Author Topic: Money, the Fed, Banking, Monetary Policy, Dollar, bitcoin, crypto, Gold/Silver  (Read 362695 times)

Crafty_Dog

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From YA:

https://www.cnbc.com/amp/2021/06/05/el-salvador-becomes-the-first-country-to-adopt-bitcoin-as-legal-tender-.html

El Salv. is considered a banana country...but still

KEY POINTS
El Salvador President Nayib Bukele plans to introduce legislation that will make it the world's first sovereign nation to adopt bitcoin as legal tender.
Bukele broadcast his intentions on a video at the Bitcoin 2021 conference in Miami.
Bukele said the country is partnering with digital wallet company, Strike, to build modern financial infrastructure using bitcoin technology.

Crafty_Dog

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Scott Grannis against BTC
« Reply #1451 on: June 06, 2021, 08:45:36 PM »
Bitcoin has so many potential pitfalls (hard forks, many hundreds of competing crypto currencies, wildly unstable bitcoin/dollar exchange rate, huge potential for loss—think forgotten codes to $billions!—and the ginormous cost of mining and processing). Not to mention the fact that the US government is already mandating the reporting of all bitcoin-dollar transactions that occur at bitcoin exchanges, which in turn removes one of the key attractions (anonymity) of using bitcoin. I think it will take many, many years before it could—maybe—garner a meaningful percentage of global transaction volume. Between now and then what will be its eventual (stable?) price?

-Scott Grannis

YA:  I thought you had a good response to this, chart and all.  May I ask you to post it here?
« Last Edit: June 06, 2021, 08:48:04 PM by Crafty_Dog »

ccp

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trump on bitcoin
« Reply #1452 on: June 07, 2021, 05:33:14 PM »


Crafty_Dog

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ccp

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ya

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Re: Scott Grannis against BTC
« Reply #1456 on: June 08, 2021, 08:37:06 PM »
Bitcoin has so many potential pitfalls (hard forks, many hundreds of competing crypto currencies, wildly unstable bitcoin/dollar exchange rate, huge potential for loss—think forgotten codes to $billions!—and the ginormous cost of mining and processing). Not to mention the fact that the US government is already mandating the reporting of all bitcoin-dollar transactions that occur at bitcoin exchanges, which in turn removes one of the key attractions (anonymity) of using bitcoin. I think it will take many, many years before it could—maybe—garner a meaningful percentage of global transaction volume. Between now and then what will be its eventual (stable?) price?

-Scott Grannis

YA:  I thought you had a good response to this, chart and all.  May I ask you to post it here?
1. Hard forks: All of them are failed currencies (BCH, BSV). There is only one king.
2. Hundreds of competing currencies: Most are centralized scams, BTC is decentralized. No serious competition, BTC has13 yr history, tried and tested. Its like competing with Facebook, network effects rule.
3. Wildly unstable $ rate: Please remember 1 BTC=1BTC, but still see this list of corrections

ya

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BTC bill has been submitted  in El Salv Congress. The Prez has a majority so the bill will likely go through.



Crafty_Dog

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I could be wrong (not for the first or last time haha) but this seems to me to have huge implications:

Surely, the El Salvadorans did not write this.  Who did?  If I read correctly, there are some deep implications here-- for example Article 5 is an incredibly pithy and precise refutation of the coming US Govt push to treat BTC appreciation as a capital gain.

If I grasp correctly BTC is now the legal tender of a nation, a base of operations from which to take over the world?

ya

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BTC is now an official asset class, It will not be criminalized or banned.

https://www.bis.org/press/p210610.htm

ccp

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Group 2 cryptos
« Reply #1460 on: June 10, 2021, 05:28:55 AM »
Hi Ya,

thanks for post :

"Group 2 cryptoassets - are those, such as bitcoin, that do not fulfil the classification conditions. Since these pose additional and higher risks, they would be subject to a new conservative prudential treatment."

I do not know how to translate what this means into English.  :-o

treated more like stocks ?

Aslo googling BIS  it represents 63 national Central Banks

but I do not see the US federal reserve Central Banks on list:

https://www.bis.org/about/member_cb.htm
« Last Edit: June 10, 2021, 05:43:24 AM by ccp »

ccp

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2ND POST; MicroStrategy CEO on Bitcoin on Hannity
« Reply #1461 on: June 10, 2021, 05:56:50 AM »
for those who did not pick it up last night :

https://www.youtube.com/watch?v=HTsVHqoRfbQ


ya

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Re: Group 2 cryptos
« Reply #1463 on: June 10, 2021, 06:38:29 PM »
Hi Ya,

thanks for post :

"Group 2 cryptoassets - are those, such as bitcoin, that do not fulfil the classification conditions. Since these pose additional and higher risks, they would be subject to a new conservative prudential treatment."

I do not know how to translate what this means into English.  :-o

treated more like stocks ?

Aslo googling BIS  it represents 63 national Central Banks

but I do not see the US federal reserve Central Banks on list:

https://www.bis.org/about/member_cb.htm

I dont know a lot about BIS, except that its very important organization. Re:BTC they want banks who hold BTC to have fiat reserves in a 1:1 ratio. BIS thinks this ratio will discourage banks, but actually its great for BTC, as leverage will not be encouraged.

Crafty_Dog

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G M

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ccp

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".Is that Krugman is against it"

Love the point that Krugman stated the internet no more important to the economy than a fax machine.

Then thinks he is explaining the major stupidity away by saying he said that as a "thought experiment".

 :-D

G M

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".Is that Krugman is against it"

Love the point that Krugman stated the internet no more important to the economy than a fax machine.

Then thinks he is explaining the major stupidity away by saying he said that as a "thought experiment".

 :-D

He's the George Costanza of economics.

https://www.quotes.net/mquote/847510

ccp

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Bitcoin back up to near 40 K
on the news Krugman called it a waste !    :-D :-D :-D

thanks Paul

indeed you do have some utility as a 100% wrong contrarian


DougMacG

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Isn't that funny, the only thing we knew for sure was that Paul Krugman would be wrong.


Crafty_Dog

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WSJ must have read my comments on El Salvador
« Reply #1470 on: June 16, 2021, 04:41:35 AM »
Central banks around the world have been scrambling to co-opt digital currencies for their own purposes. El Salvador beat them all to the punch by passing a law that makes bitcoin legal tender for all debts public and private.

Through this law, El Salvador’s legislators essentially voted to begin the process of outsourcing the country’s monetary policy to a decentralized network of computers governed by a fixed set of rules. This is an important step toward a world where money is sound, not subject to the vagaries of politics.

Most proposed central-bank digital currencies would be tightly controlled by governments. These currencies would reinforce the status quo, not revolutionize monetary systems. That’s because the overwhelming majority of money in existence issued and controlled by central banks is already digital—only a small share of global money supply exists as paper money and coins. When most people talk about a digital coin issued by the Federal Reserve, they do not have in mind a rules-based, censorship-resistant money like bitcoin, but rather a mechanism for the Fed to control the money supply directly without private banks serving as intermediaries.

One huge concern about granting the Fed this much power is the distinct possibility of weaponizing the money supply. Certain parts of the country could be targeted with lower interest rates to spur economic growth selectively, creating opportunities for partisan conflict.



El Salvador, which doesn’t have its own currency, is avoiding this risk by making bitcoin legal tender alongside the U.S. dollar. The law provides that any economic actor technologically able to accept bitcoin is required to do so for payments of goods and services. It also permits bitcoin to be used to pay taxes and exempts bitcoin transactions themselves from capital-gains taxation.


To deal with bitcoin’s wild price fluctuations, the legislation establishes a free-floating exchange rate determined by the market. If someone immediately transfers his bitcoins to dollars when he receives them, then it shouldn’t matter how volatile the exchange rate is because he’ll always have the equivalent in dollars. Salvadorans are free to hold their savings in either currency; the legislation simply puts bitcoin on par with the U.S. dollar and doesn’t disadvantage the cryptocurrency with higher transaction costs.

There are distinct advantages to this dual-track system. In a recent National Bureau of Economic Research paper, David Yermack, Fahad Saleh and I use an economic model to show that the existence of private digital currencies not controlled by the state has important implications for countries in the emerging market. They discipline the government and encourage local investment. Throughout history, central banks have devalued their currencies or tried to maintain untenable exchange rates to the detriment of investors.

This isn’t the first step El Salvador has taken away from monetary uncertainty. In 2001 the country officially dollarized its economy. The colón was taken out of circulation and all prices, including taxes and wages, became denominated in U.S. dollars. Among other effects, this decision limited the discretion of the Central Reserve Bank of El Salvador to manage monetary policy, essentially outsourcing the function to the Fed.

El Salvador has the right idea here. In “The Denationalization of Money” (1976), F.A. Hayek questioned whether government control over the money supply was necessary and argued that competition in money had the same benefits as competition in goods and services. It disciplines economic actors and gives them incentives to serve consumers better—in this case by acting as a check on governments’ tendency to inflate and forcing innovation in payment systems.

Central banks want the benefits of digital currency, but they also want to control the system and not cede their monetary tools. This makes the concept of a central-bank digital currency inherently contradictory. Bitcoin was created to provide an alternative to a currency managed by the state.


Sound monetary policy isn’t a magic solution to a country’s every economic woe. El Salvador needs to embrace the rule of law, private property and limited government. But having faith in a sound currency is going to become more and more important as the inflationary costs of monetary stimulus become known.

Mr. Raskin is director of research at Qvidtvm Inc. and an adjunct professor at New York University School of Law.

Crafty_Dog

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ccp

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Chinese bitcoin miners kicked out
« Reply #1472 on: June 16, 2021, 08:17:47 AM »
https://www.cnbc.com/2021/06/15/chinas-bitcoin-miner-exodus-.html

(how do we know they are not all spies? -  We don't)

Crafty_Dog

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Anonymous, but not private
« Reply #1473 on: June 16, 2021, 11:38:41 AM »
WSJ:

How did the Justice Department recover $2.3 million of the ransom paid by Colonial Pipeline to a group of hackers known as DarkSide? Isn’t bitcoin, the cryptocurrency in which the payment was made, supposed to be untraceable? Actually, no. Bitcoin is anonymous, but it’s far from private—an important but often overlooked distinction. The Justice Department recovered more than $1 billion in bitcoin in various investigations during 2020 alone.

The blockchain—bitcoin’s historical ledger of all transactions—is publicly viewable at all times by anyone, so that there can’t be any under-the-table cash transactions. Software firms such as Chainalysis and Elliptic have supported federal investigators with a suite of analysis tools intended to help trace criminals and tax cheats, including those who try to obscure the bitcoin trail through dozens of successive transactions.

What complicates recovery is bitcoin’s anonymity. Senders and recipients are denoted by wallet addresses—a string of numbers and letters—rather than names or Social Security numbers. Other cryptocurrencies such as Monero, zCash and Haven are working on technologies that would offer both anonymity and privacy. But even then, users would face the “off-ramp” dilemma.

That arises when criminals need to spend their bitcoin or convert it into conventional currency. The final transaction deanonymizes the participant and usually triggers the jurisdiction of one or more government agencies. Thus, once criminals transfer their coins into an exchange wallet—even one that doesn’t adhere to the exchange’s Know Your Customer/Anti-Money-Laundering requirement—investigators have what they need to freeze and ultimately claim those assets. That’s likely what happened in the case of Colonial Pipeline.

Traditional currency poses problems of its own for investigators. Bank notes are untraceable unless authorities note the serial numbers in advance. Global banks amassed some $15 billion in fines in 2020 for tacitly enabling money laundering and other financial crimes. Bitcoin’s transparency may do more to mitigate fraud and theft than traditional banking and currency ever could.
Mr. Galston is managing partner of Starting Line, an early-stage venture-capital firm, and an investor in bitcoin among other cryptocurrencies.

ya

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The US $ and currency notes in particular is the currency of choice for illegal dealings. The smart crooks dont use BTC, after all its a public ledger. There are coin mixers available, which can make your original BTC untraceable but most dont use them.

ya

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Fascinating interview with Jack Mallers of Strike, 1 hr long but worth it. He got El salv do make the Bitcoin standard. Why BTC will be a world currency someday.

https://www.youtube.com/watch?v=yL6J56Jzvl0

DougMacG

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Fascinating interview with Jack Mallers of Strike, 1 hr long but worth it. He got El salv do make the Bitcoin standard. Why BTC will be a world currency someday.

https://www.youtube.com/watch?v=yL6J56Jzvl0

Wow, sharp kid (27 y.o.).  If you're interested in this topic, this is a must see.

There are some things I still don't understand, but this is amazing.  This widens economic freedom and inclusion right where it's been forever denied.  Disintermediation, cross border payments, disruptive innovation for all things financial.

It's great how he describes the fight for economic freedom as the fight for humanity.  I wish more could see that connection.

ccp

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China taking control back
« Reply #1477 on: June 21, 2021, 05:34:24 AM »
" China reiterated its crypto ban last month, citing dangers associated with speculative trading."

 :roll:

https://finance.yahoo.com/news/ether-drops-below-2k-bitcoin-090610954.html

ya

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China has banned BTC many times, I think if the choice is between the Chinese CBDC and BTC, BTC will win every time. However, this is a strategic blunder by China, as all the mining is moving to the US, where most of it is done with reusable energy. This is actually good for the space and for the USA. In the past there was a concern that most of the mining was located in China. Mayor of Miami wants to provide cheap nuclear energy to miners!.

Re: BTC, there is strong support at 30K, if it breaks that, might be a rare opportunity to buy more, cheaply. Last year the low was 3500, now its about 35,000 $, not bad.


Crafty_Dog

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Crafty_Dog

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China Clobbers Crypto

Bitcoin has lost more than half its value since April, due in large part to a move by Chinese authorities to regulate crypto markets:

The original cryptocurrency has lost more than 50% from its mid-April high of almost $65,000, leaving it up marginally for the year. That compares with a 12% gain for the S&P 500 since the end of December. The coin started 2021 trading around $29,000 following a fourfold increase in 2020.

Chart-watchers said Bitcoin, which failed to retake $40,000 last week, could have a tough time finding support in the $20,000 range following its drop below $30,000. Still, Bitcoin had prior to Tuesday breached $30,000 during at least five separate instances this year but recuperated to trade above that level each time.


Elsewhere:

Representatives from Industrial and Commercial Bank of China Ltd., Agricultural Bank of China Ltd. and payment service provider Alipay were reminded of rules that prohibit Chinese banks from engaging in crypto-related transactions, according to a statement from the central bank on Monday.

The latest development is a sign that China will do whatever it takes to close any loopholes left in crypto trading. In May, China’s State Council – the country’s cabinet – called for a renewed crackdown on Bitcoin mining and trading activities. . . . Crypto activities “disrupt financial order and also breed risks of criminal activities like illegal cross-border asset transfers and money laundering,” according to the statement from China’s central bank.

China has been more zealous in cracking down on crypto than many market watchers expected: While it started with a ban on Bitcoin mining, the regulatory push has expanded to include trading and holding of cryptocurrencies. Because an estimated 65 percent of global Bitcoin mining is done in China, this push has had a significant effect on the processing power devoted to Bitcoin, and therefore on the functioning of Bitcoin markets.

While China has hinted at regulation in the past without following through, it seems this time is different
===================
https://www.bloomberg.com/news/articles/2021-06-21/china-s-pboc-orders-alipay-banks-not-to-assist-crypto-business?sref=KgEBWdKh&utm_source=Sailthru&utm_medium=email&utm_campaign=CAPN_20210622&utm_term=Capital-Note-Smart

https://www.bloomberg.com/crypto

ya

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China has banned BTC many times, I think if the choice is between the Chinese CBDC and BTC, BTC will win every time. However, this is a strategic blunder by China, as all the mining is moving to the US, where most of it is done with reusable energy. This is actually good for the space and for the USA. In the past there was a concern that most of the mining was located in China. Mayor of Miami wants to provide cheap nuclear energy to miners!.

Re: BTC, there is strong support at 30K, if it breaks that, might be a rare opportunity to buy more, cheaply. Last year the low was 3500, now its about 35,000 $, not bad.

We may have seen the bottom...30-42K is the chop zone.