- Yes, The FBI Is America's Secret Police
Authored by James Bovard via TheHill.com,
Politifact delivered a “pants on fire” slam to Fox News on Friday because one of its commentators asserted that the Federal Bureau of Investigation “has become America's secret police.”
The FBI has legions of new champions nowadays among liberals and Democrats who hope that its probes will end Donald Trump’s presidency.
This is a stunning reversal that may have J. Edgar Hoover spinning in his grave.
In order to boost the credibility of the FBI’s investigations of the Trump team, much of the media is whitewashing the bureau’s entire history. But the FBI has been out of control almost since its birth.
A 1924 American Civil Liberties Union report warned that the FBI had become “a secret police system of a political character.”
In the 1930s, the Chief Justice of the Supreme Court feared that the FBI had bugged the conference room where justices privately wrangled over landmark cases, as Tim Weiner noted in his “Enemies: A History of the FBI.”
In 1945, President Harry Truman noted that “We want no Gestapo or Secret Police. FBI is tending in that direction.”
And FBI chief J. Edgar Hoover compiled a list of 20,000 “potentially or actually dangerous” Americans who could be rounded up and locked away in one of the six detention camps the federal government secretly built in the 1950s.
From 1956 through 1971, the FBI’s COINTELPRO program conducted thousands of covert operations to incite street warfare between violent groups, to get people fired, to smear innocent people by portraying them as government informants, to sic the IRS on people, and to cripple or destroy left-wing, communist, white racist, antiwar, and black organizations (including Martin Luther King Jr.). These operations involved vast numbers of warrantless wiretaps and illicit break-ins and resulted in the murder of some black militants. A Senate Committee chaired by liberal Sen. Frank Church (D-Idaho) issued a damning report on FBI abuses of power that should be mandatory reading for anyone who believes the bureau deserves deference today.
According to Politifact, the FBI is not a “secret police agency” because “the FBI is run by laws, not by whim.” But we learned five years ago that the FBI explicitly teaches its agents that “the FBI has the ability to bend or suspend the law to impinge on the freedom of others.” No FBI official was fired or punished when that factoid leaked out because this has been the Bureau’s tacit code for eons. Similarly, an FBI academy ethics course taught new agents that subjects of FBI investigations have "forfeited their right to the truth." Are liberals so anxious to get Trump that they have swept under the rug the 2015 Washington Post bombshell about false FBI trial testimony that may have sentenced 32 innocent people to death?
Politifact absolved the bureau because “The FBI doesn’t torture or carry out extrajudicial executions.” Tell that to the Branch Davidians — 80 of whom died after the FBI assaulted their ramshackle home with tanks and pyrotechnic devices and collapsed much of the building on their heads even before fires burst out.
Politifact quotes a professor who asserts that “any use of unnecessary violence (by the FBI) would be met with the full force of the criminal law." Is that why an internal FBI report claimed that every one of the 150 shootings by FBI agents between 1993 and 2011 was faultless?
FBI sniper Lon Horiuchi gunned down Vicki Weaver in 1992 as she stood in her Idaho cabin doorway holding her baby. After I accused the FBI of a coverup in a Wall Street Journal oped, FBI chief Louis Freeh denounced me for twisting the truth. But after a confidential Justice Department report leaked out revealing the FBI’s deceits and unconstitutional rules of engagement, the feds paid a $3 million wrongful death settlement to the Weaver family. When an Idaho County sought to prosecute the FBI sniper, the Justice Department invoked the Supremacy Clause of the Constitution to torpedo the case.
Politifact asserts that “just because the FBI sometimes operates in secret does not mean that it’s a ‘secret police.’" But the FBI’s secrecy is profoundly skewing American politics. More than a year after the 2016 election, Americans still have no idea the true extent of the FBI's manipulation of the presidential campaign. Did the FBI wrongfully absolve Hillary Clinton on the email server issue? What role did the FBI have in financing or exploiting the Steele dossier? Will we ever learn the full truth?
The so-called fact checkers insists that any comparison of the FBI and KGB is “ridiculous” because the FBI is “subject to the rule of law and is democratically accountable.” But there is little or no accountability when few members of Congress have the courage to openly criticize or vigorously cross-examine FBI officials. House Majority Leader Hale Boggs admitted in 1971 that Congress was afraid of the FBI: “Our very fear of speaking out (against the FBI) … has watered the roots and hastened the growth of a vine of tyranny … which is ensnaring that Constitution and Bill of Rights which we are each sworn to uphold.” The FBI is currently scorning almost every congressional attempt at oversight. Thus far, members of Congress have responded with nothing except press releases and talk show bluster.
Politifact repeatedly scoffs at the notion that the FBI is “a secret police agency such as the old KGB.” And since the FBI is not as bad as the KGB, let’s mosey along and pretend no good citizen has a right to complain. A similar standard could exonerate any American president who was not as bad as Stalin.
In the 1960s, some conservatives adorned their cars with “Support Your Local Sheriff” bumper stickers. How long until we see Priuses with “Support Your Secretive All-Powerful Federal Agents” bumper stickers? But those who forget or deny past oppression help forge new shackles for the American people.
- "It's In The Mania Phase": Securities Regulator Warns That "Mortgages Are Being Taken Out To Buy Bitcoin"
As the investing world continues to argue back and forth over whether Bitcoin is an acceptable store of value or nothing more than a massive bubble that has only been rivaled by the Dutch tulip mania of the 1600's, new information revealed by the President of the North American Securities Administrators Association would tend to lend some credence to the latter.
Appearing on Power Lunch today, Joseph Borg, also director of the Alabama Securities Commission, argued that Bitcoin has clearly entered its "mania phase" with people now taking out home equity loans and cash advances on credit cards to purchase the digital currency in the hopes of getting rich quick.
"We've seen mortgages being taken out to buy bitcoin. … People do credit cards, equity lines," said Borg, president of the North American Securities Administrators Association, a voluntary organization devoted to investor protection. Borg is also director of the Alabama Securities Commission.
"This is not something a guy who's making $100,000 a year, who's got a mortgage and two kids in college ought to be invested in."
"You're on this mania curve. At some point in time there's got to be a leveling off. Cryptocurrency is here to stay. Blockchain is here to stay. Whether it is bitcoin or not, I don't know," Borg said in an interview with "Power Lunch."
Of course, as we noted a few months ago, JP Morgan's Jamie Dimon has has been among the most vocal critics of Bitcoin and has frequently expressed his skepticism that international governments will allow it to survive in any meaningful capacity after someone inevitably "gets killed…"
Speaking to CNBC later in the day, Dimon said he’s skeptical governments will allow a currency to exist without state oversight: “Someone’s going to get killed and then the government’s going to come down,” he said. “You just saw in China, governments like to control their money supply.”
“You’re wasting your time with Bitcoin! Virtual currency, where it’s called a bitcoin vs. a U.S. dollar, that’s going to be stopped,” said Dimon. “No government will ever support a virtual currency that goes around borders and doesn’t have the same controls. It’s not going to happen.”
“Blockchain is like any other technology. If it is cheaper, effective, works, and secure, then we are going to use it. The technology will be used, and it could be used to transport currency, but it will be dollars, not bitcoins.”
…perhaps the Americans now levering up their largest asset in the midst of yet another housing bubble, only to turn around and purchase what could very well end up being an even bigger bubble, are the people to whom Dimon was referring???
- America's Decline And The Neglect Of Luther's Principles Of Liberty
Authored by S.T.Karnick via Specator.org,
Freedom requires a sense of personal responsibility if it is to survive.
With the nation’s news dominated by reports of political corruption (most recently, the Clintons’ apparent use of “pay to play” schemes during Hillary Clinton’s tenure as U.S. secretary of state), sexual harassment scandals pandemic among the nation’s elites, extreme vulgarization of political speech and the common culture, riots against freedom of speech on the nation’s college campuses, paralyzing partisanship in Congress, death threats and open assassination attempts against government leaders and police officers, and the rest of the dismaying parade of moral shortcomings on display among the nation’s leaders in all walks of life, it appears that we are in the midst of a war not just between political and cultural factions, but over the very definition of our civilization.
The primacy of individual liberty versus rule by elites is at the heart of this conflict, but with a twist: The undermining of personal responsibility is creating a backlash against liberty as people rampantly abuse their freedoms. A half-millennium ago, the German monk and theologian Martin Luther set the foundations for the modern world by redefining the relationship between people and their institutions, shattering the legal structures that insulated elites from the consequences of their misdeeds.
Writing in the Wall Street Journal on the eve of the 500th anniversary of the beginning of the Protestant Reformation, King’s College history professor Joseph Loconte insightfully traces the sources of Martin Luther’s ideas about freedom of the individual will and the world-changing effect those thoughts would have over the subsequent half-millennium.
Although Luther was committed to the spiritual authority of the Catholic Church, his religious views about spiritual elitism would eventually affect political attitudes throughout the West, introducing “a radical egalitarianism that helped lay the foundation for modern democracy and human rights.” Loconte writes,
Luther came to despise every form of spiritual elitism. He sought to replace rigid church hierarchies with “the priesthood of all believers,” the proposition that there are no qualitative differences between clergy and laity. “Just because we are all priests of equal standing,” he wrote in “An Open Letter to the Christian Nobility” (1520), “no one must push himself forward and, without the consent and choice of the rest, presume to do that which we all have equal authority.”
Luther’s “message of freedom” has not lost its power after five centuries, Loconte notes, providing a useful example for those who today oppose the many leaders of modern U.S. institutions who abuse their offices for personal gain:
Luther took an ax to the legal culture that shielded priests and bishops from criminal prosecution simply because they held church offices. “It is intolerable that in canon law, the freedom, person, and goods of the clergy should be given this exemption, as if the laymen were not exactly as spiritual, and as good Christians, as they, or did not equally belong to the church.”
Loconte observes that Luther’s concept of liberty included a deep awareness of the responsibilities that accompany freedom:
“A Christian has no need of any work or law in order to be saved,” [Luther] insisted, “since through faith he is free from every law and does everything out of pure liberty and freely.” Christian liberty of this kind provided no excuse for libertinism. Just the opposite: “I will therefore give myself as a Christ to my neighbor, just as Christ offered himself to me.”
Our nation’s founders universally acknowledged this view, evident in observations such as this from Benjamin Franklin: “Only a virtuous people are capable of freedom. As nations become more corrupt and vicious, they have more need of masters.”
Similarly, the rise and proliferation of such masters undermines virtue, both by making choice impossible (one cannot earn moral credit for actions done under compulsion) and by creating moral hazard, artificial reduction of the risks associated with making choices.
Thus, the enormous growth of government in the United States over the past 125 years both reflects and generates the loss of the idea of liberty, which has made national greatness possible.
We are seeing the results in economic stagnation, the takeover of the nation’s institutions by thieves and tyrants, the decline of U.S. power in the world, and the dizzying array of stories of personal corruption among the nation’s leaders in all walks of life.
The fall of today’s political and cultural icons cannot arrive too soon.
- Chinese Banks Push Back On Shadow Banking Regulations – Expose "Catch-22" For Financial System
In November, we discussed how the post-Party Congress measures to deleverage and crackdown on the worst abuses in China’s credit bubble took an important step forward with the announcement of a new era of regulation for China’s $15 trillion shadow banking and asset management industry. See "A New Era In Chinese Regulation Means Turmoil For $15 Trillion In China's Shadows". In particular, the authorities turned their sights on wealth management products (WMPs).
On the way out are “guaranteed returns” and “capital pools” which had turned the $4 trillion sector into a leveraged Ponzi scheme. We joked that in a “radical and shocking” departure from the norm, financial institutions would have to offer yields based on the risk and returns of the underlying assets. Paying out guaranteed returns with new funds from depositors would no longer be allowed.
Commentators at the time described it as “a new era of regulation” which would lead to tighter risk control and slower but higher quality growth in the Chinese economy, blah, blah. However, our interest was piqued by the implementation date for the new rules. This is slated for the end of June 2019, providing Chinese banks and the entire shadow banking system a grade period to get their house in order. As we suggested.
We can only guess the delay reflects the enormity of the problems discovered by China’s regulators when they finally looked under the hood.
We didn’t have to wait long for confirmation that our cynicism was justified. It turns out that there was a “closed-door meeting” last week during which Chinese banks laid out the systemic risk if the regulators pursue their reform plan. According to Reuters.
Ten Chinese banks have raised strong objections to the central bank’s recent move to tighten rules on the asset management sector, saying it may cause a rush of redemptions among other risks, three sources with knowledge of the matter told Reuters.
Senior executives from the joint-stock banks said during a closed-door meeting in Shanghai last week that the rules would have a big impact on financial markets and could even “trigger systemic financial risks”, according to the sources, who declined to be identified due to the sensitivity of the matter. The executives also said the new rules on removing implicit guarantees for wealth management products (WMPs) could spark liquidity risks and increase market volatility, the sources said late on Thursday.
Unlike the Big Four state-owned banks, the smaller banks have limited scope to increase lending in the absence of WMP funding…and that's ignoring the "black holes" hidden beneath the surface.
In short, the entire Chinese financial system, from depositors to banks to asset management companies, has become addicted to the WPM model. Reforming it will only advance the crystallization of losses and bankruptcies, never mind largescale protests from investors who have always assumed that, somehow, the banks would make good on their promises. On a small scale, the clearest example of the near-impossibility of reforming WMPs without threatening China’s financial system, was the example of Foresea Life Insurance in May this year. This report from Fortune captured Ponzi nature and risk of civil unrest.
A Chinese insurer has warned the country’s regulators of defaults in the billions and possible unrest unless it is allowed to launch new products again. Foresea Life Insurance asked the China Insurance Regulatory Commission (CIRC) in a letter dated Apr. 28 to lift its ban, “in order to avoid inciting mass incidents by clients and localized and systemic risks, producing greater damage to the industry,” reports the Financial Times. It further warned that, with an expected redemption of $8.7 billion this year, the insurer might not be able to meet payouts without selling new products.
The Bloomberg article portrays the feedback they gave to regulators on the new regime as “a rare protest by Chinese bankers as pressure mounts amid a government campaign to de-leverage and de-risk the country’s massive and increasingly complex financial system”. However, it’s much more than that, it’s essentially a plea for the survival on the part of smaller banks. Without large pools of deposits, smaller banks have relied on WMP and other shadow banking conduits for funding. In the absence of guaranteed returns, leverage and fraud, that might not have been a problem.
The new rules will pose a direct challenge to a business model that small- and mid-tier banks have been relying on to drive asset expansion and profit growth, bankers told Reuters earlier. “Every time when the regulators announce tighter regulations it would almost always benefit the large state banks and hurt the smaller ones, because they (the latter) are taking much bigger risks,” said a senior executive at one of the country’s big four state-controlled lenders.
The joint-stock banks, which are unable to compete against large state banks for public deposits, have depended on selling WMPs with implicit guarantee of fixed returns to attract retail funds. In turn, they invest the money they manage into stocks, bonds and non-standard debt assets to generate profit. Bank executives said at the meeting the 28.38 trillion yuan of banks’ WMPs, part of the so-called shadow banking sector, have allowed them to bypass regulatory restrictions on credit expansion and capital constraints.
The problem for Xi Jinping and his cronies is that they left the situation to fester for way too long before attempting to intervene. In an effort to dissuade the authorities, here is Reuters on more warnings from the threatened banks.
If the current draft of the rules takes effect, banks will be forced to offload assets beforehand, including selling bonds, stocks and other liquid assets at a discount and asking clients to repay loans before time, the sources said. “No matter which solution we choose, it will hit financial markets,” they added.
The banks also said rules on strictly limiting bank WMP investments in non-standard debt assets and private equities would reduce their support for the real economy and increase financing costs for companies, the sources said. They also suggested the central bank remove certain rules and extend the transition period for the new rules – currently up to June 2019 – to three years to smooth the impact, the sources said.
…which basically amounts to a “Catch-22” situation for China’s financial system.
Meanwhile, it’s worth highlighting a (very) recent example of fraud in the Chinese banking system which encompassed the WMP sector. Last Friday, the South China Morning Post (SCMP) reported on the 722 million yuan ($109 million) fine – the industry’s biggest penalty – served on Guangfa Bank, the largest bank in Guangzhou city. The bank covered up the default of two bonds issued by phone maker, Cosun Group, which had ben sold on an Ant Financial Holdings’ WMP platform. As the SCMP explains.
Ant Financial and 10 other banks sought compensation for investors from Zheshang Property and Casualty Insurance, which had provided insurance coverage on the debt, only to discover that the insurer had been issued fake letters of guarantee by Guangfa’s branch in Huizhou city. The fraudulent documents were created using counterfeit corporate seals made by branch staff. The case involved as much as 12 billion yuan, as the bank tried to channel money to cover its mounting bad loans and operational losses.
“Guangfa did everything that regulators hate the most,” said Chen Shujin, chief financial analyst at Huatai Securities. “They gave an under-the-table guarantee, and made illegal interbank investments to cover up a non-performing loan.”
The epidemic of fraud across China’s financial system has been obvious for years. The Catch-22 situation faced by the Chinese authorities boils down to a timing preference. With Xi’s position cemented for the next five years, the authorities can bring on the
“Minsky moment”adjustment, knowing that the economy can recover by 2022. Or they can postpone it, leading to a truly catastrophic collapse down the road.
- "It Will Impact The Life Of Every Single Human Being" – The Cryptocurrency Revolution Documentary
The latest short film from Jonathan Roth discusses the advent of the blockchain, where it goes next and how the technology will impact every single human being on the planet.
Featuring investment powerhouses like Frank Giustra and Frank Holmes, as well as mathematician and finance entrepreneur Marco Streng:
The blockchain will disrupt nearly every industry from purchasing groceries to heating your home… everyone from banking to government is racing to develop the technology.
Watch the full movie:
Source: SHTFplan.com's Mac Slavo
- "Millennials Don't Care About Logos": How Collapsing Brand Loyalty Will Allow Amazon To Dominate Apparel
Despite daily affirmations from the White House that “everything is awesome” with the economy, 2017 has been a miserable year for retailers. As Reorg First Day points out, over 30 retailers, with debt aggregating into the billions of dollars, have filed for bankruptcy so far this year…
After Shiekh Shoes’ filing today, at least 30 retail chains have filed for chapter 11 relief thus far in 2017: pic.twitter.com/7cLZXXFecl
— Reorg First Day (@ReorgFirstDay) November 29, 2017
https://platform.twitter.com/widgets.js
...with over half of them coming from the apparel industry.
Apparel companies account for 52% of retail chain chapter 11 bankruptcies this year: pic.twitter.com/2eE2IEXGVI
— Reorg First Day (@ReorgFirstDay) November 10, 2017
https://platform.twitter.com/widgets.js
Of course, as we discuss frequently, this trend is attributable to, among other things, collapsing mall traffic courtesy of a persistent shift of consumer spending to online retailers like Amazon and others. And while apparel was always expected, or at least hoped, to be somewhat immune from the “Amazon Effect,” one of the derivative results of lower mall traffic, and one that is only becoming more apparent now, is the collapsing brand loyalty of millennials.
As Bloomberg points out today, a whole generation of millennial Americans, who are just now starting to obtain financial self-sufficiency, couldn’t care less about polo ponies, crocodiles or any of the other clever logos that retailers have spent billions on over the years to convince you that you should pay $125 for a shirt that would sell for $15 absent the logo on the breast…
“Every new generation is becoming less and less brand-loyal,” Bahulkar says. “Millennials don’t care as much about logos. They will buy anything from anywhere at any price point, and that is a big change.”
The erosion of brand loyalty has been a boon for Target, the cheap-chic retailer that made its name in apparel via partnerships with top designers Isaac Mizrahi and Jason Wu more than a decade ago. It’s leveraged that success to create its own private labels in recent years, most notably Cat & Jack, a kids’ apparel line whose sales surpassed $2 billion after a little more than a year on the shelves. Target’s winning formula has emboldened Wal-Mart, which recently hired a veteran of Saks Fifth Avenue and Ralph Lauren Corp. to boost its fashion game.
…which is great news if you’re an online retailing giant and want to get into apparel but haven’t spent decades dumping billions of dollars into now-useless brand development.
According to Wells Fargo estimates, Amazon will leapfrog T.J. Maxx and Macy’s in 2017 to become the second-biggest seller of apparel and footwear in the United States and it has everything to do with how they’ve managed to transform the shopping habits of consumers.
For those of you who are old enough, consider how you planned out your apparel shopping trips in the late 90s. For many of you it probably included a trip to the mall with predetermined stops at the specific stores you liked for any number of different reasons…not the least of which was brand recognition.
Now, contrast that to today when apparel shopping often begins with an online search…a search which consultants at Bain & Co. recently found to often exclude any mention of a brand at all…consumers just enter “yoga pants” and see what comes up.
Searching for generic product categories on Amazon turns up plenty of private-label options. More than one-quarter of first-page Amazon search results in categories such as men’s button-down shirts were private labels, Bain says. That helps explain why almost 40 cents of every dollar spent online on clothing and footwear in the U.S. will go to Amazon this year, according to data tracker Euromonitor, up from 23 cents in 2014.
In some categories—like the active wear that Americans increasingly wear all day, whether or not they hit the gym—private labels combined account for 20% of the market, according to researcher NPD. That makes store brands in aggregate larger than any single brand, which should strike fear in the executive suites of Lululemon Athletica, Nike, and Under Armour.
“Active wear is going like wildfire,” Wilson says, for the simple reason that “you don’t have to try on spandex pants. If I was in those categories, I would be worried.”
Of course, not everyone, including Candace Corlett of WSL Strategic Retail, thinks Amazon will be successful in apparel, saying “I don’t know anyone who is jumping up and down about buying clothes on Amazon…They’ve put together a lot of midpriced, uninteresting stuff.” Somehow, we suspect the CEO of whichever apparel giant is forced into bankruptcy next just might disagree.
- The Fed's "Magic Trick" Exposed
Authored by Jeff Thomas via InternationalMan.com,
In 1791, the first Secretary of the Treasury of the US, Alexander Hamilton, convinced then-new president George Washington to create a central bank for the country.
Secretary of State Thomas Jefferson opposed the idea, as he felt that it would lead to speculation, financial manipulation, and corruption. He was correct, and in 1811, its charter was not renewed by Congress.
Then, the US got itself into economic trouble over the War of 1812 and needed money. In 1816, a Second Bank of the United States was created. Andrew Jackson took the same view as Mister Jefferson before him and, in 1836, succeeded in getting the bank dissolved.
Then, in 1913, the leading bankers of the US succeeded in pushing through a third central bank, the Federal Reserve. At that time, critics echoed the sentiments of Messrs. Jefferson and Jackson, but their warnings were not heeded. For over 100 years, the US has been saddled by a central bank, which has been manifestly guilty of speculation, financial manipulation, and corruption, just as predicted by Mister Jefferson.
From its inception, one of the goals of the bank was to create inflation. And, here, it’s important to emphasise the term “goals.” Inflation was not an accidental by-product of the Fed – it was a goal.
Over the last century, the Fed has often stated that inflation is both normal and necessary. And yet, historically, it has often been the case that an individual could go through his entire lifetime without inflation, without detriment to his economic life.
Yet, whenever the American people suffer as a result of inflation, the Fed is quick to advise them that, without it, the country could not function correctly.
In order to illustrate this, the Fed has even come up with its own illustration “explaining” inflation. Here it is, for your edification:
If the reader is of an age that he can remember the inventions of Rube Goldberg, who designed absurdly complicated machinery that accomplished little or nothing, he might see the resemblance of a Rube Goldberg design in the above illustration.
And yet, the Fed’s illustration can be regarded as effective. After spending several minutes taking in the above complex relationships, an individual would be unlikely to ask, “What did they leave out of the illustration?”
Well, what’s missing is the Fed itself.
As stated above, back in 1913, one of the goals in the creation of the Fed was to have an entity that had the power to create currency, which would mean the power to create inflation.
It’s a given that all governments tax their people. Governments are, by their very nature, parasitical entities that produce nothing but live off the production of others. And, so, it can be expected that any government will increase taxes as much and as often as it can get away with it. The problem is that, at some point, those being taxed rebel, and the government is either overthrown or the tax must be diminished. This dynamic has existed for thousands of years.
However, inflation is a bit of a magic trick. Now, remember, a magician does no magic. What he does is create an illusion, often through the employment of a distraction, which fools the audience into failing to understand what he’s really doing.
And, for a central bank, inflation is the ideal magic trick. The public do not see inflation as a tax; the magician has presented it as a normal and even necessary condition of a healthy economy.
However, what inflation (which has traditionally been defined as the increase in the amount of currency in circulation) really accomplishes is to devalue the currency through oversupply. And, of course, anyone who keeps his wealth (however large or small) in currency units loses a portion of it with each devaluation.
In the 100-plus years since the creation of the Federal Reserve, the Fed has steadily inflated the US dollar. Over time, this has resulted in the dollar being devalued by over 97%.
The dollar is now virtually played out in value and is due for disposal. In order to continue to “tax” the American people through inflation, a reset is needed, with a new currency, which can then also be steadily devalued through inflation.
Once the above process is understood, it’s understandable if the individual feels that his government, along with the Fed, has been robbing him all his life. He’s right—it has.
And it’s done so without ever needing to point a gun to his head.
The magic trick has been an eminently successful one, and there’s no reason to assume that the average person will ever unmask and denounce the magician. However, the individual who understands the trick can choose to mitigate his losses. He can take measures to remove his wealth from any country that steadily imposes inflation upon him and store it in a country where this either does not occur, or occurs to a lesser degree.
* * *
Moving a portion of your wealth overseas sounds daunting… like something only the ultra-rich can or even should do. In reality, it’s one of the most important steps anyone can take to protect his wealth from an out of control government. Now Doug Casey is sharing practical ways to get started in his timely special report Getting Out of Dodge. Click here to download your free PDF copy now.
- Top Crypto-Mining Executive Explains Why "We're Hoarding The Coins"
Authored by Mac Slavo via SHTFplan.com,
If the price action in crypto currencies over the last several months has proven anything, it’s that the blockchain has gone fully mainstream with global investors, major financial institutions and governments showing significant interest in the space. While a number of blockchain projects are moving onto the stage, the primary focus for investors has been Bitcoin, which has seen an increase of over 1,600% in 2017. And according to Frank Holmes, there is much more to come.
In an interview with SGT Report, Holmes, the Chairman of Hive Blockchain Technologies, the world’s only publicly traded blockchain mining company explains that, while roughly 78% of the available 21 million Bitcoins, or about 16.4 million, have been mined up to this point, there are probably only about 10 million coins in actual circulation around the world because somewhere on the order of 25% have been lost forever due to misplaced wallet access keys and other issues. Moreover, of those 10 million or so available coins, it has been widely reported that about 1000 “whales,” or high net worth investors, own some 40% of the coins, creating a scarcity in the market that has left millions of global investors chasing a limited supply of BTC.
Holmes suggests that this limited availability works to the advantage of cryptocurrency miners who use expensive computer hardware mining rigs to process transactions on the blockchain, because with so much investment capital moving into the space they can hoard the coins they mine and sell into the market during price spikes while loading up on more coins when markets dip. Hive currently mines Ethereum, Ethereum Classic, Bitcoin and will soon move into Litecoin and other popular cryptocurrencies using the same strategy:
We’re hoarding the coins… we mine virgin coins and in fact we are getting offered premiums for our coins because they’ve never been tainted.
We never buy the coins… anytime it has a huge surge we will sell one, two or three percent… and as soon as it corrects we just mine more and replenish ourselves…
We want to wait until we get at least 20,000 coins and then we can turn around and use our quant models, so we’re doing things very unique…
Most crypto currencies have a maximum supply of coins that can ever be mined. As Bitcoin demonstrates, a percentage of those already-mined coins will be lost. Another percentage will be locked up by high net worth and long-term investors. These mechanics create a situation where, perhaps only a little over half of the actual listed circulation of coins is actually circulating.
With this being the case it’s not difficult to see why, as tens of billions of dollars, and perhaps even trillions as has been suggested by investment gurus, continue to pile into these assets, prices for top tier crypto currencies could continue to rise exponentially in coming months and years.
- Measuring the Mania of Crypto
From the Slope of Hope: It seems everyone is talking about Bitcoin these days. On ZeroHedge, I’d say easily half the articles are crypto-related. And why not? The equity market has become a bore. How much can you say about a market which basically goes up about half a percent day after day until the end of time? I’ve anchored my life to discussing equity markets, God help me, so having something that actually moves up AND down is exciting and novel after the past eight years.
Of course, daring to predict ANYTHING about cryptos is a fool’s errand. Just a few months ago, a Bitcoin trader and “expert” offered up this prediction for the second half of the year:
So – – basically down to “S3” at about $1200 and then a tremendous rally to $3,000 by about now. Of course, nothing like that took place. As I’m typing this, we’re around $17,000 or so (click here to see the latest chart) and there was never any big dip – – except maybe for the chap who created the aforementioned chart in the first place.
Some predictions – – maybe even wild guesses – – have been closer to the mark. Way back in December 2013, the Winklevoss twins (of Social Network fame) made the lunatic prediction that Bitcoin would rise to $40,000 (it was $1,000 at the time). Surely that seemed to be stark raving mad, and also quite self-serving, since they had bought $11 million of Bitcoin.
And how foolish they must have looked (and felt) when just weeks after their ridiculous prediction, Bitcoin fell 90% – – NINETY PERCENT!! – – which made it look like it was a ruinous choice. I confess, I’d have been the first one laughing. But he who laughs last laughs loudest, and the Winklevii are laughing their assess off now, since their stake is approaching $2 billion. Their $40,000 prediction is, to some, looking conservative.
The now-super-rich WInklevoss twins have updated their crazy prediction with, of course, something even crazier, stating that even with the incredible rise we’ve seen so far, it’s going to go up another twenty-fold. In other words, about $300,000 per Bitcoin (let’s all remember this launched at a value of 1 penny in 2009, so that’s a rise of 30-million-fold in value).
The ascent of cryptos is, of course, unprecedented. People keep talking about tulips. Look, I wrote a book about financial manias, and tulips went up about ten-fold during its mania. Bitcoin has already gone up hundreds-of-thousands-of-fold, so it’s not even close. Instead, let’s compare it to the one mania we experienced in our lifetimes, which was the hottest stocks of the Internet bubble.
To give us a baseline, let’s try to think of a “base” for Bitcoin. It isn’t a penny. Instead, I like to think of the price where Bitcoin stabilized after its first big crash (see chart above), which is around $160 to $200 (see two arrows pointing out the double bottom). Let’s split the difference and call it $180. So that’ll be our starting point.
There were hundreds of new stocks during the initial Internet era, but the two I want to use for this little thought experiment are Amazon and Yahoo, both of which had breathtaking ascents in price. When people remember the Internet bubble, they might think stocks had insane P/E ratios of 100, 200, or 300. Not so. Yahoo, for instance, had a P/E of nearly 2,200 before the bubble burst. (Of course, Bitcoin has a P/E of infinity, but let’s not get distracted with the fact it actually isn’t a business that could ever produce a profit someday).
So, starting off with Amazon………….
The red arrow from the late 1990s show its incredible explosion from about $1.31 to $113, a rise of about 90-fold. Using our base of $180, that gives us a target “bubble peak” of $16,200. Well, although Bitcoin does seem to be stalling and struggling at around the $17,000 level, it seems to me we’ve already smashed by this lofty target. In other words, Bitcoin has outperformed Amazon’s 1990s bubble phase.
Turning our attention to the late Yahoo (now a funky holding company with the unfortunate moniker of Altaba…….):
Its rise was even crazier, from .70 to 125, which is 180-fold, giving us a target price of about $30,600. And, since one guess is as good as any other, let’s go with that. It’s a mere 1/10th what the Winklevii are calling for, and who knows, they may well be right. But at least loony Yahoo in the late 1990s give us SOME basis for just how high the public might bid up a totally new financial instrument before greed gives way to fear, and it all comes tumbling down to something a little less tethered to stark, raving madness.
Digest powered by RSS Digest
Saving...