Dec 03

Today’s News 3rd December 2017

  • Trump Congratulates ABC For Firing Brian Ross Over "Horrendously Inaccurate" Report

    Update: Just hours after he told a group of reporters that he's "not worried" about Mike Flynn's decision to cooperate with special counsel Robert Mueller because – as Trump put it – "there's been absolutely no collusion and we're prefectly happy with that," the president has weighed in on ABC's decision to suspend World News Tonight's Brian Ross.

    "Congratulations to @ABC News for suspending Brian Ross for his horrendously inaccurate and dishonest report on the Russia, Russia, Russia Witch Hunt. More Networks and “papers” should do the same with their Fake News!"

    Yesterday, Ross fraudulently reported that Flynn was set to testify that Trump ordered him to contact the Russians "during the campaign" when – in fact – Flynn had testified that the order happened during the transition, and was handed down by Trump's son-in-law, Jared Kushner.

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    Notably, Trump has revived the "Russia, Russia, Russia" expression he used in a tweet attacking the Democrats last week following reporters that Flynn might've flipped because his lawyers had decided to cut off contact with Trump's legal team.

    * * *

    Having suffered a massive backlash from their attempt to downplay a fraudulent story with a "clarification," ABC News has upgraded their contrition to a "serious error" and suspended the veteran reporter Brian Ross who wrote the story.

    As a reminder, citing a single anonymous source, Ross told viewers during an ABC special report on Friday morning that Flynn was prepared to testify that Donald Trump, as a candidate for president, told him to contact Russians.

    The left erupted in excitement…

    But then, during Friday's edition of "World News Tonight," Ross corrected his report, telling viewers that the source who had provided the initial information for his story later told him that it was as president-elect, not as a candidate, that Trump asked Flynn to contact Russians.

    The rest of the world then erupted over such an egregious error that confirmed every emotions-over-intelligence 'fake media' shot that Trump has ever sent.

    The initial "clarification" has been upgraded to a "serious error" as ABC attempts to put this fire out.

    ABC News statement:

    We deeply regret and apologize for the serious error we made yesterday.

     

    The reporting conveyed by Brian Ross during the special report had not been fully vetted through our editorial standards process.

     

    As a result of our continued reporting over the next several hours ultimately we determined the information was wrong and we corrected the mistake on air and online.

     

    It is vital we get the story right and retain the trust we have built with our audience –- these are our core principles.

     

    We fell far short of that yesterday.

     

    Effective immediately, Brian Ross will be suspended for four weeks without pay.

    While it might be nice for Ross to have a month off over the Christmas holidays, many are asking for refunds in their brokerage accounts from the market's reaction to his "serious error."

  • Signs Of A Market Top? This Pole Dancing Instructor Is Now A Bitcoin Guru

    Pole dancing instructor Dee Heath built a successful fitness business in western Sydney teaching “stripper fitness” classes that seem to be in vogue among millennial women.

    But recently, Heath has discovered a new passion: Investing in digital currencies.

    Heath has spent $5,800 on Bitcoin since July and has more than tripled her investment.

    "Look, I love pole dancing but lately my passion has definitely been Bitcoin," she told SBS News.

       Heath is spending less time on the pole and more time advising would-be bitcoin investors about navigating the world of digital currencies, even starting a website to explain the digital currency to novices.  

    "It comes with any investing, it's volatile at times, especially cryptocurrencies," she said.

     

    "The good thing is when it goes down, you can buy some more, and you know it's going to go up at some point."

    Dee Heath

    "As long as you're calm and you don't let emotions run you when you're dealing with any sort of cryptocurrency, particularly Bitcoin, then you're safe."

    Still, there are plenty of skeptics in her native Australia, where digital currencies are still largely associated with the black-market economy thriving on the dark web.

    "Australia in particular has been involved in buying and selling drugs on the dark web using cryptocurrencies," said Professor David Glance from the Centre for Software Practice at The University of Western Australia.

     

    "Many are comparing the buzz around Bitcoin to tulip mania that hit the Netherlands in the 17th century."

    Professor Glance said with such a volatile currency, investors should only buy what they can afford to lose.

    But with the digital currency recently peaking above $11,000 – a valuation that represents a 950% return since the beginning of the year in US dollar terms – mom and pop investors who had previously never heard of bitcoin are trying to get a piece of the action. Recently, the CME Group and other exchanges around the world have launched – or announced they’re planning to launch – new bitcoin derivatives that will make it easier for institutional investors like hedge funds to play in that market. Though many new funds have been established already this year to get in on the action.

    Earlier this week, pioneering cryptocurrency investor Mike Novogratz, whose digital-currency focused fund has recorded astronomical returns this year thanks to the performance of bitcoin, Ethereum and many other digital currency copycats. After accurately predicting that bitcoin would reach $10,000 this year, Novogratz now says he sees it going to $40,000 by the end of next year.

    Other financial luminaries like Warren Buffett and – most famously – JP Morgan CEO Jamie Dimon have said they believe bitcoin is a bubble. Dimon famously opined that the digital currency could get somebody killed.

    And while bitcoin has given investors no reason in recent months to believe the rally is slowing down, the idea that strippers are starting to pour their cash earnings into bitcoin is eerily reminiscent of a scene from the movie “The Big Short” where two of the film’s protagonists interview a stripper who took out subprime mortgages to buy nearly half a dozen properties.

    Should investors pay attention to this “stripper indicator”?

  • Mysterious Gold Dealer's Testimony Puts Erdogan On Shaky Ground

    Authored by M K Bhadrakumar via The Asia Times,

    As on the soccer field in his youth, so in a tumultuous political career spanning four decades: Turkey’s president Recep Tayyip Erdogan has consistently shown his mettle as a fighter who won’t be satisfied with anything short of total victory. 

    But in the battle that is now unfolding around him, and which is besieging him, there isn’t going to be a winner.

    What is at stake is survival – the chance to live another day, even if in some ignominy. That much is clear from the opening testimony in a federal courtroom in New York on Wednesday from the Turkish-Iranian gold trader Reza Zarrab, who allegedly helped Tehran sidestep US sanctions to export oil with the connivance of corrupt Turkish high officials and then to launder the income.

    When the principal accused becomes the star witness in a US court, he has possibly struck a deal with the authorities. The remaining ambiguity is with regard to when it was that Zarrab struck the deal – was it when he landed in Miami 18 months ago, ostensibly to show his young son around Disneyland, or before he was spirited out of Turkey to America on the express understanding that he’d get clemency for providing hard evidence to nail Erdogan.

    Zarrab explained before the court the elaborate scheme he orchestrated to free “a few billion euros” of Iran’s sanctioned oil using funds deposited in the Turkish state-owned Halkbank which were used to buy gold that was subsequently smuggled to Dubai and sold for cash. (The FBI also nabbed a senior functionary of Halkbank, Hakan Atilla, who is on trial.)

    Turkish gold trader Reza Zarrab is shown in a court room sketch as he appears in Manhattan federal court in New York. Photo: Reuters / Jane Rosenberg

    Zarrab named a confidant of Erdogan, the former Turkish Economy Minister Zafer Caglayan, as having taken bribes amounting to over US$60 million and also implicated Turkey’s Aktif Bank, which is part of a holding company headed at the time by Erdogan’s son-in-law, Berat Albayrak (the current energy minister). Zarrab is due to testify again. We have only seen the tip of the iceberg.

    Meanwhile, Turkey’s main opposition leader, Kemal K?l?çdaro?lu, revealed on Tuesday that Erdo?an’s close circle – including his brother, his son and his executive assistant – made transactions worth around US$15 million to an off-shore company called Bellway Limited in the Isle of Man (a tax haven) in late 2011 and early 2012. Kilicdaroglu produced documentary evidence and promised to revert with more such disclosures.

    Top Turkish officials and senior leaders of the ruling party have made the counter-allegation that all of this is a political conspiracy orchestrated by Islamist preacher Fetullah Gulen, who lives in the US. They say Gulen and his American mentors are making a second attempt to remove Erdogan from power after the failed military coup two years ago. The Turks believe that CIA officials sponsored Gulen’s exile in Philadelphia.

    Evidently, the US establishment has been preparing the case file for quite some time – and the effort predates the Trump presidency.

    The Turkish side have kept President Trump personally out of the firing line.

    There is, in fact, an eerie similarity here to what the Russians have been saying – namely, that Trump himself desires a good working relationship with Russia and President Vladimir Putin, but, alas, the Washington establishment is pursuing a contrarian agenda.

    Erdogan’s strategic defiance of Washington seriously hurts US interests. Without Turkey’s cooperation, America’s military presence in northern Syria is unsustainable. Turkey’s entente with Russia and Iran undermines US regional strategies.

    Add to that Turkey’s S-400 missile deal with Russia, Erdogan’s hostility toward Israel and support of Qatar in its rift with Saudi Arabia, the downhill slide in Turkey’s relations with major European countries and its lackadaisical attitude toward NATO, and it’s not hard to see how the West might view Erdogan as a hurdle that must somehow be overcome.

    Zarrab can help irreparably damage Erdogan’s reputation, and even implicate his family members and close aides as criminals.

    Worse still, heavy penalties of billions of dollars could be levied on the Turkish banks involved, crippling the country’s economy. And sanctions could be imposed.

    Suffice to say, Erdogan has a choice between capitulation or the desecration of the house he has built in a long and hugely successful political career. Time is running out. Erdogan is circling the wagons. He may feel tempted to ride the wings of Turkish nationalism. There is still no credible political figure who can seriously challenge him in Turkish politics. He is daring and charismatic. The next elections are due only in 2019.

    But that is to cast an eye at the horizon.

    Significantly, US Secretary of State Rex Tillerson quietly digressed during a speech on trans-Atlantic relations in Washington on Tuesday to pose a riddle to no one in particular – whether Turkey would be better off partnering with Russia and Iran or aligning with the West.

    On the eve of Zorrab’s testimony, Tillerson seemed to hint at a passage that Erdogan has not taken, toward a door that he has never opened – one that leads into the rose-garden.

  • Mueller's Top FBI Agent Probing Clinton Emails, Russian-Collusion "Removed" After Anti-Trump Texts Found

    Special Counsel Robert Mueller's top FBI investigator into 'Russian meddling' and Clinton emails has been removed from the probe reportedly due to the discovery of anti-Trump text messages exchanged with a colleague (whom he happened to be having an extra-marital affair with).

    FBI veteran, Peter Strzok, considered "one of the most experienced and trusted FBI counterintel investigators" according to the NYT, and who was tapped by Mueller to help lead the probe of Russian meddling in last year's presidential election, after helping lead the investigation into whether Hillary Clinton mishandled classified information on her private email account, has left Mueller's team.

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    As ABC reported in August, when Strzok's departure was first noticed, this was the first known hitch in a secretive probe that, by all public accounts, is charging full steam ahead. ABC reported that it was unclear why Strzok stepped away from Mueller's team of nearly two dozen lawyers, investigators and administrative staffers. Strzok, who had spent much of his law enforcement career working counterintelligence cases and has been unanimously praised by government officials who spoke with ABC News, was moved the FBI's human resources division. The move prompted many questions about why one of the FBI's top investigators was being reassigned.

    We now know the answer: anonymous sources close to the matter told The Washington Post that Strzok was removed from the investigation after the Justice Department’s inspector general began examining whether the agent had sent text messages that expressed anti-Trump political views, three people briefed on the matter told the WaPo.

    In a rare, on the record statement to the media, the Special Counsel's office effectively admitted that the head investigator into both Clinton and Trump was tainted: "Immediately upon learning of the allegations, the Special Counsel’s Office removed Peter Strzok from the investigation."

    More from the WaPo:

    During the Clinton investigation, Strzok was involved in a romantic relationship with FBI lawyer Lisa Page, who worked for Deputy Director Andrew McCabe, according to the people familiar with the matter, who spoke on condition of anonymity because of the sensitivity of the issue.

     

    The extramarital affair was problematic, these people said, but of greater concern among senior law enforcement officials were text messagesthe two exchanged during the Clinton investigation and campaign season, in which they expressed anti-Trump sentiments and other comments that appeared to favor Clinton.

     

    The people discussing the matter did not further describe the political messages between Strzok and Page, except to say the two would sometime react to campaign news of the moment.

     

    Officials are now reviewing the communications to see if they show evidence of political bias in their work on the cases, a review which could result in a public report, according to people familiar with the matter.

    At the time they left Mueller’s group, no one publicly linked the two departures. For months, officials have refused to explain why Strzok was reassigned, but people familiar with the matter said it was ultimately Mueller’s decision.

    As WaPo concludes, the president’s most vociferous defenders in Congress have called for a special counsel to investigate how the FBI handled the Clinton probe, and other Clinton-connected matters. Word of the texts could give new fuel to those demands.

    For those confused, what this means is that the "professional, impartial, objective" FBI agent tasked with not only uncovering fraud and/or problems with Hillary's abuse of a personal email server and was then charged with finding dirt on Donald Trump in his "Russian collusion", was himself a member of the "resistance."

    No wonder Comey's "recommendation" was to leave Hillary alone, while personally leaking his own, confidential data to the NYT in hopes of starting the Russia proble and ultimately getting Trump impeached.  One does wonder, however, just when will all this anti-Trump bias running across the FBI and CIA be noted, and when truly objective investigations finally take place.

    Furthermore, we suspect Page and Strzok were not alone in their anti-Trumpedness, but we do note that the implicitly pro-Trump 'leak' of these Mueller-probe-embarrassing details is a radical sea-change from the usual torrent of 'gotcha' leaks emanating from the NSA/CIA/FBI designed to further the Deep State's grip on the administration.

  • Frustrated Investors File Lawsuits Against World's Largest ICO

    Here's the latest sign that the massively fraudulent ICO market is headed for a collapse.

    Tezos’s investors are still waiting to learn when they can expect to receive the digital tokens that they paid a premium for during the company’s record-setting crowdsale. But as reports of abuse, internal strife and outright embezzlement have surfaced in the press, three groups of angry investors have filed class action lawsuits accusing the company of fraud and securities violations.

    In response, Arthur and Kathleen Breitman, the young couple that founded the Tezos project, are asking the Switzerland-based Tezos Foundation to foot the bill for their legal defense – a controversial move, seeing as that money is supposed to seed the Tezos coin ecosystem, according to Reuters.

    Tezos set a new sales record in the white-hot IPO market this summer when it raised more than $230 million in a hotly anticipated ICO that saw several behemoth firms in the northern California venture capital scene invest millions while thousands of individual investors followed suit, enticed by the astronomical returns of digital currencies like bitcoin and ethereum?

    However, anybody who stopped to scrutinize the Tezos whitepaper – where the company’s founder laid out his “vision” for a product that he has yet to build – would recognize that the company’s business plan sounds like gibberish.

    Despite this, the company raised more than $200 million during the first week of its July crowdsale.

    To help shore up investors’ faith in the company, the leaders of Tezos promised to entrust the money they raised during the token sale to a nonprofit organization set up in Switzerland. The Tezos Foundation, is supposed to keep the company on budget until the product is finished. The company initially promised investors that it would deliver their tokens – informally known as Tezzies – by the end of the year.

    The Tezos project and its founders, Arthur and Kathleen Breitman, are facing three class-action lawsuits in the United States. Plaintiffs allege federal securities law violations and that the fundraiser defrauded participants, who were told they were making non-refundable donations to the Swiss foundation. The lawsuits are seeking refunds and damages.

     

    The project has yet to launch, which is required for contributors to receive new Tezos digital coins, called Tezzies. Meanwhile, their contributions – made in bitcoins and ether – have soared in value.Both lawsuits name as defendants the project’s young founders, their Delaware-based company, Dynamic Ledger Solutions Inc (DLS), which owns the Tezos source code, as well as the Zug-based Tezos Foundation.

     

    A Reuters investigation in October found that the couple was in a bitter dispute with Johann Gevers, the foundation’s president, over control of the project.

     

    Arthur Breitman told Reuters in Zurich on Thursday that he would not answer any questions. Gevers said he could not comment on the Breitmans’ request that the foundation indemnify them against legal actions.

    According to legal experts who are familiar with the arcane rules governing Swiss nonprofits say the legal argument for the Tezos Foundation covering its founders’ litigation expenses is flimsy, at best.

    Georg von Schnurbein, co-author of a book on Swiss foundation governance, said he saw no reason for the Tezos Foundation to cover the Breitmans’ legal costs.

     

    “In my opinion, there is no reason for that because their activities were connected to their Delaware company, not to the foundation,” he said.

     

    The foundation’s three board members could be held liable by Swiss regulators if they were to agree “because the lawsuits have nothing to do with the foundation purpose, only with the collection of money prior to that,” von Schnurbein added.

    Unfortunately for investors, Tezos neglected to disclose many of the details about the relationship between the foundation and Dynamic Ledger Solutions Inc, Tezos’s corporate entity.

    Further complicating matters is the contractual agreement between DLS and the foundation that was signed in June. The agreement, which is not public, governs the sale of DLS and its intellectual property to the foundation.

     

    The agreement, a copy of which was reviewed by Reuters, states that the Swiss federal supervisory authority for foundations must approve the agreement. It also indicates the approval was required before the fundraiser took place.

    However, a spokesman for the department that oversees the Swiss authority told Reuters that approving these types of agreements lies outside the authority’s scope of influence: “It is not the Foundation Authority’s task nor its responsibility to approve private law agreements."

    The contract also says that some Tezos software code would be put in the public domain prior to the fundraiser. But the foundation later said that it has a license to release the code and will do so “at an appropriate time before the launch of the main network.” Conveniently,  documents provided to investors didn’t mention the required approval by the Swiss authority or the timing of the source code’s release.

    Stephen Palley, an attorney at Anderson Kill in Washington who focuses on software development, told Reuters after reviewing the investor agreement that it may help plaintiffs’ lawyers show that contributors to the Tezos fundraiser were purchasing securities, not making donations. According to the agreement, the contributions were needed to launch the Tezos network, he said. Over the summer, the SEC issued a ruling in an inquiry into the implosion of the DAO that effectively deemed all ICOs securities offerings. This means companies that launch ICOs must register their tokens as securities and abide by all pertinent securities laws.

    “This weakens the argument that tokens were a discretionary gift, akin to a tote bag given to people who donate to a public radio fundraising drive,” he said.

     

    Kathleen Breitman told Reuters in June that participating in the Tezos fundraiser was like making a donation to a public broadcaster and receiving a tote bag.

     

    The agreement was signed on June 27 by Gevers and DLS’s shareholders, who are the Breitmans and an investment firm founded by Silicon Valley venture capitalist Tim Draper. The shareholders eventually stand to receive 8.5 percent of the funds raised in the initial coin offering in cash, and additional Tezos coins distributed over four years.

     

    Reuters also reviewed a separate agreement between DLS and the foundation. It lists 11 early backers of Tezos, including the living trust of Frederick Ernest Ehrsam III, a co-founder of Coinbase, which operates a U.S. cryptocurrency exchange; Meta Stable Capital and CoinFund LLC.

     

    Jake Brukhman, CoinFund’s managing partner, said the fund initially backed the Tezos project but received a refund in May before the fundraiser. “Our teams came to a mutual decision to part ways,” he said.

     

    Ehrsam declined to comment through a spokesperson for Coinbase. Other early backers did not respond to requests for comment.

    The internal strife at Tezos spilled into public view back in October when the Breitmans accused Johann Gevers, the head of a Swiss foundation which oversees their funds, of attempting to overpay himself using the massive pot of investor capital – despite the fact that the company will likely blow through its promised deadline of allocating tokens to buyers by December (the tokens have yet to be created). The news sent Tezos futures contracts trading on BitMEX spiraling lower.

    Of course, Tezos isn’t the only major ICO that’s in trouble: Last month, we reported that Bancor, the world’s fifth-largest ICO by funds raised, has plunged by more than 50% since the company’s June ICO as investors have become disillusioned with its obscure product.

    The question remains: Would Tezos’s failure help pacify the investing fervor surrounding ICOs? Or will investors in these products continue to be victimized by fraudsters until the offerings are banned outright?

    Luckily for Tezos, if the owners can't remedy the company's many intractable problems, PwC is now accepting payment in bitcoin for its consulting services…

  • Trump May Recognize Jerusalem As Israel's Capital Next Week

    Submitted by South Front

    On Friday a senior US official told Reuters that US President Donald Trump may deliver a speech next Wednesday recognizing Jerusalem as Israel’s capital.

    Some Middle East experts speculate that such a move will be a major blow to the US relations with Arab countries and the Israeli-Palestinian peace process. No US president or any western leader have ever recognized Israel’s control over all of Jerusalem.

    However, a spokesperson with the White House National Security Council denied these claims and told Reuters that the White House has “nothing to announce”.


    Israel flag with a view of old city Jerusalem and the Western wall. Image via South Front.

    President Trump had promised during his presidential campaign in 2016 that he will recognize Jerusalem as the capital of Israel. Many experts doubted Trump’s promises back then and didn’t believe that a US president could take such a dangerous step. However many recent reports have claimed that the US president is close to announcing this historical decision.

    Trump said on October 8 that he wanted to give a shot at achieving peace between Israel and the Palestinians before moving the US embassy from Tel Aviv to Jerusalem. Since then, no real effort has been made by the US to push the Israeli-Palestinian peace process forward.

    “I want to give that a shot before I even think about moving the embassy to Jerusalem … If we can make peace between the Palestinians and Israel, I think it’ll lead to ultimately peace in the Middle East, which has to happen” Trump said during an interview on October 8 according to Reuters.

    Saeb Erekat, a member of the Palestinian Parliament described the possible US recognition of Jerusalem as Israel’s capital as “playing with fire”, according to Al-Jazeera. "Any American recognition of Jerusalem as the capital of Israel will bring about the end of the Jerusalem issue. This issue is weighty and dealing with it is playing with fire." Erekat's full statement said.

    Hamas also stated that the move would lead to an “escalation” of the “Jerusalem intifada.” Indeed, the Palestinian side will likely halt all negotiations if Trump fulfills his promise to Israel, and a new uprising in the Western Bank and a military escalation in Gaza Strip is also a possible outcome.

  • "Deadliest Year Ever" – Baltimore Eclipses 2016 Homicide Total

    As of 11:20am ET. Thursday morning, the wave of violent crime continued in Baltimore with the death of a 21-year old man by gunfire.

    The significance of this latest death in Baltimore’s urban war zone, is that total homicides in 2017 have now topped 2016 levels at 319, and there is still one month to go. 

    Homicides in Baltimore have averaged 29 per month, which could indicate Baltimore is now on track for the deadliest year ever to be recorded. The all-time per-capita record was set back in 2015, with 344 homicides, said Fox News.

    Throughout the year, we have pointed out Baltimore’s rapid deterioration into chaos (see: America’s Urban War Zone: Baltimore Doubles Chicago’s Homicide Rate In 2017).

     Baltimore is on track to exceed 400 homicides in 2017 for the first time in the city’s history and has more than doubled Chicago’s homicide rate on a per capita basis. 

    Baltimore Mayor Catherine E. Pugh has called the city’s gun violence “out of control.” Earlier this year she begged the Federal Government for help as 2017 murders soar to a 20-year high.

    “I’m calling on all the assistance we can possibly get because I can’t imagine going into our summer months with our crime rate where it is today, what that’s going to look like by the end of the summer,” says Mayor Catherine Pugh.

     

    “Murder is out of control,” says Pugh.

     

    “We are looking for all the help that we can get,” she says.

    The most recent flare up to draw national attention was the November execution of Sean Suiter, an 18-year veteran of the force, who was fatally shot while on active duty. Shortly after, we reported on the 4-5 day lockdown of one West Baltimore neighborhood by police was described as ‘Martial Law’.

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    Death and despair in Baltimore comes at no surprise since the city has been run by democratic controlled leadership for over 50-years. As the death toll Skyrockets, Republican Gov. Larry Hogan has had enough and said this week that he will be issuing his own crime-fighting strategy, per CBS:WJZ.

    Gov. Hogan said no need for the National Guard but ‘will reveal his own plan to stop the violence in Baltimore as soon as next week’. Back in 2015, Hogan declared a state of emergency during the Baltimore riots, where he called in the National guard to restore order in the city.

    Developments in the next 30-days for Baltimore will be critical in determining government’s next step in tackling the urban war zone for the 2018 timeframe. As expected, the city is projected to further deteriorate this month and record the most homicides ever. Now it’s Hogan’s turn to offer a crime-fighting plan and what we’ve seen before… He isn’t afraid to use the National Guard.

    Baltimore is an urban war zone – it should be treated like one.

  • The Government Is Coming For Your Bitcoin

    Authored by Simon Black via SovereignMan.com,

    The same day Bitcoin cracked its all-time high above $11,000, the government dealt its first blow to the crypto world…

    On Wednesday, a federal judge in San Francisco ordered the popular Bitcoin exchange, Coinbase, to provide the IRS with information on over 14,000 account holders.

    The taxman noticed that only 800-900 people reported gains related to Bitcoin in each of the years between 2013-2015. It seemed unusual given Bitcoin’s meteoric rise.

    So the IRS went for its pound of flesh.

    Initially, the government wanted complete data on every Coinbase user that transacted between 2013 and 2015. The exchange’s website says it has 13 million users (more than the number of Schwab brokerage accounts).

    But Coinbase pushed back… and the government agreed to only take limited data (including name, date of birth, address, tax ID number, transaction statements and account logs) for accounts that have bought, sold, sent or received at least $20,000 worth of Bitcoin in a given year.

    Don’t say I didn’t warn you about Coinbase. I told Sovereign Man: Confidential readers last month:

    If you’re tempted to purchase Bitcoin from the popular Coinbase exchange, don’t bother.

     

    They’ve sold out to regulators.

    The IRS is calling this a “partial win.”

    But you can be sure, there will be a public beheading. This is something governments almost always do.

    They’ll find a prominent Bitcoin person, someone that’s polarizing to the public – like “pharma bro” Martin Shkreli.

    It will be a very public trial… and they’ll throw his ass in the slammer.

    Government’s always do this because they want to scare people.

    Kim Dotcom is the perfect example. Kim founded the popular file-sharing site Megaupload.

    The government wanted to stop illegal downloads, so they raided his guy’s house in New Zealand for violating US law.

    The government also does this for taxes… everything, really.

    Look at Wesley Snipes. The IRS accused him of felony tax evasion. He spent three years in jail.

    They had to take a celebrity and throw him in jail to scare everyone else.

    Back to Bitcoin…

    Now that it’s at all-time highs, the government wants its piece.

    I read the 400+ pages of the proposed tax code. How many lines in there do you think deal with cryptocurrency? ZERO.

    How many lines deal with e-commerce? ZERO.

    The government had every opportunity to set the rules for the 21st century. And they failed miserably.

    So the rules remain as clear as mud.

    Instead of trying to make it clear, their tactic is intimidation, force and coercion.

    This is just the beginning. There will be more.

    And my advice is don’t be one of those guys.

    Every transaction that you make in Bitcoin is potentially a taxable event.

    Let’s say you bought Bitcoin for $1,000 and after it went to $10,000 you buy a business class trip to Australia for $10k. When you pay the airline with one Bitcoin, you’ve just triggered a taxable event.

    The IRS would say that you essentially sold your Bitcoin, have a $9k gain and used those proceeds to buy the ticket.

    Which means you owe the IRS capital gains tax on $9k, which is 20% plus the Obamacare surcharge.

    So, don’t be that guy. If you’ve been doing this, trust me, you don’t want the IRS find out.

    You’d rather come forward yourself and disclose it and pay taxes… Rather than be the next Martin Shkreli.

    And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide. Because… If you live, work, bank, invest, own a business, and hold your assets all in just one country, you are putting all of your eggs in one basket. You’re making a high-stakes bet that everything is going to be ok in that one country — forever. All it would take is for the economy to tank, a natural disaster to hit, or the political system to go into turmoil and you could lose everything—your money, your assets, and possibly even your freedom. Luckily, there are a number of simple, logical steps you can take to protect yourself from these obvious risks.

  • Iceland's New Government Has Cunning Plan Of Tapping Banks To Boost Growth, Improve Infrastructure

    We like Iceland, we’ve never been there, but that doesn’t matter. Besides the outstanding natural beauty, Iceland, unlike the US, UK and practically everywhere else, holds bankers accountable. Last time we checked, 29 had been jailed. As we discussed, it also holds its leaders accountable (partially – see below) when they are complicit in exonerating convicted child rapists. Such an event brought down Iceland’s government in September.

    Last week, it emerged that Prime Minister Bjarni Benediktsson knew of attempts by his father, Benedikt Sveinsson, to have the Ministry of Justice grant “restored honor” to a convicted child rapist. Benediktsson kept this secret as the rapist, a friend of his father’s was essentially exonerated.

    Restored honor is the controversial process by which convicted criminals can have their crimes expunged and return to society with all rights and privileges restored. It requires that the convicted person serve between two to five years of their sentence on their best behavior and that they have multiple letters of recommendation. Sveinsson provided one such letter.

    Iceland held new elections on 28 October 2017 and a new coalition government came in to power this week. Iceland’s economy has been booming, in part due to the influx of tourists visiting its thriving capital city, Reykjavik, along with the Geysir geyser and the Gullfoss waterfalls. On any given day, tourists are likely to account for about 10% of the island’s population. However, as the FT explains, Iceland is paying a price for its success.

    These challenges include everything from the poor quality roads and overburdened infrastructure to a lack of accommodation and simmering popular discontent over how tourism is being handled. At Geysir and Gullfoss in central Iceland, dozens of buses and cars park at both attractions for free before disgorging tourists who pay no entrance fee. The roads across Iceland are under intense strain from hire cars and a tourist died just after Christmas in a head-on collision on a single-track bridge.

    “What are we sacrificing when we don’t put a levy on tourists? The roads here are dangerous,” says Asta Helgadottir, an MP for the anti-establishment Pirate party…Accommodation is also a problem. Cranes everywhere in Reykjavik attest to the surge in hotel construction but the increase in rooms still lags behind the growth in tourism.

    However, all is not lost. The new government has a plan…which involves Iceland’s banks and tapping their excess capital. According to Bloomberg.

    Iceland’s new left-right coalition government is gearing up for a spending drive to fix the nation’s dilapidated infrastructure after years of austerity and it could tap its banks for the some of needed cash.

    Iceland got a new government on Thursday, in a coalition between the Left Greens, the Progressive Party and the conservative Independence Party. The parties have pledged to spend more on roads and other infrastructure to catch up on an estimated 400 billion kronur ($3.9 billion) in missing investments.

    Even in Iceland, it seems, discredited politicians can bounce back into public life almost immediately, which is precisely what’s happened in the case of Bjarni Benediktsson, usually known as “Bjarni Ben”.

    Bloomberg spoke to the man himself, “According to Finance Minister Bjarni Benediktsson the government has an ace in the hole that can help finance the spending: the excess equity in its three largest banks, Arion Bank hf, Landsbankinn hf and Islandsbanki hf. The banks have leverage ratios in the 16 percent to 18 percent range at the end of June, far above the 3 percent minimum, according to Iceland’s central bank.

    “We have hundreds of billions of kronur, way more than any other European nation, tied up in financial institutions,” said Benediktsson, a former prime minister who will now take over at the Finance Ministry, in an interview on Thursday “And we in the three parties are ready to shake loose this capital to use it toward an infrastructure build up.”

    With a plan like that, the government must have considerable leverage over Iceland’s major banks…and it does.

    The government owns most of Landsbankinn and all of Islandsbanki and has a stake in Arion. The banking assets were acquired after the 2008 collapse when the government stepped in to save the financial industry. The crisis is now largely in the rear-view mirror and the new government is being handed a booming economy.

    The government will now put together a white paper on the financial system and have a broad discussion in parliament.

    We hadn’t fully appreciated how rapidly Iceland’s economy has been growing – last year it grew faster than China (6.7%) and even faster than India (7.1%). However, the growth rate is declining rapidly, so the coalition government’s plan might be timely, if it can be executed.

    There are signs that the economy may be cooling after growing at a whopping 7.4 percent last year. Economist surveyed by Bloomberg are forecasting gross domestic product growth at 4.2 percent this year, while the central bank recently lowered its forecast for 2018 to 3.4 percent from 5.5 percent.

    Despite the differing left-right ideologies in the new coalition government, Bjarni Ben and the new prime minister are cautiously confident, especially the former.

    Internally, the government may find it hard to reconcile the policies of its two biggest party’s, the Left Greens and the Independence Party. But both party leaders on Thursday insisted they would make it work.

    “The outer circumstances are working in our favor in forming this government,” Benediktsson. “We are the European nation that is growing at one of the fastest rates — we have no unemployment in Iceland to speak of, we have a budget surplus since 2014 and forecasts predict continuing growth, a great increase in tourism next year.”

    Taking over as prime minister will be Left Green leader Katrin Jakobsdottir, the first time the party holds the top spot after emerging as the second biggest group in October’s election. While she faced some internal party turmoil for joining with the Conservatives, she is now “optimistic but realistic” that she can make it work.

    Having cratered the economy during the crisis, it would be poetic justice if the major Icelandic banks were its saviour as we head towards the next one.

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