I’m in Awe of How Far the Scams & Stupidities around ‘Blockchain Stocks’ are Going

This can happen only during the very late stage of a bubble. It just doesn’t let up. UBI Blockchain Internet, a Hong Kong outfit whose shares trade in the US [UBIA], filed with the SEC to sell an additional 72.3 million shares owned by its executives. In other words, it isn’t selling the shares to raise money for corporate purposes, but to allow its executives, including CEO Tony Liu, to bail out.
This is happening after the company – which sports zero revenues and a disconnected phone number in its SEC filings – managed to get its shares to spike briefly by over 1,100%, pushing its market capitalization to $8 billion.
UBI Blockchain didn’t do an IPO. Instead, in October 2016, it acquired a publicly traded shell company registered in Las Vegas, called ‘JA Energy.’ It then changed the name and ticker symbol to what they’re now.
Over the six trading days starting on December 11, 2017, its shares soared over 1,100%, from $7.20 to $87 on December 18, as the word ‘blockchain’ in its name and sufficient hype and speculator-idiocy took hold. By December 21, shares had plunged 67% to $29. They closed on Wednesday at $38.50. At this price, it still has a ludicrous market cap of $3.64 billion.

This post was published at Wolf Street on Dec 28, 2017.

Doug Noland: Epic Stimulus Overload

This is a syndicated repost courtesy of Credit Bubble Bulletin . To view original, click here. Reposted with permission.
Ten-year Treasury yields jumped 13 bps this week to 2.48%, the high going back to March. German bund yields rose 12 bps to 0.42%. U. S. equities have been reveling in tax reform exuberance. Bonds not so much. With unemployment at an almost 17-year low 4.1%, bond investors have so far retained incredible faith in global central bankers and the disinflation thesis.
Between tax legislation and cryptocurrencies, there’s been little interest in much else. As for tax cuts, it’s an inopportune juncture in the cycle for aggressive fiscal stimulus. And for major corporate tax reduction more specifically, with boom-time earnings and the loosest Credit conditions imaginable, it’s Epic Stimulus Overload. History will look back at this week – ebullient Republicans sharing the podium and cryptocurrency/blockchain trading madness – and ponder how things got so crazy.
From my analytical vantage point, the nation’s housing markets have been about the only thing holding the U. S. economy back from full-fledged overheated status. Sales have been solid and price inflation steady. While construction has recovered significantly from the 2009/2010 trough, housing starts remain at about 60% of 2004-2005 period peak levels. It takes some time for residential construction to attain take-off momentum. Well, liftoff may have finally arrived. As long as mortgage rates remain so low, we should expect ongoing housing upside surprises. An already strong inflationary bias is starting to Bubble. Is the Fed paying attention?

This post was published at Wall Street Examiner on December 23, 2017.

Watch Live: Senate Banking Committee ‘Grills’ Trump’s Fed Chair Nominee Jerome Powell

Update (11:45 am ET): As Powell’s testimony draws to a close, analysts at Stone & McCarthy noted that – as expected – the future Fed chair’s comments were “generally dovish”.
The hearing was largely free of surprises. As it neared its close, Powell offered his thoughts about the blockchain and digital currencies (one day they could impact the Fed’s policies, but right now they’re too small to matter), and the mysterious roots of low inflation (the Fed is still struggling to determine if it’s due to transitory factors, or some kind of fundamental shift.
Here’s Stone & McCarthy:
In his confirmation hearing before the Senate Banking Committee, Powell fielded questions mainly on the topics of raising interest rates, shrinking the balance sheet, and his views on “tailoring” regulation. Powell maintained the view that it is appropriate to gradually increase short-term rates against a backdrop of healthy, consistent growth with a strong labor market. He did not address inflation issues. He said GDP growth should be about 2.5% in 2017, and looking forward to “something pretty close to that” next year. Powell declined to specifically say if he would vote for another rate hike at the December 12-13 FOMC meeting. He did say “conditions are supportive” for another rate hike and “the case for raising rates at the next meeting is coming together”.

This post was published at Zero Hedge on Nov 28, 2017.

BANK ADMITS FIAT CURRENCIES ARE FAILING AND CRYPTOCURRENCIES MAY REPLACE THEM

As the transition towards a blockchain based economy continues, the established financial powers are desperately trying to stay relevant. In an attempt to boost their credibility, analysts at Deutsche Bank are finally admitting that state-run fiat currencies are becoming obsolete. For years, blockchain entrepreneurs and other critics of central banking have been branded either conspiracy theorists or criminals. But recently, those controversial opinions about the inevitable changes coming to the world’s financial system are being echoed by mainstream pundits.
Deutsche Bank’s top strategist, Jim Reid, recently articulated a view on the economy that is shared by many but rarely talked about:
‘Central banks and governments which have ‘dined out’ on the 35 year secular, structural decline in inflation are not able to prevent it rising as raising interest rates to suitable levels would risk serious economic contraction given the huge debt burden economies face. As such they are forced to prioritise low interest rates and nominal growth over inflation control which could herald in the beginning of the end of the global fiat currency system that begun with the abandonment of Bretton Woods back in 1971.’

This post was published at The Daily Sheeple on NOVEMBER 15, 2017.

Technical Scoop – Weekend Update Nov 5

Weekly Update
To the moon, Alice!
Ralph Kramden, The Honeymooners
And at the current rate it might not be too long before it’s actually there. The moon, that is. No, not Alice – Bitcoin. Yes, Bitcoin crossed $7,000 this week. It was less than a month ago Bitcoin passed $5,000. The riches are dazzling as Bitcoin is up 640% this year alone. Bitcoin now has a market cap of $100 billion. How much longer before it’s bigger than Amazon or Apple or worth more than the entire gold stock market? But the question continues to beg – is Bitcoin an historic bubble? Until it bursts, the question is strictly academic. And don’t forget, not only is there Bitcoin but there are now over 1,000 other cryptocurrencies. And Bitcoin has forks as well called Bitcoin cash and Bitcoin gold.
Okay, we are not going to get into a huge discussion of Bitcoin and how it is structured and what blockchains are all about. It is mind boggling enough trying to figure all of that out. We will have further comments on our weekly ‘Bitcoin Watch!’ commentary.
The stock markets made new all-time highs again this past week. That comes against the backdrop of the terrorist attack in New York City, indictments in the Russia investigation including former top aides of President Donald Trump, and possible brewing trouble in the Mid-East. There is also the escalating crisis in Catalonia in the heart of the EU, ongoing trouble between Kurds and Iraq/Iran/Turkey, and continued moves afoot to lessen the use of the US$ in world trade. As well, a new Fed chairman has been proposed. But all the stock market cares about is the potential to pass the tax bill that could put billions into corporations and the 1% even as it could create deficits estimated at up $1.5 trillion over the next decade.
Maybe the stock markets are also headed for the moon, albeit at a much slower pace. Still, the records just keep on falling and there seems to be little in the way of stopping it. We may wring our hands over the alleged terrorist attack that killed 8 and injured many more but largely ignore an attack in a Walmart in Colorado that left 3 dead that occurred not long after the NYC attack. And I might add as we prepare this for distribution another attack in some small Texas town in a church that has left multiple fatalities.

This post was published at GoldSeek on 5 November 2017.

Hyperinflation Chronicles, Part 1: Einstein’s Scribble, Newman’s Watch, And Dot-Blockchain

When governments create insane amounts of money, the recipients of that money tend to behave accordingly. Consider:
Einstein scribbled his theory of happiness in place of a tip. It just sold for more than $1 million.
(Washington Post) – He is known as one of the great minds in 20th-century science. But this week, Albert Einstein is making headlines for his advice on how to live a happy life – and a tip that paid off.
In November 1922, Einstein was traveling from Europe to Japan for a lecture series for which he was paid 2,000 pounds by his Japanese publisher and hosts, according to Walter Isaacson’s biography, ‘Einstein: His Life and Universe.’ During the journey, the 43-year-old learned he’d been awarded his field’s highest prize: the Nobel Prize in physics. The award recognized his contributions to theoretical physics.
News of Einstein’s arrival spread quickly through Japan, and thousands of people flocked to catch a glimpse of the Nobel laureate. Impressed but also embarrassed by the publicity, Einstein tried to write down his thoughts and feelings from his secluded room at the Imperial Hotel in Tokyo.

This post was published at DollarCollapse on OCTOBER 27, 2017.

Are Cryptocurrencies Inflationary?

There’s a debate raging over what, exactly, bitcoin and the thousand or so other cryptocurrencies actually are. Some heavy-hitters are weighing in with strong, if not always coherent opinions:
Jamie Dimon calls bitcoin a ‘fraud’
JPMorgan Chase CEO Jamie Dimon did not mince words when asked about the popularity of virtual currency bitcoin.
Dimon said at an investment conference that the digital currency was a ‘fraud’ and that his firm would fire anyone at the bank that traded it ‘in a second.’ Dimon said he supported blockchain technology for tracking payments but that trading bitcoin itself was against the bank’s rules. He added that bitcoin was ‘stupid’ and ‘far too dangerous.’
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Peter Schiff: Even at $4,000 bitcoin is still a bubble
One of the best-known among the bears, investor Peter Schiff, is now making his case in even stronger terms for why bitcoin has advanced ever farther into bubble territory.
Schiff, who predicted the 2008 mortgage crisis, famously referred to bitcoin as digital fool’s gold and compared the cryptocurrency to the infamous bubble in Beanie Babies.

This post was published at DollarCollapse on OCTOBER 22, 2017.

Gary Cohn is Concerned about Wall Street Clearinghouses – Blockchain is Already Fixing it

Gary Cohn, chief economic adviser to the President, voiced concern over the weekend about risk posed by Wall Street clearinghouses that became systemically important following the 2008 financial crisis.
As Bloomberg reported:
As ‘we get less transparency, we get less liquid assets in the clearinghouse, it does start to resonate to me to be a new systemic problem in the system,’ Cohn, director of the White House’s National Economic Council, said at a banking conference in Washington on Sunday.
Cohn isn’t the first to raise the risk. JPMorgan Chase & Co. and BlackRock Inc. have argued for years that clearinghouses pose their own threats, shifting risk to just a handful of entities. The Treasury Department’s Office of Financial Research has warned that clearinghouses used for derivatives trades can be vulnerable and potentially spread risks through the financial system.
While it is worth noting that this is another example of how the government’s response to a crisis they created made the economy as a whole more fragile, the good news for Mr. Cohn is that there is an exciting technological breakthrough that allows people to transparently move money without relying upon third parties to guard against shady counterparties: blockchain.

This post was published at Ludwig von Mises Institute on October 17, 2017.

Credit, Crypto, & Kuroda’s “Bat-Shit-Crazy Monetary Expansion”

Authored by Kevin Muir via The Macro Tourist,
Today’s post will be about Japanese yen vol, but I am sure to bore some readers with that topic, so I am starting with something a little more interesting.
As many of you know, I am a little bit of a bitcoin skeptic. At the end of the day, I have trouble investing in the ledger in the sky.
Call me old-fashioned, call me a troglodyte, call me a bitter gold bug, call me whatever you want, I just can’t bring myself to get long bits in the cloud. And before you send me messages how I don’t understand it, don’t forget I was mining bitcoin before most of Wall Street had ever heard of it. So I am much more than just some trade-a-saurus that refuses to get with the times, I am the knob who passed on bitcoin at $5.
Yet I have the privilege of counting Tony Greer from TG Macro as one of my pals, and his enthusiasm about using crypto currencies for micro-payments has piqued my interest. From Tony’s great letter the other day:
For selfish reasons, this is the article that gets me most excited about bitcoin and the blockchain. The streamlining of media distribution is going to kick the door open for individuals to compete with publishing powerhouses and main stream periodicals.
Publishing content on Amazon, iTunes, even YouTube is extremely costly for the author/artist. Youtubers can’t earn money until they get 10,000 views. Apple and Amazon take between 30% and 75% for the right to their distribution networks. Since media consumption has gone digital, it’s been difficult to charge on a PER ARTICLE basis because of high transaction costs making it prohibitively expensive. All that’s about to change. The blockchain is going to allow thousands of transactions to be processed at low to no cost, it will preserve a record of all those transactions along with all the content, it provides transparency for the artist/author and consumer, and one day, it will make the Morning Navigator available to every single reader in the world for $1 per copy.
Take a moment to read the article Tony linked to. Yeah, I know. You would never expect me to be linking to an article in BitCoin Magazine, but life’s funny.

This post was published at Zero Hedge on Sep 29, 2017.

Bitcoin’s Biggest Bull Isn’t ‘Long Crypto’, He’s ‘Short Government’

Six years ago, Kyle Bass provided a crucial context for the debt-laden world of ever-increasing sovereign debt:
“Buying gold is just buying a put against the idiocy of the political cycle. It’s That Simple”
And now, as interest in Bitcoin surges, Arthur Hayes, a former CitiGroup trader who runs BitMEX – a Hong Kong-based crypto exchange – asks an interesting question – In the coming war between digital currencies, which side will your money be on?
As CoinDesk reports, Hayes thinks blockchain is lighting a fuse that will ignite open combat between “true cryptocurrencies” (like bitcoin) and a new “digital fiat” controlled by central banks.
These two parallel currency systems are the inevitable outcome of his core investing thesis:
“A digital society needs digital cash.”

This post was published at Zero Hedge on Sep 12, 2017.

Government Crackdowns and Regulation Could Take Shine Off Cryptocurrencies

Bitcoin has risen meteorically in recent months. Many investors call cryptocurrency the ‘new gold.’ But at least one analysts sees trouble on the horizon for cryptocurrencies in the form of government crackdowns. A recent announcement in China lends credibility to his warning.
Bloomberg reports emerging markets fund manager Mark Mobius warned that governments will begin clamping down on digital currencies because of their use in illicit financing, terrorism, and drug trafficking. He said that’s going to mean a rush back to gold.
Cryptocurrencies are beginning to get out of control and it’s going to attract the attention of governments around the world. You’re going to get a reversion back to gold because people are going to wonder, can I really trust these currencies?’

As if to confirm Mobius’ prophecy, on Monday the People’s Bank of China announced initial coin offerings (ICOs) are now illegal and ordered the halt of all related fundraising activity. In an ICO, digital currency based on blockchain technology is sold publicly and often traded on secondary exchanges.

This post was published at Schiffgold on SEPTEMBER 6, 2017.

Sprott CEO On Bitcoin: ‘It Could Go To $100,000… Or $0… Keep Both Numbers In Mind’

With the advent of crypto currencies came an entirely new marketplace that was nonexistent just a decade ago. And as with all new things, once the market started adopting blockchain technology like Bitcoin, everybody wanted a piece of the action.
So much so that prices for Bitcoin and other digital currencies have skyrocketed to the tune of thousands of percentage points over the last few years.
But how high can Bitcoin really go?
To answer this question we must consider this new space in similar light to other speculative investments, and there’s no better person to give us a realistic, unbiased view of this new investing sphere than Rick Rule, the billionaire Chief Executive Officer of Sprott Global Resources. As a long-time advocate of free markets and decentralization from government control, in his recent interview with Crush The Street Rule says that with a $70 billion market cap, and perhaps more importantly the distributed ledger technology that makes it function, Bitcoin and the blockchain are here to stay.
Bitcoin to me is all positive… I’m a consumer of currencies and currencies are a medium of exchange… and the more competing currencies there are the better it is for consumers of currencies… I use U. S. dollars, I use Canadian dollars, I use gold, I use silver, and from time-to-time I use BitCoin.

This post was published at shtfplan on September 4th, 2017.

Bernanke Flip-Flops: Will Be Keynote Speaker At Blockchain Conference

Echoing his predecessor Greenspan’s shift to the ‘dark side’ (fully supportive of a gold standard after leaving office), former Fed Chair Bernanke now appears to be full-heartedly supportive of cryptocurrencies having warned in 2015 of “serious problems” with bitcoin due to its “instability” and “anonymity.”
As CoinTelegraph reports, in an interesting turn of events, former chairman of the Federal Reserve Ben Bernanke, will be the keynote speaker at a Blockchain and banking conference in October hosted by Ripple.
Bernanke is an interesting call for the keynote speaker as he has criticized cryptocurrencies in the past… (via Qz.com)
[Bitcoin]’s interesting from a technological point of view. We’re in a world where the payments system is evolving quickly and new approaches to managing payments are proliferating, and some of the ideas around bitcoin will no doubt be useful in doing that.

This post was published at Zero Hedge on Aug 27, 2017.

Why Cryptocurrencies Will Never Be Safe Havens

Every further new high in the price of Bitcoin brings ever more claims that it is destined to become the preeminent safe haven investment of the modern age – the new gold.
But there’s no getting around the fact that Bitcoin is essentially a speculative investment in a new technology, specifically the blockchain. Think of the blockchain, very basically, as layers of independent electronic security that encapsulate a cryptocurrency and keep it frozen in time and space – like layers of amber around a fly. This is what makes a cryptocurrency ‘crypto.’
That’s not to say that the price of Bitcoin cannot make further (and further…) new highs. After all, that is what speculative bubbles do (until they don’t).
Bitcoin and each new initial coin offering (ICO) should be thought of as software infrastructure innovation tools, not competing currencies. It’s the amber that determines their value, not the flies. Cryptocurrencies are a very significant value-added technological innovation that calls directly into question the government monopoly over money. This insurrection against government-manipulated fiat money will only grow more pronounced as cryptocurrencies catch on as transactional fiduciary media; at that point, who will need government money? The blockchain, though still in its infancy, is a really big deal.

This post was published at Ludwig von Mises Institute on August 15, 2017.

Beyond Bitcoin

Last week we wrote a simple introduction to digital currencies, describing the motivation of their creators, the technologies that underlie them, and some of the pitfalls that may be waiting for speculators. A lot of readers found the piece helpful; if you haven’t seen it, please feel free to request a free copy.
Bitcoin and other digital currencies were designed as forms of ‘digital gold’ that would meld characteristics of physical gold with those of electronic money. They may or may not ever become viable media for storing and exchanging value. For now, they remain highly speculative, highly volatile, and subject to a variety of risks that are nearly impossible to evaluate. Some of those risks are existential and could lead to the collapse of digital currency systems, either because of the regulatory crackdown or because of a technical failure from unexpected advances in computing technology. We concluded that for now at least, digital currencies are for intelligent and careful speculators who have some idea what they’re getting into – but definitely not for investors.
With all that said, some of the most interesting things about digital currencies are not the currencies themselves, but the technologies that underlie them. We’re not kidding ourselves; the current bubble in bitcoin, ether, and several other digital currencies is much more exciting than the underlying technologies. Still, those technologies may ultimately prove to be more influential on the global economy and the global financial system than the currencies they were created to support.
The Technologies That Make Bitcoin Work
As we mentioned last week, bitcoin rests on two key technological innovations: public/private key encryption and the blockchain. Public/private key encryption has been around since 1976; the blockchain was an innovation contributed by bitcoin’s anonymous inventor when he wrote the white paper that launched the currency in 2008.

This post was published at FinancialSense on 06/30/2017.

Can Gold & Silver Be Put On The Blockchain?

Many gold bugs and hard money advocates still see bitcoin as being an enemy of gold when, in fact, it is complementary to gold.
They’ll often point out there is ‘nothing backing bitcoin’ without, for even a second, realizing there is nothing backing gold either.
All value is subjective and in today’s digital age there is real value in being able to digitally transfer value nearly instantly worldwide at the click of a button for very little cost and in a way that no bank, government or other third party can block or steal.
But, with that said, nothing is a more proven store of wealth than gold and silver. And while technically nothing ‘backs’ gold and silver, it is pretty hard to imagine many scenarios where precious metals become worthless.

This post was published at Dollar Vigilante on June 28, 2017.

Gold and Silver Are “Asymmetric” Trades

An asymmetric trade is a situation where investing a relatively small amount of money holds the potential of yielding a profit many times the amount of the original sum at risk. In other words, where the risk to reward is skewed massively in the direction of reward.
This took place recently with Bitcoin (BTC). Is this conceptually different from bets made years ago on Microsoft, Cisco, Amazon, or Facebook, which yielded hundreds of percent profit to intrepid investors? Does it have relevance to the possible returns during the next few years for those who hold physical gold and silver?
I would answer “yes” and “yes.”
The current “mania” in the cryptocurrency space – most notably BTC and Ethereum (ETH), along with a few other “app coins” – offers an in-future lesson for a similar setup in the precious metals. (For more on the above topic, see “The Blockchain: A Gold and Silver Launchpad?”
First: This may be the first time ever that an investment “story” has had the ear and investment dollars of a global audience on a simultaneous basis. Individual investors, hedge funds, businesses, and even countries, are sending a torrent of funds, with the effect, to paraphrase Doug Casey’s famous remark, of “trying to push the power of the Hoover Dam through a garden hose.”

This post was published at GoldSeek on Friday, 23 June 2017.

Precious Metals & The Block Chain, A Game Changer? David Morgan

The following video was published by The Morgan Report on Jun 15, 2017
Precious Metals expert David Morgan’s talk at the Cambridge House Metal Writers Conference in Vancouver.
His talk was on the state of Blockchain technologies along with the pros and cons of this technology and its role as currency.
He goes through the parabolic cycle and compares it to the 1980 parabolic cycle of silver and gold.
Other things is the dangers of Bitcoin and Blochchains in a volitile digital cyber security world.