Tag Archives: Cryptocurrencies

The Two Undersides To Geo-Politics, by Alastair Crooke

The US and China are fighting a war on the battlegrounds of high tech and finance. From Alastair Crooke at strategic-culture.org:

At the explicit level, today’s geo-political struggle is about the U.S. maintaining its primacy of power – with financial power being a subset to this political power. Carl Schmitt, whose thoughts had such influence on Leo Strauss and U.S. thinking generally, advocated that those who have power should ‘use it, or lose it’. The prime object of politics therefore being to preserve one’s ‘social existence’.

But at the underside, Tech de-coupling from China is one implicit aspect to such a strategy (camouflaged beneath the catch-phrase of recovering ‘stolen’ U.S. jobs and intellectual property): The prize that America truly seeks is to seize for itself over the coming decades, all global standards in leading-edge technology, and to deny them to China.

Such standards might seem obscure, but they are a crucial element of modern technology. If the cold war was dominated by a race to build the most nuclear weapons, today’s contest between the U.S. and China — as well as vis à vis the EU — will at least partly be played out through a struggle to control the bureaucratic rule-setting that lies behind the most important industries of the age. And those standards are up for grabs.

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Market Friday: Bitcoin, The Great Reset and Systemic Failure

When it comes to governments, there’s no stopping a truly terrible idea, like state-issued cryptocurrencies. From Tom Luongo at tomluongo.me:

It’s been a whirlwind week in the cryptocurrency world. There have been a rash of news items all pointing towards the same thing — attempts to rein in alternatives to the future of central bank digital currencies (CBDC) that are quickly creeping up over the horizon.

It started with the CFTC’s indictment of the owners of crypto-exchange BitMex after more than a year of investigation last week.

Even if its founders are not convicted, this might still spell the end of the embattled BitMEX. In tandem with the criminal indictments, the CFTC also launched a civil action against the BitMEX network of companies and its founders.

The formal counts on which the CFTC seeks relief are:

1. Executing futures transactions without registering with the CFTC
2. Offering illegal off-exchange commodity options
3. Failure to register as a futures commission merchant
4. Failure to register as a designated contract market/swap execution facility
5. Failure to supervise in relation to its lack of KYC and AML procedures and failing to ensure that its partners and employees lawfully handled BitMEX accounts
6. Failure to implement KYC and AML procedures as required under the CEA

That put a lid on a nascent rally in Bitcoin which was beginning to challenge $11,000. The net result was a $500 move down and killing any potential short-term bullish momentum. It should have seen a breakdown below support at $9800 (orange line, see chart) but that didn’t happen.

Since then Bitcoin has been bouncing around between $10,400 and $10,900 without any real direction, continuing to coil and consolidate.

But despite the violent intra-day reaction Bitcoin weathered that news item well, with last week’s volatility dropping off to next to nothing.

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Fedcoin: A New Scheme for Tyranny and Poverty, by Ron Paul

Couple a Federal Reserve cryptocurrency with a government issued universal basic income and you do indeed have a recipe for both tyranny and poverty. From Ron Paul at ronpaulinstitute.org:

If some Congress members get their way, the Federal Reserve may soon be able to track many of your purchases in real time and share that information with government agencies. This is just one of the problems with the proposed “digital dollar” or “fedcoin.”

Fedcoin was initially included in the first coronavirus spending bill. While the proposal was dropped from the final version of the bill, there is still great interest in fedcoin on Capitol Hill. Some progressives have embraced fedcoin as a way to provide Americans with a “universal basic income.”

Both the Senate Banking Committee and the House Financial Services Committee held hearings on fedcoin in June. This is the first step toward making fedcoin a reality.

Fedcoin would not be an actual coin. Instead, it would be a special account created and maintained for each American by the Federal Reserve. Each month, Fed employees could tap a few keys on a computer and — bingo — each American would have dollars added to his Federal Reserve account. This is the 21st century equivalent of throwing money from helicopters.

Fedcoin could effect private cryptocurrencies. Also, it would limit the ability of private citizens to protect themselves from the Federal Reserve-caused decline in the dollar’s value.

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Under this new law, cryptocurrency could become illegal, by Simon Black

The US government has long sought back doors into encrypted systems and Congress is at it again. From Simon Black at sovereignman.com:

In early 1775, Benjamin Franklin and his European colleague, Charles Dumas, developed a secret method of communicating with each other.

Dumas had spent years gathering intelligence in Europe to assist the Americans in their revolt against Britain. But the two needed a secure way to pass information across the Atlantic.

So they developed a special cipher– a crude form of encryption where letters and words were substituted for numerals.

The decryption key changed with every letter; so, for example, in a letter from Franklin dated March 2, 1781, the word “MERCHANT” was written as “23. 3. 4. 13. 6. 14. 24. 18.”

At the same time, the physician James Jay (brother to the first Chief Justice of the Supreme Court, John Jay) developed an invisible ink so that revolutionary leaders could communicate in secret.

These encrypted communications became critical to the Revolution. And it’s safe to say there would probably not be a United States if they hadn’t developed a secure way to send information.

Ironically, politicians are trying to destroy modern methods of encryption.

Over the past few months while everyone has been in mandatory isolation, cowering in fear in their homes… and over the past few weeks while the Land of the Free has been consumed with rage. . .

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Time to learn about money, by Alasdair Macleod

Alasdair Macleod, the best monetary economist on the internet and probably on the planet, writes long articles that are well worth taking the time to read. In this one he explains how currencies collapse: slowly, and then very fast. From Macleod at goldmoney.com:

An unexpected destruction of fiat currency has been advanced by the monetary and fiscal response to the coronavirus. Financial markets have yet to discount the possibility of such an outcome, but in the coming months they are likely to awaken to this danger.

The question arises as to what will replace fiat currencies. In the past the answer has always been gold but today there are cryptocurrencies as well, whose enthusiasts are more aware than most of fiat money’s failings.

This article describes the basics about money, what it is and the role it plays in order to understand what will be required by the eventual replacement for fiat. It concludes that gold will return as the world’s medium of exchange, and secure cryptocurrencies, unable to provide the scalability and stability of value required of a medium of exchange will be priced in gold after the demise of fiat. But then the rationale for them will be gone, and with it their function as a store of value.

The destruction of fiat money

These are strange times. Circumstances are forcing governments to destroy their money by debasing it to pay for their obligations, real and imagined. If central bankers had a grasp of what money really is, they wouldn’t have got into a position where they are forced to use their seigniorage to destroy it. They are so ignorant about catallactics, the fundamentals behind economics, that they cannot see they are destroying the means of exchange they have imposed upon their citizens with far worse consequences than the abandonment of the evils they are trying to defray.[i]

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The Real Reason for the Shocking New Developments in the War on Cash, by Jeff Thomas

When cash vanishes so too will any vestige of financial privacy other than transactions in real money, i.e. gold and silver. From Jeff Thomas at internationalman.com:

war on cash

International Man: Australia has proposed a law that provides a $25,000 fine and two years in jail for those who make cash transactions of $10,000 or more. If passed, the Currency (Restrictions on the Use of Cash) Bill could be implemented in 2020.

Do you see this legislation as Orwellian?

Jeff Thomas: Oh, yes, very much so. The claim by the Australian government’s Black Economy Taskforce is that the law will help stamp out tax evasion, money laundering and other crimes.

What we’ll be seeing is a plethora of laws popping up in all the countries that were a part of the post-war prosperity boom – the US, Canada, Japan, Australia, Europe and others. All those jurisdictions dove headlong into the debt pit that the US created after 1971. All of them are now facing an economic crisis as a result.

Consequently, all of them will be creating capital controls. My belief is that each will host several of these laws, and the others will all adopt them. Each law will be justified as protection against money laundering, terrorism, tax evasion, a rising black market or a combination of those scare tactic focal points. As such, the populace of each country will welcome them, not understanding that the real purpose is to have the banks determine how much you’re allowed to spend.

By having each country put forth a portion of the laws, then having all the others copy them, they’ll hope to make the laws appear to be less draconian. After all, how bad could they be, if all these countries support them?

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Farewell to Paper Money? by Jeff Thomas

Governments want money to be all electric, so that they can keep track of it and what people do with it, and so they can keep it in banks should the banking system run into trouble (they call it a bail-in). From Jeff Thomas at internationalman.com:

A decade or more ago, I began to discuss with associates the possibility of governments and banks colluding to eliminate physical cash. Back then, the idea struck most everyone as poppycock, that governments could never get away with it.

I didn’t write on the subject until 2015, when several countries had begun to limit the amount of money a depositor could extract from his bank account. At that point, the prospect that central banks might conceivably eliminate cash was looking less like an alarmist fantasy, and it became possible to write on the nascent issue.

In a nutshell, today, in most of the world’s most prominent countries, the people who control banking are the same people who pull the strings in government. A cashless system therefore seemed to me to be a natural, as it dramatically increased both profit and power for both banking and government – an opportunity that can’t be passed up.

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It only costs about 20 grand to get away with murder, by Simon Black

Simon Black’s weekly collation of government-related absurdities, from sovereignman.com:

Are you ready for this week’s absurdity? Here’s our Friday roll-up of the most ridiculous stories from around the world that are threats to your liberty, your finances, and your prosperity.

Kentucky Governor Pardons Murderer after family’s fundraiser

Kentucky Governor Matt Bevin lost reelection in November.

But the governor still had some campaign debt to retire. And it’s not easy to convince people to donate to a campaign that already lost.

Still, one family managed to raise over $20,000 for the governor at a fundraiser they held for him after he lost the election, but before he left office.

Why would they do this? Perhaps it is related to the fact that a few weeks later, Governor Bevin pardoned the fundraiser’s brother– a convicted murderer.

The brother was serving a 19 year sentence for dressing as a cop, invading a man’s home, and shooting him to death.

Believe it or not, that wasn’t the only questionable– to say the least– pardon of the 428 issued by the governor since he lost reelection.

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The Rush To A Cashless Society Only Serves Globalist Interests, by Brandon Smith

Brandon Smith is dead on, warning that cryptocurrencies could well be a Trojan horse for the cashless society, where governments, or a one-world government, and central banks or central bank know every unit of currency you spend. From Smith at alt-market.com:

A fundamental pillar of true free markets is the existence of choice; the availability of options from production to providers to purchase mechanisms without interference from governments or corporate monopolies. Choice means competition, and competition drives progress. Choice can also drive changes within society, for if people know a better or more secure way of doing things exists, why would anyone want to stay trapped within the confines of a limited system? At the very least, people should be allowed to choose economic mechanisms that work best for their particular situation.

This is NOT how our society functions today, and free market do not exist anywhere in modern nations including the US. Whenever I hear someone (usually a socialist) blame free market “capitalism” for the oppressive ailments of the world, I have to laugh. The alliance between governments and corporate monopolies (what Mussolini called national socialism or fascism) makes free markets utterly impossible. What we have today is an amalgamation of socialist economic interference and corporatocracy. Our system is highly restrictive and micro-managed for everyone except the money elites, who do not have to follow the same rules the rest of us do.

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Plans for a global Dystopia, by Alasdair Macleod

The globalist financial powers intend to use what’s not working on a national level on a global scale. What could go wrong? An excellent article from Alasdair Macleod at goldmoney.com:

Global policy planners intend to deliver replacements for both dollar hegemony and fossil fuels. Plans may appear uncoordinated and in their early stages, but these issues are becoming increasingly linked.

A monetary reset incorporating state-sponsored cryptocurrencies will enable exchange controls to be introduced between nations by separating cross-border trade payments from domestic money circulation. The purpose will be to gain greater control over money and to direct its investment into green projects.

The OECD will build on current tax disclosures to make everyone’s income and capital known to governments and therefore readily taxable, money destined to kick-start economic growth. Under the guidance of supranational organisations, governments will redirect investment into green technology. The objective, particularly for Europeans, is to neutralise Russia’s increasing dominance of the global energy market by becoming carbon neutral by 2030.

But perhaps as Robert Burns put it, “the best-laid schemes o’ mice an’ men gang aft agley”. They are based on Keynesian fallacies, but cannot be ignored.

Introduction

There appear to be policy areas being driven by statist responses to events, encouraging global institutions to take on a coordinating role. It means deeper levels of centralised planning by unaccountable bureaucrats. Assuming their plans continue to gain credence, we could end up with a dystopian world where supranational bodies direct individual governments to conform. We are already on this road to perdition. The OECD has coordinated attempts by governments to restrict the freedom of their citizens to avoid taxes by forcing over a hundred jurisdictions to automatically supply information on the financial affairs of every citizen, irrespective of nationality and where they reside.

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