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Bitcoin Doesn’t Exist – 5


Gustave Courbet Sunset on Lake Geneva 1876
Chapter 1 of this five-part series by Dr. D is here: Bitcoin Doesn’t Exist – 1

Chapter 2 is here: Bitcoin Doesn’t Exist – 2

Chapter 3 is here: Bitcoin Doesn’t Exist – 3

Chapter 4 is here: Bitcoin Doesn’t Exist – 4

Next up: all 5 chapters combined in one big essay.

Dr. D: Bitcoin can be stolen. Although “Bitcoin” can’t be hacked, it’s only software and has many vulnerabilities. If held on an exchange, you have legal and financial risk. If held at home, you could have a hard drive fail and lose your passwords. If it’s on a hardware fob like a Trezor, the circuits could fail. For a robust system, computers themselves are pretty fragile. You could write down your passwords on paper, and have a house fire. You could print out several copies, but if any of the copies are found, they have full access to your account and stolen without you knowing. You could have your passwords stolen by your family, or have a trojan take a screen or keystroke capture.

Hackers could find a vulnerability not in Bitcoin, but in Android or AppleOS, slowly load the virus on 10,000 devices, then steal 10,000 passwords and clear 10,000 accounts in an hour. There are so many things that can go wrong, not because of the software, but at the point where you interface with the software. Every vault has a door. The door is what makes a vault useful, but is also the vault’s weakness. This is no different than leaving blank checks around, losing your debit card, or leaving cash on your dashboard, but it’s not true that there are no drawbacks. However the risks are less obvious and more unfamiliar.

…click on the above link to read the rest of the article…

Peak Fantasy Time

Peak Fantasy Time

If you want to know why both Wall Street and Washington are so delusional about America’s baleful economic predicament, just consider this morsel from today’s Wall Street Journal on the purportedly awesome November jobs report.

Wages rose just 2.5% from a year earlier in November—near the same lackluster pace maintained since late 2015, despite a much lower unemployment rate. But in a positive signfor Americans’ incomes, the average work week increased by about 6 minutes to 34.5 hours in November…. November marked the 86th straight month employers added to payrolls.

Whoopee!

Six whole minutes added to a work week that has been shrinking for decades owing to the relentlessly deteriorating quality mix of the “jobs” counted by the BLS establishment survey. In fact, even by that dubious measure, the work week is still shorter than it was at the December 2007 pre-crisis peak (33.8) and well below its 2000 peak level.

The reason isn’t hard to figure: The US economy is generating fewer and fewer goods producing jobs where the work week averages 40.5 hours and weekly pay equates to $58,400 annually and far more bar, hotel and restaurant jobs, where the work week averages just 26.1 hours and weekly pay equates to only $21,000 annually.

In other words, the ballyh0oed headline averages are essentially meaningless noise because the BLS counts all jobs equal—-that is, a 10-hour per week gig at the minimum wage at McDonald’s weighs the same as a 45 hour per week (with overtime) job at the Caterpillar plant in Peoria that pays $80,000 annually in wages and benefits.

When the line is trending inexorably from the upper left to the lower right, of course, it means there are more of the former and fewer of the latter. Six more minutes of continuing worse—-is still bad.

…click on the above link to read the rest of the article…

Finally, An Honest Inflation Index – Guess What It Shows

Finally, An Honest Inflation Index – Guess What It Shows

Central bankers keep lamenting the fact that record low interest rates and record high currency creation haven’t generated enough inflation (because remember, for these guys inflation is a good thing rather than a dangerous disease).

To which the sound money community keeps responding, “You’re looking in the wrong place! Include the prices of stocks, bonds and real estate in your models and you’ll see that inflation is high and rising.”

Well it appears that someone at the Fed has finally decided to see what would happen if the CPI included those assets, and surprise! the result is inflation of 3%, or half again as high as the Fed’s target rate.

New York Fed Inflation Gauge is Bad News for Bulls

(Bloomberg) – More than 20 years ago, former Fed Chairman Alan Greenspan asked an important question “what prices are important for the conduct of monetary policy?” The query was directly related to asset prices and whether their stability was essential for economic stability and good performance. No one has ever offered a coherent answer even though the recessions of 2001 and 2008-2009 were primarily due to a sharp correction in asset prices.A new underlying inflation gauge, or UIG, created by the staff of the New York Fed may finally provide the answer. Its broad-based measure of inflation includes consumer and producer prices, commodity prices and real and financial asset prices. The New York Fed staff concluded that the new inflation gauge detects cyclical turning points in underlying inflation and has a better track record than the consumer price series.

The latest reading shows inflation of almost 3 percent for the past 12 months, compared with 1.8 percent for the consumer price index and 1.8 percent for core consumer prices, which exclude food and energy. Since the broad-based UIG is advancing 100 basis points above CPI, it indicates that asset prices are large, persistent and reflect too easy monetary policy.

…click on the above link to read the rest of the article…

The Zealous Pursuit of State-Sponsored Collapse

When Bakers Go Fishing

Government intervention into a nation’s economy is as foolish as attempting to control the sun’s rise and fall by law or force.  But that doesn’t mean governments don’t meddle each and every day with the best – and worst – of intentions.  The United States government is no exception.

From the “When the government helps the economy” collection: Breaking a few eggs while baking the bridge to nowhere omelet. [PT]

Over the years, layers and layers of interference by various federal, state, and local agencies have built up like grime on a kitchen window.  The grease shines and smells of something fierce.  The layers of government grime also drip and ooze into every crack and crevice of the economy.

These days, for example, it is impossible to carry out a simple private transaction with your barber or barista without some form of government interference.  Has your barber obtained the required license and paid the obligatory fees to be able to legally taper your neck line?  Has your barista’s espresso bean grinder passed city health inspection?

Is the hot Cup of Joe served in a paper cup of appropriate recycled material composition?  Did the hot beverage exceed the legally accepted temperature standard?  Did state and local governments receive their tax exaction upon payment?

The licensing racket – left panel: the basic definition of the racket; middle panel: how long it takes and what it costs to obtain licenses for assorted jobs in the US; right panel: the inexorable growth of rules and regulations. One shouldn’t be surprised that the pace of real economic growth has steadily declined since peaking in the late 19th century (or if one wants to focus on the modern era, since it peaked not too long after WW2).

…click on the above link to read the rest of the article…

U.S. ECONOMIC CRISIS AHEAD: Major Failure Of Analysts To Spot Danger

U.S. ECONOMIC CRISIS AHEAD: Major Failure Of Analysts To Spot Danger

The U.S. economy continues towards an epic crisis while the overwhelming majority of analysts are completely in the dark.  Even though some alternative media analysts understand that our highly leveraged fiat monetary system and markets will crash, they fail to understand the underlying reasons.  Thus, we are heading into a future we are not prepared because… the BLIND continues to lead the BLIND.

I don’t mean to be harsh on my fellow analysts, but the truth remains that the public is being misled due to the inability of market analysts unable to spot the real dangers.  So, we continue to move step-by-step closer to the edge of the cliff while “no one seems to notice or no one seems to care” (George Carlin-comedian).  I have to tell you; I miss ole George Carlin.  Yes, he had a filthy mouth, but the truth in his comedic material gave me hours of much-needed laughter.

To explain what I mean about the “Major failure of analysts to spot Danger,” I am going to provide two examples and some additional information.  It is crucial that the reader understand the FACTS and REAL DATA about our dire predicament and not become lost or confused in regards to lousy conspiracies or misinformation.

When I wrote the article, THE BLIND CONSPIRACY: The Gold Market Is Heading Towards A Big Fundamental Change; I thought for sure the individual and his analysis that I was calling into question would read the facts and data in my article and realize his error.  However, it seems as if it provided quite the opposite reaction.

Mr. Weir spent 50 minutes of his time putting together another video about the Massive Billion Ounces of Hidden Gold in the Grand Canyon:

…click on the above link to read the rest of the article…

The High Cost of Denying Class War

Visitors and volunteer at the Salvation ArmyMatt Cards/Getty Images

 

The High Cost of Denying Class War

The rise of populism on both sides of the Atlantic is being investigated psychoanalytically, culturally, anthropologically, aesthetically, and of course in terms of identity politics. The only angle left unexplored is the one that holds the key to understanding what is going on: the unceasing class war waged against the poor since the late 1970s.

ATHENS – The Anglosphere’s political atmosphere is thick with bourgeois outrage. In the United States, the so-called liberal establishment is convinced it was robbed by an insurgency of “deplorables” weaponized by Vladimir Putin’s hackers and Facebook’s sinister inner workings. In Britain, too, an incensed bourgeoisie are pinching themselves that support for leaving the European Union in favor of an inglorious isolation remains undented, despite a process that can only be described as a dog’s Brexit.

The range of analysis is staggering. The rise of militant parochialism on both sides of the Atlantic is being investigated from every angle imaginable: psychoanalytically, culturally, anthropologically, aesthetically, and of course in terms of identity politics. The only angle that is left largely unexplored is the one that holds the key to understanding what is going on: the unceasing class war unleashed upon the poor since the late 1970s.

In 2016, the year of both Brexit and Trump, two pieces of data, dutifully neglected by the shrewdest of establishment analysts, told the story. In the United States, more than half of American families did not qualify, according to Federal Reserve data, to take out a loan that would allow them to buy the cheapest car for sale (the Nissan Versa sedan, priced at $12,825). Meanwhile, in the United Kingdom, over 40% of families relied on either credit or food banks to feed themselves and cover basic needs.

…click on the above link to read the rest of the article…

If You Don’t Own Any Bitcoin, Read This

If You Don’t Own Any Bitcoin, Read This

This week it hit $19,000. What’s next?

Wow. Just….wow.

Bitcoin’s price has gone ‘beyond exponential’ this week. Just yesterday, as I started working on this article, it shot up 22% — from $14,000 to $17,000 (hitting an intraday high of over $19,000).

And that’s after a mind-blowing upwards rocket ride over the past several months.

I think it’s safe to say that the vicious melt-up in price over such a short timeframe has surpassed the expectations of even the starriest-eyed Bitcoin fanboys.

The whole world, especially the 99.99% of us that own zero cryptocurrency, is asking: What happens next? And, What should I do?

Is this insane trajectory going to continue for a lot longer? Do I need to get in now to avoid missing this once-in-lifetime fortune-making opportunity?

Or is this a classic bubble blow-off top? Is this the deadliest time to enter, right before the price implodes?

An Expert’s Take

I had the chance to ask these questions Wednesday to a long-time veteran in the digital currency space. We met at a gathering of online media ‘mavens’; this guy has published news and analysis on cryptocurrencies since 2011, for both investors and developers. He knows the space exceedingly well.

Unsurprisingly, he holds a lot of Bitcoin. I didn’t ask directly how much; but knowing that he was covering the space back when Bitcoin traded in the single-dollars range, my conservative mental math quickly concluded he’s probably worth more than most people I’ve met in my life.

So here what I learned during my chat with him:

  • He thinks the current price action is “nuts”: To his veteran eye, the current frenzy is a speculative mania and will end in a massive sell-off, resulting in huge losses for those buying in at these prices. He’s watched Bitcoin long enough to have seen it experience several 70%+ corrections. In his mind, this will simply be the latest one. And there will be more in the future, he predicts.

…click on the above link to read the rest of the article…

Stranger Things

     The hidden agenda in the so-called tax reform bill is to act as stop-gap quantitative easing to plug the “liquidity” hole that is opening up as the Federal Reserve (America’s central bank) makes a few gestures to winding down its balance sheet and “normalizing” interest rates. Thus, the aim of the tax bill is to prop up capital markets, and the apprehension of this lately is what keeps stocks making daily record highs. Okay, sorry, a lot to unpack there.

Primer: quantitative easing (QE) is a the Federal Reserve’s weasel phrase for its practice of just creating “money” out of thin air, which it uses to buy US Treasury bonds (and other stuff). The Fed buys this stuff through intermediary Too Big To Fail banks which allows them to cream off a cut and, theoretically, pump the “money” into the economy. This “money” is the “liquidity.” As it happens, most of that money ends up in the capital markets. Stocks go up and up and bond yields stay ultra low with bond prices ultra high. What remains on the balance sheets are a shit-load of IOUs.

The third round of QE was officially halted in 2014 in the USA. However, the world’s other main central banks acted in rotation — passing the baton of QE, like in a relay race — so that when the US slacked off, Japan, Britain, the European Central Bank, and the Bank of China, took over money-printing duties. And because money flies easily around the world via digital banking, a lot of that foreign money ended up in “sure-thing” US capital markets (as well as their own ). Mega-tons of “money” were created out of thin air around the world since the near-collapse of the system in 2008.

…click on the above link to read the rest of the article…

China Systemic Risk: HNA Group Denies Liquidity Problem, It’s Only “End-Of-The-Year Tightness”

China Systemic Risk: HNA Group Denies Liquidity Problem, It’s Only “End-Of-The-Year Tightness”

Every few days at the moment, it seems, we return to the subject of systemic risk in China related to its big four highly-indebted conglomerates, HNA, Anbang, Evergrande and Dalian Wanda.

Our main source of concern recently has been HNA, after it issued a bond with less than one year to maturity with the extortionately high coupon of 9%. This prompted us to ask whether China was experiencing the beginning of its Minsky moment? The reason for our continuing focus on HNA is its $28bn of short-term debt which matures before the end of next June, much of it accumulated during a binge of acquisition-driven growth which saw it become a major shareholder in Deutsche Bank, Hilton Worldwide and others.

Last week, as we discussed, S&P downgraded HNA’s credit rating by one notch from b+ to b, five levels below investment grade. in another sign that HNA is under pressure from the Chinese government and its creditors, CEO Adam Tan announced that it was ditching its acquisitive strategy, while considering the IPO of Gategroup, a company it only acquired last year for $1.5 billion.

We also noted how HNA businesses, even ones with supposedly good credit ratings, were stepping up fundraising moves in the domestic bond market at high coupon rates. For example, Hainan Airlines, the company’s core business, issued bonds at junk rates despite having “top ratings from local credit assessors”.

Although cancellations of bond offerings in China had reached their highest level since April, due to the rout in the domestic market, we remarked how HNA didn’t appear to have that “luxury”. While it may not have the luxury, it’s been forced into cancellations. On Wednesday, Hainan Airlines scrapped a 1 billion yuan ($151.2 million) of perpetual bonds to repay a maturing debt. This from Bloomberg.

…click on the above link to read the rest of the article…

Weekly Commentary: Q3 2017 Flow of Funds

Weekly Commentary: Q3 2017 Flow of Funds

In nominal dollars, Total U.S. System (Non-Financial, Financial and Foreign) borrowings expanded $1.007 TN during the third quarter to a record $68.012 TN. Total Non-Financial Debt (NFD) rose a nominal $732 billion during the quarter to a record $48.635 TN. It’s worth noting that NFD has expanded 46% since ending 2007 at $33.26 TN.

Total Non-Financial Debt expanded a seasonally-adjusted and annualized rate (SAAR) of $2.954 TN during Q3, the strongest Credit growth since Q4 2015. As has often been the case over the past nine years, Washington led the Credit expansion. Federal borrowings jumped to SAAR $1.656 TN, the strongest in seven quarters. Total Business borrowings expanded SAAR $751 billion, up from Q2’s $692 billion. Total Household debt growth slipped slightly q/q to $550 billion.

On a percentage basis, Non-Financial Debt expanded at a 6.2% rate during Q3, accelerating from Q2’s 3.8%, Q1’s 1.7% and Q4 2016’s 3.1%. Federal borrowings grew at a 10.3% pace, Total Business at 5.4% and Total Household debt expanded at 3.7%.

To the naked eye, percentage debt growth figures for the most part don’t appear alarming. But there’s several unusual factors to keep in mind. First, the outstanding stock of debt has grown so enormous that huge Credit expansions (such as Q3’s) don’t register as large percentage gains. Second, overall system debt growth continues to be restrained by historically low interest-rates and market yields. Debt simply is not being compounded as it would in a normal rate environment. And third, it’s a global Bubble and a large proportion of global Credit growth is occurring in China, Asia and the emerging markets. U.S. securities markets continue to a big target of international flows.

…click on the above link to read the rest of the article…

IMF Stress Tests Find $280 Billion Black Hole In Chinese Banks’ Capital

IMF Stress Tests Find $280 Billion Black Hole In Chinese Banks’ Capital

The IMF released a new analysis on the instability stability of the Chinese financial system. Speaking to the media in an online briefing, some of the insights from Ratna Sahay, deputy director of the IMF’s Monetary and Capital Markets Department, hardly advanced our knowledge much.

Sahay noted that “Risks are large. Having said that, the authorities are really aware of risks and they are working proactively to contain these risks.”

That’s why the authorities are finally racing to contain the worst excesses of China’s insane credit boom following October’s Party Congress, for example overhauling the $15 trillion shadow banking and asset management sector. As we noted on the latter, the new measures don’t take effect until the end of June 2019, no doubt reflecting the enormity of the problems uncovered by Chinese regulators.

Sahay pointed to three main risks: credit growth, the complex and opaque financial system and implicit guarantees which “encourage excessive risk-taking” (think WMPs).

However, the IMF does a better job in explaining why a massive financial crisis in China is all but inevitable – the conflicting needs of social stability versus financial stability. According to Reuters.

But the near-term prioritisation of social stability seems to depend on credit growth to sustain financing to firms even when they are non-viable, it said. “The apparent primary goals of preventing large falls in local jobs and reaching regional growth targets have conflicted with other policy objectives such as financial stability,” the report said. “Regulators should reinforce the primacy of financial stability over development objectives,” the fund said.

Too late.

…click on the above link to read the rest of the article…

The Fed’s QE-Unwind is Really Happening

The Fed’s QE-Unwind is Really Happening

Fed’s assets drop to lowest level in over three years.

The Fed’s balance sheet for the week ending December 6, released today, completes the second month of the QE-unwind. Total assets initially zigzagged within a tight range to end October where it started, at $4,456 billion. But in November, holdings drifted lower, and by December 6 were at $4,437 billion, the lowest since September 17, 2014:

“Balance sheet normalization?” Well, in baby steps. But the devil is in the details.

The Fed’s announced plan is to shrink the balance sheet by $10 billion a month in October, November, and December, then accelerate the pace every three months. By October 2018, the Fed would reduce its holdings by up to $50 billion a month (= $600 billion a year) and continue at that rate until it deems the level of its holdings “normal” – the new normal, whatever that may turn out to be.

Still, the decline so far, given the gargantuan size of the balance sheet, barely shows up:

The Fed is unloading its Treasuries alright.

As part of the $10-billion-a-month unwind from October through December, the Fed is supposed to unload $6 billion in Treasury securities a month plus $4 billion in mortgage-backed securities (MBS) a month.

The Fed doesn’t actually sell Treasury securities outright. Instead, it allows some of them, when they mature, to “roll off” the balance sheet without replacement. When the securities mature, the Treasury Department pays the holder the face value. But the Fed, instead of reinvesting the money in new Treasuries, destroys the money – the opposite process of QE, when the Fed created the money to buy securities.

This happens only on dates when Treasuries that the Fed holds mature, usually once or twice a month.

…click on the above link to read the rest of the article…

Pool of Funding the Heart of Economic Growth

Most experts are of the view that massive monetary pumping by the US central bank, the Fed, during the 2008 financial crisis saved the US and the World from another Great Depression.

If increases in money supply is an important catalyst for economic growth then the World poverty should have been eliminated a long time ago! Most countries have central banks that know how to print money – why then the World poverty still exists?

We suggest that at no stage increases in money supply can be an important driving factor of economic growth.

Some experts do not agree with this. Following the logic that monetary spending by one individual becomes an income of another individual and the spending of another individual becomes an income of the first individual, they hold that this raises the economy’s overall income and in turn overall economic growth.

Note that in this way of thinking, money stimulates consumer outlays, which in turn strengthens overall income and overall economic activity i.e. demand creates supply.

In this way of thinking what funds i.e. provides support to economic growth is the increase in money supply.

We suggest that individuals, which are engaged in the various stages of production, in order to support their lives and wellbeing, require an access to final consumer goods and not money as such.

At any point in time, there is a finite pool of final consumer goods. Hence, the early recipients of a newly created money are going to benefit from the increase in money supply at the expense of the late recipients or no recipients at all of the newly created money.

…click on the above link to read the rest of the article…

Warning: ‘They Need The Markets To Implode’ To Usher In Cashless System

Warning: ‘They Need The Markets To Implode’ To Usher In Cashless System

stockmarketcrash

Market analyst Lynette Zang predicts in the next market meltdown, “real estate, stocks, and bonds will all crash.” When asked when this will happen, Zang says, “Enjoy your Christmas,” but in 2018, all bets are off.

Greg Hunter interviewed Lynette Zang, Chief Market Strategist at ITMtrading.com, and her assessment of the 2018 economy is dire.  Zang predicts, “In 2018, I don’t think they can hold these things together. I think we will see a major market correction in 2018. When that happens, that will cause the derivative implosion. We have to feel a lot of pain. . . . I think we are going to go into hyperinflation, and I think we will start to see that in 2018 because I think we will see these markets implode. I think we will see QE4 (money printing) for sure. . . . We have QE right now propping it up, according to the Fed’s own documents.”

Zang says ever since the 2008 meltdown, the elite have just been buying time to set up a debt reset.

“I am 100% certain we are in the middle of a money standard shift.  Ultimately, they need the markets to implode. . . . In 2008, the debt based system broke.  It died, it was done.  The central banks, globally, put it on life support, and they have to create a new system.  In my opinion, they want us cashless, and they want everything in digital form.  They want to dematerialize wealth at least for the masses.  I am 100% certain that this Bitcoin craze, and all of this, is about getting people used to digital currencies.  So, when they shift us from the debt based system to the digital system, we are more comfortable with it and more familiar with it.”

…click on the above link to read the rest of the article…

Propaganda, Confrontation and Profit

Propaganda, Confrontation and Profit

Propaganda, Confrontation and Profit

The waves, the artificial tides of anti-Russian propaganda continue to beat upon the ears and eyes of Western citizens, spurred by Washington politicians and bureaucrats whose motives vary from deviously duplicitous to blatantly commercial. It is no coincidence that there has been vastly increased expenditure on US weaponry by Eastern European countries.

Complementing the weapons’ build-up, which is so sustaining and lucrative for the US industrial-military complex, the naval, air and ground forces of the US-NATO military alliance continue operations ever closer to Russia’s borders.

Shares and dividends in US arms manufacturing companies have rocketed, in a most satisfactory spinoff from Washington’s policy of global confrontation, and the Congressional Research Service (CRS) records that “arms sales are recognized widely as an important instrument of state power. States have many incentives to export arms. These include enhancing the security of allies or partners; constraining the behaviour of adversaries; using the prospect of arms transfers as leverage on governments’ internal or external behaviour; and creating the economics of scale necessary to support a domestic arms industry.”

The CRS notes that arms deals “are often a key component in Congress’s approach to advancing US foreign policy objectives,” which is especially notable around the Baltic and throughout the Middle East, where US wars have created a bonanza for US weapons makers — and for the politicians whom the manufacturers reward so generously for their support. (Additionally, in 2017 arms manufacturers spent $93,937,493 on lobbying Congress.)

Some countries, however, do not wish to purchase US weaponry, and they are automatically categorised as being influenced by Russia, which is blamed for all that has gone wrong in America over the past couple of years. This classification is especially notable in the Central Asian Republics.

…click on the above link to read the rest of the article…

Olduvai II: Exodus
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Olduvai
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Olduvai II: Exodus
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Olduvai III: Cataclysm
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