crypto · Economic History · Federal Government

They’re Getting Fearful

Today as I was browsing Twitter the following article popped up:

Imagine that. UBS is warning people that the major threat to cryptocurrency as a dominant means of exchange lies with the inability of central banks to control it by limiting total money supply. This honestly sounds like the product of some bizarro alternate reality. Such organizations have (at least in recent history) printed money and flooded the market with extra cash, not restricted the amount available. Do I sense a desire to manipulate the market and maybe snag some cheaper BTC for late-arriving buyers at UBS?

Time will tell. It’s no secret however that UBS has been on the warpath with their fear predictions, as seen just a week prior:

Of course if they do manage to drive the price down, smart folks will pick up a little more. The big shots will catch up, eventually.

Economic History · Federal Government · investing · Personal Finance

What Happens To Bitcoin Post-Dollar?

This is more of a thought piece than anything else, though I’m sure it will rile up a lot of Bitcoin HODLs and “technical analysts.” Much as I own (not enough) of the shiny algorithm coin,  the entire way we go about perceiving future currency seems rather warped. It’s a question requiring a bit beyond the typical wide-eyed enthusiasm of liberty advocates and the general freedom rabble.

For a long time, the theory of Bitcoin promoters has been that its limited cap of 21 million units serves as a safe store of value versus the highly-inflated dollar, which shows no signs of stopping its brrr-a-thon. Coin baggers predict that their currency will continue to rise as governments spend and borrow, perhaps at some point replacing the classical concept of “fiat” or paper money. Folks who have bought or continue to purchase before Bitcoin’s rise to a dominant financial position will be rich, while others are left with largely worthless investments.

But there’s one problem of sorts. These Bitcoin pumpers are basing their wealth and success on its exchange rate with the U.S. Dollar. In other words, to be a Bitcoin “millionaire,” you must assess its value in accordance with the same fiat currency that is supposedly unstable. Selling out of Bitcoin to realize some of this wealth means holding large amounts of an inflationary currency which continues to rise along with the president’s signature on spending bills.

Now, a skeptic could argue he will buy gold with his Bitcoin, but this is highly inconvenient for global transfer and transactions where the price point is less than a full ounce of yellow metal. Furthermore, gold itself is giddily valued in line with the dollar, despite the fact that its supporters believe fiat to be unstable and inflationary. A goldbug I knew even tried to diminish the validity of S&P 500 returns by claiming they were based in dollars instead of gold, despite arguing for gold on the basis of dollars.

This brings us to an important query: what happens if the dollar actually collapses, or ceases to exist? Does gold continue to “store” value? Is Bitcoin still worth a lot of money relatively, or does it adopt a dominant position attune to the dollar, albeit with less inflationary tendencies? And what happens to the people who failed to purchase crypto when it was cheaper in dollar terms? Are they doomed to scraping out an existence with whichever fiat currencies remain, or trying to collect a monthly check of 0.00000000001 BTC to afford the good consumerist lifestyle?

No one can really know. The future might be crypto, but that scenario could end up being unpleasant, depending on who possesses a bigger account.   

Economic History · Federal Government · investing · Uncategorized

Break Their Fall

The older I get, the less enjoyable or exciting any “black pill” realization becomes. It might speak to the sad state of affairs currently showcased, but in reality a cosmic manifestation of elitist gall is the culprit. Rather than hiding their malevolence, the dominant players of our time have settled into an open, unapologetic method of communicating intent. Thus we as observers are left to endorse rather blasé attitudes in the face of searing rain, at once feeling the discomfort but taking solace in the fact that its arrival could be predicted from a long ways off.

A perfect example of this lies in the wondrous implications of the Dodd-Frank legislation signed by President Obama in 2013. The landmark legislation was celebrated for supposedly raining in the excesses of Wall Street (a highly dubious claim), and is regularly cited by leftists to show the successes of 44. At the same time, the mammoth bill put forward some rather interesting features that drop hints about what is to come.

In reaction to the controversy over government-funded bailouts of banks, the legislation permits such institutions to maintain solvency by pursuing a strategy of “bail-ins,” an option which involves seizure of a large percentage of customer assets to keep the firm afloat. Due to protections bolstering derivatives on the totem pole of importance, users with regular checking and savings accounts might well be subjected to the experience of people in Cyprus, who lost tremendously after a financial crisis on the island.

What’s really lamentable about the whole matter concerns how little attention it has received. The stock market continues to return stimulus-induced profits, Congress is just barely approaching a COVID deal after months of haggling, and an incompetent geriatric is poised to become president in January. But this bit of legal scribbling, which stands to produce disastrous effects in the very real future, is remanded to the likes of The Epoch Times, an alleged “fake news” paper.

I suppose the natural response is to dive deeper into Bitcoin, yet even on that front the waters are becoming murkier. Mnuchin the Moocher has taken first blood, and I would not expect Yellen to be much different. The steady swill of power and corporate greed seems to overtake everyone, no matter the designs of their sacred oaths and professed beliefs.

Perhaps we should buy land.

Economic History · Federal Government · investing · Personal Finance

The XRP Smackdown

There has been much gnashing and simping over the announcement of an SEC lawsuit against Ripple, one of the more controversial cryptocurrencies on the market. For some, the move is confirmation of their fears that XRP is a scam, and carries with it an advisement to purchase Bitcoin. Others are holding the line, suggesting the storm will work itself out and leave Ripple stronger than before.  

I tend to be in the latter category, perhaps driven in part by my long-time holding of the currency, but also because the lawsuit itself seems rather like a rather flimsy last-ditch attempt at relevance by Jay Clayton, the outdoing SEC chairman and historical big bank shill. Take a look at the government’s statement:

“We allege that Ripple, Larsen, and Garlinghouse failed to register their ongoing offer and sale of billions of XRP to retail investors, which deprived potential purchasers of adequate disclosures about XRP and Ripple’s business and other important long-standing protections that are fundamental to our robust public market system.”

The SEC’s argument hinges around the idea that Ripple should have been registered as a security (like a stock) rather than a currency, and thus their practices are problematic under federal law. They claim that the coin’s coming into existence with an existing trove of units rather than gradual mining of new ones pushes it outside the cryptocurrency category, as buyers were purchasing coins from the company itself.

Much as this might seem devastating to XRP’s future, it runs up against an obvious issue: the government previously granted Ripple the status of a currency, and thus will have to go against its prior declarations. While the SEC has won lawsuits against other altcoins in the past, this was following the release of a 2017 directive on their part, a rule which post-dated the ICO of Ripple. Thus Jay Clayton and Co. will need to prove XRP was running afoul of existing rules despite the relatively uncharted waters of cryptocurrencies in federal code.

Another obstacle for the federales surrounds the openness of the global community. Although Uncle Sam might well crackdown on firms like Ripple, other jurisdictions could opt for looser restrictions, or perhaps adopt XRP for themselves. It is not beyond the realm of possibility that smaller countries begin to use Ripple, and geopolitical opponents may well do the same. In any case, the nature of crypto makes it difficult for a single bureaucratic move to put the kibosh on all hope.  

Of course this could just as easily be investment white-knighting on my own part, but at least the cheap price of Ripple makes any future collapse largely nonthreatening.

Federal Government · investing

Can Bitcoin Be Regulated?

One of the great cultural nuances of the internet is how everyone can be right. Providing you are convincing, or at least look the part, most effective dissent will get chucked out the window, along with any need for respect. In point, we have the prototypical messaging of the Bitcoin-promoting community, which often argues that digital currency is beyond government regulation or control due to algorithms and encryption. They have some credibility, but as with all things deemed to “beat the system,” there are major exceptions which must be considered.

To start, the idea that crypto transactions can simply fly under the radar is muddled by known IRS actions. The federal government has already issued warnings to thousands of people about failure to report crypto gains to the IRS, and significant penalties lurk for those who flaunt such warnings. We also have the recent indictment of John McAfee for allegedly hiding cryptocurrency assets. Thus from a reactive standpoint the State is already gearing up for the long haul fight.

Perhaps more immediately, reports suggest the government seized around $1 billion worth of Bitcoin connected to the controversial Silk Road marketplace, whose founder Ross Ulbricht was given a life sentence for numerous alleged crimes. That’s a small but noticeable chunk of the overall coin value, and it’s not the first time Uncle Sam has held a stake. Other governments such as Bulgaria have snapped up digital currency in the past, with the leaders in Sofia holding 200,000 bitcoins at one stage.

Ruling out these sorts of criminal situations, what of the more obvious methods for centralized regulation? Governments could begin requiring trading firms like Coinbase to meet specific standards of licensure and tax reporting, much as investment companies are required to do. They might also go after crypto miners, placing restrictions or taxes on their Morian mainframes These are hardly out of the question when we examine the history of the State, and its insatiable desire for money.

By this I don’t mean to suggest crypto is a bad idea; in fact, I own a great deal and will continue adding. Just avoid becoming too drunk on the swill of lolbertarianism. As Ronny boy might say, “The government wants what it wants.”

Federal Government · investing · Personal Finance

The Terrifying Future For Stocks

No, this article falls outside the category expected. It is not destined to be some foreboding warning about the threats of excessive fiat printing, or monopoly money stock buybacks. Nor are bonds the subject to be promoted as a safe alternative. Those are all great angles, but they fail to seize the goose.

What we’re concerned with is a little different. Over the last several days it dawned on me that stocks might be unsafe from the standpoint of maintaining legal ownership. Forget about the respective firm going bankrupt, or a market downturn burning the green. Might corporations or states one day simply require shareholders to surrender their stake, or, in the former’s case, revoke your assembled stocks completely? 

The idea is not as far-fetched as gullible GOPers probably believe. The State could certainly nationalize retirement and investment accounts to generate more revenue, or perhaps jack up tax rates on any sales/withdrawals. The easiest justification for an act is embodied in Social Security’s fractious position, and the move would be advertised as a question of patriotism.

Corporations on the other hand merely have to follow current social trends. They have already bent over backwards to appease the street-based terrorist group known as BMM, firing people for dissenting opinions and donating millions to “civil rights” despite their property being destroyed. How long until they bow to communist pressure and dilute or withdraw shares held by individuals who do not tow the party line?

But that’s impossible, you will say. Really? The present Supreme Court just barred churches from holding large religious services, and endorsed the undemocratic immigration power grab by an esteemed progressive. If little people stand to lose their financial holdings, would the Supreme Corporate actually care?

Not to interject with a Godwin’s Law moment, but our friend Joseph Goebbels had some great insight on this issue. Writing after his boss moved to snatch up the estates of a less-than-cooperative German monarchy, Joey said: “Real estate is the foundation of economic independence, and economic independence always furnishes a basis for political influence.”

Absolutely, and stocks are similar in nature. Will the likely Biden presidency, free of all legitimate DOJ scrutiny, defend the economic rights of the Right?

The answer, my friends, is blowing in the NASDAQ.

investing · Personal Finance

How The Stock Market Works

As some of you surely know, Elon Musk’s lovely contributions to humanity have taken yet another fanciful turn. After a few hard lemonades, he spat this out on the tweet deck:

I’m sure there’s more to the story than meets the eye, though it presents a fascinating look at how markets react in the current age. We have already seen how the Religious Investor approach chucks all principles and guidelines out the window in favor sheer fanboyism, but it’s getting worse. Literally nothing matters except the increasingly-fatter balloon of millennial viral popularity.

 Tesla fans will quickly castigate any skeptics on stock price by appealing to the “technology of the future,” but a mere microemail from their leader is now enough to cut about $15 billion from the market cap. Is the company now fairly valued, still too big, or dirt cheap? No guess exists worth taking.

In fairness to Teslaites, the rest of the stock market is not acting much different, so they can hardly be brought up on charges of cucking against humanity. We just have to sit and wait, or maybe buy bitcoin and hope it goes to $150,000. I mean, come on.

All that’s left to say is this: quality weed matters, Elon.