• Skip to primary navigation
  • Skip to main content
  • Skip to footer
  • Home
  • About Us
  • Contact Us

Blockchain Consultants

Blockchain Transformations Done Here

  • Pricing Page
  • Block Examples
  • Landing Page

debt

Earth needs Bitcoin as economy hits ‘debt saturation point’ — Keiser

September 22, 2020 by Blockchain Consultants

The world now has so much debt that, for the first time ever, it is impossible to add more, says Max Keiser.

On the latest edition of his Keiser Report TV show on Sep. 22, the RT host warned that central banks were responsible for global debt reaching a new “inflection point.”

Keiser on debt: “We’re at saturation point”

Together with co-host Stacy Herbert, Keiser referred to comments from Singapore’s central bank, the Monetary Authority of Singapore (MAS), which last week warned that copying economic recovery methods after World War Two would not work in 2020.

Central banks worldwide have intervened in markets, buying equities and other assets in a highly controversial move designed to limit the economic impact of Covid-19 and its lockdowns.

“First, it’s quite obvious that you can’t keep increasing your debts,” MAS chairman Tharman Shanmugaratnam said.

“But I don’t believe that the new higher levels of debt that many countries are now moving towards are going to be sustainable without imposing significant costs on growth as well as equity within their societies.”

The United States’ national debt alone has ballooned to $26.7 trillion this year, up $4 trillion since June 2019.

“There is no capacity for the Earth’s economy to carry any more debt; we’re at the saturation point,” Keiser summarized.

Regarding the consequences for increasingly indebted countries, he said that ordinary consumers would simply foot the bill from now on:

“Now, every dollar that these central banks print will go directly into consumer price index inflation — and you’ll see it at the cash register immediately, and that’s going to incredible social unrest[.]”

In the 1940s, states which had built up debts from combat were able to inflate them away. This time, Herbert said, there were so many insignificant gig economy jobs that wages would not follow price rises, leading to the kind of gap between the elite and the rest of society that Keiser has termed “neo-feudalism.”

Federal Reserve balance sheet 10-year chart. Source: Federal Reserve

Federal Reserve balance sheet 10-year chart. Source: Federal Reserve

MicroStrategy and Bitcoin low-time-preference business

Keiser has long championed Bitcoin (BTC) as an escape route from the knock-on effects of fiat inflation.

With its fixed, unalterable emission and decentralized network, Bitcoin represents the antithesis of centrally-controlled money. 

BTC/USD has shown to rise in step with central banks’ inflating balance sheets, but remains susceptible to U.S. dollar performance, Cointelegraph reported.

“Bitcoin, like Gold, is inversely correlated to the USD — *not* the stock market,” Keiser pointed out on Sep 22. “Don’t be fooled by randomness.”

Beyond its technical prowess, Bitcoin also promotes so-called low-time-preference living — saving money, safe in the knowledge that its value will not be inflated away over time.

As Saifedean Ammous explains in his popular book, “The Bitcoin Standard,” this ultimately allows for better and quicker advancement of society in time than simply spending money as quickly as possible on as much as possible.

Keiser and Herbert noted that MicroStrategy’s decision to put over $400 million of cash reserves into Bitcoin was proof of the low-time-preference mindset encroaching on big business.

Earth needs Bitcoin as economy hits ‘debt saturation point’ — Keiser

Source

Filed Under: blockchain technology Tagged With: Bank, Banks, Better, Bitcoin, Bitcoin Price, Business, Central Bank, chairman, COVID-19, debt, decentralized, decentralized network, economy, equity, Federal Reserve, fiat, Fiat Money, gig economy, Go, gold, index, Jobs, Market, Markets, Max Keiser, money, other, Singapore, stock market, u.s., War, world, youtube

Trump Prohibits U.S. Purchases of Venezuelan Cryptocurrency

March 21, 2018 by Blockchain Consultants

  • President’s order bans Americans from buying Maduro’s Petro
  • Venezuela is under U.S. sanctions and debt-purchase ban

President Donald Trump banned U.S. purchases of a cryptocurrency the Venezuelan government is rolling out, as part of a campaign to pressure the government of President Nicolas Maduro.

Trump issued an order on Monday prohibiting U.S. citizens from engaging in transactions using the oil-backed currency, called the Petro. He authorized Treasury Secretary Steven Mnuchin to issue any necessary regulations to enforce his order.

Maduro created the currency to try to salvage his country’s failing economy, where inflation is estimated to spiral to 13,000 percent this year.

The ban complicates the Maduro government’s efforts to boost its foreign reserves through a digital token. Venezuela’s offering accepted transactions in U.S. dollars and euros, meaning that Venezuelan citizens are forbidden from participating given a ban on buying foreign currency.

“It’s a pretty big blow,” said Russ Dallen, the managing director at Caracas Capital. “Since most cryptocurrencies are not actually backed by anything real, cryptocurrency speculation is based on the greater fool theory — I can buy this at $100 because there is someone who is a bigger idiot who is going to buy it at $200. When you take the U.S. out of that equation, you reduce the interest and potential for that speculation.”

New Sanctions

Mnuchin met with other finance ministers on Monday at the G20 conference in Buenos Aires to discuss the situation in Venezuela. His department also announced sanctions on four more current and former Venezuela government officials, according to a statement posted on Treasury’s website.

The sanctioned officials are Willian Antonio Contreras, the vice minister of internal commerce; Nelson Reinaldo Lepaje Salazar, who is acting as head of the office of the national treasury, according to the U.S.; Americo Alex Mata Garcia, an alternate director on the board of the National Bank of Housing and Habitat; and Carlos Alberto Rotondaro Cova, the former president of the board of directors of the Venezuela Institute of Social Security.

“President Maduro decimated the Venezuelan economy and spurred a humanitarian crisis. Instead of correcting course to avoid further catastrophe, the Maduro regime is attempting to circumvent sanctions through the Petro digital currency – a ploy that Venezuela’s democratically-elected National Assembly has denounced and Treasury has cautioned U.S. persons to avoid,” Mnuchin said in a statement.

In his meeting with his international counterparts, Mnuchin said, “we discussed how to achieve our shared objectives of restoring Venezuelan democracy, combating the kleptocracy of the Maduro regime, and responding to the humanitarian crisis caused by Maduro’s economic policy.”

For more on cryptocurrencies, check out the podcast:

A press official for Venezuela’s Information Ministry declined to comment

Pence Speech

In August, the Trump administration barred the trading of new debt issued by Venezuela’s government and state-owned oil company in U.S. markets amid deteriorating humanitarian conditions in the oil-rich nation. The U.S. government has been weighing sanctions on Venezuela’s all-important oil sector before the nation’s presidential election on May 20. That would be a potentially crippling blow to the Maduro government, which depends almost exclusively on crude sales to sustain what’s left of the economy.

The Treasury Department warned investors in January to steer clear of the digital currency, calling it “another attempt to prop up the Maduro regime, while further looting the resources of the Venezuelan people.”

Vice President Mike Pence will pressure Maduro’s government in a speech Wednesday to a session of the Organization of American States, his office said.

“The Vice President will call on all members to increase pressure on the Maduro regime to restore the country’s democracy and address the humanitarian crisis unfolding in Venezuela,” Pence’s spokeswoman, Alyssa Farah, said Monday in a statement.

Trump plans to attend the Summit of the Americas in Lima next month, where his administration is likely to highlight its efforts to isolate the Venezuelan government.

Read more: http://www.bloomberg.com/news/articles/2018-03-19/trump-prohibits-u-s-purchases-of-venezuelan-cryptocurrency

Filed Under: cryptocurrency Tagged With: AMERICO, Buenos Aires, Business, Cryptocurrencies, cryptocurrency, Currency, debt, Economic Policy, G-20, Generic 1st 'CL' Future, Markets, politics, Social Security, Technology, Venezuela

From Bitcoin to Belize, Here Are Best and Worst Assets of 2017

December 31, 2017 by Blockchain Consultants

It was a great year to hold bitcoin, but a bad time to have been invested in the Uzbek soum.

As 2017 winds to a close, a look at the winners and losers around the globe shows that, broadly speaking, the riskiest assets performed well, with bullish sentiment on display in stocks, emerging-market sovereigns and corporate debt. Securities generally seen as the safest and least volatile bets — think Japanese government bonds — trailed behind.

There was perhaps no investing idea that attracted more attention in 2017 than cryptocurrencies, from Jamie Dimon’s dismissal to Katy Perry quizzing Warren Buffett about the subject. Bitcoin soared almost 1,500 percent while smaller counterparts such as ethereum and litecoin gained at least 6,000 percent. Of course, the surges were accompanied by no shortage of pessimists calling a bubble.

Here’s our wrap-up of the best and worst performers in various asset classes over the past year:

Equities

Bulls in Ukraine had a good year after the International Monetary Fund said in May that it sees “welcome signs of recovery” for the economy and “a promising basis for further growth.” It was part of a broader rally in emerging markets as investors flocked to developing nations in hopes of higher returns.

It wasn’t a good year, however, to have bet on stocks in Qatar and Pakistan. The Persian Gulf country was thrown into chaos mid-year when Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport ties. In Pakistan, the index was coming from a high base, but also suffered from foreigners pulling money out of the market. (NOTE: We excluded the Venezuelan stock exchanges 3,865 percent gain this year because it’s almost entirely due to the effect of a rapidly devaluing currency.)

Best and Worst Performing Equity Indices

Since the start of 2017

*As of 12/26/2017

Bonds

The three-decade bull run for fixed income rolled on in 2017, defying yet again predictions that faster inflation and tighter monetary policy would bring it to an end. The bond world’s best performers were yesteryear’s losers, with Greece and Argentina among the standouts.

It took effort to lose money on bonds this year — the Japanese central bank’s stitch-up of its government-debt market, and Venezuela’s economic collapse made those two the worst performers in the developed and emerging categories, respectively.

Developed Market Government Bonds in 2017

Year-to-date performance

Source: Bloomberg, based on bonds in ICE BofAML Developed Markets Sovereign Index

Total return YTD as of 12/21/2017

Tiny Belize earned top marks in the emerging government-debt category after an upgrade from Moody’s Investors Service in April.

Emerging Market Government Bonds in 2017

Year-to-date performance

Source: Bloomberg, based on corporate bonds in Bloomberg Barclays EM USD Aggregate Total Return Index

Total return YTD as of 12/21/2017, excludes defaulted and called bonds

Turning to the corporate-debt world, U.S. high-yield securities saw a wide dispersion of results, from high-flying food-and-beverage, retail and transport companies to trauma for holders of bonds sold by commercial printer Cenveo Corp.

U.S. High-Yield Corporate Bonds in 2017

Year-to-date performance

Source: Bloomberg, based on industrial bonds in Bloomberg Barclays U.S. Corporate High Yield Total Return Index

Total return YTD as of 12/21/2017; excludes defaulted and called bonds

In the emerging-market corporate debt category, an Indonesian energy company topped the list, while securities tied to Brazilian construction giant Odebrecht SA — which is embroiled in a corruption scandal that stretches across South America — proved to be ones to avoid.

Emerging Market Corporate Bonds in 2017

Year-to-date performance

Source: Bloomberg, based on industrial bonds in Bloomberg Barclays EM USD Aggregate Total Return Index

Total return YTD as of 12/21/2017, excludes defaulted and called bonds

Commodities

Palladium, which is typically used in pollution-control devices for gasoline vehicles, led gains in precious metals this year by climbing more than 50 percent as investors bet on increased usage in vehicles. Copper and aluminum bulls also had a great year. Those gains were largely tied to better economic prospects across the globe, which would mean higher usage of industrial metals. 

On the down side, sugar and natural gas had a bad year. The sweetener has been falling on concerns of a global surplus, while natural gas recently hit a 10-month low following two warm winters that left stockpiles at high levels.

Best and Worst Commodities

Since the start of 2017

*As of 12/26/2017

Currencies

The biggest gainer in the currency space is a bit on the obscure side: the Mozambique new metical. The East African country has struggled to control inflation following a debt crisis, but the central bank has said it wants to achieve a lower and more stable rate.

On the down side, the Uzbek soum tumbled after the gold-rich republic removed the currency’s peg to the dollar.

Best and Worst Performing Currencies

Since the start of 2017

*As of 12/26/2017

    Read more: http://www.bloomberg.com/news/articles/2017-12-28/from-bitcoin-to-belize-here-are-best-and-worst-assets-of-2017

    Filed Under: cryptocurrency Tagged With: Belize, Bitcoin, Business, cryptocurrency, debt, Emerging Markets, Government Bonds, Investing, Jamie Dimon, Pakistan, Stocks, Technology

    This Is How You Can Short Bitcoin

    November 29, 2017 by Blockchain Consultants

    Bitcoin’s assault on $10,000 has stirred bears who see fresh evidence of a bubble. There are ways to bet on a crash, but they’re even riskier than trading the cryptocurrency on the way up.

    The options to short bitcoin are mostly through unregulated exchanges, and very risky given bitcoin’s volatility. Not to mention it hasn’t exactly been a good year for bitcoin bears given the 10-fold surge in price. But for those daring enough to try, there are ways to bet against bitcoin’s rise.

    “All the options to short in common markets are becoming available in the bitcoin market,” said Charles Hayter, co-founder of market tracker CryptoCompare. “There’s pretty good liquidity for shorting bitcoin. The main difference with shorting the Nasdaq for example, is it will be a lot more volatile, so there’s a lot more risk. The rate to borrow will also be a bit higher.”

    Contracts for Difference

    One of the most popular ways to short bitcoin is through CFDs, a derivative that mirrors the movements of the asset. It’s a contract between the client and the broker, where the buyer and seller of the CFD agree to settle any rise or drop in prices in cash on the contract date.

    Read more: Ken Griffin sees bitcoin ending in tears

    “CFD is currently a great market if you want to short bitcoin, especially ahead of that milestone 10K mark, which we think will bring some retracement,” said Naeem Aslam, a chief market analyst at TF Global Markets in London, which offers the contracts. “The break could push the price well above $10,100 and it would be in that area when we could see some retracement.”

    Margin Trading

    Another common way to short bitcoin is through margin trading, which allows investors to borrow the cryptocurrency from a broker to make the trade. The trade goes both ways; a trader can also increase their long or short position through leverage. Depending on the funds kept as collateral to pay back the debt, this option increases the already risky bitcoin trade. Bitfinex, one of the biggest cryptocurrency exchanges, requires initial equity of 30 percent of the position.

    Short-margin trading positions on Bitfinex were at around 19,188 bitcoins on Monday, versus 23,931 long positions, according to bfxdata.com, which tracks data on the bourse.

    Borrow to Short Bitcoin

    Most of the brokerages that allow margin trading will also let clients borrow bitcoin to short with no leverage. This will be a less risky way to bet bitcoin price will fall.

    Futures Contracts

    The futures market isn’t as widely developed as CFDs and margin trading, but it’s still possible to make bearish bets on bitcoin with options. For now, LedgerX is the only regulated exchange and clearing agent for cryptocurrency options in the U.S. The CME Group Inc. and the Chicago Board Options Exchange have both asked for approval to list bitcoin futures, so that may open up the market to more investors.

    Shorting Bitcoin ETNs

    Investors can also indirectly bet against bitcoin by shorting exchange traded notes with exposure to the cryptocurrency, like Stockholm-based Bitcoin Tracker One, and Grayscale Investments LLC’s Bitcoin Investment Trust. The risk is that these notes don’t always trade in line with bitcoin, so the exposure won’t be perfect.

    Read more on Swiss certificates used to short bitcoin

    Aslam at TF Global Markets said he’s not seeing an increase in demand to short bitcoin.

    “Right now as of this minute, the race is still to the upside,” he said.

      Read more: http://www.bloomberg.com/news/articles/2017-11-27/calling-a-bitcoin-top-here-s-how-you-can-short-the-digital-coin

      Filed Under: cryptocurrency Tagged With: Bitcoin, BITCOIN INVESTMENT TRUST, CME GROUP INC, cryptocurrency, debt, Europe, Fixed Income, GRAYSCALE INVESTMENTS LLC, Great Britain, London, Technology

      Bitcoin Surges Past $7,000 to Extend Record Rally

      November 3, 2017 by Blockchain Consultants

      Bitcoin surged past $7,000 for the first time, breaching another milestone less than one month after it tore through the $5,000 mark.

      The digital currency got new impetus this week after CME Group Inc., the world’s largest exchange owner, said it plans to introduce bitcoin futures by the end of the year, citing pent-up demand from clients. Skeptics including Themis Trading say the rally is evidence that the software-created asset is a bubble that should not be given regulatory cover.

      Spot pricing for bitcoin climbed as much as 12 percent to a record $7,392 before pulling back slightly to $7,025 at 8:53 a.m. in New York. The cryptocurrency is up almost sevenfold this year and is now worth more than $100 billion.

      “It is simply remarkable how resilient bitcoin has been in the face of significant negativity,” said Lukman Otunuga, a research analyst at ForexTime, in a Nov. 1 note to clients. “The price action suggests that bulls have a very firm grip.”

      In a blog post this week, Themis warned CME is “caving in” to pressure from clients and placing a seal of approval around a “very risky, unregulated instrument that has a history of fraud and manipulation.” The products planned by CME “remind us of the collateralized debt obligations which were peddled during the financial crisis,” the post said.

      Asked whether he’s concerned about a potential bubble, CME Chief Executive Officer Terry Duffy said on Bloomberg TV on Nov. 1 that the firm’s job is to “manage risk, not decide what the price of a product is.”

        Read more: http://www.bloomberg.com/news/articles/2017-11-02/bitcoin-surges-past-7-000-to-extend-record-rally-this-year

        Filed Under: cryptocurrency Tagged With: Americas, Bitcoin, Bonds, CME GROUP INC, cryptocurrency, Currency, debt, Markets, New York, Technology, United States

        SEC shows support for ICOs that are not obviously securities

        October 10, 2017 by Blockchain Consultants

        Gil PenchinaContributor

        Gil Penchina is a partner at IDG Ventures and Flight.vc.

        More posts by this contributor:

        • Let’s make Series A terms more logical by moving to object-oriented capital

        The SEC appears to have taken very thoughtful action on two crypto projects to date. Nay-sayers are predicting the end, while proponents of crypto dismiss the actions.

        Here’s a quick analysis of what is actually happening. The two recent steps by the SEC were:

        1. The SEC actually issued a letter on one project — the ill-fated DAO. This was a project that allowed investors in the token to pool their funds and invest in other crypto companies (including C Corps that were in the crypto space). This was a clear sale of securities under almost anyone’s definition, as the investors were to receive ownership in a variety of crypto startups.
        2. The SEC recently contacted Protostarr and as a result of the verbal inquiry, Protostarr decided to “shut down and return all funds.” What was Protostarr doing? They were securitizing the income stream of YouTubers and Twitch casters, by letting investors get a percentage of the future revenues of those stars.

        In both cases, even a non-lawyer can see that both were clearly securitization and under the SEC’s jurisdiction, as there were underlying assets in both cases. The DAO securitized equity, Protostarr securitized a future revenue stream much like a royalty on an artist.

        My takeaway is pretty clear:

         
        • Protocol-level tokens (Bitcoin, Ethereum, etc.) do not have any assets of any kind underlying them and remain far from the SEC’s current focus.
        • Apps that give you a credit for future usage (Filecoin, Civic, Gnosis, etc.) are in my opinion still effectively pre-paid gift cards like an Amazon gift card, and are not covered by the SEC. I have no proof of this but the analogy is amazingly sound.
        • Apps that “sell future income streams” now have two examples of SEC scrutiny, and I would expect more.

        The takeaway: Securitization of assets like LAToken (assets like art and real estate), Onegram (gold) and others will continue to receive SEC scrutiny and these sorts of innovations will move offshore (LAToken is offshore). This is entirely appropriate, given the SEC’s purview over sale of derivatives.

        What happens to the rest of the ICO market? It’s not clear yet, but the SEC is clearly focused on the “low-hanging fruit” by going after examples where they can obviously win and have a great case against a weak opponent.

        The DAO, for example, was already closed when the SEC issued their letter. And for Protostarr, both securities lawyers I know (J. Dax Hansen at Perkins Coie and Marco Santori at Cooley) would have told the Protostarr team that their idea was terrible in the first 5 minutes of an introductory call… just like they did when I first talked to them.

        Read more: https://techcrunch.com/2017/09/14/sec-shows-support-for-icos-that-are-not-obviously-securities/

        Filed Under: Blockchain Consultants Tagged With: Cryptocurrencies, debt, ethereum, ICO, initial coin offering, money, SEC, Securities and Exchange Commission, securitization, security, The DAO

        Footer

        Design Inspiration

        Get the latest on minimalism and white space. Simple as that.

        Copyright © 2021 · Revolution Pro on Genesis Framework · WordPress · Log in