Author Topic: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver  (Read 406605 times)

Crafty_Dog

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Different POV from Grannis
« Reply #2200 on: September 04, 2022, 03:36:11 PM »

ya

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Russia mulling pricing oil & gas in BTC
« Reply #2201 on: September 05, 2022, 04:26:24 PM »
For long Russia threatened that Ukr joining NATO would be a red line...Kamala harris said Ukr should join Nato, next day Russia invaded. Then Russia said, oil pipelines would be shut down, after 6 months Nordstream 1 is shut down. Now Russia is threatning to use cryptocurrencies (BTC) for oil payments (see below), this too will happen at some point. Once they start pricing oil in BTC, that could be the end of the petrodollar. Oil is currently indirectly priced in gold as the rouble is linked to the price of gold. Similarly, any trade in Yuan is freely convertable to gold at the Shanghai exchange (from what I read).

https://www.zerohedge.com/crypto/russia-legalize-use-cryptocurrency-international-trade-report
« Last Edit: September 05, 2022, 05:19:15 PM by Crafty_Dog »

G M

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2202 on: September 05, 2022, 05:11:17 PM »
For long Russia threatened that Ukr joining NATO would be a red line...Kamala harris said Ukr should join Nato, next day Russia invaded. Then Russia said, oil pipelines would be shut down, after 6 months Nordstream 1 is shut down. Now Russia is threatning to use cryptocurrencies (BTC) for oil payments (see below), this too will happen at some point. Once they start pricing oil in BTC, that could be the end of the petrodollar. Oil is currently indirectly priced in gold as the rouble is linked to the price of gold. Similarly, any trade in Yuan is freely convertable to gold at the Shanghai exchange (from what I read).

https://www.zerohedge.com/crypto/russia-legalize-use-cryptocurrency-international-trade-report

Weimerica, including our currency.


Crafty_Dog

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Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2205 on: September 06, 2022, 01:50:39 PM »
The article I cite uses trend lines to project for the future.

G M

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2206 on: September 06, 2022, 02:06:23 PM »
The article I cite uses trend lines to project for the future.

What is the pending collapse of europe going to do for those trend lines?

Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2207 on: September 06, 2022, 02:58:32 PM »
Drive prices down even further-- and inflation rate is the question presented in this moment, yes?   

G M

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2208 on: September 06, 2022, 03:11:07 PM »
Drive prices down even further-- and inflation rate is the question presented in this moment, yes?

Yes, however there are lots of complexities such as supply chain impacts that will impact prices.

G M

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2209 on: September 06, 2022, 03:47:44 PM »
Drive prices down even further-- and inflation rate is the question presented in this moment, yes?

Yes, however there are lots of complexities such as supply chain impacts that will impact prices.

A small anecdote, my wife just returned from Costco and note she observed three distinct groups there:

1. The well to do retirees shopping in part as something to do.

2. The middle class carefully shopping, looking for deals and carefully planning purchases.

3. The illegal aliens flush with EBT bennies and under the table employment loading up their carts with junk food.

Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2210 on: September 06, 2022, 07:13:41 PM »
I agree that the price of food and many things essential to daily life have gone up a lot-- well above the purported inflation rate.

Returning to a distinction made previously-- Not all price increases are inflation, some are , , , price increases e.g. due to contraction in supply, perhaps due to government triggered reductions in the supply of fertilizer.

Is it deflation that gasoline has gone down from its peak price?  $110 to 85? for oil?  Is it deflation that gold has gone from $2000 to the low 1700s?


G M

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2211 on: September 06, 2022, 07:16:39 PM »
I agree that the price of food and many things essential to daily life have gone up a lot-- well above the purported inflation rate.

Returning to a distinction made previously-- Not all price increases are inflation, some are , , , price increases e.g. due to contraction in supply, perhaps due to government triggered reductions in the supply of fertilizer.

Is it deflation that gasoline has gone down from its peak price?  $110 to 85? for oil?  Is it deflation that gold has gone from $2000 to the low 1700s?

Something to keep in mind, we are eating LAST YEAR's harvest.

Next year? Good luck.


Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2212 on: September 06, 2022, 07:46:46 PM »
As both our posts testify, on this we are in complete agreement AND it is unresponsive to the distinction between price increases (e.g. in food, due to shortages) and inflation (an overall increase due to increases in money supply).

G M

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2213 on: September 06, 2022, 08:04:54 PM »
As both our posts testify, on this we are in complete agreement AND it is unresponsive to the distinction between price increases (e.g. in food, due to shortages) and inflation (an overall increase due to increases in money supply).

Not easy to parse the impacts of various issues on the price of food or other items essential to survival, but I strongly suggest stocking up now.

Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2214 on: September 07, 2022, 03:00:59 AM »


And on that we are heartily agreed as well!!!

Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2215 on: September 08, 2022, 03:32:07 AM »
GM:

This is relevant to our conversation of yesterday:

https://mailchi.mp/3c4e38ce9a56/unleash-prosperity-hotline-867056?e=320eaee609

DougMacG

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2216 on: September 08, 2022, 08:42:45 AM »
GM:

This is relevant to our conversation of yesterday:

https://mailchi.mp/3c4e38ce9a56/unleash-prosperity-hotline-867056?e=320eaee609

Let's say that the money supply has stabilized.  How long until 6.5 trillion dollars if excess are absorbed into the economy as non inflationary, normal growth?

My guess looking at past patterns is 3-4 years.  What happens during that time?  For one thing, another 3/4% interest rate increase coming now.  A certain economic slowdown, looks like we are in month 9 of it.  Collapse in housing then cars and large purchases.  Continued energy squeeze and food / famine.  Business closures and layoffs and unemployment increases.  Protests and riots.  War - on two continents?  And civil war here.  All because of economic mismanagement, to put it mildly.

Anybody want to put more money in the market?  I think my money is going toward election security and voting these people out.

ya

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2217 on: September 09, 2022, 05:12:09 AM »
Yesterday WH released their crypto report. Many aspects of it are BTC friendly. People are realizing that it may be the greenest technology on earth, with the potential to save the climate (if you believe in that narrative). Once the environmental groups understand it. BTC will be heavily marketed. BTC is energy friendly for several reasons.

1. It can utilize flared CH4 (methane) and make money!, which is 80x worse than Co2. There are thousands of oil wells world wide flaring CH4.
2. It can use stranded energy, hydroenergy, geothermal energy, and is stabilizing the power grid in TX. At times of peak load, in TX they shut of the miners, and in low loads, they mine.
3. CH4 released from abandoned oil wells, as well as the thousands of land fills all release CH4. This can be monetized, while cleaning the environment.

https://twitter.com/Vespene_Energy/status/1567956516300537858/photo/1

In other parts of the report, they are more threatning (good luck with arresting the CEO of BTC)
https://pbs.twimg.com/media/FcI9FAJXoAAJqpj?format=png&name=900x900
« Last Edit: September 09, 2022, 05:17:29 AM by ya »

ya

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2218 on: September 09, 2022, 05:14:06 AM »
Looks like BTC is doing BTC things (going up suddenly). BTC goes up, when the US $ goes down. At some point the USD will go down again after its current strengthening phase and that is when BTC will rise.

Crafty_Dog

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WSJ: Changes in mining
« Reply #2219 on: September 12, 2022, 02:38:34 PM »
A Bad Year for Crypto Is a Really Bad One for Crypto Miners
Electricity bills are surging and the equipment isn’t worth what it used to be, which makes for a bleak outlook for companies that mine bitcoin and ether

Harvesting digital coins calls for powerful computers and prices are soaring for electricity to keep them running.
PHOTO: JAMES JACKMAN
By Caitlin OstroffFollow
 and Vicky Ge HuangFollow
Sept. 12, 2022 5:30 am ET

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Last year was harvest time for crypto miners. Now, they’re getting hit on all sides.

Crypto prices are plunging. Miners’ electricity bills are surging. Practically no one wants to buy their equipment.

It is a sharp turnaround from 2021, when crypto prices were soaring and many mining firms went on a mostly debt-funded buying spree of mining machines. But this year, crypto prices have been dropping and major crypto projects and companies have been wiped out. That has reduced the profits that miners can make from harvesting digital coins—and from selling their equipment in a pinch.

Meanwhile, prices for electricity—needed to keep the miners’ powerful computers running—are soaring. Russia’s war with Ukraine has hamstrung global energy supplies, while an extreme heat wave has bolstered energy demand from families that need to cool their homes.

Shares of crypto miners Marathon Digital Holdings Inc., Riot Blockchain Inc. and Core Scientific Inc. are all down 55% or more this year.

“I don’t think we are at the max pain yet in mining,” said Amanda Fabiano, head of mining at Galaxy Digital.

Bitcoin miners set up and run the powerful computers that process bitcoin transactions. Those computers generate random numbers in hopes of finding the right combination to unlock formulas; the first to do so are rewarded with newly created bitcoins.

This makes it most profitable to mine bitcoin when the cryptocurrency’s value is rising. Near bitcoin’s 2021 peak, miners earned more than $60 million a day, according to data from Blockchain.com. Now, that number is around $19 million a day.

Last year bitcoin’s value surged to nearly $70,000. This year the Federal Reserve started raising interest rates, scaring many investors away from assets like crypto. Last week bitcoin traded around $19,000. What is more, many once-highflying crypto lenders have buckled, leaving mining companies with few places for funding.

Crypto enthusiasts used to routinely mine bitcoin with one machine at home. Now, bitcoin mining companies run banks of high-powered—and noisy—computers to get the job done.

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When bitcoin’s value soared last year, bitcoin-mining machines became a hot commodity. The rush to load up on mining rigs then was akin to “buying spades in the middle of the gold rush,” said Andy Long, chief executive of bitcoin miner White Rock Management.

Prices for the most-efficient tier of bitcoin miners are now one-third of their cost in December, according to Luxor Technology Corp., a bitcoin mining data analytics firm.

The steep decline has especially grave repercussions for the miners that borrowed funds to finance their equipment purchases last year. As bitcoin’s price tumbled, these miners were forced to sell some of their mining rigs and bitcoin holdings to avoid running out of cash. But few people want to buy the machines on the secondary market, driving the price of mining machines even lower.

Some analysts worry that more forced selling of bitcoin could lie ahead, particularly as miners also struggle with energy-price shocks.

Average power prices for the largest users in Texas had climbed to 7.52 cents per kilowatt-hour in June, up 41% from the same month last year, according to government data. Their German equivalent was at €525 a megawatt hour this month, roughly equivalent to the same number in dollars and up almost 140% from last December. A White House report last week warned that crypto miners could strain the Texas power grid.

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Two Georgia facilities used by bitcoin-mining company Compass Mining LLC recently had to close after their local utility providers increased electricity prices by 50%. Northern Data, a Frankfurt-based mining company, and other bitcoin miners said they were running mining machines only in the hours when power grids have less demand.

Publicly traded miners were forced to unload about 240,000 bitcoin at fire sale prices in May and June, according to Arcane Research, though the pressure has eased since then.

The U.S. quickly became the world leader in bitcoin mining after China cracked down on crypto last year. WSJ’s Shelby Holliday takes a look at what the global shift has meant for the bitcoin network, the energy industry and the environment. Photo: Mark Felix/Agence France-

Currently, crypto platform Ethereum uses a model similar to bitcoin, rewarding the fastest miners with new tokens. A software upgrade known as “the Merge” will change that. After the update, planned for this month, the Ethereum network will no longer require miners and their machines.

Already, there is less money to be made. Ether miners are averaging about $20 million in revenue a day, down from $50 million in 2021, according to crypto research firm CoinMetrics.

Ether miners will be able to migrate to platforms that still require miners, though those might not be as lucrative.

If ether miners decide to stop mining altogether, they can sell their machines to gaming or machine-learning companies, said Kyle Waters, a research analyst at CoinMetrics. That is because most ether mining machines have features that allow them to be repurposed, he said.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Vicky Ge Huang at vicky.huang@wsj.com

Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2220 on: September 13, 2022, 03:03:01 PM »
https://mailchi.mp/c72ce8f1b937/unleash-prosperity-hotline-867072?e=320eaee609

Once again BTC moves down hard on bad inflation news.

I do not understand.

ya

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2221 on: September 15, 2022, 04:58:13 AM »

ccp

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set up for Joe?
« Reply #2222 on: September 15, 2022, 05:48:13 AM »
https://www.washingtontimes.com/news/2022/sep/15/joe-biden-tentative-railway-labor-deal-reached-ave/

yesterday I was thinking this would happen
it would make it appear Joe steps in and single handedly used his negotiating prowess to avert a strike.

of course he will read his lines in front of the cameras
and Anderson Cooper will with that notorious straight face have guests on who tell us
"thank God for Joe"

my theory:

in the small print on page 4,274 is the promise of a Federal guarantee by tax payers for the railroad if they give in to workers



Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2223 on: September 15, 2022, 08:26:46 AM »
Silver is now below $20 and Gold is now below $1700.  Both of them moving down during the rising inflation of the past year is not what I would expect to see.

DougMacG

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2224 on: September 15, 2022, 09:22:25 AM »
Silver is now below $20 and Gold is now below $1700.  Both of them moving down during the rising inflation of the past year is not what I would expect to see.

Yes, and previously, Bitcoin has not held up as the new gold - hedge against inflation. 

Also I would add real estate is not poised to hold up against new inflation, because it is overpriced already and
the interest rate hikes (in reaction to high inflation) and resulting economic decline and real wage decreases are bound to bring it down.

We are screwed.

This gets solved only at the ballot box.  Vote out these people and these policies.  Or if a fair and free election cannot be held, then only a more aggressive approach that cannot be mentioned on open internet is left.

Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2225 on: September 16, 2022, 04:59:45 AM »
Just had a Captain Obvious moment.

Gold crashed in the late '70s from $800 when Volcker raised interest rates. 

Same dynamic here?

ccp

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yield curve inverted most in 40 yrs
« Reply #2226 on: September 16, 2022, 10:54:47 AM »
https://finance.yahoo.com/news/us-yield-curve-set-invert-053806103.html

Grannis always said to watch this

so how is he going to twist the argument that things are really ok as he always does?

Crafty_Dog

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Stratfor on ETH and The Merge
« Reply #2227 on: September 16, 2022, 05:55:34 PM »
Ethereum's Launch of 'The Merge' Hopes to Add Sustainability to Blockchain
4 MIN READSep 15, 2022 | 18:01 GMT





An ethereum mining rig is on display at the Thailand Crypto Expo 2022 on May 14, 2022, in Bangkok, Thailand.
An ethereum mining rig is on display at the Thailand Crypto Expo 2022 on May 14, 2022, in Bangkok, Thailand.

(Photo by Lauren DeCicca/Getty Images)

"The Merge" by the ethereum blockchain is the first major cryptocurrency to shift away from the computing- and energy-intensive "mining" process for data validation to one that is more sustainable. On Sept. 15, the ethereum blockchain finally merged with a different blockchain that shifts the currency's blockchain validation method away from a so-called proof-of-work to a proof-of-stake consensus algorithm for validation. In the more widespread proof-of-work method, computers essentially compete to be the first to solve complicated mathematical equations to "validate" a new block in a blockchain and earn cryptocurrency to do so. For extremely popular cryptocurrencies like ethereum and bitcoin — which respectively have about $200 billion and $400 billion of currency in circulation based on current prices — this has led to an arms race among blockchain miners to use more processing power — and more energy — to more frequently win the race to solve those equations. The high power consumption of the proof-of-work model has led to concerns about the carbon footprint and scalability of cryptocurrencies, as the bitcoin blockchain alone uses an estimated 150 terawatt hours of electricity annually — equivalent to the annual energy consumption of Argentina, one of the world's Group of Twenty leading economies.

Blockchain validation graphic

Proof-of-stake algorithms promise to dramatically reduce power consumption and the energy footprint of the cryptocurrencies and distributed ledger technologies that use them. Ethereum's energy usage is expected to decline by around 99.9% because under a proof-of-stake model, there is no competition among miners to solve equations, nor is there an arms race to gain computer power. Instead, the algorithm chooses the "winner" based on a user's stake (i.e. the amount of the cryptocurrency the user has). In the case of the new ethereum algorithm, it randomly selects a user that has at least 32 ether (about $50,000) based on the overall amount of the currency the user holds to calculate the next block in the blockchain, and then the other validators (i.e. those with at least 32 ether) check the user's work to see if it is accurate. Once a certain number of other validators agree that the user's calculations are accurate, the original winner gains a transaction fee similar to what miners earn in other algorithms.

Proponents of the proof-of-stake algorithm point to its ability to scale up without environmental impacts and that the "stake" aspect improves security because those most heavily invested in the currency have an incentive to protect it, but opponents point out its untested nature and propensity to centralize power. Thus far, the security aspect of the proof-of-stake algorithm has not been tested on a widely-used cryptocurrency, as ethereum is the largest one to test it thus far. Proponents of the new algorithm point out that the only way to carry out a so-called 51% attack on the blockchain — that is, for a threat actor to control or collude with more than half of the validators to insert fraudulent transactions — would be by controlling more than half of the currency, which is exceedingly difficult given ethereum's $200 billion market capitalization. By contrast, in an attack on a proof-of-work algorithm, attackers would need only to control 51% of the processing power validating blocks. While this may seem large, just three mining pools (groups of users that work together and share bitcoins mined evenly) control more than 50% of the current hash rate for bitcoin mining. Finally, opponents of the proof-of-stake algorithm point out that the validation process rewards large users and that over time this will result in wealth concentration among those holding a lot of the currency, an argument that will be tested in the future.

ya

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Critique of Govt's failed update on climate and crypto
« Reply #2228 on: September 17, 2022, 06:58:52 AM »
« Last Edit: September 17, 2022, 07:44:25 AM by Crafty_Dog »

ya

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2229 on: September 17, 2022, 07:21:12 AM »
BTC hash rate keeps going up, price has been down. At some point this will correct.


ya

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2230 on: September 17, 2022, 08:38:08 AM »
Silver is now below $20 and Gold is now below $1700.  Both of them moving down during the rising inflation of the past year is not what I would expect to see.

Yes, and previously, Bitcoin has not held up as the new gold - hedge against inflation. 

Also I would add real estate is not poised to hold up against new inflation, because it is overpriced already and
the interest rate hikes (in reaction to high inflation) and resulting economic decline and real wage decreases are bound to bring it down.

We are screwed.

This gets solved only at the ballot box.  Vote out these people and these policies.  Or if a fair and free election cannot be held, then only a more aggressive approach that cannot be mentioned on open internet is left.

The current state of BTC suggests, its a hedge against  Fed QE, and not directly an inflation hedge. In the long run QE will continue and hence BTC will always go up. We have to wait for the USD to start coming down and QT to end.

ccp

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ether shift proof of work to proof of stake
« Reply #2231 on: September 17, 2022, 08:40:17 AM »
https://time.com/nextadvisor/investing/cryptocurrency/ethereum-merge-complete-what-investors-should-know/

seems to have been a sell on the news
but OTOH
everything is down

so timing bad
for the traders of which I am not
I do own ether

ccp

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The rich keep getting richer
« Reply #2232 on: September 17, 2022, 08:51:49 AM »
I am jealous:

https://www3.forbes.com/billionaires/forbes-worlds-billionaires-list-the-richest-in-2022-v3/2/

not long ago Bloomberg was in the 20 bill range
now "80 bill"


Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2233 on: September 17, 2022, 01:00:30 PM »
"We have to wait for the USD to start coming down"

What are the variables in play here?

ya

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Re: ether shift proof of work to proof of stake
« Reply #2234 on: September 17, 2022, 01:13:48 PM »
https://time.com/nextadvisor/investing/cryptocurrency/ethereum-merge-complete-what-investors-should-know/

seems to have been a sell on the news
but OTOH
everything is down

so timing bad
for the traders of which I am not
I do own ether

Ether is now a Proof of Stake coin...i.e. centralized coin. This means Vitalik Buterin can be called in for a congressional hearing...

Crafty_Dog

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WSJ: Cllimbing rates fuel stablecoin war
« Reply #2235 on: September 17, 2022, 01:40:11 PM »
Climbing Interest Rates Fuel Stablecoin War as Binance Makes Move on Rivals
World’s largest crypto exchange will automatically convert users’ deposits of rival stablecoins into its own Binance USD after its market value topped $20 billion

Stablecoins, including one issued by Binance, have surged in popularity in recent years.
PHOTO: DADO RUVIC/REUTERS
By Vicky Ge Huang and Caitlin Ostroff
Sept. 17, 2022 5:30 am ET


The battle for the stablecoin market is heating up as interest rates continue to rise and the largest players jostle for market share.

Binance, the world’s largest crypto exchange, said it would automatically convert users’ deposits of several rival stablecoins into its own stablecoin, Binance USD, starting this month. Analysts say Binance’s decision could escalate the rivalries among the largest stablecoin players, such as Tether and Circle, and generate additional revenue for Binance as the market cap of its stablecoin grows.

So-called stablecoins are cryptocurrencies pegged to government-issued currencies on a 1-to-1 ratio. Stablecoin issuers run a lucrative business by investing user deposits in cash and cash-equivalent assets like short-duration U.S. Treasurys. The more deposits a stablecoin issuer has to invest, the more interest income it earns.

Yields on Treasury bills have risen sharply this year as the Federal Reserve has increased interest rates to curb decades-high inflation. The yield on the one-month and three-month Treasury bills stood at 2.570% and 3.149%, respectively, on Friday.

“The game of stablecoins is essentially to grow your stablecoin market cap as large as possible so you can increase your revenue,” said Katie Talati, director of research at crypto asset manager Arca.

The popularity of stablecoins has surged over the past two years, accounting for about $143 billion in market value compared with $21 billion at the end of September 2020, according to data from the Block.

Circle Internet Financial Ltd., which issues the second-largest stablecoin, USD Coin, held $40.1 billion in short-term Treasurys as of Sept. 15, according to its website. The Boston-based company earned $28.5 million in interest income on USD Coin in 2021 and $100.4 million for the first six months of this year, according to a recent filing.

Circle estimated it could earn $438 million in total interest income this year and as much as $2.2 billion in 2023, it said in a financial outlook presentation in February. USD Coin has a market cap of $50 billion.

Tether Holdings Ltd., the company behind the largest stablecoin with a market value of $68 billion, held $29 billion in U.S. Treasury bills at the end of June, according to its latest attestation. Tether also charges a 0.1% redemption fee for a minimum withdrawal of $100,000.

“Stablecoin issuers cannot efficiently pass on the interest that they earn because that would be a security,” said Matthew Sigel, head of digital assets research at VanEck. “So as a result, the earnings power is quite high.”

The market cap of Binance’s stablecoin, Binance USD, already crossed $20 billion about a week ago, just three years after it launched. The auto-conversion could boost the market cap by another $908 million, given that the exchange holds 2%, or $898 million, of USD Coin’s supply and 1%, or $10 million, of Pax Dollar’s supply, Bank of America analysts Alkesh Shah and Andrew Moss wrote in a recent research note.

Over the long term, Binance’s decision could potentially help USD Coin increase its market share relative to tether, which is excluded from Binance’s newly unveiled change. On Binance, many tokens and derivative contracts are still quoted and collateralized in tether. Mr. Shah wrote that Binance users may be more likely to withdraw their Binance USD as USD Coin than tether “given the inconvenient inability to convert BUSD to USDT without executing a trade.”

Tether said Binance’s move could be “aimed at taking out USD Coin’s number two spot and replacing it with Binance’s own BUSD” stablecoin.


Jeremy Allaire, chief executive of Circle, said via Twitter that he thinks the move would likely benefit USD Coin because the usage of Binance USD is still limited outside the exchange. Indeed, 86%, or $17 billion, of Binance USD’s supply is held on Binance, indicating that the stablecoin isn’t regularly used throughout the crypto ecosystem and lacks utility, BofA’s Mr. Shah said.

“With consolidated dollar books, it will now be easier and more attractive to move USDC to and from Binance for trading core markets,” Mr. Allaire said.

Binance said the move would allow “greater trading liquidity and a better user experience.” Patrick Hillmann, chief communications officer of Binance, said Binance’s auto-conversion move provides a more frictionless trading experience and any shared revenue it earns from Binance USD is minimal.


On crypto exchange FTX, when customers deposit USD Coin, TrueUSD, Pax Dollar and Binance USD, the stablecoins are immediately treated as U.S. dollars in their account. In July, Coinbase unified its U.S. dollar and USD Coin order books, meaning that the exchange treats customer deposits of USD Coin as U.S. dollars.

But neither exchange dominates the crypto trading market quite like Binance, which accounted for 36% of the overall crypto trading market share as of Sept. 9, according to CryptoCompare.


Coinbase, which launched USD Coin with Circle in 2018, has a revenue-sharing agreement with Circle on the interest income earned from reserves backing USD Coin. JPMorgan analyst Ken Worthington said in a recent note that Coinbase could potentially earn $700 million of incremental revenue from its relationship with Circle in 2023 and 2024.

Despite carrying the Binance brand, Binance USD is issued by the company Paxos. The stablecoin is regulated by the New York Department of Financial Services, which requires stablecoins to be fully backed and readily redeemable. The reserves backing Binance USD are held by a bankruptcy-remote trust, which “offers greater consumer protections,” according to Rich Teo, co-founder and chief executive of Paxos Asia.

A spokeswoman for Paxos declined to comment on the details of the revenue-sharing agreement between Binance and Paxos.

Write to Vicky Ge Huang at vicky.huang@wsj.com and Caitlin Ostroff at caitlin.ostroff@wsj.co


Crafty_Dog

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Scott Grannis 9/16/22- also see 9/14 entry as well.
« Reply #2237 on: September 19, 2022, 09:50:19 AM »
Very much worth the reading:

https://scottgrannis.blogspot.com/

G M

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ya

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Why the math is stacked against J. Powel
« Reply #2239 on: September 20, 2022, 04:00:01 PM »
« Last Edit: September 20, 2022, 04:11:31 PM by Crafty_Dog »

ccp

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2240 on: September 20, 2022, 04:35:20 PM »
"Billion dollar orders being cancelled"'

 :-o :-o :-o

save cash for crash.....



G M

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2241 on: September 20, 2022, 09:40:49 PM »
If you don't having the guns, food and a safe place already, you are fucked.


"Billion dollar orders being cancelled"'

 :-o :-o :-o

save cash for crash.....

ccp

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economy sucks and as always no one held accountable
« Reply #2242 on: September 22, 2022, 08:23:39 AM »
for something that was preventable

I still can't get over how government officials seem never to be held accountable

how is this guy and yellen
still in their posts?

https://www.newsmax.com/finance/streettalk/federal-reserve-soft-landing-inflation/2022/09/22/id/1088592/

DougMacG

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Re: economy sucks and as always no one held accountable
« Reply #2243 on: September 22, 2022, 08:11:39 PM »
for something that was preventable

I still can't get over how government officials seem never to be held accountable

how is this guy and yellen
still in their posts?

https://www.newsmax.com/finance/streettalk/federal-reserve-soft-landing-inflation/2022/09/22/id/1088592/

"Powell's Stark Message: Inflation Fight May Cause Recession"

No. It does cause recession. 

Preventable?  Yes. Keep these jerks out of power.  Inflation is the policy. More money.  Fewer goods.  Inflation necessitates the Fed tightening and without other stimuli, ie supply side boost, downturn necessarily follows.  All of it is a feature, not a bug.  When he shut down the Keystone XL in his first hour, you knew downturn was coming.

Elect a Jack Kemp instead (Rubio, DeSantis, Pompeo).  Pro-growth policies are how you get, drum roll, growth. Anti growth policies bring you recession.  It's definitional, yet we keep acting surprised!

Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2244 on: September 23, 2022, 03:54:20 AM »
Yes, supply side!

I repeat my distinction that prices increases are not only a monetary phenomenon.  Less supply also creates price increases.   Applying monetary solutions to the latter is serious error.

DougMacG

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2245 on: September 23, 2022, 06:11:15 AM »
Right. Last time this was solved with a two pronged approach.  Today they refuse to revisit that history.

Even on liberal mainstream coverage it's obvious to see, Powell and the Fed want to tighten and squeeze until economic activity slows down while the Dems in the White House and Congress keep passing trillions and trillions more spending.

What level IQ can't see the contradiction?  Spenders make the tighteners have to tighten more and more and more until what?

Supply side, OTOH, eases barriers to produce, increases supply, eases the need to tighten money so far, and we survive this without collapse.  cf. 1983, 1984 .

It isn't rocket science, but it isn't taught in most schools or any economics books any of these fascist socialists have read.
« Last Edit: September 23, 2022, 06:15:52 AM by DougMacG »

ya

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ya

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2247 on: September 24, 2022, 11:00:46 AM »

Crafty_Dog

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Re: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver
« Reply #2248 on: September 24, 2022, 11:42:57 AM »
If we draw a line from the lows of 2019 and 2020 it looks like we are on it right now , , ,

G M

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It's a big club...
« Reply #2249 on: Today at 11:45:02 AM »