Author: Justin O'Connell

What America Learned From Tony Soprano

[heading]What America Learned From Tony Soprano[/heading]

In this age of NSA wiretapping, it is highly unlikely a family like Sopranos will ever exist, and considering how the public reacted to Edward Snowden, this is a fact that most Americans regret.  As one who respects his elders, I thought now would be a fitting time, in tribute to Jim Gandolfini, to take a step back and see what America has learned from Tony Soprano. Here are some of those lessons: Read More

Eurogroup Legitimizes “Bail-In” For Europe

[heading]Eurogroup Legitimizes “Bail-In” For Europe[/heading]

Did you think Cryprus was a “one-off?”

Himagegen.ashx.jpgopefully you didn’t put any money on it, as Eurozone finance ministers agreed over the weekend that freezing accounts was an acceptable way to inject money into struggling banks. The Eurogroup stated in the agreement that “An appropriate level of bail-in will be applied before the bank is recapitalised by the ESM in line with EU State aid rules.”

Enabling the 500bn euro ($660bn; £427bn) European Stability Mechanism to help banks aim to ensure that the European Union won’t fail.  The ESM, now able to inject a total of 60bn euros into trouble lenders, has awarded themselves the privilege to dip into depositor accounts first so that lenders – not national governments- may be made whole.  As BBC writes,

 In addition, the bank’s shareholders, bondholders, lenders and even large depositors, may also have to contribute ahead of any funds from the ESM, a process known as a bail-in.

European technocrats hope that the new agreement comes into effect in late 2014, although many details will still need to be agreed upon.

A major change, nonetheless, has taken place. Heretofore, the ESM could only bail out national governments, not banks. There was precedent for such a move, however, and they can do it with depositor money first. In June 2012, the ESM financed the bailout of Spanish banks, but indirectly, with the Spanish government ultimately on the hook for future bank losses (and of course losses would come).

banksters_robbing_sheeple.jpg

Making the problem of insolvent banks worse is the fact that most eurozone governments are beholden to the banks, which lend them the money they then for some reason call “legal tender.”

The new banking directive was vague in its parameters regarding what exactly a “bail-in” is, but when Europe’s technocrats do decide, the decision would apply across the whole EU.

So, one-by-one, countries along the periphery of Europe will go bankrupt forcibly trying to bailout international banks at the behest of an EU institution. How many countries will go down this road before the whole of Europe sees the writing on the wall?

Searching For a Critical Mass In Bitcoin

[heading]Searching For a Critical Mass in Bitcoin[/heading]

For a physicist, the “critical mass” is the amount of radioactive material that must be present for a nuclear fission explosion to occur.

For a Bitcoiner, the “critical mass” is the number of individuals that must adopt Bitcoin for the commanding heights of finance and government to adopt true “fiscal responsibility,” thus leaving bitcoiners be… Read More

Bitcoin & The Commercial Real Estate Collapse

[heading]Bitcoin & The Commercial Real Estate Collapse[/heading]

In 1340 AD, the last great real estate collapse in history took place in Italy. It almost destroyed civilization. When real estate prices fell by 50 percent in Florence, Europe was thrust into a dark age.

Read More

Could Silver Save the Human Race?

Could Silver Help Save The Human Race?

Silver has been used to fight infection for thousands of years. Hippocrates first described its antimicrobial properties in 400 BC. Read More

Section 215: The NSA Wants “Any Tangible Things”

Section 215: The NSA Wants “Any Tangible Things”

The government demands the turning over of your bitcoins. You’ve held them on an online exchange, so your stash is vulnerable. And, under the Patriot Act, the government maintains this authority. Read More

Bitcoin: The Decentralization of Privacy Or A Consumer Rights Breach?

Bitcoin: The Decentralization of Privacy Or A Consumer Rights Breach?

Lately, Bitcoin has been getting it from all sides, like a cheap whore when the camera is turned on. Whereas once the concern was that Bitcoin made transacting almost anonymous, the problem, according to PC World, could actually be that Bitcoin is not private enough. PC World writes:

Businesses that accept Bitcoins as payment risk making the transactions publicly traceable, which could get companies in trouble with government regulators, experts say.

 

The privacy weakness within the digital currency’s payment network was reported on Wednesday by Wired, which found troubling possibilities related to transaction tracking. The problem is in the way the Bitcoin peer-to-peer network works.

Because Bitcoin “associates” senders and recipients of money with an ID number, and all sales are recorded in the Bitcoin public ledger, an entity could pay another company in Bitcoin, then track all payments to that address.

A graph could presumably be developed around that company and the entities with which it does business, finances, spending habits, and so on.

Does Bitcoin Breach Consumer Rights?

“There is a lot of uncertainty today about the scope and sharing of consumer protection responsibilities—and associated liability—for digital and mobile financial services,” said Mark W. Brennan, an attorney at the law firm Hogan Lovells and a member of its global payments team.

The Federal Trade Commission has recommended that companies accepting new financial products and services, like Bitcoin, take responsibility in keeping consumers’ personal data private.

And this is something Bitcoin companies can do, no problem. With additional layers of technology – either available or coming in the future as part of the Bitcoin protocol, such as colored coins – as well as enhanced authentication, end-to-end encryptions and secure storage, making Bitcoin private is easy.

“These Bitcoin developments are a reminder that businesses in the financial services ecosystem should assess their existing data privacy and security practices and other terms and conditions of service to ensure that they are consistent with evolving legal developments,” Brennan said.

One simple way to stay within the purview of law regarding consumer rights is to use a new public facing address for each transaction.

Fundamental Consumer Rights & How Bitcoin Can’t Play Along

In the European Union, a blanket regulatory system has been instituted that gives its citizens certain fundamental rights – like the right to obtain copies of records held about them by companies and institutions. Many proponents believe US citizens should be afforded this right, and the Obama Administration has taken efforts to make this so.

But, the entity of Bitcoin – that is, the protocol –  can not be asked for copies of transactions records, even though they exist in the Bitcoin public ledger.

Governments on either side of the Atlantic are fighting over which values privacy the most, except when it comes to expectations of state privilege. Regulators from each side claim “deficits” on the part of the other.

Europe to this day moves forward with a “one-regulation-fits-all-data approach,” as the New York Times called it.

“The ecosystem of the Internet is very delicate,” says Kevin Richards, senior vice president of federal government affairs at TechAmerica, a trade group that represents companies like Google and Microsoft. “It’s not wise to have an overly broad, prescriptive, one-size-fits-all approach that would hinder or undermine the ability of companies to innovate in a global economy.”

European Union member-states have data protection laws already, based on a directive from 1995 that described principles for the collection of personal information.  The proposed new rules would standardize data protections across the 27 member states.

Just last month, Jan Philipp Albrecht, a European Parliament representative who reviewed draft legislation  proposed additional rights for citizens, like the right not to be subject to consumer profiling.

But, with Bitcoin’s public ledger viewable online, the onus will be 100% on the Bitcoin user to ensure that he or she does not become subject to consumer profiling.

President Barack Obama last year introduced a  “Consumer Privacy Bill of Rights” that if passed, would ensure US citizens same base protection as the European rule wishes to reinforce. For instance, the right of access to records that companies hold about them; the right to correct those records; and the right to have limits on the personal data that companies collect and keep.

Although Bitcoin is not incorporated as a traditional business, the unpredictable efforts of regulators to define Bitcoin have opened a space in which what Bitcoin is, in a legal sense, is unclear.

The world will simply have to come to terms with the vector of responsibility. The government cannot protect us from ourselves. That is an unacceptable expectation for any individual to place on another individual or group thereof.

Bitcoin users will remain responsible for ensuring their own privacy. Thus, the result – with Bitcoin’s help – is the decentralization of privacy.

The public ledger, known as the Block Chain, will have to appease regulators as record enough for Bitcoin users. If that is enough, then software can be developed in which a log of transactions based on a certain ID number can be generated and sent as a digital file to an e-mail address.

Low Sentiment, Record Sales: The Paradox of AG

Sentiment has not been so low in silver since the beginning of the bull market ten years ago.

So, is now an excellent time to buy? Read More

The Disintermediation of Society

Human action is comprised of cost-benefit analysis, and although at first it might be extremely difficult to determine what the true cost-benefit of a certain action is, oftentimes it becomes clearer over time. Read More

Why The NSA Needs Bitcoin

State surveillance has been going on for more than 150 years. However, eavesdropping – that is, in the sense of listening in on someone’s conversation – is a certainly ancient practice indeed. Read More

2013 Market Crash, Gold & Silver

With lofty sentiment spreading from Japan to Europe to US markets, it is no wonder wiretapping and armed conflict in Syria have caught the attention of media.

But, it can all really only mean one thing: we’re nearing a top in the stock market. Many indicators, above and beyond the run-of-the-mill ones, show us this. Read More

The 21st Century Digital Currency Arm’s Race: America’s Only Hope?

The 21st Century Digital Currency Arm’s Race: America’s Only Hope?

So, let’s be clear: 56.7577° N, 86.4196° W and 40.4230° N, 98.7372° W. In the former geographical coordinates, Bitcoin is free of banking regulation. However, in the latter, Bitcoin is not free from banking regulation.

The case grows increasingly murky in 32.9043° N, 110.4677° E, otherwise known as China. Perhaps the geographical coordinates of 35.1234° S, 71.5720° W – that is Chile – will keep with their recent history of laissez-faire economic policies and be kind to Bitcoin.

Or maybe one with bitcoins would be best off at 18.1667° S, 178.4500° E, far away from civilization in Fiji. Read More

Bilderberg 2013: Where The Cutting Edges of Internet Technology, Bitcoin & The Old Guard Meet

[heading]Bilderberg 2013: Where The Cutting Edges of Internet Technology, Bitcoin & The Old Guard Meet[/heading]

Do the rich billionaires at Bilderberg gather ’round for golf and appetizers or do they sit in conference rooms plotting the future? That seems to be the crux of the Bilderberg debate. Read More

FederalReserve.Gov?

Most Americans go through their lives thinking the Federal Reserve is just yet another governmental institution, no more interesting than the DMV or Post Office. Read More

If Bilderberg Controls The World, Then THIS Is What Will Be On Their Agenda

Bilderberg’s esoteric deal-makings have put them at the center of the debate about who, what, where, when and why in the New World Order. Since their first meeting in the Netherlands in 1954, their storied history has evolved to become a popular meme in Internet circles. Read More

6/2/12 Bitcoin Flash Crash A Whisper Time

And then there was $130, for a short time. With Bitcoin heading to $136 recently, the early morning hours of Sunday saw what could be considered a flash crash of sorts. Read More

Rebuilding The Case For Silver

Silver got to $50. So what?

I wrote after the price collapse on MayDay 2011 an article I entitled “The Sorrow of the 49er.” It looked into those who had come into the silver story, as we all know now, late. The price tumbled, and many middle classers were left underwater.

Oftentimes, these individuals never had a chance to consult anyone other than a shop owner, who had no problem moving product. Read More

Crisis Time? Dollars’ Worst Drop In Nearly 2 Years

The conversation is swelling across the globe: once again, it’s crisis time.

The dollar is suffering its biggest 2-day drop in 19 months. But, Reuters says it’s cool, uptrend intact.

State-controlled Press TV, on the other hand, says the dollar is over.

Japan, the dollar, Syria, Russia…

…Peace in Baghdad, Afghanistan, Lybia?

…We know Japan’s bond market is doing poorly, but how about the radiation. They cool with that?

CNN reports this morning that despite Japan’s jitters, US stocks have not been shaken. No word on Fukushima.

But, the US dollar and precious metals prices certainly have been shaken.  Bitcoin is right there alongside precious metals, although it seemed a little bit more clever to the panic, sliding upwards over the previous three sessions.

Gold shorts are essentially at the same peak low as in 2009, before gold ran from $900-$1920 scantily pausing for a break. From $1300? One could easily suspect that $1,600 is right around the corner.

$46 silver doesn’t seem that unlikely should go do that.

Check out the gold shorts, denoted by the green line for this exercise:

Timeframe: 5 minute | hourly | daily | weekly

Off 10% from its peak, Japan’s Nikkei has not proven sustainable. Thirty years into a depression, Japan has lived up to its expectations, which have been low.

On this day, despite a yawn from the US stock market, precious metals and the US dollar told the story.

From state-controlled media such as Reuters to Press TV, two very different pictures of the future of the dollar were outlined. Press TV foresaw the end of the dollar.

In the former, Reuters contended that, despite the drop in the USD index of about 2%, the USD uptrend remained intact.

The dollar was down across all indexes, for people are extricating themselves of “positions across the board.” Investors are getting out of the USD; they are getting out of the stock market; they are getting out fiat currencies in general.

And, if you believe at all in supply-and-demand, the action of gold silver, platinum and palladium over the past decade – and by doing so, you’re really just looking at the action of humans – you’ll see that there is buying support.

Bitcoin, since 2009, has been even more dramatic. There is no doubt that, if the protocol and its protections prove invincible, then demand will be stalwart.

Even though short positions in yen increasing, and dollar longs also increasing, the dollar could not find its footing.

The dollar lost 1.3 percent against the yen to trade at 101.08 yen. Against the Swiss franc, the dollar slid 1.5 percent to 0.9619 franc.

Even through a picket fence, one can see the other side. And from behind the blinder of economy, we peer through and see what’s there: gold, silver and bitcoin.

The pops today in gold and silver were familiar. It was the sort of evening and morning which younger gold and silver bugs used to stay up all night/wake up early for. This pop of last night and today carried an excitement reserved as of late for Bitcoiners.

The inverse story of today is also familiar: one in which the US Dollar has traded down. This is the true root of the rise in the metals on this day. The dollar will trade up again, but over time as minds are released from the play of domination and subjugation, the USD will serve no purpose, and never trade again.

And then, things will be different.

 

US Media Blackout of Canadian FinTrac Ruling

Last week the Bitcoin world was surprised to learn that Canada’s FinTrac would not hold Bitcoin exchanges to the strict Anti-Money Laundering and Know Your Customer regulations of the financial industry. Read More

JP Morgan Rollbacks Metals Forecast

This just in.

Analysts at JP Morgan on Cazenove on Tuesday revised down the price forecasts for most metals, including cutting the outlook for gold in 2013 to $1,595 an ounce from $1,745 previously expected.

They didn’t note what could possibly be undermining a logical metals reaction to incessant quantitative easing. Read More

Liberty Reserve Shut Down By US, Spanish Authorities & Owners Arrested

On the day after Memorial Day, US authorities indicated that they had shut down a Costa-Rica based money transfer company Liberty Reserve which they claimed aided cyber criminals the world over launder $6 billion in illicit funds using a digital currency that was not Bitcoin. Read More

Chinese, European Union Solar Panel Talks Break Down, Silver Still Slumping

European Union and Chinese trade negotiations fell throw on Monday. China called upon the European Union to cease the imposition of tariffs on solar panels, and the European trade comissioner complained that China was forcing individual countries to ensure that no consensus was reached. Read More

The Protocol Loads The Gun, The Environment Pulls The Trigger: Bitcoin, An Evolution

The idea of crypto-currencies goes beyond the life of Bitcoin, for there are many sorts of similarly decentralized currencies born, in vitro or not even a sparkle in its founders’ eyes. Where one crypto-currency ends and another begins will prove to not be so clear. Read More

North American Union Shattered: Canada Goes Laissez Faire On Bitcoin, US Goes Draconian

With Canada’s letter from their Financial Transactions and Reports Analysis Centre (FINTRAC), we see a play of two paths by the North American powers. The paths are betokening of how dynamic, new and spontaneous Bitcoin and decentralized virtual currencies are. Read More

Bitcoin Beyond Money: Peer-to-Peer’s New Paradigm

In the past year, discussion of Bitcoin as a currency or money has overtaken an earlier paradigm in which Bitcoin began to be interpreted as beyond money and currency. Like many argue that the US Constitution was written in an earlier time, say “before automatic weapons” or “equality,” and thus making it irrelevant, many individuals have noted the ways in which Bitcoin is actually a part of a paradigm outside the purview of money and currency. While containing most, if not all, of the characteristics of Aristotelian money, it also portrays Platonic interpretations of what money is, such as that the value of currency should independent from the material with which money was made. Thus, Bitcoin is both conservative and progressive all at the same time. Read More

Misplayed Game: How Governments Have Failed To Regulate Bitcoin

In March of 2013, Bitcoin entered into a third phase of its evolution. Whereas the first two represent creation (2009) and popular acceptance, the third began as FinCen published a guide on how virtual currencies such as Bitcoin would be managed by the US government (and thus, by extension, all governments under the thumb of anglo-americanism worldwide).  In the wake, government agencies began cracking down on exchanges and wallets such as Mt. Gox and Dwolla. Read More

Big Banks: The New Morality Police

In the US, financial institutions are acting as morality police, rejecting individuals from acquiring bank accounts due to the nature of their careers.

This naturally leaves them little choice, and will likely lead many individuals to grow open-minded towards alternative currencies such as Bitcoin, gold and silver. Read More

Europe, US Leaders Target Money Laundering

Money laundering has world leaders acting jittery. With US authorities going after Mt. Gox and Dwolla in a rather sloppy way, and Europe meeting in order to create information exchanges between nations, the clampdown on personal finance continues. Read More

PayPal, Facebook & Bilderberg Heavyweight Peter Thiel Enters Bitcoin Space

[heading]Peter Thiel Enters Into Bitcoin Space[/heading]

BitPay has announced a capital raise of $2 million led by Peter Thiel’s Founder’s Fund. Max Keiser’s Heisenberg Capital was also a part of the capital raise.  Thiel, through Valar Ventures, also invested $6 million into Transferwire, a p2p online exchange around the same time.

What this betokens is the future of Bitcoin. This will be a future in which Mt. Gox and all the other usual suspects are no longer the main players of Bitcoin. This torch will be passed onto major transnational corporations whom already have Money Transmission Licenses and, in most cases, are operating in the US or were at least founded there. Read More

The Future Of Bitcoin In a Magic 8 Ball

By Justin O’Connell, Author of Bitcoinomics

The oracles in banking have let it be known. They’ve looked into their magic 8 balls and pulled the future right out of the black and blue depths: “I would be very surprised if Bitcoin is still around in 10 years,” said Bremmer, the founder and CEO of Eurasia Group, the world’s largest risk consulting firm. He knows that commercial banks are looking to enter in.

To be fair, GoldSilverBitcoin ran its own magic 8 ball experiments on the future of Bitcoin. Here is what we came up with in a best of 3.

“What is the future of Bitcoin?” we asked. Read More

ASB Tattle-Tellers Running The World While Strung Out On Coffee Poised To Reject Bitcoin

From author of Bitcoinomics, Justin O’Connell

Bitcoin skeptics don’t understand one important thing: that virtual currencies are already here and they’ll have, most likely, no effect whatsoever on that. First of all, everyone knows that the Federal Reserve acts as a plague of egomania blinding all of society to its self-important cruel and insane way of living. That’s mostly because former Associated Student Body kids are running monetary policy. That means two things: 1) the tattle-tellers are in charge and 2) they’re still sucking on the teet of some wrinkly and pungent Principal, now referred to as a “President”, who is still wearing a suit and tie day-in, day-out nonetheless. And, that’s with all due respect to the President of course. But, really, some shady building down the block known as the “district office” or, in adult life, the Pentagon, is really responsible for the whole thing. These former Associated Student Body reps are faithful to the number one drug-pusher on the streets: Starbucks. Sipping on some Joe for many years in a row, stooped in habit, has led to a numbed state of yes-saying, a hallucination where straight ahead is the only mode. Read More

RFID & The Fiat Paper Trail: The Death of Cash & Virtual Currencies Bright Future

[heading]RFID & The Fiat Paper Trail: The Death of Cash & Virtual Currencies Bright Future[/heading]

US researchers have introduced a new way of embedding traceable chips within so-called “smart” paper so that banks and governments can guard against counterfeiting and even track the usage of paper money.

The innovation is perhaps the last after many centuries of fiat currency, considering the rise of virtual currencies in recent months and years. Read More

History: BitcoinATM Demonstration

In a riveting talk, CEO/President Evan Rose walked the audience through two transactions: Cash-in and cash-out. In what would represent the first hardware that undeniably brings Bitcoin to mainstreet, the CEO discussed ways in which the spreading of Bitcoin could be achieved through the BitcoinATM. Watch history in the making below:

Read More

Government Will Be As Successful At Regulating Bitcoin As Its Been With File Sharing

“If you guys want to be a shill for the financial industry and support a shadow currency that people use to purchase drugs and money with—have a party, man. My job is a regulator; I’m going to look after it.” said CFTC commission Bart Chilton to a group of CNBC television hosts, evidencing his dim worldview. Read More

Commercials Banks Seeking To Compete With Bitcoin?

With Bitcoin having thrown the fits-and-spasms of history on its head, commercial banks are now taking a route other than straightforward co-option in favor of creating their own virtual money.

With individuals all over the world seeing the utility in the low cost of international Bitcoin transfers, some commercial banks want to compete with Bitcoin, according to Kirk Hope, the chief executive officer of the New Zealand Banker’s Association in an e-mailed transcript of an interview with TVNZ television. Read More

PayPal, Western Union & Others Look To Clinch Bitcoin Market

The Money Transmitters – that is, those with the licenses to transfer value – have garnered quite a bit of attention with their public interest in offering Bitcoin services.

Their sudden interest, of course, comes from the power of a law on their side. Bills across the entirety of North America, for instance, dictate that many new Bitcoin-startups are unable to enter into the market cleanly.

Instead, in that space, some of the world’s biggest corporations not only have interest, but have the licenses needed to be a money transmitter. Read More

Marijuana, Tide Detergent, Chewing Gum & Bitcoin: A Basket Of Currencies For The Near-Future?

[heading]Marijuana, Tide Detergent, Chewing Gum & Bitcoin: A Basket Of Currencies For The Near-Future?[/heading]

The dollar fell to a two-month low versus a basket of currencies on Tuesday on the dollar index. Although merely a technicality – a blip in the overall trajectory – the recent weakness continues cast doubt upon the dollar from all around. In places like Colorado, Washington and the Internet, new forms of currency are taking hold: Marijuana and Bitcoin. Both are sterile assets, meaning they serve a purpose other than just as exchange medium. Read More

Ron Paul: The Atavism

Ron Paul pulled something that is quite familiar to sports fans in the 2012 Presidential Election: he threw in the towel. This is a common phenomenon in sports, as players and coaches sometimes bet against their own team, thus leading to lackluster play on whatever field it may be. One of the most infamous examples of this are the 1919 Chicago Black Sox when 7 or 8 players all promised bookies they’d throw the game for a pre-determined payout. Read More

Love & Bitcoin: OkCupid First Online Dating Site to Accept BTC

OkCupid, one of the world’s most popular dating sites, will now introduce Bitcoin to millions of people who have yet to hear of it. Bitcoiners can now pay for a list of functions at the OKCupid website, such as PM’ing individuals with priority messages.

On Tuesday, despite Bitcoin’s recent correction, OKCupid announced its acceptance of the digital currency for users wanting to pay for the site’s bonus features. The popular, free dating site boasts approximately 4 million active users, and will now become on the world’s largest websites accepting Bitcoin. Read More

Silver Dip Lends Bitcoiners Buying Opportunity

With Bitcoin hovering around $100, and silver at $23.60, it lowest price in three years, now might be a good time for bitcoiners to possibly look into becoming silverbugs. There are lots of reasons to buy silver with Bitcoin, especially now.

One of the primary reasons is sheer demand for silver. Currently, silver holdings are at an all-time high, and this recent dip will surely contribute some to that. With so much money sitting with few individuals in Bitcoin, there is no reason for them  to not diversify some and add to the demand pressures on silver, which since May 2011 have been on the losing side of the price.

First, let’s look at silver demand in recent, recent history.

Appearing on November 9, 1998, “India Silver Hoarding Worries Users Group,” penned by Silver Users Association spokesman Walter Frankland, stated:

“Is there a role for the Silver Users Association–in conjunction with groups in other countries–to take action that would focus on India and see if their market can be opened to freer trade? There’s no reason to wait around until volatility hits the market again, in my opinion.”

In the United States and the “west”, doused in mainstream media mustard gas,  less than 1% of the retail public buys silver. In other countries, taxes of 50% and more on silver sales has dampened demand. But it cannot forever. The derivatives bull market has created a bull market in physical silver that does not exist and a pop-panic out of paper like the world has never seen will ensue. The war on silver will spin epically out of control, and there is no telling where the price may land.

That, alongside short-and-medium term speculation, is why investors’ holdings are near a record high set last April for silver, despite that hedge funds are the least bullish on silver in nearly four years. In the medium-term, speculators have reduced bets on higher silver prices by 72 percent  since the end of February, according to U.S. Commodity Futures Trading Commission data. Silver products held in exchange-traded funds, however, have increased three straight months and now totals $16.2 billion, according to Bloomberg.

Since the first three months of 2012, silver has, for the lion’s share, been held under the $30 mark. Until March, silver appeared to be heading back towards $50 an ounce, its previous high, after climbing above $36. This was short-lived. Now, analysts, based on a survey by Bloomberg, expect the price of silver to average $33.02 an ounce in the fourth quarter.  Despite any bias that a panel chosen by Bloomberg might encompass, silver remains on a long-term trajectory poised to continue its peak-every-two-years model.

The long-term, to be sure, is only in terms of human lifespans, for already the silver price has sat well-off its recent high in April of 2011 for a year-and-four months. That would mean that, although silver might have a doldrum 2012, it would then begin to rise significantly in early 2013.   The price of silver will average $33.02 an ounce in the fourth quarter, 18 percent higher than its current price, according to the median of 13 analyst estimates compiled by Bloomberg. Silver could then easily be poised for a 100-150% rise in price in early spring 2013, landing it at least around $66 per ounce.

But, some hedge funds are predicting an economic slowdown which they surmise will curb demand for silver.  On the opposite side of the rope in the tug-of-war for silver, many monied investors and  main street investors are anticipating a price rise based on the implementation of global quantitative easing, spearheaded by the Federal Reserve. The price of silver tripled when the Federal Reserve purchased $2.3 trillion of debt through Quantitative Easing 1 and Quantitative Easing 2 from December 2008-June 2011. One can tease also from the chart below that in the late summer of 2007, as there was a stealth Q.E., silver responded predictably.

 

Much of the Bloomberg article is focused on the “schizophrenic” model for silver, which is a seriously flawed axiom from which to look at the silver price. Silver’s history is one much longer than that of Industrial Society. Industry has created novel demand for silver.  And so, therefore, is predisposed to act as upward price pressure in the long run. Even if there were a complete collapse of industry in the world, in the fog of a broken price mechanism, silver would retain desirability. It would be psychologically comforting to many to default onto the money of their forebearers. Silver will be one item of many that has cultural relevancy were there to be an industrial collapse. It would be one of few with history as money.

“Since the beginning of the year it has reacted more like a base metal than a precious one,” said Frederique Dubrion, the Geneva-based president and chief investment officer of Blue Star Advisors SA, which manages metals and energy assets. “The main negatives are still in industry. We’re waiting for more quantitative easing, and that would be really positive.”

The idea that quantitative easing is the only basis for a rise in the price of silver is preposterous. What about war? An open war with Iran would send gold up, and then also increase industrial and fear demand for silver. Gold could head up towards $1900 if there is a further breakup of plans for an European Stability Mechanism (ESB). That would mean a price rise for silver. Quantitative Easing alone is not the only reason to expect silver to increase in price.

The silver price tumbled 29 percent from February-June 2012, but, as Bloomberg points out, the metals volatility is “masking what are already historically high prices.” Despite that silver is trading 44 percent below its recent high of $49.85 of April 2011, the two-decade average for the devil’s metal is $9.97.

“Industrial demand may remain weak at least for another six months,” said Jochen Hitzfeld from UniCredit SpA in Munich. “This makes the gap that investors have to absorb even higher,” said Hitzfield, who forsees an average 2012 Q4 price of $28.

Investors purchased 797 tons via silver-backed ETPs this year and are now holders of 18,093 tons, if one does not want to question the solvency of COMEX.That is more than eight months of global mine output.  Investors sold a net 812 tons out of ETPs last year. Total silver assets are currently 2.9 percent below the record 18,639 tons reached in April 2011, and Barclays and Morgan Stanley predict that investors will buy 500 more tons in 2013. Hedge funds are adding to their depressed silver position, too. They doubled their net-long position to 9,323 futures and options in the two weeks leading into Aug. 7, according to the CFTC, although this is still 58 percent below the five-year average, a figure which clearly signals that more shorts have accrued as the global awakening in the wake of the 2008 banker-wealth confiscation, as well as the associated fear trade, has put the spotlight on silver and precious metals.

Although silver is usually tagged as schizophrenic metal due to its dual monetary and industrial applications, it really might be the options traders who are schizo. For example,  the most held contract offers the right to buy silver at $50 per ounce by November 2013, whilst the next two biggest enable holders to sell silver at $20 by November 2013 and November 2012. For a comparison, the five largest gold options are all for purchases at higher than today. Those silver positions suggest that there is a tug-of-war taking place over the silver price.

The 100-day historical volatility for futures in silver is at 30.8 percent, which is a volatility more pronounced than gold, platinum, palladium and the main industrial metals traded on the London Metal Exchange.  All these dynamics with the vast majority of the retail public not taking part in this popular investment – less than 1%.

Currently, silver sits at its lowest level in years.

Demand for silver will continue to increase. In India, where silver hoarding has been of concern to the silver abusers (big industry, mostly) for over a century (at least), gold and silver demand is expected to exceed 6000 tons annually by 2016-2017 from the current levels of 3000 tons.  By 2025, according to the Mineral Exploration and Development Report for 12th Five Year Plan Period by the Ministry of Mines, that number could exceed 10,000 tons.

Bitcoin Price March 15-April 10: The Bubble Heard ‘Round The World

Like mistaking the true process of biological evolution, many mistake the ebb-an-flow of supply-and-demand as oozing steadily from the pipes of commerce. The truth behind human action is more complicated than that, and the Bitcoin price over the past week has demonstrated that.

On April 10, Bitcoin climbed to a high $266 and closed at $124.9 the next morning before Mt. Gox, the leading Bitcoin exchange and de facto bitcoin price-fixer, went down for nearly a day. This was the bubble heard around the world, as during this time Bitcoin was the talk of the financial world.

When trading began Thursday, Bitcoin fell again to a low of around $65, before rebounding to sit around $100 through Sunday night trading.

Bitcoin began the year around $13.51. It’s percentage increase fluctuating around 750%. It has outperformed all other assets Year-To-Date, with Natural Gas up 27% since Jan. 1. The green line on top, BTC, would have to be extended 5.5 times to show bitcoin’s 2013 performance.

As I wrote at my blog Silver Vigilante in January:

In the last six months, according to Google trends, countries the world over searched the term “Bitcoin” for the second most amount of times since the digital currency was extremely volatile at the beginning of the 2011 summer. In December, “Bitcoin” was searched the third most amount of times in its history, behind June 2011 (the peak) and just this passed September.

Egypt historical peak search volume, September 2012.
Saudi Arabia, second highest search volume, December 2012
Kazahkstan, 2nd highest search volume
Pakistan, third highest behind February 2012 and June 2011
India, November 2012 second highest behind June 2011
Vietnam, August 2012 second highest behind June 2011,
Turkey second highest December 2012 behind June 2011
In Spain, December 2012 is third largest search volume behind August 2012 by one point, and the peak June 2011.

That Bitcoin is holding at $100 is ominous in that, should it fall below $100 and experience continued bad press and Mt. Gox exchange technical difficulties, the next stop could conceivably be $20, with some support at $30. On the other hand, in consideration of unrelenting demand by increasingly moneyed individuals and groups, it could continue the trajectory it was on during the bubble phase of March 15-April 10, finding support between $150-$300.

After months of gold and silver becoming cheaper in Bitcoin, the trend has reversed this past week, despite the break of key support for precious metals. Nonetheless, gold and silver have become more expensive compared to Bitcoin:

But Mt. Gox has been center-stage throughout a week of DDoS attacks on their server, failed customer service, locked funds and the volatile Bitcoin price largely due to how easy it is to disrupt the Bitcoin network by simply attacking the center for its unfortunately centralized exchange.

Mt. Gox held a Reddit “Ask Me Anything” on Friday for those worried by recent trading problems that culminated with a 12-hour trading halt. Currently, 20,000 new Mt Gox are being opened a day compared with the 60,00 opened in all of March, according to the website.

Mt. Gox explained some issues:

Our system was designed to handle 2~3x our normal load, but now we’re experiencing 10x the amount, which was difficult to prepare for (it takes weeks) with the sudden new accounts. We have two problems: the DDos and volume related to new accounts.

The trade engine is capable of accepting much more of a load. Within 2~3 weeks we will completely rewrite the trade engine, in the meantime we shut down the system today and installed a new server with the current trade engine. Of course, if we didn’t have DDos everything would be fine, so now we’re dealing with two issues at once.

Who is attacking Mt.Gox with a DDoS? “We cannot disclose details, but we have some ideas…Basically because by naming them it makes our job harder because they will move to protect themselves.”

Trading Updates too much to ask for? “We absolutely understand this. The fact is that we are programmers and engineers, not PR guys, and we are still building out our capabilities beyond technology and into servicing our customers better. So, yes, we’re moving on this now and have secured help.”

Question from pmarches: Does mtgox run as a fractional exchange? Meaning, do you have 100% of the bitcoins your users have deposited in your system? “NO. Everything is accounted for (BTC and money). Fractional reserve is absolutely against our principles. In fact 90~95% of BTC are held in cold storage.”

No matter how Mt. Gox plays this off, the jugular of the issue is that users have been unable to withdraw their funds throughout most of the turbulence. Many former capacities of Mt. Gox have been nullified. With Mt. Gox transacting 80-90% of Bitcoin transactions, Bitcoin has suffered.

But, Mt. Gox is not to be mistaken with the actual Bitcoin protocol, which itself has proven unhackable by even the world’s foremost hackers and engineers.

It is impossible to know if Bitcoin will rise and fall until an attack or sudden spike in demand falls upon the market. As Erik Vorhees, an early adopter of Bitcoin, wrote: “Guessing short term price movements is a fool’s game.”

In an Austrian’s eyes, some recent explanations for bitcoin’s price rise, which is really still the main story for Bitcoin in 2013, read as follow:

The emergence of respected online merchants such as Mega, NameCheap, Reddit and others accepting Bitcoin has proven that businesses see its value, thus leading to the price increase.
Europe’s confiscation of Cypriot bank accounts have led to an influx in Bitcoin purchasers, not so much in Cyprus, but in North America and Europe. This has led to greater levels of speculation upon the price of Bitcoin, with cliques of buyers-and-sellers pumping the price only to sell all at once, and buy in the aftermath of the ensuing panicked selloff.

FATCA regulations have driven individuals to bitcoin for privacy.
Venture Capitalists and other private investors, now moving into Bitcoin, also want Bitcoin at the best prices. While their bitcoin purchases help explain the price rise, they could also explain the volatility and even DDoS attacks on key websites. To DDoS a website, it costs under $500.
Gold and silver buyers, moreover, have moved into the Bitcoin market. Largely thanks to the work of Trace Mayer, many former gold-and-silver bugs have seen the parallels in Bitcoin to precious metals.
The recent FinCEN ruling could have been made at the request of venture capitalists who did not want to put money into Bitcoin only to see it shortly thereafter outlawed. Now, people can be assured the government sees it as just another financial instrument.

Mainstream press interest in Bitcoin has been parabolic. This has led to incredible “hype” around Bitcoin.
Many, many people who simply do not understand Bitcoin are now buying bitcoins due to its media-hype.

Thankfully, Mt. Gox does not act as the Federal Reserve. It can be supplanted based on simple competition or cooperation within the Bitcoin market. This time will come, and more alternatives, such as BitcoinATM, will pop-up online. Greater Internet and computer security literacy could secure privacy for future generations, and Bitcoin encourages this spread. A free market has been born, and it will experience high price volatility and a arm’s race of ideas and technologies built around it.

Paul Krugman, Adam Smith & Bitcoin Mining

The understood return potential for Bitcoin is well-known, as at year’s onset a Bitcoin was worth $13.51. On April 10, it traded as high as $266. And on Thursday, it fell to less than $100 mostly due to issues at Mt. Gox. For good measure, that is similar to if the exchange rate for the British pound soared from $1.62 (where it was on Jan 1.) to $31.90 and the falling back to $12.

Paul Krugman took his swing at Bitcoin on Friday.  He cites an article, first of all, in which the author states two reasons Bitcoin cannot be money:

First, because it has the endorsement of no government, it will never be usable for official transactions. If you are an American, you will eventually have to pay your taxes, which means getting hold of some dollars, and as long as everyone needs to use dollars, that will be the way the currency in which an overwhelming majority of U.S. transactions occur.

A central premise for this statement is the eternal and ubiquitous nature of government. In fact, there is no law of social relationships or economics wherein it is stated that a government must exist. And also,

Second, the cap on the supply of bitcoins may reassure people that there will be no inflation, but in fact it ensures that it can never go into widespread use. A currency needs to be elastic — that is, its supply has to rise and fall in order to keep prices stable even as people’s demand for money varies. Part of the reason the Federal Reserve was created a century ago is that the dollar was at that time an inelastic currency, its supply was basically fixed based on how much gold banks had in their vaults. That meant that when harvest season came around in what was then a heavily agricultural nation, there was always a shortage of cash and a spike in interest rates, and in some years a banking panic.

Due diligence can be a pain, but often spares the outspoken of mis-stepping in their reasoning. In this one by Neil Irwin, he clearly understands that only a certain amount of Bitcoin will ever exist. But, what this individual does not get, is that Bitcoin can be divided to the eighth decimal place, creating so much elasticity that, in today’s dollar terms, the market could grow to theoretically 21 quadrillion.

Krugman fails to use his imagination, and thus viewing Bitcoin as literally being gold. He cannot make the extrapolation that there is a theory on which Bitcoin is based to which the gold mining process can lend insight. But the insight must go much deeper than merely Internet workers digging holes into the dirt of the web to pull out certain specs from the digital abyss, with the same variables input as with real-world mining. Krugman writes:

One thing I haven’t seen emphasized, however, is the extent to which the whole concept of having to “mine” Bitcoins by expending real resources amounts to a drastic retrogression — a retrogression that Adam Smith would have scorned.

But, the real resources expended in mining Bitcoin do not equal the real resources expended in mining gold. Plus, the vector of real resources eventually expended to create money based on fiat ends up draining the economy much more. Krugman:

Smith actually wrote eloquently about the fundamental foolishness of relying on gold and silver currency, which — as he pointed out — serve only a symbolic function, yet absorbed real resources in their production, and why it would be smart to replace them with paper currency:

The gold and silver money which circulates in any country, and by means of which, the produce of its land and labour is annually circulated and distributed to the proper consumers, is, in the same manner as the ready money of the dealer, all dead stock. It is a very valuable part of the capital of the country, which produces nothing to the country. The judicious operations of banking, by substituting paper in the room of a great part of this gold and silver, enable the country to convert a great part of this dead stock into active and productive stock; into stock which produces something to the country. The gold and silver money which circulates in any country may very properly be compared to a highway, which, while it circulates and carries to market all the grass and corn of the country, produces itself not a single pile of either. The judicious operations of banking, by providing, if I may be allowed so violent a metaphor, a sort of waggon-way through the air, enable the country to convert, as it were, a great part of its highways into good pastures, and corn fields, and thereby to increase, very considerably, the annual produce of its land and labour.

And now here we are in a world of high information technology — and people think it’s smart, nay cutting-edge, to create a sort of virtual currency whose creation requires wasting real resources in a way Adam Smith considered foolish and outmoded in 1776.

Resources expended mining Bitcoin are nowhere near the amount of real resources expended in eighteenth century gold and silver mining technology

Krugman lacks an understanding about the nature of the Internet. He fails to note that never before has information technology and its infrastructure been used for such purposes, and it is by far an exact mathematical equivalent to the mining process. It is not the gold mining industry. This is as clear as day. He takes the simile too far.

Bitcoin, World Energy Use & Prospects For Growth

Time Magazine has defended the social viability for the spread of Bitcoin, proclaiming that “stopping the movement of [Bitcoin] will be possible only if countries are willing to impose harsh taxes and capital controls. Once alternative currencies are frictionlessly available on the Internet, every laptop will become its own Cayman Island.”

All sorts of characters have come out of the woodworks to take a swing at Bitcoin. As Bloomberg wrote:

Blockchain.info, a site that tracks data on Bitcoin mining, estimates that in just the last 24 hours, miners used about $147,000 of electricity just to run their hardware, assuming an average price of 15 cents per kilowatt hour … That’s enough to power roughly 31,000 U.S. homes, or about half a Large Hadron Collide Read More

Opportunity Cost: Silver, Bitcoin

Opportunity Cost: Silver, Bitcoin

Let’s say that at $49 you had 1,000 ounces of silver.  And you kept it. You’d have 1,000 ounces of silver, valued in USD denominated terms at $27,500.

Now, let’s say that anytime between then and now, you moved just half of that silver into Bitcoin. Let’s look at your silver, now, as insurance on your liquid funds via the bitcoin protocol.

That 500 ounces of silver could have been $15,000 in value to about $300,000 now.  That’s assuming a $10 bitcoin price…That could have been as recently as January, 2013.

Now, let’s say you traded back into silver now, with premiums on silver products rising in price now. You could buy about 10,344 ounces of silver… Read More

Bitcoin, The Hive & Spontaneous Order

An important question when pondering Bitcoin’s place in the world is this: is it a phenomenon of the hive or spontaneous order? Was it given by modern day philosopher-kings or did it rip through the cracks in the “boot stamping on human face forever” as an alternative to submission?

First things first, let’s learn more about the hive and spontaneous order.

Smart phones and social media have created the next step in technological collective consciousness.  More so than ever the individual is connected to friends, family and acquaintances 24/7. A constant stream of information informs us and is, ultimately, meant to guide, making more like the greater group.

The Borg is known from Star Trek, and is essentially a synonym of “hive mind” or “collective consciousness.” The Borg Collective is a civilization with a group mind. Each individual is not truly an individual, for they are linked to the collective by a sophisticated network. Today, this is known as the Internet, which ensures each “individual” is under constant supervision and guidance.  In fiction, this collective consciousness, known as the borg, allows the individual to “share the same thoughts,” and adapt quickly to defensive tactics used against them. We are today cybernetic organisms,  to a degree, thanks to our droid phones and so on.  The ultimate goal of borg society is achieving perfection and “resistance is futile.” Read More

Guest Post: Bitcoin: The New World’s Orders Plot For a One World Currency?

[Editor’s Note: The following post is by TDV Researcher, Justin O’Connell]

As a general rule, if anything is covered en masse by the mainstream media, then I tend to believe that which I am watching is actually one long promotional spot.

The same could potentially be said for Bitcoin as over the past months its popularity has grown so much that “anarcho-capitalist…Libertarian…Freedom Fighter against mankind’s two biggest enemies, the State and Central Banks,” Dollar Vigilante Chief Editor, Jeff Berwick, has been on CNBC, CNN, Fox News, and BBC, and other mainstream outlets.

What brought on this sudden attention? No, not our anarcho-capitalism, but our announcement of the world’s first BitcoinATM.

So, is Jeff just a patsy so that the New World Order can bring in a digital currency? I began wondering this myself, and I came to what I think is a reasonable conclusion.

What many skeptics fail to understand is that the so-called New World Order – with its global governance, fiat currencies and so on – has already, for the most part, been implemented on a global scale. Especially economically. For instance, 95%+ of fiat money today is digital, and it’s all based on the Federal Reserve System, thus creating one worldwide currency with lots of different designs on the actual notes supposedly representing the various cultural backgrounds of nation-states.

Despite nearly everything being digital already, there are mainstream technologies that go above-and-beyond, aiming to rule out the need for cash.

One particular app for this cashless society, above-and-beyond credit and debit, is called Square, and was developed by Jack Dorsey, Twitter’s co-founder. According to CNN, “this is a telltale signs that the mobile-payments revolution has arrived.” CNN writes, as anyone who has studied American consumers know, “changing the way Americans pay for stuff is going to be really hard work.”

But Bitcoin is turning out to be a force to be reckoned with. For instance, in comparison to long-time friends of the liberty movement, gold and silver, Bitcoin seems to have been the play to make over the past six months and beyond. For months, besides today’s drop from $150-$115, after running to $150 from $105, our charts over at Gold Silver Bitcoin have shown a bimetallic standard precipitously dropping relative to Bitcoin.

The CNN article surmises that,

“Paying by phone will be as transformative as the advent of the credit card in the 1950s. It will change the way we shop and bank. With powerful smartphones and tablets taking center stage on both sides of the checkout counter, it will reshape the relationship between buyer and seller. Not only will the phone or the tablet become a wallet for consumers, but it will also turn into a credit card reader and a register for merchants. Shoppers will use their mobile device as a coupon book, a comparison-shopping tool, and a repository of those unwieldy loyalty cards they carry from everyone from giant retail chains to the corner bakery. And your smartphones will serve as beacons that will alert a retailer when you walk into its store so that it can recommend products, show you reviews, or direct you to aisle five, where that beanbag chair you didn’t buy last week still beckons — and you can now have it for 10% off. You won’t even need a few singles to tip the valet or pay the dog walker, because they’ll take mobile payments too.”

This basically explains the Bitcoin experience. One big difference? While CNN assumes a central authority, Bitcoin does not. With big players like AT&T, Verizon, Visa, Mastercard, Google, Microsoft, and eBay’s PayPal unit investing in billions in digital payment solutions,  it is no surprise that the mainstream media is serving the idea to the public domain in kind and uncritical ways. One of their assumptions is a monopoly on the technology by some corporation friendly to compromising. While the mainstream press has been unable to ignore Bitcoin, it certainly has been critical of Bitcoin being prone to hackers. Sure, a great many people have lost bitcoins. But, imagine if the general population had to become their own banks. Most of them would get eaten right away by sharks in the economic waters.

The CNN article champions the ease of digital transactions, and the time saved. Bitcoin is surely faster:

“While this revolution will be powered by complex technology, its ultimate effect will be to greatly simplify things for consumers. Think about my experience at Grumpy. While I had to fiddle with my phone ahead of time — to upload my credit card to the Square app and to authorize it to talk to the Grumpy register — once there, the phone never left my pocket. All I had to do was order my cappuccino.”

The article portends that “a cashless future is more real than many suspect.” According to the global head of mobile at Visa, “financial institutions are going to have a big role to play.”

“We are, I think, on a precipice of some fundamental change in the way money is exchanged between consumers and businesses,” Rep. Shelley Moore Capito, R-W.Va., said as she opened the first of a string of hearings one year ago on cashless ways.

The Federal Reserve found that 12 percent of cell phone users had already made a payment through their phones, and almost two-thirds of technology experts surveyed by the Pew Center on Internet and American Life said they expected mobile payments to eclipse cash and credit cards by 2020.

But, Square and similar technologies are different from Bitcoin. Bitcoin has caught on with a younger generation that, as Trace Mayer once put it to me (to paraphrase), “grew up in a digital sea. [The younger generation] are fish in a digital sea, whereas the older generation are snorkeling tourists.” In other words, p2p technology is a concept in-and-of itself for the Internet-literate. That goes a long way to explaining its popularity.

As the late Bob Chapman of the International Forecaster asked about gold and silver relative to fiat, “where else are you going to go” in a time of ubiquitous deceit? Bitcoin offers yet another alternative to what I’ve coined a “rebel’s portfolio” already heavy in silver and gold.

The pseudonymous nature (read: not totally anonymous) of Bitcoin does associate IPs with wallets. But, the paper-trail is a more obtuse alternative to the traditional bank account. The Powers That Be focus intensely on record-keeping, the historical record shows this, and so any added time-cost for their zeroing-in on you acts as the new privacy.

The popular appeal of Bitcoin – its p2p foundation – is as simple as first-language to the younger generation. Trace explains this well. Max Keiser recently said that he called gold in 2008, and people asked “What if the government confiscates my gold?” To which Max Keiser responds, “What you should have been asking yourself is, ‘What if the government confiscates my bank account?’” He then goes on: “Since $5 per BTC I’ve been recommending Bitcoin and many of you asked, ‘What if the government shuts off the Internet?’” Max Keiser answers thus: “What you should have been asking yourselves is, ‘What if the government shuts down the banks?”

And so, there are fundamental differences between the digital payment technologies pursued publicly by TPTB, and Bitcoin. This is what caught the eye of so many tech-savvy and Austrian-minded individuals across the world, but largely concentrated in the US and greater North America. Now, with Bitcoin skyrocketing from $9.31 last Fall to $150 today, the power of the Internet has never been clearer.

Bitcoin is a bet on the Internet. And, if you read our recent TDV Homegrown issue, you might have learned something about the Egyptian experience with a government using the “internet kill switch.” I wrote:

“Over one year ago, the Egyptian government cut off approximately 88% of the country’s internet access. Here is what happened: The government owned the biggest Internet provider in the nation, and only had to contact a few other companies to make this happen. The government ordered the shutdown of nearly all Internet access within Egypt. Ninety-three percent of Egypt’s networks went down. One of the only connections to the Internet that was not blocked belongs to Noor Data Network, the ISP used by the Egyptian (stock) Exchange.”

I then went over some of the ways Egyptians worked around this Internet shutdown, as well as the likelihood of it happening in the US. The conclusion of the article was bullish for the Internet, for the Internet is a vibrant and evolving system. It is crucial to everyone’s way of life, and we see this with centralized and decentralized payment solutions. The Internet will continue to be defended by its users and impinged upon by its self-appointed overseers. It’s a battle in which any Dollar Vigilante would delightfully indulge.

[Editor’s Note: News of Jeff’s latest Bitcoin venture along with a list of Bitcoin-related business opportunities are in the pages of the latest TDV Dispatch, which is available only to subscribers. To learn more about becoming a TDV subscriber, and getting access to more in-depth analysis and actionable ideas, just click here now.]

Currency Wars Ramp Up As BRIC Propose Global Fund a la IMF, World Bank

The IMF and World Bank sit across the street from each other, facing each other, in Washington DC.  They were set up as institutions of the Bretton Woods Monetary System which ended in August 1971. These institutions have taken taxpayer money from western countries like the US and UK, to restructure so-called Third World countries. Along the way, the former First World has grown to be more like the Third World, and vice versa. This has resulted in a synthesis, the Third Way, or, as it is sometimes referred, the globalization of poverty. Read More

Cyprus Government Stealing Depositors Money for New Brand of Austerity

buy gold silver bitcoin

www.goldsilverbitcoin.com

 

With the world watching the new brand of banking austerity taking place in the tiny island of Cyprus many will not see the United States’ own version of austerity.

The Senate on Friday voted for what has been called the “Amazon tax” which allows states to tax businesses outside of their borders. The tax received very strong bi-partisan support in a congress not known to work well together.

While the legislation is non-binding, meaning that the details of the new tax will have to be hammered out in subsequent legislation, “Brick and mortar” companies are hailing the passing of the new law, as now they will not have to adapt to the changing economy.

Interestingly enough, the bill was passed with the help of 26 free market worshiping republican senators. Of course the mantra behind the passing of the bill is that it will help local small business owners compete with larger competitors. This of course will not work any better than central banking has helped to create jobs.

With the ongoing wealth confiscation developing in Cyprus, the U.S’s desperate attempts to siphon off as much wealth from the people as possible should not go unnoticed.

While the world is watching what a corrupt bankrupt government is capable of, they may not notice the noose that is ever so slightly being tightened around the wealth producers necks here in the United States. Austerity is going worldwide. The U.S only has one advantage in that its time is farther down the road.

With these kinds of austerity measures occurring it is no wonder that gold silver and bitcoin interests are at all time highs. While the metals haven’t got the assistance that it should’ve with this government-sanctioned theft, Bitcoin has certainly shown well.

Gold and especially silver’s time will certainly come again as banker theft becomes more blatant in the mist of the ongoing world financial meltdown. Look around to see what is ahead. The banks have shown their card. It is time the people showed theirs by moving their wealth outside the banking larcenists hands and moving it to hard assets instead.

 

Sorry, But Maybe You’re An Idiot: Bloomberg Says Bitcoin Is Not A Currency

Bloomberg reports today that Bitcoin is not currency. There is nothing wrong with this assertion, other than the reasons submitted where fore are based on the baseless. But, before all that, I’d like to say that, no, Bitcoin is not just a currency. Bitcoin is not merely money. Bitcoin is something totally beyond the scope of monetary history. For 7000 years since the official discovery of silver, man’s monetary exchanges have been on a course for total centralization. Maybe you’ve learned about it in church as “The Great Work.” Maybe you heard about in your history books in school as “progress.” Or, maybe even more recently, you’ve heard about this tendency towards mandated centralization known as the “New World Order” via the “web.” Read More

Cyprus Steals Bank Depositers Money. Not if You Have Gold Silver Bitcoin

Citizens of Cyprus, known as Cypriots, are finding out that their duly elected representatives have now sanctioned theft of their private bank accounts.

President Nicos Anastasiades first proposed the wealth confiscation this last Friday. Under his plan, parliament would levy a 6.75 % tax from all bank deposits of 100,000 Euro or less and 9.9% on bank deposits of more than 100,000 euro.

“The solution taken may be painful, but it was the only one” worth taking said President Anastasiades in regards to his proposal.

This is the first time that the IMF and the Eurozone have actually dipped into people savings accounts. It is the next stage in austerity that is affecting the world as the banking plunder continues.

The purpose of banking holidays is to stop any runs that my occur on a bank by holders that fear the bank will not be able to make good on their deposits or for people getting their money out before it is revalued.

Cypriots are making every attempt to avoid this new tax by going to ATM’s throughout the county to withdrawal as much money as possible. However, with banks in the country being closed, it is unlikely that depositors will be able to get any sizable amount of their money out before it is too late.

Holders of gold, silver, and Bitcoin in Cyprus do not have this problem though as they have hard assets in their possession at any given time and can use those assets to barter and trade with.

For everyone else it seems that they will have a portion of their wealth taken from them because they choose to have their wealth in the wrong currency. With all government in the world facing fiscal crisises like Cyprus sometime in the near future, this brand of wealth confiscation will evolve and continue. Hard physical assets do not have this problem.

Gold Silver Bitcoin “it’s your choice”


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