Category: maxkeiser

Regulating Cryptocurrencies–and Why It Matters

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There’s a great deal of confusion right now about the regulation of cryptocurrencies such as bitcoin. Many observers seem to confuse “regulation” and “banning bitcoin,” as if regulation amounts to outlawing bitcoin.

Further confusing things is the regulation of cryptocurrency exchanges, where cryptocurrencies are bought and sold.

In China, for example, cryptocurrencies are not outlawed, but exchanges were shut down until regulators could get a handle on how to deal with the potential for excesses such as fraud, misrepresentation, etc.

A Wild West free-for-all is conducive to scammers, and so some thoughtful regulation that protects users is to be welcomed.

Governments tax income and capital gains. This is how they fund their activities. Clearly, gains reaped from cryptocurrencies are no different from gains reaped from other speculations and investments, so they should be recorded and taxed in the same manner.

Some enthusiasts of cryptocurrencies seem to think that regulations requiring the reporting and taxation of gains made buying and selling cryptocurrencies is tantamount to destroying cryptocurrencies.

I think this view has it backwards: fully legalizing and regulating cryptocurrencies as financial instruments legitimizes them in a much wider circle of potential users, and common-sense regulations are to be encouraged and welcomed, not viewed as threats to cryptocurrencies.

I want to stress that beneath all the speculative frenzy we see in the cryptocurrencies, what will retain value and remain scarce and in demand is whatever solves problems.

Cryptocurrencies have the potential to solve two problems:

1. reducing the cost and friction of financial intermediaries.

2. holding value as the $250 trillion in phantom wealth created in the asset bubbles of the past 12 years vanishes.

These are real problems: financial intermediaries introduce a great amount of friction and cost globally, and even a modest reduction in cost and friction (time, effort, compliance, recording transactions, etc.) would add up very quickly.

The global value of real estate, stocks, bonds and debt-assets such as mortgages and auto loans is around $500 trillion. By my rough estimate, about half of this was created in the past 12 years as central banks inflated enormous bubbles.

A house that was worth $200,000 in 2005 is now worth $500,000, but it provides no additional value as shelter; it is the exact same house with the exact same utility value. So the additional $300,000 of current market value is entirely phantom wealth.

The same can be said of all the other assets whose value has skyrocketed: the underlying assets/collateral haven’t changed enough to justify the current valuations.

Once the bubbles in stocks, bonds, housing, commercial real estate and debt-assets start popping, the owners of all that phantom wealth will be desperate to sell what is dropping in value and convert that wealth into assets that are either holding their value or appreciating.

Virtually all of this newly created financial “wealth” is ephemeral. Bitcoin et al. are routinely criticized as being “worthless” due to their digital/ephemeral nature.

But critics rarely if ever examine the equally ephemeral nature of $250 trillion in financial “wealth.”

Bitcoin in particular has two features which may be viewed as having value as all these coordinated bubbles pop:

1. The organization and distribution of bitcoin is mathematical. It is not something that can be changed at the whim of a handful of self-serving people in a room (i.e. central bankers).

2. It is limited in quantity.

Some critics claim this can be changed, but that’s not the way it works. A group of bitcoin miners can propose a new version of bitcoin that will issue a trillion coins, but if nobody supports their new version, it dies.

In other words, the marketplace of users decides what has value and what doesn’t.

Regulations that enable cryptocurrencies to solve the two problems listed above should be welcomed, as these problems are structural and impact everyone in some fashion.

Nations that attempt to limit cryptocurrencies’ ability to solve these problems will find that protecting high costs and systemic friction will grind their economies into dust.

 

I’m offering my new book Money and Work Unchained at a 10% discount ($8.95 for the Kindle ebook and $18 for the print edition) through December, after which the price goes up to retail ($9.95 and $20).

Read the first section for free in PDF format. 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Vía Max Keiser http://ift.tt/2CzLK8L

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Don’t Be Surprised If Gold And Silver Pull Out In front Of the Cartel This Week

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On the surface, things look calm. Not much going on through hump day:

We have a Kashkari speech on Tuesday and a plethora of housing data.

Thursday and Friday are equally full of meh:

We don’t have any Fed speakers to worry about, unless of course, they are trotted out on CNBC. If that is the case, there is something wrong in the markets that the Fed will try to fix with some good old fashioned jaw-boning.

We do get more economic data releases in the latter half of the week, but we can rest assured knowing that nearly every single piece of statistical economic data is crafted in a manner to fit whatever narrative that the bankers and the government want to portend.

What we have this week is crunch time for government. And we get a double-shot.

Whereas economic data points and Fed Heads are one thing, the government often does make policy errors, and a policy error could move the markets one way or another.

Specifically this week, there are two major issues big gov will be tackling:

Click here to read the rest of the article on Silver Doctors

Vía Max Keiser http://ift.tt/2CWkKS1

‘Gold Strengthens Public Confidence In The Central Bank’ – Bundesbank

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– ‘Availability of gold strengthens public confidence in the central bank’s balance sheet’ say Bundesbank
– Bundesbank has Audited Reserves amounting to almost 3,400 tonnes, around 68% of Bundesbank’s reserve assets
– Bank taken series of steps to increase transparency around Germany’s gold holdings
– Germany has second largest gold holdings in the world; U.S. believed to be largest
– Transparency important and all central banks should follow the Bundesbank lead

Editor: Mark O’Byrne


GoldCore: Bundesbank Gold Reserves

Germany’s central bank serves as an example to central banks when it comes to respecting gold reserves and the public’s knowledge of them. The Bundesbank has worked incredibly hard in recent years to be transparent in regard to its gold bullion reserves.

The latest edition of Gold Investor from the World Gold Council has a very interesting article written by  Carl-Ludwig Thiele, Member of the executive board of the Bundesbank which we bring to you below. In it Thiele outlines the reasoning of the Bundesbank to be open and transparent about the 3,373.6 tonnes of gold that represents nearly 70% of the country’s reserves.

There are two significant lessons to be learnt here – one for central banks and one for individual investors. The first is, central banks should be aware of the benefits of gold and how transparency will boost the public’s confidence. The second is investors should understand why the Bundesbank is so interested in protecting its gold bullion.

Gold cannot be devalued as the euro, dollar, sterling and all fiat currencies are being and will be. It cannot be confiscated a la deposits in bank bail-ins and it is extremely difficult to confiscate gold coins and bars if owned in allocated and segregated storage in safe vaults in the safest jurisdictions in the world. It is a borderless money that acts as the ultimate reserve and safe haven in a diversified portfolio.

Click here to read full story on GoldCore.com.

 

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

Vía Max Keiser http://ift.tt/2oE6Lxb

[KR1163] Keiser Report: American Empire Entering Decline

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In this episode of the Keiser Report, Max and Stacy discuss the proposal to send Erik Prince’s private army to secure the trillions of dollars worth of national resources of … Afghanistan. And while the elite like Prince rig the system at the top to dole out free money for oligarchs, so too must the bottom 99% game the complex Obamacare system in order to get free healthcare. In the second half, Max interviews Marshall Auerback of the Levy Institute. They discuss ice hockey and economics of MMT.

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Have We Reached Peak NFL?

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OK, I get it: pro football is so popular because it’s one of the last refuges of modern life that hasn’t been ruined by politics. Oops, scratch that. But we shouldn’t pin the decline of pro football’s popularity (as measured by viewership) solely on player protests, as the decline predates the recent politicization.

As this chart shows, viewership has been sliding for years across the entire demographic spectrum:

Even more troubling for the multi-billion-dollar NFL empire, the youth demographic is evaporating like mist in a scorching summer day in Death Valley. The problem for the NFL is two-fold: the number of young people who are dedicated NFL viewers is modest, and even worse, it’s declining at a fast clip.

I am sure there are plenty of 25-year old fans, but anecdotally, I don’t know a single Millennial who has any interest in sitting through a 2-hour pro football game at home, or ponying up the big bucks and huge chunk of time required to attend a game.

Again, anecdotally, young people seem more likely to watch a short clip of the game’s highlights on Youtube than devote 2+ hours to sitting through endless annoying TV adverts for a few moments of action.

Or they’re investing their sports-related time and money in college or local sports; if they’re parents, their time may be devoted to their kids’ sports activities.

In other words, pro football is an interest of the older generations that isn’t shared by the younger generations. We can chart this progression with an S-curve, which in the case of the NFL, is marked by the “boost phase” of viewership in the 1970s and 1980s as Monday Night Football expanded the TV audience and the league added franchises.

The league reached a maximum audience some years ago, and has now entered the decline phase.

But the NFL’s troubles run even deeper than demographics: its fan base is being pressured financially while the cost of attending a game keeps rising.Anecdotally, attending a game costs a small fortune now. Yes, there may be a few cheap seats in the nose-bleed sections, but the costs of getting to the game, parking and refreshments far exceed what attendance cost the previous generation, even adjusting for inflation.

Maybe somebody feels $10 for a beer in a tiny plastic cup suitable for a urine sample and $20 (or more) for a couple of hot dogs or snacks is a fair price, but outside the circle of dedicated fans, it’s a ripoff.

Just in case the NFL didn’t notice, 95% of the populace is experiencing stagnating wages and rising costs of essentials, leaving less and less to blow on luxuries such as NFL games.

Only the top 5% have the dough to blow on luxuries, and not to put too fine a point on it, but outside of the luxury corporate boxes, the top 5% is not the prime NFL audience for several reasons, including that they’re too busy working and taking care of responsibilities to devote precious spare time to watching pro football.

Spending is correlated to income, naturally enough: most of the “recovery” is the result of soaring discretionary spending by the top 5%, not the modest spending that is affordable to the bottom 95%. That means that the advertisers spending big bucks to advertise on NFL TV games are reaching an audience with diminishing cash or credit to spend.

Lastly, the NFL has reached the point of over-saturation. Monday Night Football was an innovation in 1970, but who has time or interest for Thursday morning football, Friday afternoon football, etc.? Then there’s the health-related issues (brain damage suffered by players) and the politicization.

To summarize:

1. The NFL has saturated the potential audience to the point of exhaustion.

2. The potential audience is shrinking as student-loan-burdened Millennials have collectively little interest in spending the money or time required to be a rabid fan of pro football.

3. The cost of attending an NFL game is increasingly out of reach of the bottom 95% of households.

4. TV viewership is declining across the entire demographic spectrum.

5. The wages/income of the vast majority of the TV audience has stagnated, and 95% of the populace has less disposable income than a generation ago.

6. The top 5% with the majority of the disposable income are not big pro sports fans, mostly due to the many demands on their time and the diversity of other pursuits available to them.

How will the owners and managers of the multi-billion-dollar NFL empire handle the league’s decline phase? Managing the decline phase is less fun than reveling in the expansion phase. 

I’m offering my new book Money and Work Unchained at a 10% discount ($8.95 for the Kindle ebook and $18 for the print edition) through December, after which the price goes up to retail ($9.95 and $20).

Read the first section for free in PDF format. 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Vía Max Keiser http://ift.tt/2jWSqHp

WGC: 2018 Set To Be A Positive Year For Price of Gold and Investors

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WGC: 2018 Set To Be A Positive Year For Price of Gold and Investors

– Gold expected to build on 2017 gains into 2018 despite headwind conditions
– Gold has gained more than 9% in the year-to-date
– Monetary policy and policymakers will continue to be “significant drivers of gold demand”
– Physical and structural market changes will support gold into 2018
– Goldcore has been at forefront of reporting on major developments in gold market and price

Gold’s had a tough year. This isn’t in reference to price. After all, it has made double-digit gains in some currencies and US Gold futures are up more than 9%. The precious metal has had some harsh criticism from the mainstream media and unfair comparisons to bubblicious assets, such as bitcoin and US equities.

Few have acknowledged gold’s impressive performance in the face of rising interest rates, tightening monetary policies and the ongoing equity bull market.

The World Gold Council’s Chief Market Strategist John Reade is optimistic that gold can carry on with its strong performance, well into 2018. Below, we outline how he expects gold to perform next year.

Click here to read full story on GoldCore.com.

 

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

Vía Max Keiser http://ift.tt/2jXqcfr

[KR1162] Keiser Report: Three Bitcoin Pizza Masterpiece

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In this episode of the Keiser Report, Max and Stacy discuss the three bitcoin pizza masterpiece and poverty in America. In the second half, Max interviews Steve Marshall of Cuba Ventures about his new crypto solution for Cuban tourist trade – Revolupay!

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Year-end Rate Hike Once Again Proves To Be Launchpad For Gold Price

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Year-end rate hike once again proves to be launchpad for gold price

– FOMC follows through on much anticipated rate-hike of 0.25%
– Spot gold responds by heading for biggest gain in three weeks, rising by over 1%
– Final meeting for Federal Reserve Chair Janet Yellen
– Yellen does not expect Trump’s tax-cut package to result in significant, strong growth for US economy
– No concern for bitcoin which ‘plays a very small role in the payment system’

There were few surprises yesterday when the Federal Reserve decided to hike rates for the third time this year, by 0.25% to 1.5%. Gold responded with a climb of over 1%.

The statement accompanying the announcement was cautiously optimistic. Two FOMC members dissented whilst Yellen gave comments on Trump’s much lauded tax package and bitcoin.

This was Yellen’s last FOMC announcement as Federal Reserve Chair. As has become her style she was communicative of the Fed’s upcoming plans in terms of normalising monetary policy and the three rate hikes intended for 2018.

Overall Yellen and co are feeling good about how the current Chair is leaving things:

“…the committee expects the labor market to remain strong, with sustained job creation, ample opportunities for workers and rising wages,”

However concern and perhaps surprise was expressed when inflation data came in lower than expected. The reading of 1.7% in the year to November did not hold back the FOMC from increasing their growth projection from 2.1% to 2.5% for 2018.

Click here to read full story on GoldCore.com.

 

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

Vía Max Keiser http://ift.tt/2o5xfai

Could Central Banks Dump Gold in Favor of Bitcoin?

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Exhibit One: here’s your typical central bank, creating trillions of units of currency every year, backed by nothing but trust in the authority of the government, created at the whim of a handful of people in a room and distributed to their cronies, or at the behest of their cronies.

And this is a “trustworthy” currency?

Exhibit Two: central banks can’t become insolvent, we’re told, because they can create as much currency as they want, whenever they want. And this is a “trustworthy” currency?

Exhibit three: and here’s what happens when trust in the currency is lost due to excessive currency issuance: the currency goes from 10 to the US dollar to 5,000 to $1 and then to 95,000 to $1, on its way to 2,000,000 to $1:

Yes, this was once a “trustworthy” currency.

While many people expect China to issue a gold-backed currency some day, they overlook the inconvenient reality that China is creating far more fiat currency than it is adding in gold reserves. They also overlook that gold-backed means nothing if the currency isn’t convertible into gold.

If it isn’t convertible, it isn’t gold-backed. Claiming there’s gold somewhere in a vault doesn’t make a currency gold-backed, as the central bank can devalue the currency it issues at will. Gold-backed means the currency is pegged at X units of currency to 1 unit of gold, and X units of currency can be exchanged for 1 unit of gold.

All of which brings us to the “crazy” idea of backing fiat currencies with cryptocurrencies, an idea I first floated back in 2013, long before the current crypto-craze emerged: Could Bitcoin (or equivalent) Become a Global Reserve Currency?(November 7, 2013)

Since there is no real-world commodity backing the digital currency, its value must be based on scarcity and its ubiquity as money. The two ideas are self-reinforcing: there must be demand for the digital money to create scarcity, and the source of demand is the digital currency’s acceptance as money that can be used to buy commodities, goods, services and (the ultimate test) gold.

Speaking of gold, correspondent Liberty Philosopher recently posed a scenario that was new to me: if gold continues losing value, could central banks dump their gold in favor of cryptocurrencies?

Yes, I realize this is anathema to those who anticipate a gold-backed currency becoming the dominant form of centrally issued currency, but the idea of governments that have debauched their currencies building reserves of decentralized and limited-in-issuance cryptocurrencies may not be as farfetched as you might imagine.

Here is Liberty Philosopher’s commentary:

My understanding is that gold is kind of a reserve asset held by governments that provides the ultimate assurance that they are able to pay their debts. If the value of the assets they hold, which are a guarantee of their ability to pay, begins to erode, and the erosion in value is not a temporary or passing phenomenon, but a continuous and long-term trend, this would imply that the ability of governments to ultimately pay their debts would be eroding. If the value of gold begins to decline, governments who have gold reserves, but whose ability to pay their debts may be somewhat in question, would come under pressure to fortify their reserves as proof that they remained able to pay their debts.

If the price of gold were to continue to decline, my thought is that governments would be under pressure to sell the reserve asset that was declining in value, because the continuing decline in value would call into question their ability to repay their debts. They couldn’t just sit there and allow their reserves to decline in value year after year. They would have to act. If the need for having some kind of “hard” currency reserve remains (creditors may not want to accept newly printed bank notes in lieu of “hard” reserves), and they are forced to begin selling their gold reserves, what other hard reserve asset could they obtain or purchase? I think they could become purchasers of the most valuable cryptocurrencies as a replacement for their gold reserves.

The ideal reserve gains in purchasing power over time. If Venezuela had purchased bitcoin in size when it was $100, or even $1,000 in January 2017, its own currency wouldn’t be heading to near-zero quite so quickly.

In my book A Radically Beneficial World, I proposed that nations which had debauched their centrally issued fiat currency could acquire the labor-backed currency I propose as reserves.

The acquisition of decentralized cryptocurrencies as reserves may sound crazy now, but as central banks destroy the purchasing power of their fiat currencies, all sorts of ideas that seem crazy now will start looking practical once the death spiral of the current unstable monetary regime begins. 

I’m offering my new book Money and Work Unchained at a 10% discount ($8.95 for the Kindle ebook and $18 for the print edition) through December, after which the price goes up to retail ($9.95 and $20).

Read the first section for free in PDF format. 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Vía Max Keiser http://ift.tt/2ynqZe6

Despite Today’s Fed Love Fest: The Evidence Is Strong That Gold & Silver Bottomed Yesterday

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We may well have just seen the bottom in gold and silver yesterday:

That is not to say we can’t take another trip down, and the move faded overnight.

Side note: The dollar is up somewhat, but not in a way as to mirror the drop in the metals, especially going in to “everything is awesome” FOMC Day.

The significance of today cannot be understated.

Today is December FOMC day. In 2015, silver bottomed two days before this day, and in 2016, silver bottomed six days after.

In other words, we either saw the bottom yesterday, or we are very near the bottom right now.

If we did not see the bottom yesterday, that’s fine by me. I took in my loose change that I accumulated since this summer and I deposited it in my bank, so if we break-down in silver from here and trade with a $15.5X handle, I’ve I’m gonna pull the trigger on some phyzz again. 2.25 ounces to be exact. Every little bit helps right?

Another sign the bottom may be in already is just how oversold silver is right now:

Twice now in recent days silver broke-down into what many would call “very oversold”. That is a good sign in and of itself. Manipulation aside, it means that everybody who wanted to sell silver, has sold silver. Furthermore, notice the bottom forming on the chart as indicated by the last few days of trading.

The turn is better shown in gold:

Click here to read the rest of the story on Silver Doctors

Vía Max Keiser http://ift.tt/2AB1MTt