
A source close to the effort told TheDC, 
“the center piece of the plan is to mainstream digital currency so it can be treated just like the American dollar. 
First, there is a new entity that is considering issuing a brand new digital currency that is compliant with anti-money laundering laws unlike any other in circulation.” 
Although cash has some of the same problems being used to pay for illegal activities, the perception that digital currencies are being used for illegal activities is seen as the primary roadblock to wholesale acceptance by the American public. 
The source told TheDC the new model is going to follow federal laws that prevent money laundering. This is a break through and could lead to the use of digital currencies replacing the dollar for many transactions.  The legislation is expected to be introduced in early September. 
The source asked the members of Congress involved in drafting the bill not be identified yet, explaining, “this is a very complicated issue and staff are working through some issues that have in the past stopped alternative currencies from being launched.” 
They continued that: 
“...the law needs to be changed to protect digital currencies from federal government harassment to make sure that a complaint currency can be backed by value, the currency cannot be treated like a security or investment, and that transfers are protected against taxation. 
The bottom line is that Congress needs to remove all the obstacles to a vibrant digital currency that has voluntarily taken the initiative to keep the bad guys from using it.” - Zerohedge

Thursday, August 10, 2017

Gold vs. Bitcoin: Peter Schiff debates Max Keiser over which is a better form of money


Company in the UK gets green light to turn gold into currency for use in everyday transactions

While 2017 has seen numerous blockchain companies launched to created a myriad of gold-backed cryptocurrencies, one business in the UK wants to take this even further by turning gold into a currency where it can be used in everyday monetary and retail transactions.

On Aug. 10, a company called Glint announced that they had received approval from sovereign agencies in the financial services arena to begin implementing physical gold deposits as a currency and legal tender, which can be spent and saved through special accounts and an online application.

The same week an analyst told CNBC gold “has never been used as a currency,” a UK-basedstartup is attempting to make it do just that. 
Like the growing number of startups dedicated to making Bitcoin function as a day-to-day means of transacting, Glint hopes to allow consumers to effectively perform point-of-sale transactions in gold. 
“There will be surges where digital assets will go up several times and then there will be a bubble when a genius would switch to gold. We’re on the cusp of it,” a post on the company’s blog last month writes quoting investment fund officer Charlie Morris. 
While few concrete details are known about how Glint will operate once it launches at the end of 2017, it describes its offering as “a new global currency, account and app.” 
As TechCrunch notes,  the premise behind the idea may be simple in that gold is traditionally stable long-term, allowing users to benefit from reduced exposure to centralized fiat controls or Bitcoin volatility. 
Glint has already been given the green light to operate in the UK by the country’s Financial Services Authority. - Coin Telegraph

Wednesday, August 9, 2017

Disconnecting from the dollar completely is now a matter of National Security for Russia

The other day a foreign minister in Russia stated publicly that the Eurasian power was going to be looking at ways to wean themselves more and more off the dollar following the U.S.'s newest round of sanctions in their ongoing game of economic warfare.  Now on Aug. 9 a Chief economist for a Russian development bank stated that disconnecting from the dollar is now a matter of National Security, and the means to completely divest Russia's economic system from dollar use was imperative.

Russia needs alternative, independent payment systems that do not depend on foreign processing centers, and that the Mir national payment system is a step in the right direction. 
"This is a security matter. The Russian payment system needs to be independent, allowing us to live without fear of being hit by sanctions and getting our accounts blocked; it should allow us to use our money without having to worry about processing centers located beyond our country’s borders," Zubets explained. 
Meanwhile, Dmitry Polevoy, chief economist for Russia & CIS region at ING Bank, warnedthat the Russian economy may not be able to become independent from the US dollar anytime soon due to the fact that Russia’s status as major exporter of raw materials - for example, oil - which is globally priced in US dollars. 
"Therefore, a significant decrease in dependence on the US dollar can only be achieved by increasing the volume of non-raw material trade with the non-USD bloc countries," Polevoy said. 
However, chief economist of the Eurasian Development Bank Yaroslav Lissovolik pointed out that coordinated efforts by energy resources’ exporters may help them trade raw materials using national currencies and not just US dollars. 
"For example, if Russia and certain other natural gas exporting countries were to form an alliance, it would afford them more options for trading their commodity using payments in national currencies," he remarked. - Sputnik News
In the end, the more that Washington tries to isolate Russia by using the dollar as its primary weapon, the sooner nations as a whole will reject the reserve currency as a medium of exchange in international trade.  And this will quickly usher in a new monetary system that will either be one of direct trade using bi-lateral currencies, or an ultimate return of some form of resource or gold backed money.

Thursday, July 20, 2017

The gold versus Bitcoin debate is really about obsession rather than fundamentals

With Bitcoin and many other cryptocurrencies seemingly draining potential monies that would have in the past gone into gold and silver, there has been a raging debate among the alternative media sphere over which is better, and even over which is more relevant following the advent of the Blockchain.


In fact, there has been a very recent back and forth between silver advocate Chris Duane regarding his beliefs that Bitcoin as not a viable currency or store of wealth for the future, and Bix Weir, who claims in his refutation to this that Duane lost his clients and subscribers 'billions' by not giving them the 'facts' on the cryptocurrencies.



Yet with all the rhetoric, and the 'red lines' being drawn among both sides of the gold/silver vs. Bitcoin debate, what are the facts?  And more importantly, what do each separate asset provide savers and investors in their portfolios?

Gold and silver have been a proven and accepted store of wealth for thousands of years, and at certain times in history both have been used and accepted as money.  Bitcoin, Ethereum, and the myriad of cryptocurrencies on the other hand have a track record going back just eight years in human history, and according to how they are both seen and traded in the market place, do not at this time function as either a currency or as a store of wealth.

Now to be absolutely fair here, cryptocurrencies do act as a medium of exchange, but not in the same way currencies such as the dollar, euro, and yen do.  Instead they function as a medium of exchange similar to the way U.S. Treasuries do, which as AAA rated instruments, are as 'good as dollars' but must go through a third party conduit to function as a medium of exchange.

Ie... when XXX retailer in the U.S. buys manufactured goods from a company in China, they send over Treasuries rather than pallets of dollar bills.

It is the same way with Bitcoin for the most part.  When someone wants to use Bitcoin to pay for a product or service at Target for example, they cannot simply send an amount from their Bitcoin wallet to the cashier of the retailer, but instead must fund an exchange or card service that does the conversions for them from Bitcoin to dollars, and then use those conduits to pay for whatever item they want to purchase.

Additionally, when you go into a store like Target they do not have their items priced in both dollars and Bitcoin, so the reality is the business isn't really accepting Bitcoin as payment, but only dollars as payment with the third party conduit converting one's Bitcoin to dollars.
"Today, there are a number of billion dollar businesses that accept Bitcoin as a form of payment. These include Dell, Reddit, Expedia, PayPal, and most recently, Microsoft. So for the uninitiated who have not yet grasped what Bitcoin and other cryptocurrencies are, you ought to catch up." 
In other words, Hey haterslook at all these huge companies that are accepting bitcoin! How can you ignore that kind of support? 
Well, there's just one problem there: Almost none of the businesses mentioned above technically accept bitcoin. Instead, they partner with a middleman—generally either Coinbase or BitPay—who takes a customer's bitcoin, immediately converts it into cash, and then deposits the cash in the company's bank account. 
In other words, DellExpedia, Microsoft, and Time, Inc. don't actually "accept" bitcoins, per se. They accept U.S. dollars. It's their bitcoin processing partners who accept bitcoin. They, in turn, make money on transaction fees (in the case of Coinbase), or by selling their software and services as a subscription (in the case of BitPay). - Time Magazine
So what exactly does Bitcoin and other cryptocurrencies function as in the economy and in the market?  According to several Wall Street analysts who are now researching and monitoring the crypto sphere for their clients and brokerage houses, they have labelled Bitcoin as a speculative investment, but also something that has the power through the Blockchain to one day soon replace the entire financial structure of how businesses are financed, and how equities may be traded on Blockchain exchanges instead of in antiquated 'stock markets'.

In the end, Bitcoin and other cryptocurrencies have the potential to do many things in the financial system that gold and silver cannot do.  However, at this point in time these cryptos also do not perform in the same capacity that gold and silver do as wealth protection, and as a true representation of money.  So the bottom line is to treat each as they are rather than as we might want them to be, and invest accordingly in each in relation to the risks and attributes that are intrinsically tied to these individually unique asset classes.

Sunday, July 9, 2017

Money manager concurs that a massive sovereign gold purchase is coming and will be used to fund gold backed cryptocurrencies to replace the dollar

On July 7 we provided an update to metals analyst Andrew Maguire's forecast of an upcoming major purchase of 250 tons of gold by one or more sovereign entities.  Now on July 9 we have another well respected economist and money manager concurring with Maguire's information.


Stephen Leeb, who is a recurring guest on CNN, FoxNews, NPR and Bloomberg TV, and has been called 'one of the country's foremost financial experts', spoke with King World News on Saturday and said he stands with Andrew Maguire's prediction that not only is there soon to be a massive purchase of physical gold coming to the markets by one or more sovereigns, but that this gold will be used to both fund a national cryptocurrency being established in China, and it will lead to the eventual replacement of the dollar as the global reserve currency.
Maguire Is Right, China To Use Gold In Blockchain  
I also was struck by Andrew’s points about blockchains that include gold and about the potential for 2017 to be a major bottom for gold. My thinking for some time has been that the Chinese will use blockchains and some form of virtual currency - not bitcoin or anything available today but a currency of their own creation - to replace the dollar. I don’t think anyone can guess point by point what the plan will be, but the currency almost surely will be a basket that includes gold, the renminbi, and perhaps other paper currencies. 
Whatever its precise form, the goal will be to segue from a dollar-based reserve currency to a gold-centered monetary system. And as I’ve noted previously, this new currency will likely first be introduced as the denomination for trading an Eastern oil benchmark that the Chinese will control. - King World News 
Leeb also went on to say that this gold backed cryptocurrency system would likely be facilitated through the new Eastern oil system being developed between Russia, China, Iran, and quite possibly Qatar... which has been the subject of belligerence in recent weeks over their integration of the Chinese Yuan into their financial system.

The People's Bank of China has done a great deal of research into Bitcoin and the potential for other cryptocurrencies to first be integrated into their economy and Silk Road project, but just yesterday rejected its viability as being a replacement for currency and labeled it simply as a securitized asset.  And with China looking for that one edge to achieve credibility and dominance over both the dying petrodollar, and the world's long-standing unipolar reserve currency, returning money to a gold backed paradigm is just the catalyst needed to bring about the long desired reset to the global monetary system.

Tuesday, July 4, 2017

Japan officially removes taxes from purchase and sale of Bitcoin

On July 1, a new law went into effect which removes all taxation from the buying and selling of Bitcoin in the nation of Japan.  And with their already having recognized the cryptocurrency as a viable medium of exchange within their monetary system, the world's third largest economy has moved another step closer to recognizing Bitcoin as a legitimate currency.

Japan’s tax reform bill which officially eliminated consumption tax on the sale of Bitcoin came into effect on July 1. Bitcoin trading activities are expected to rise in Japan following the activation of the bill. 
In a report entitled “Japan: Inbound Tax Alert, 2017 Tax Reform Proposals,” Deloitte previously revealed that virtual currencies including Bitcoin were set to be exempt from the eight percent consumption tax in Japan. 
Deloitte’s report read
“The supply of virtual currency will be exempt from Japanese Consumption Tax (“JCT”). Currently, virtual currencies such as Bitcoin do not fall under the category of exempt sales, and as a result, the sale of virtual currencies in Japan have been treated as taxable for JCT purposes. Following the enactment of the amended Fund Settlement Law in May 2016, which newly defined “virtual currency” as a means of settlement, the sale of virtual currency as defined under the new Fund Settlement Law will be exempt from JCT. This change will apply to sales/purchase transactions performed in Japan on or after 1 July 2017.” - Coin Telegraph

Thursday, June 8, 2017

Bitcoin regulation in the U.S. still in the 'Wild West' stage as each state is passing different laws regarding its use

There are two types of recognized money in the United States... Constitutional money (gold and silver), and whatever Congress determines to be legal tender.  And this means that for the 50 states, they are somewhat limited in what they themselves can deem as money in this new era of cryptocurrencies.


And this is why it will be a very long time before there is a both a standardized acceptance, and a designated universal platform regarding monetary regulation of Bitcoin and other cryptocurrencies.  But for now these digital currencies are functioning in the realm of 'old west' territories where governance came from a local administrator since there has yet to be full guidance given regarding their labeling and use from the Federal government.

Take for example the state of New Hampshire, which on June 7 signed into law the exemption of Bitcoin from their own local monetary transmission regulations.
The governor of New Hampshire has signed a bill into law that exempts digital currency traders from the state's money transmission regulations. 
Public records show that Gov. Chris Sununu signed measure on 2nd June, more than a month after the state's legislature completed work on the bill. The measure was first introduced in January. 
According to the text of the bill, the new rules exempt "persons conducting business using transactions conducted in whole or in part in virtual currency" from the state's money transmitter regulations. 
The newly-signed bill also stands out for what is effectively deregulation for the state's trader community, whereas other states have looked to beef up rules for those who engage in similar activities. As might be expected, the effort was cheered by community members who have called for fewer regulations for those who work with digital currencies like bitcoin. - Coindesk
Or in the state of Vermont from a month ago, which passed a law labeling Bitcoin as 'Permissible Investment', which is a way for the state to skirt around the Constitution since individual states do not have the power to designate something as money or a currency outside the two types outlined at the beginning of this article.
On May 4 the Governor of Vermont, Phil Scott, signed a bill into law that recognizes bitcoin as a “permissible investment” for money transmission operations. Many bitcoin proponents believe the state is becoming an innovative region as Vermont authorities have crafted quite a few bitcoin and blockchain friendly statutes. 
Vermont’s latest amendment clearly defines bitcoin and alternative digital currencies as a “means of stored value that can be a medium of exchange, a unit of account, and store of value. Has an equivalent value in money or acts as a substitute for money and also may be centralized or decentralized.” 
As far as virtual currencies are concerned “permissible investments shall be held in trust for the benefit for the purchasers and holders of the licensee’s outstanding payment instruments and stored value obligations,” explains Vermont bill 182. - Bitcoin
Unlike Japan, which has all of its monetary statutes determined at the central government level, the United States is made up of 50 semi-autonomous and semi-sovereign territories that have some, but mostly limited, powers in designating monetary policies within their own borders.  But once a transaction occurs across state lines, then instantly the monetary oversight of that transaction falls under the authority of the Federal government.

And until Congress sees fit to make a law or determination on the use of cryptocurrencies as money or legal tender, then use of Bitcoin and their brother cryptos will remain a sort of 'black market' industry, and the ability for a critical mass of individuals and businesses accepting it as money will remain on the fringe of society.

Tuesday, May 30, 2017

UK to have gold dispensing ATM machines in every major city over next few years

An interesting thing has been happening in the United Kingdom ever since the Brexit vote took place a year ago in June.  And that is that the people there have re-awakened to the monetary power of gold, and where the Brits have been one of the driving factors in Europe's recent increase in physical gold purchasing.
When Britain voted to leave the European Union, the thoughts of Yorkshire teacher Grace Hall immediately turned to her family's bottom line. 
Three days later, as UK stocks and sterling plummeted, she put those thoughts into action and deposited part of her life savings -- 25,000 pounds -- into gold. 
"My husband and I are both worried about bank failures and our cash getting swallowed up," she said. "I'm also worried about our kids' jobs and their future." 
Hall was not alone. Dealers are seeing an unprecedented amount of interest in gold, much of it from first-time buyers, to take advantage of its role as a safe haven in times of stress or unexpected "black swan" events like Brexit. 
"The speed at which people are purchasing gold is unprecedented," said Joshua Saul, CEO of The Pure Gold Company, where Hall bought and keeps her Britannia coins. 
"We are seeing people convert as much as 40 to 50 percent of their net worth into physical gold, (compared to) 5 to 10 percent in the past," he said. 
Government-owned bar and coin producer, the Royal Mint, saw a 7-fold increase in sales of 100-gram bars, around half the size of a credit card and costing around $4,400, in the two weeks following the June 23 vote. - Fortune
And a year later the move away from the Pound and the Euro into gold doesn't appear to be slowing down, which has led Ex Oriente Lux to not only install a new gold dispensing ATM machine in West London, but to also have plans to install these machines in every major city in the UK over the next few years.

Gold vending machines are to be placed in every major city in Britain after the country's first machine was switched on in a West London shopping centre. 
The company behind the gold bar vending machines plans to install 50 across Britain over the next few years, allowing ordinary shoppers to invest in the precious metal as an investment. 
Michael McCleary, a businessman from Croydon, yesterday became the first person in Britain to buy a nugget from one of the machines. He paid in cash and bought a 1g "bar" of gold, costing £47. In reality the piece of gold was smaller and thinner than a mobile phone SIM card, but came in a presentation box. - UK Telegraph

Sunday, May 21, 2017

Bitcoin suddenly becoming the investment of the elite as price soars to over $2300 in some Asian exchanges

When Satoshi wrote his White Paper back in 2008 regarding the creation of a money form that would be secure and outside the control of sovereign entities, the underlying premise was that it would not only change the way commerce was conducted, but also provide the common person a means to store their wealth in an asset that was absent of monetary devaluation.

And while it took about five to six years for Bitcoin to move away from the fringe of society, where it was half seen as a novelty and half seen as the savior from the world's fiat monetary system, its sudden emergence into the mainstream has been incredibly robust and unlike anything ever seen in monetary history.

But as we enter into the second quarter of 2017, what was originally intended for the masses to be used as a medium of exchange has suddenly turned into a speculative investment that is being lapped up by the very institutions that would see it financialized instead of used as a real currency.  And the massive rise in value over just the past five months is threatening to categorize the cryptocurrency as a bubble, and scare away many individuals who might seek an alternative to the dollar, euro, or yen as a way to secure their wealth.

Image result for bitcoin bubble
Bitcoin price established its new all-time high at $2,087 earlier today after surging past its previous all-time high set at $2,050, with demand toward Bitcoin rising from institutional investors in the US, Japan and South Korea. 
At the time of writing, Bitcoin is being traded in Japan and South Korea, the second and third largest Bitcoin exchange markets in the world, at around $2,350, at an 11 percent premium relative to the global average Bitcoin price and the price listed by US-based Bitcoin exchanges. 
Analysts including Charles Hayter, the CEO of CryptoCompare, explained that the Japanese and South Korean Bitcoin exchange markets played a key role as the driving factor of Bitcoin’s recent price surge. In an interview with CNBC, Hayter stated
"Arbitrage between the fiat pairs drags markets up or down in line with leading markets. At present, volumes on the KRW and JPY pairs dominate trading with a combined 48 percent market share.” - Coin Telegraph
From a purely fundamental point of view, investors and owners of Bitcoin need to realize that the market is treating the cryptocurrency like a security, and at a time when nearly all other assets such as bonds, stocks, and real estate are at all time highs.  And one of the reasons that Bitcoin is skyrocketing in price and value right now is because institutional players are moving money into what they believe is one of the very few potentially undervalued assets.  But like with any security or investment that receives too much buying in a short amount of time in relation to selling, at some point it will hit terminal velocity, and the fall in price will be just as fast as the velocity in which it rose.

Saturday, May 20, 2017

Bitcoin growing as a currency as UK company to use it as payment at 27 airports

One of the biggest debates in recent weeks as the value of Bitcoin skyrockets to nearly $2000 per coin is whether the crypto-currency is really a medium of exchange, or simply a security that allows one to store their wealth in a decentralized digital wallet.  And while the argument has been strongly on the side of it being a security thanks to Chinese and Japanese investors using it simply as a way to find an alternative to their own devaluing currencies, on May 19 a British company is pulling Bitcoin back onto the currency side of the ledger by allowing its use at all 27 UK airports for extraneous payments such as short and long-term parking.

SkyParkSecure, an airport parking provider in the United Kingdom, is now accepting bitcoin for payments at a number of airports across the region in cities including London, Liverpool, Glasgow and Belfast. 
Are you a frequent flier in and around the UK? A parking provider will now take your bitcoin. SkyParkSecure will automatically convert the fiat pricing of a parking ticket into Bitcoin for quicker and seamless payments directly from your cryptocurrency wallet. 
Based in the North-West of England in Blackpool, SkyParkSecure doesn’t own or operate car parks but acts as a booking platform for airport parking and a host of other travel services including hotels and lounges. The parking provider claims to have facilitated over 1.6 million bookings on its website and ropes in customers with discounted rates. 
Now, SkyParkSecure has laid claim to becoming the first independent UK travel company to accept bitcoin for airport parking. - Crypto Coin News

Thursday, May 11, 2017

Economist Harry Dent honorably pays off bet between a Bull and Bear in the argument to predict direction of gold prices

In the gold sphere there are a ton of different analysts making predictions on where the price of gold is going in light of the Fed's half-decade long policies of quantitative easing, and near zero interest rates.  And of the more well known and popular analysts on either side of the fence, the one who stands out the most on the bearish side of gold is none other than Harry Dent.

Harry Dent is an economist who specializes in trends and demographics, and has a better than average track record of success in many areas of his analysis.  However he became the butt of many criticisms when a few years back he publicly predicted that the price of gold was going down to below $700 an ounce, and likely to reach around $250 before beginning a trend back up.

And the primary premises for his bearish outlook for gold?  That assets were going to hit a deflationary cycle and that gold is more of a commodity than it is money.

So with Dent's analysis out there for all to see in hear, it was not surprising that someone in the gold industry would take his forecasts as a challenge and seek to put Harry on the spot for his future price predictions.  And that someone was Jeff Clark from Goldsilver.com, and an associate of the site's founder Mike Maloney.

So what was the bet you might ask?  Well it was fairly straight forward... within two years time of the agreed upon bet, the price of gold itself would determine who won.  And if it crossed below $700 (or very close to that number) anytime intra-day or closing, then Harry Dent would be considered the winner.

If it did not, and of course we know that it never even dropped to three figures during that period, then Jeff Clark was determined the winner.

And the prize?  A single ounce of gold.

Two years ago I bet economist Harry Dent an ounce of gold that the price wouldn’t fall to his prediction of $750/ounce. 
He had made some noise in the gold community that year about how gold was going to crater. He advised selling your gold and buying dollars. He even stated that $750 wasn’t the stopping point, that the price would fall to as low as $250. 
I couldn’t pass it up. I wrote an open letter to him, citing why I thought he was wrong, and offered to bet him a one-ounce gold Eagle. I even raised the target to $800 and gave his prediction two full years to come to fruition. He accepted. 
My bet was a bold one at the time… if you remember early 2015, the gold price had been falling for two years, and showed little sign of stabilizing. Almost no one thought the bottom was in. Market participants had been decimated. Gold showed some life in January that year, but by the time we finalized our agreement in March the price had fallen another 12%. It dropped below $1,100 that summer, and by December hit $1,049. My wager was not looking so good. 
But gold never fell to $800—never even cracked three figures. I won. And yes, he paid up. (He kept his word and sent me a check for the proceeds, including a little extra for a purchase premium; you may not agree with his predictions, but this speaks highly of his character). - Gold Silver
In the end there is one thing to remember among all the forecasting that is and has taken place over the past several years, and that is that as we go through this current cycle of declining prices in the gold sphere, the price of gold has ended each year higher than the same time as the prior year going back to 2015.  And that trend is likely to continue as long as the economy needs to rely upon the central banks having to pump out more and more credit just to survive.

Arizona officially removes taxation on gold and silver purchases and sales

On May 10 the Arizona state legislature completed its approval of Bill 2014 which removes the state taxation on the sale and purchase of physical gold and silver.

This move is also the first step by the state to once again recognize gold and silver as Constitutional money, and to begin the process towards one day allowing the precious metals to be used in commerce within its borders.

Arizona also joins Utah, Idaho, Texas, Oklahoma, and Virginia in either proposing or passing legislation to work towards the legalization of gold and silver as money.

Sound money advocates scored a major victory today when the Arizona state senate voted 16-13 to remove all income taxation of precious metals at the state level. The measure heads to Governor Doug Ducey, who is expected to sign it into law. 
Under House Bill 2014, introduced by Representative Mark Finchem (R-Tucson), Arizona taxpayers will simply back out all precious metals “gains” and “losses” reported on their federal tax returns from the calculation of their Arizona adjusted gross income (AGI). 
Dr. Ron Paul noted, “HB 2014 is a very important and timely piece of legislation. The Federal Reserve’s failure to reignite the economy with record-low interest rates since the last crash is a sign that we may soon see the dollar’s collapse. It is therefore imperative that the law protect people’s right to use alternatives to what may soon be virtually worthless Federal Reserve Notes.” - Goldseek

Monday, May 8, 2017

Money psychology: Is Bitcoin price already too high for desirability as a currency?

The advent of Bitcoin, as well as rise of the blockchain and its growing number of different crypto-currencies, is bringing forth a great debate on whether these constructs of digital money are the wave of the future for consumers, savers, and investors.

But there are a few very interesting things that are bing missed by most individuals in the Bitcoin eco-sphere, and these are the psychology of money, and the fact that as Bitcoin has now crossed over $1600 per coin, and is being forecast to possibly go as high as $4000 by the end of the year, has the crypto-currency priced itself out of the general market?  And perhaps even more, has it already destroyed its psychological value to individuals as a viable form of money?

A layman's definition of what money is can be determined as this:  An idea backed by confidence.  And for something to be considered a medium of exchange (money) it must have the intrinsic properties that all monies have (store of value, divisible, fungible, portable, etc...), but it also must have the confidence, be it forced (by government), or voluntarily accepted (by critical mass of consumers and retailers), to act as a recognized medium of exchange.

Thus as the price of Bitcoin in dollars as well as other currencies skyrockets due to speculation and investor sentiment, the question that has to be asked is whether or not Bitcoin has priced itself out of the ability to become an accepted currency, simply by the fact that the majority of individuals today can only afford to purchase fractions of the currency, rather than whole Bitcoin's themselves.

Picture this.  A person has $20 they can afford to use to purchase Bitcoin, so they create a digital wallet and go through an exchange to buy some of the crypto-currency.  Now this individual understands the basics of monetary division when it comes to dollars as they have used quarters, dimes, nickles, and pennies for nearly all of their lives.

But at today's price, $20 will buy that individual only .0125 of a Bitcoin, which in physical terms would equate to a penny and a quarter of a penny.  So psychologically, that individual has exchanged $20 for a penny.


Now of course in the crypto-currency realm .0125% of a Bitcoin is not valued at one cent, but you can see the psychology of this as people used to dealing in round numbers and limited fractions in their money now have to go outside the box to try to come to the understanding that it will be unlikely they will ever own a single full Bitcoin since more than half of Americans alone cannot even afford to pay $500 if a sudden emergency required them to come up with those funds in addition to their normal budget.

Then of course there is the reality that the amount of retailers who deal in Bitcoin is still quite limited, and the marketing of Bitcoin as a viable medium of exchange in the mainstream is almost negligible.  And also the fact remains that if people don't see Bitcoin promoted in the mainstream media, or shown in some viable application from the commercial advertising they are programmed to trust, then Bitcoin, as well as other crypto-currencies, will remain as fringe ideas and concepts, or as simply a construct traded in financial markets under the guise of a speculative investment.

Wednesday, April 19, 2017

MIT Professor believes Bitcoin or other crypto-currencies could save financial system

The original idea and concept of Bitcoin was to create a de-centralized form of currency that could not be manipulated, devalued, or financialized by governments or central banks who throughout history have used the power to print money as the means to accumulate wealth and power at the highest levels.  And indeed, the very nature of the world's most current fiat monetary construct has done just that as less than 20 individuals hold more wealth than half the world's population.

This is why gold and silver are and were so important in the past because left to their own devices, they provided individuals, communities, and even nations a stable and often un-inflationary form of money that not only grew productivity, but kept a check on corrupt governments until they seized the power to either 'clip', or replace gold and silver outright.

But in the 21st century the world is rushing headlong into a new paradigm of digital money, and at stake is the age old battle over who controls the ability to 'print' that money.  And according to a Professor at MIT, the advent of Bitcoin or some other decentralized crypto-currency could be the answer to both improving and perhaps even saving the financial system.

Image result for bitcoin can save the financial system
Simon Johnson, a professor at MIT’s Sloan School of Management, says some form of digital currency could fundamentally improve the financial system.
“How do you feel about the way that our existing financial system operates?” Johnson asked the audience at the Business of Blockchain conference, an event organized by MIT Technology Review. “I myself have a lot of concerns. The system we have is not robust—it almost collapsed in the fall of 2008 in the United States, the most sophisticated financial market in the world.” 
In theory, a cryptocurrency such as Bitcoin might make the financial system more stable by providing a way to monitor and trace transactions. Indeed, it may be no coincidence that the paper outlining the concept for Bitcoin was released in 2008, during the financial meltdown. The open-source code for the currency was released several months later, in 2009. Bitcoin was invented by the pseudonymous Satoshi Nakamoto, whose identity remains a subject of great speculation. 
Cryptocurrencies might also remove many of the hurdles that make it harder for poorer people to use the financial system, even in advanced countries, Johnson said: “It is absolutely shameful and really embarrassing that so many people in the United States—one of the richest counties in the history of the world—do not participate in the formal financial system." - Technology Review
In reality a completely Bitcoin based financial system would not be feasible as the 21 million total bitcoins ever to be mined would not fully support both a government and consumer's needs for over 200 countries.  However, a combination of an international trade currency, which would be designated for use by banks and governments only, coupled with a crypto-currency like Bitcoin for use by consumers and businesses that would not be allowed to be traded in financial markets, could solve many of the inefficiencies and corruptions that inevitably spawn over time from the use of a singular form of money.

As former President Calvin Coolidge once said, "The business of America is business", but what he really should have meant was that the government has no place in interfering with business and free markets.  And in a free market, money is determined to be what consumers and producers agree for it to be, and without interference from corrupt men and women who control the means of its production.

Wednesday, April 12, 2017

Maine legislator wants state to join AZ, TX, UT, and ID by removing sales tax from purchase of gold and silver

On April 11 a state Senator from Maine is seeking to follow the growing trend of other states in recognizing gold and silver as money once again by calling for the removal of state sales tax from the purchase of precious metals.

Speaking this week with the state's Committee on Taxation, Senator Eric Brakey is pushing a measure to have state taxes removed from the buying and selling of gold and silver bullion since many dealers and buyers are simply going across the border to states which currently do not have tax impositions on precious metal transactions.

If Sen. Eric Brakey gets his way, buying silver and gold may get cheaper for Mainers.
State Sen. Eric Brakey, R-Auburn, is pushing a measure to exempt gold and silver coins and bullion from the state sales tax. 
Brakey, an Auburn Republican, is pushing a measure to exempt gold and silver coins and bullion from the state sales tax. 
Douglas Carnrick of Winslow told lawmakers that many coin collectors and investors simply buy their gold and silver out of state — and then forget that they’re still required to pay the sales tax on their own later. 
Since about half of the states don’t impose sales tax on gold and silver purchases, it’s not hard for buyers to avoid shelling out for sales tax online or by traveling to nearby states that exempt precious metals sales. 
“The reason for this is, gold and silver coinage and bullion are not normal goods like everything else we charge a sales tax on,” Brakey told the Committee on Taxation this week. He said they are a form of currency for many. - Sun Journal

Wednesday, April 5, 2017

Texas now joins in on the rebellion as legislature submits bill to make gold and silver legal tender

2017 has been a watershed year so far for states desiring to break away (rebel) from irresponsible fiscal policies out of Washington, and diabolical monetary policies issued by the central bank.  By this we mean that more and more states are looking hard at the potential of having gold and silver as money in the wake of rising inflation and a devaluing dollar.

So far three states have either submitted or passed legislation allowing for the metals to once again be recognized and accepted as Constitutional money, and now we can add a fourth as the great state of Texas is currently debating a new bill to allow gold and silver to become once again legal tender.

A bill introduced in the Texas Senate would establish gold and silver as legal tender in Texas. Passage of the bill would create currency competition in the state and serve to undermine the Federal Reserve’s monopoly on money. 
Sen. Bob Hall introduced Senate Bill 2097 (SB2097) on March 10. The bill includes a number of provisions to establish gold and silver as legal tender in Texas. It declares specifically that  certain gold and silver coins are legal tender, and prohibits any tax, charge, assessment, fee, or penalty on any exchange of Federal Reserve notes (dollars) for gold or silver. The bill authorizes the payment of taxes and fees in gold & silver in certain circumstances. It would also prohibit the seizure of gold or silver by state authorities. SB2097 also included provisions relating to gold and silver clauses in contracts, prohibiting payment in dollars if the contract calls for payment in gold and silver. Legally enforcing these contracts through state law would serve to encourage their use. 
Along with the establishment of a Texas gold depository authorized in 2015, passage of SB2097 would set in place all four steps states can take to encourage sound money and take on the Federal Reserve. - 10th Amendment Center
Ironically Texas had already forged ahead with another important step towards allowing gold and silver to be used as legal tender prior to SB2097 when they created a gold depository a few years back, and ordered gold owned by the state's university system to be repatriated from the Federal Reserve.  And in fact they, along with Utah, are the only current states to have either a public or private depository to hold gold for use in commerce.

Bitcoin finally to function as a currency as Japanese retailers rush to allow the digital money as payment

In the opinion of the staff here at The Daily Economist, a large number of Bitcoin advocates over the past few years have sold out the original mission of the crypto-currency as being primarily a form of decentralized money that individuals and entities could use as a medium of exchange for goods and services and instead have welcomed its financialization by both Wall Street type markets, and third party conduits.  By this we mean that Bitcoin has been seen and purchased more as a speculative investment versus used as a form of money.

But with the Japanese government suddenly buying into the crypto-currency last week, and setting forth a regulatory framework to allow it to function as a medium of exchange within their nation's borders, Japanese retailers on April 5 are now rushing in to get on board to accept Bitcoin in their online and brick and mortar stores.

Image result for bitcoin is money
A few days after Japan recognized bitcoin as a legal method of payment, two of the country’s biggest retailers have sealed cooperation agreements with bitcoin exchanges to begin accepting the digital currency. 
The two leading retail groups, Bic Camera and Recruit Lifestyle, have announced trials of a bitcoin payment option, according to Japanese daily Nikkei. 
Bic Camera, a consumer chain selling electronics, has partnered with the Tokyo-based bitcoin exchange bitFlyer. The retailer will test the digital currency in two outlets. 
Consumers will be able to pay up to 100,000 yen ($900) using bitcoin, getting reward points at the same rate as for cash payments. 
Recruit Lifestyle, the retail branch of human resources conglomerate Recruit Holdings, is cooperating with another Tokyo bitcoin exchange operator Coincheck to include bitcoin payment option into its AirRegi application. 
The step will enable over 260,000 outlets across the country to start accepting bitcoin. Coincheck will process payments made by consumers using the app, converting bitcoins into yen and transferring the funds to the store. 
Japan is poised to become one of the leading cryptocurrency markets. Nearly 4,500 Japanese stores are currently accepting bitcoin while over 700,000 outlets actively use other modes of digital payments. - Russia Today

Wednesday, March 22, 2017

Bitcoin goes Wall Street as an exchange brings margin trading into crypto-currency investing

Despite the recent no-go for a Bitcoin ETF on Wall Street, the financialization of the crypto-currency continues as Coinbase, a popular Bitcoin exchange, is now introducing margin trading for investors of the digital money.

GDAX, the cryptocurrency exchange run by Coinbase, has added margin trading to the platform. 
Eligible traders can now trade up to 3X leveraged orders on Bitcoin, Ethereum and Litecoin order books. 
If you’re unfamiliar with trading and exchanges, margin trading is when you borrow money from your broker to buy or sell more stock than you can afford. It’s essentially a short-term loan. By buying or selling on margin, traders can increase their leverage and buying power, potentially generating profits beyond what their own cash balance would have supported. 
This feature is mainly geared toward institutional investors. That’s because Coinbase has launched the feature attempting to fit within the boundaries of the Commodity Exchange Act. - Tech Crunch
In just the past week sovereign controls by both the Chinese and U.S. governments have wiped out one of Bitcoin's primary functions as privacy is no longer applicable for those who buy or sell Bitcoin in many exchanges.  And now with this new derivative trading scheme available from another exchange, the crypto-currency may soon become extremely leveraged beyond its mined production limit of 16 million Bitcoins.

This has always been the biggest fear for Bitcoin purists... that a government or financial market would co-opt digital currencies and make their underlying potential null and void as a 'decentralized form of money'.  And it has always been the actions of third party conduits, such as with crypto-currency exchanges, that have placed digital forms of money like Bitcoin in jeopardy of simply becoming another leveraged asset that Wall Street can profit off of to the detriment of the holders.

Tuesday, March 21, 2017

As European countries rush headlong towards the cashless society, the Swiss still consider cash to be king

Like with most central bankers and politicians, their justifications for nearly any new monetary agenda is steeped in the foundation of imposing greater controls over people, and removing their freedoms to conduct commerce as they see fit.  And perhaps no greater example of this can be seen in the global movement to ban cash, and usher everyone into a completely digital society.

Several European countries like Sweden, Norway and Denmark are already well on their way towards the banning of physical cash, and many other EU nations have imposed capital controls disallowing the use of cash in large transactions.  And even the advent of crypto-currencies has helped spawn the idea of a cashless Africa, with nations like South Africa and Rawanda working hard towards forcing everyone onto a digital banking model.

But one country is remaining defiant in the wake of this global move to take away physical currency from the hands of the people, and that nation is the one who's history is steeped in banking, and the right of individuals to do with their money as they see fit.

Image result for cash is king no cashless society
When it comes to cash and its future, Swiss authorities seem to have a totally opposite view to that of their Indian counterparts -- for them cash is "more reliable" and enjoys a low opportunity cost. 
Among other benefits over cashless payments, cash provides "more effective budget control" and can be used without any technical know-how, while it also offers a comprehensive protection with regard to financial privacy, a top official of Swiss National bank (SNB) has said. 
Amid a debate on future of cash globally and the ambitious demonetisation move carried out by India, SNB's deputy head Fritz Zurbruegg said there remains a continuing robust demand for cash among general public and banknotes are like the country's 'calling cards' in case of Switzerland. - India Times
The truth of the matter is, the recent push for a cashless society has little to do with convenience, and more with the failed banks and central banks who have leveraged their monetary systems to the point of insolvency.  And they believe that their last chance at survival is to eliminate the one factor that keeps them from expanding money supplies even more through a digital system, and that is the anchor of physical cash and the fear that individuals could bankrupt them in a day if they called for a run on their institutions.

If politicians and establishment economists really wanted to 'stop' money laundering, and the funding of drug cartels or terrorism, then all they would need to do is shutdown or nationalize the banks themselves for they are the ones who are committing this avenue of crime.  But since the West has almost completely merged into a fascist state, where governments and corporations act as one in their own common interests, then that leaves the people who have done nothing wrong to become their scapegoats, and this means that their agenda is really dedicated towards taking away our money so that they can take their fraud and theft to even greater and higher levels.