Economics

Economics
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Updated: 10 hours 3 min ago

Is Gold Stable Above $1,300 Per Ounce?

18-Jun-2017

Gold is currently trading at $1282.45 per ounce, down 0.61% on the day. Over the past 6 months, gold is now in the black, to the tune of 9.80% or $115.10 per ounce. Over the past 30-days, the precious metal has made surprising gains of 5.29% or $64.80. The recent performance of gold has a lot to do with the strength of the US dollar and rising geopolitical uncertainty. The US dollar index (DXY) measures the performance of the greenback against a basket of 6 currencies.

Performance Metrics: Gold Steadily Rising as USD Wanes

Over the past 5 days, the US dollar index is down 0.28%, and it is down 2.73% over the past 1 month. For the year to date, there is a strong correlation between the weakening of the USD and the strengthening of gold. The dollar has slipped 5.33% for the year to date, and this has been met by an increase in the gold price. Gold is a dollar-denominated asset. A weakening USD is an incentive for foreign buyers of gold to purchase the precious metal.

The price of bullion is closely correlated with the decisions taken by the Federal Reserve Bank. The Fed has hiked interest rates multiple times since the global financial crisis of 2009. An era of monetary tightening has gripped the US economy, as the Fed seeks to capitalize on strengthening fundamentals with unemployment at 4.3%, and inflation steadily rising towards the 2% benchmark. The Fed is expected to raise interest rates by 25-basis points on Wednesday, 14 June 2017. The current probability of a rate hike is now at 95.8%, up from 90.0% on 1 June 2017.

The Trifecta Stabilizes Gold Prices During Election Week

A Fed rate hike indicates increasing optimism about the state of the US economy. The 12-member FOMC is convening on 13/14 June to decide on the federal funds rate. The gold price has been steadily increasing towards the $1,295 handle and it is eyeing the $1,307 level as the next price objective. The volatility of financial markets has imperiled the USD, but been beneficial to the gold rally. Several events have worked in gold’s favour, notably the UK general election, James Comey’s testimony on Capitol Hill, and the ECB (European Central Bank) meeting on monetary policy with Mario Draghi. Anytime there is uncertainty in markets, the price of gold rises.

A leading Lionexo trading analyst, Hamish J. Wallace believes that the gold rally hinges squarely on the Fed, ‘Gold’s vulnerability is determined by the performance of the USD. We have a weaker USD that may reverse on a Fed decision. Short-term, the precious metal may rise about $1,295 per ounce. If bullion can break through the critical $1,295 barrier, we will likely see increased momentum.’ There are some concerns that gold may reverse, much as it did in April when it rallied towards $1,295 per ounce. This is precisely what happened with the precious metal on Wednesday 7, June. Commodities traders believe that a pullback to $1,280 is indicative of negative momentum for gold.

Traders have been waiting for gold to breach the $1,307 resistance level so that it can continue rising towards $1,350 per ounce. This sentiment is shared with traders who have heretofore held net long on gold, with ETFs (GLD), gold shares and new Gold IRA investments. For the week ending Friday 9 June, many investors started to unwind their positions on gold, with August and October futures contracts lower. The price of gold dropped marginally to $1285.10 per ounce in Singapore on Thursday, 8 June. Barring surprise results with Congressional testimony, the USD or Brexit negotiations, gold is likely to trading a subdued fashion moving forward.

STEEM – A blockchain-based social media rewards platform

18-Jun-2017

June saw the cryptocurrency market cap steer past $100 Billion with most of the cryptocurrencies enjoying an unusual surge. One such token, which was restored to its former glory during the same period was ‘STEEM.’ Post its launch, STEEM hit the $400 Million mark in market cap during July 2016. The price of STEEM tokens went quickly from $0.24 to $ 4.63 marking an 1800% rise in the value of the cryptocurrency. However, with no cap on the supply of STEEM in the long run, the price and the market cap of the digital token dropped to lower bounds of $200 Million.

Unlike other tokens which derive their value from their limited supply or intermediary burning, STEEM derives its value from its usage. Hence the drop was expected with the dilution of tokens. However, the cryptocurrency has picked up the pace in adoption and is currently competing with the Top-20 cryptocurrency projects. Let’s dive deep into how STEEM is all set to disrupt social media rewards platform and its modus operandi.

What is STEEM?

Steem is a blockchain-based social media platform where anyone can earn rewards. The social news service which runs blogging and social networking website on top of Steem blockchain is ‘Steeimit.’ The concept is similar to other blogging websites or social news websites like Reddit, but the text content is saved in a blockchain. Using a blockchain enables rewarding comments and posts with secure tokens of value (Steem).

Users can upvote posts and comments, and the authors who get upvoted can receive a monetary reward in the form of Steem tokens. People are also paid for curating popular content. Curating involves voting comments and post submissions. Hence it can be safely said that the performance of Steem tokens, in turn, depends on their utility and the adoption of Steemit platform.

How is STEEM profitable?

As pointed out earlier, Steem tokens don’t have the inbuilt feature of limiting the supply to derive value. However, the unlimited supply turns out to be profitable for the digital token class as it paves the way for better adoption. When users publish popular content on steemit, as measured by upvotes, they receive steem tokens. Other users react by sharing, upvoting, and commenting on the content.

Steem tokens reward this content creation and participation. Since there is no cap on the number of tokens, everyone gets paid irrespective of the value of tokens making it a useful social network. This factor improves adoption of the platform, thereby promoting the underlying digital asset.

One might think that in the long term since the supply is infinite, the Steem token cannot act as a store of value. However, there are guard rails to ensure that the value of Steem tokens doesn’t fall too low due to this inflationary supply model. Every 3.3 years, all the steem tokens available will be divided by 10, and their value will be multiplied by 10, thereby maintaining the market cap while making sure that the dilution won’t reduce the value. Hence the tokens are profitable with the nature of the network promoting better adoption.

Launch dynamics of STEEM and its performance

Launched as disruptive social media platform where users can generate revenue streams, STEEM was an instant hit in the crypto-community. The digital asset experienced an early hard fork in July 2016, post which the payouts drove the adoptions in quick time. The cryptocurrency hit $400 Million market cap in the same month, where the price of each token was trading above $4.

Currently (at the time of writing this post)the tokens are trading around $2 with the market cap soaring around the all-time highs of $500 Million. The token is traded on Poloneix, Bittrex, Livecoin, OpenLedger, alcurEX and HitBTC exchanges. On OpenLedger, the Steem trading pairs available encompass traditional fiat currencies like USD, EUR, etc. and also a host of tokens (OBITS, ICOO) in addition to Bitcoin and Ethereum.

Steem’s success as a digital currency will be more a reflection of Steemit’s success as a platform as opposed to the economics of the coin itself. This is an excellent example of a digital currency whose value will be closely affiliated to its utilitarian value as a social networking and sharing platform. Basing on the increasing usage statistics of Steemit and its brilliantly designed rewards platform, Steem’s value is sure to go up soon.

Disclosure: Deepak Bharadwaz, Crypto Data Analyst for BlockStreet.info, was paid for his cooperation in preparing this content. Deepak provides Bitcoin Technical Analysis & Trading Intelligence.

[KR1085] Keiser Report: Generational Gap & Cuba Policy

18-Jun-2017

We discuss the generational gap striking again: this time in the UK and what this gap means for politics and economics going forward. In the second half, Max interviews journalist and businessman, Vito Echevarria of Cuba Ventures Corp, about the latest in the US-Cuba relationship and how much of Obama’s progress is likely or not to be rolled back.

BitTeaser- The Decentralized Future of AD Tech

17-Jun-2017

The Advertising sector has now become the game changer for medium scale and established businesses alike. With most of the businesses having a strong online presence, the proportion of marketing expenditure on online advertising has gone up significantly. While 2015 saw an estimated $170.5 billion spent on online advertising globally, this number is projected to shoot up by almost 50%($252 billion) before 2018. The advertising industry is currently under the control of big players with absolutely no means for small and medium scale industries to make a profitable cut.

However, a blockchain powered, decentralized platform ‘ BitTeaser’ is here to tip the scales in the advertising industry. Let’s dive deep into how ‘BitTeaser’ and its blockchain powered tokens ‘BTSR’ will become the decentralized future of AD Tech.

What is BitTeaser?

BitTeaser is a fast-growing Blockchain Powered Smart Network that uses advanced technology to provide next-generation decentralized advertising services. BitTeaser is powered by a digital token with the abbreviation “BTSR.” The network infrastructure allows users to earn tokens by blogging, selling ads, and being an active community member. The system aims to be transparent and fair to its users.

The blockchain will display all of the click-throughs in real-time and can easily be tracked by the community. Previously, the ownership of BTSR would mean the availability of a monthly buyback option based on income generated from BitTeaser activities. Additionally, BTSR token owners could also generate revenue by trading the tokens on exchanges.

However, post-February 2017, BTSR became a digital token where all issued funds are made publicly available, and the value of the token is directly linked to the global demand for advertising. BTSR valuation is based on a combination of speculation and increasing demand for BTSR as a form of payment when the bill needs to be paid for programmatic advertising worldwide.

How is BTSR profitable?

More than a cryptocurrency token, BTSR represents the disrupting potential of blockchain technology in the advertising vertical. BTSR tokens utility as a form of payment coupled by the potentiality of the BitTeaser platform has led to a real price surge of the BTSR tokens in the recent times. The major advantages of BitTeaser are its flexibility and security. BitTeaser cooperates with any company, individual webmaster, or writers and anyone who wants a piece of the marketing pie. It is not just traditional ads network providing ads or affiliate programs that are to be displayed on websites to generate revenue streams. Writers can also submit articles to BitTeaser, get it published at their partnered sites and earn incomes from the displayed ads at writers’ articles. It helps in promoting businesses, or financing activities with donation options.

Launch dynamics of BTSR and its performance

BTSR was launched on 11th March 2016, and the first buyback took place on 2nd May 2016. The tokens are available on the OpenLedger platform backed by Danish OpenLedger ApS, registrar for the Decentralized Exchange (DEX). Users can deposit and withdraw bitcoins or many types of fiat currencies (including USD, EUR and 13 more) in exchange for BTSR. BTSR has been created to follow up the successful launch of the OBITS project which was introduced in November 2015. OBITS is considered the market maker and backbone of all future projects launched on OpenLedger. Currently, with 3,297,830 BTSR Tokens in circulation, the market cap of the tokens is nearing $700K. The buybacks scheduled for 3rd of every month and burning of the tokens had a significant impact on the BTSR value. On an average for every buyback and burning, the token value increased by a solid 12%, keeping the investors very interested in BitTeaser.

With better coverage and adoption of the BTSR tokens for payment, BitTeaser might turn out to be the much-needed game changer for the advertising industry that would make it accessible to the masses.

Disclosure: Deepak Bharadwaz, Crypto Data Analyst for BlockStreet.info, was paid for his cooperation in preparing this content. Deepak provides Bitcoin Technical Analysis & Trading Intelligence.

4 Fintech Trends to Watch in 2017

17-Jun-2017

Fintech, financial technology, is revolutionizing the world, affecting us all one smartphone at a time. Fintech, for those who aren’t familiar with the concept, is a combination of conventional financial services provided through apps and various other mediums, and brand new funding and banking alternatives such as crowdfunding platforms. Here are four fintech trends to watch in 2017 and their impact on the world.

In-App Purchasing

You can now pay for things through the Facebook marketplace via the Messenger app. It has been possible to pay for items through the WeChat app in China for ages. In-app purchasing is going to grow as more apps solicit items for sale through chat apps and apps try to directly sell things to people, whether extra lives in games or something the app developer is paid to promote.

Buying Behavior Is Changing

We’re already seeing more people buying through apps, such as ordering restaurant meals through apps. Apps even affect purchases not made through them. Customers are increasingly using apps as a way to research products whether they are standing in front of the store shelf or planning on hitting the store on the way home. Google’s studies say that four fifths of buyers use apps to check reviews before they buy a service and check product prices and reviews before they pick one off the shelf.

Financial Services? There’s an App for That

You can now apply for a mortgage, credit card and other financial services via apps instead of online websites. You can also buy insurance through a number of apps. Pay as you go auto insurance is at the forefront of this trend, allowing people to log in for commercial auto insurance as soon as they log into ride sharing apps and pick up passengers for pay. Cryptocurrency has moved from the dark web to the smartphone as a number of apps have arisen to let you buy and trade Bitcoin. The developing world is leapfrogging the developed world by adopting the smart phone and apps, letting them get information without having to install landlines or buy personal computers. And they are using apps to transfer money and make purchases to get around costly wire transfer services.

Many existing companies are playing catch up whether setting up apps to meet the demands of the unbanked and disconnected who get both internet connections and financial transfers via their new smartphones.

Gurbaksh Chahal, founder of the Chahal Foundation, sees these financial apps as a way to allow everyone at every economic level to donate to charity, check on relatives and transfer money for expenses even when mainstream institutions are shut down. He founded the Chahal Foundation with the main purpose of promoting tolerance for all religions. He also aims to eliminate child labor and promote female empowerment.

Internet Security

One of the longest lasting impacts of Bitcoin is not the use of digital currencies in place of national currencies, but the ultra-secure Blockchain that enables it. Many companies and consortia are developing end to end security via Blockchain. Whether to support digital contracts or utterly secure financial transfers, Blockchain is getting integrated into every aspect of fintech. The fact that it is both secure and fast could revolutionize bank transfers, allowing them to clear in seconds instead of days. Passwords and passcodes are being replaced by more individualized and difficult to fake security methods.

There are apps in China that verify your identity by asking you to take a picture of yourself saying a specific word or making a funny face, something more secure and harder to hijack than your password. Iris scans and facial recognition are rivaling your thumb print for personal authentication. Gurbaksh Chahal expects the application of big data to lead to new innovations in IT security beyond even these solutions.

Conclusion

In-app purchasing has moved from buying extra lives in Candy Crush to paying for items from other chat service users. Users use apps to make decisions, even when they are buying items in front of them. Financial services are being rolled out to the under-served via apps while new services like insurance and loan applications are being handled through apps by mainstream institutions. Internet security remains a major concern for fintech, though we’re already seeing the next generation in solutions.

OBITS – A Share of the future

16-Jun-2017

June has been the month where the cryptocurrency markets experienced an unusual surge with the cryptocurrency market cap exceeding $100 Billion for the first time. While Bitcoin and Ethereum, the apex digital assets led the surge, another digital asset that tripled in value during the time was OBITS. The rise in the price of OBITS started early in May where the digital asset touched $1 per OBITS before closing a tad shy of the high. Early June, the OBITS price rise was exponential, leading to a massive surge in the market cap of the cryptocurrency. While the trading value of OBITS is skyrocketing, what makes the digital asset even more valuable is what it does. Let’s delve deep into what makes OBITS so unique and in my opinion, promising.

What is OBITS?

Developed on the OpenLedger platform, the OBITS is a decentralized exchange (DEX) or decentralized financial platform. Holding OBITS entitles a person to become a part owner of the OpenLedger platform. OBITS owners have access to share in the profits incurred by the organization. Hence the token offers holders a share garnered from trading and referrals on the OpenLedger platform. Just like a real life business, shareholders will also be entitled to cast votes on critical decisions made by the issuer. Hence OBITS gains its value from a growing number of revenue streams hosted on decentralized exchange (DEX) OpenLedger. This way its volatility is under check as speculation which powers most of the cryptocurrency’s volatility has minimal impact on OBITS’ trading. CCEDK.com, the Danish registrar for OpenLedger, is continually adding more projects to the list, progressively increasing income, thereby influencing the price of the tokens.

How are OBITS profitable?

More than a cryptocurrency token, OBITS represents the possibility of the OpenLedger platform that has been breaking barriers in the cryptocurrency world. Dubbed as a “revolutionary fintech platform,” OpenLedger aims to offer the advantages of decentralization and control over balances with the speed and capacity of regular centralized exchanges. With high capacity and low latency suitable for the demands of modern-day trading, OpenLedger not only gives users the complete control over their balances that blockchain technology allows, but also the super-fast experience necessary for closing a profitable trade. Hence owning OBITS is similar to buying stakes in the exchange business where currency holders can earn from current and future revenue streams.

Also for amateurs and non-specialists who aren’t very aware of the volatility and risks in the cryptocurrency markets, OBITS is the best investment as the value of the OpenLedger platform is only going up with the advent of so many tops of the class cryptocurrency projects.

Launch dynamics of OBITS and its performance

The OBITS Token originated on December 1st, 2015, with around 20% of the total supply being available for pre-sale. During the pre-sale period, it was possible to buy OBITS with Bitcoin (BTC), BitShares (BTS), Litecoin (LTC), Peercoin (PPC), DASH, DOGE, NuBits (NBT) – always a dollar – and Etherum (ETH) and the fiat currencies EUR, USD, CNY. After the purchase, tokens listed on OpenLedger the Decentralised Autonomous Exchange (DEX). Regular buy-backs on the second day of every month, funded by the exchange’s profits, will provide liquidity for those who want to cash out. These tokens will be then burned, reducing the supply of remaining Obits and increasing their value. With 16,443,700 OBITS currently in circulation, the market cap is now surfing around $36 Million.

What does the future look like for OBITS holders

In the recent times, OpenLedger has launched the crowdfunding of a host of cryptocurrency projects which aim to solve major challenges through disruptive technologies like Blockchain. With the individual project tokens trading on the platform, the revenue stream has been consistent and promising for the investors. Since OpenLedger is the gateway for the next generation fintech solutions, the OBITS tokens are considered precious and aim to provide consistent returns on investment in a timely fashion. With the buyback and burning of tokens happening every month, the token value is bound to go up with time.

Founder and CEO of CCEDK Ronny Boesing says,

“The developers, partners and contributors to OBITS are some of the smartest people I have interacted with in my career. I am very proud to have done my small part in getting this movement going.”

Owning OBITS would indeed mean holding a share of the future.

[KR1084] Keiser Report: Trump’s Potemkin trade deals

15-Jun-2017

We discuss Donald Trump’s Potemkin trade deals with Saudi Arabia and real job losses at ward of the state, Boeing. Max also interviews Tyson Slocum, director of Public Citizen’s Energy Program, about the ‘Wrath of Saud’ as Qatar gets isolated and Aramco gets ready for an IPO.

Is there gold “hype” and is gold an emotional trade?

15-Jun-2017

– Very little hype in gold

– Sentiment is important in the gold market as is other markets particularly stocks

– Article ignores the large body of research showing gold is safe haven asset

– Gold may struggle to breach $1,300 in short term

– Trading gold and short term speculation is high risk and for professionals

– Important for investors to focus on long term fundamentals which remain sound

Cycle of Emotions – Hope Phase Now (GoldCore)

Earlier this week Shelley Goldberg , commodities strategist for Roubini Global Economics wrote  about how gold was set to disappoint the ‘gold bulls – again.’ Goldberg argued that we should ‘throw out all the fancy analysis and realize that gold is an emotional trade.’

Aside from yesterday’s little hiccup following the Fed announcement, the gold price has had a great year. Goldberg agrees, ’After breaking through a six-year downtrend line, gold rose last week to its highest level since Nov. 4, and is up an impressive 10.5 percent this year.’

Despite this performance Goldberg argues that we shouldn’t ‘believe the hype’ when it comes to gold. The hype she is referring to seems to be made up of the various op-eds and analysis that argue $1,300/oz is a key barrier for the metal to break through in order to set off on a bull run.

A very straightforward presentation of the ‘number of reasons why gold is in demand’ makes up the bulk of Goldberg’s article, yet she concludes ‘with so many valid reasons for gold to rally further, why am I a doubter?  The most rudimentary reason is that gold is also an emotional trade and $1,300 is a round number. One need not be a superstar technical analyst. Just consider that for both psychological and systematic reasons, traders and algorithms like to sell on landmark numbers that also serve as a testing ground for a rally’s sustainability.’

Is the evidence that traders like to trade off ‘landmark numbers’ but analysis says it should go higher evidence that there is ‘hype’? We disagree. Rather we argue that not only is there relatively little hype in the gold market but that it is significantly outshone by all the reasons Goldberg gives herself, for why gold demand is up.

Where is the hype?

A brief google search of ‘$1,300 gold’ and my own daily experience of reading gold commentary does not bring me to the conclusion that there is hype. Gold has had a great year, but it has also surprised and disappointed many of us for the last couple of years. We are all aware that $1,300 is the next significant level, but most think that it needs to go higher than this in order to get any significant momentum.

Read full story here…

Access Award Winning Daily and Weekly Updates Here

UK property market forecast to take hit on political uncertainty

14-Jun-2017
  • Growing evidence of slowdown in UK property market
  • Slow-down in activity in UK housing market in run up to UK election
  • Average UK house prices dropped in the three months to May
  • Halifax report annual house price growth fallen to a four-year low of 3.3 percent.
  • “Political instability breeds procrastination on the part of homebuyers and sellers”
  • Sterling drop will increase divide in housing market, first time buyers continue to struggle
  • House price growth has lost momentum, volumes continue to drop

UK property market forecast to take hit on political uncertainty

The United Kingdom has been dealt a couple of ‘shocks’ in the last year – Brexit and the Conservative’s lost majority in Parliament.

The only thing that these results definitively mean for the country is uncertainty. Whilst every voter and British resident works to navigate these unclear times there is an air of nervousness about how things will pan out. This is becoming clear through the commonly used temperature gauge of any Western economy – the housing market.

Latest data suggests that both Brexit and the UK election have negatively impacted the already overheated property market. With little foresight as to how the economy and government will move forward, the housing industry is feeling nervous.

Read full story here….

Access Award Winning Daily and Weekly Updates Here

Fintech Threatens to Tear Apart the Banking Industry as We Know It

14-Jun-2017

The banking sector is beset with challenges from disruptive FinTech companies. We are now seeing increasing levels of collaboration between FinTech enterprises and big banks. Since FinTech organizations are largely decentralized, they are not subject to the same constraints as regular banks and financial institutions. Thanks to the innovative technology that FinTech brings to the table, conventional banking is dead as we know it.

FinTech has revolutionized the way money is transferred, stored, transported, and processed. FinTech companies utilize sophisticated encryption technology, and banks are now having to play catch-up. To even the playing fields, they are feverishly working with FinTech organizations to create systems for the digital age.

FinTech Evolution: From Back-Office to Front-Office

FinTech has advanced to such a degree that blockchain technology is now the way of the future. This technology is used as a public ledger for all BTC transactions. As new blocks of information are added to the ledger, additional recordings are made available. This is done in a chronological fashion. Now, regulatory authorities are having to create oversight systems and strategies to monitor blockchain technology.

Since FinTech is decentralized, it will naturally be difficult to regulate. Various authorities will be hard-pressed to implement constraints, checks and balances in a peer to peer-based network. The evolution of FinTech is remarkable. What began as a behind the scenes operation is now front and center for clients, offering them direct access to financial markets.

The main areas for FinTech operations are found in:

  • Domestic and international money transfers.
  • Mobile payments.
  • Personal loans – by comparing interest rates.
  • Capital acquisition.

One of the most notable changes in international financing comes in the form of crowdfunding. With this option, businesses and individuals can quickly and easily raise money in an unconventional way. There is no need for clients to go through the standard banking channels, replete with all the obstacles to qualify for loans. Cryptocurrency, in the form of Dogecoin, Litecoin and Bitcoin makes it possible to expedite money transfers to eligible clients. It is possible to qualify for financing by quickly gauging a client’s tax returns, personal and/or business bank statements, credit scores and pay slips. While banks may require time to process this type of information, FinTech companies routinely beat them to the punch.

$23 Billion + Investment in FinTech in 2016

Access to credit lines is a particular niche sector that FinTech has cornered and dominated. This is particularly true of small and medium enterprises which need access to lines of credit. While banks have been increasing the amount of loans offered to clients, there are significant barriers to entry and prerequisites that need to be met. The FinTech sector is certainly more lenient, efficient and geared towards servicing market requirements.

Banks find it difficult to conduct pricing on loans, and typically avoid certain types of nontraditional loans. There is talk of rapid growth in SME lending opportunities, valued at over $280 billion with a double-digit annual growth rate for the next several years. This certainly lends credence to fueling the rapidly growing FinTech sector which reported investments of over $23 billion last year.

Dramatic Innovation in Banking

Banks have adopted a mixed response to the disruptive technology presented by FinTech companies. They are not sure how much they should invest in this new technology, and this also hinders the level of integration that banks have with FinTech. Sometimes, banks consult with FinTech organizations, at other times they buy them out and incorporate their services completely.

This speaks volumes about the low integration and high integration strategic approaches adopted by big banks like Bank of America, Wells Fargo & Company, Citibank and Morgan Stanley. What is clear is that banks are reluctant to go it alone and develop their own FinTech systems. Banks are also fully liable for the activities of FinTech companies that they partner with, making them reluctant to sign them on. BTC (Bitcoin) remains the most successful decentralized technology yet, and there is no intervention by central banks, regulatory agencies or governments.

The challenge now is what to do about FinTech: regulate it or let it operate free from constraints?

[KR1083] Keiser Report: Everything in Bubble

13-Jun-2017

We ask whether there’s a ‘catastrophic storm or economic plunge’ happening. And, if so, do we even exist if there’s no impact on the market? Max continues his interview with the former chairman of the North Carolina Democratic Party, Randy Voller, about the disastrous state of the Democrats.

Keiser’s Crypto Show – #potcoin #rodman #bancor

13-Jun-2017

Max Keiser with a crypto market update (12 June 2017). He discusses the #potcoin sponsored trip by Dennis Rodman to North Korea. And the $150 million ICO for #bancor.

Must See Gold Charts and Research Says Bull Market Will Continue

13-Jun-2017

In Gold we Trust Report: Bull Market Will Continue

The 11th edition of the annual “In Gold we Trust” is another must read synopsis of the fundamentals of the gold market, replete with excellent charts by our friend Ronald-Peter Stoeferle and his colleague Mark Valek of Incrementum AG.


Key topics and takeaways of the report:

– “Sell economic ignorance, buy gold …”
– Many signals suggest that we are about to face a big shift within the financial and monetary system
– 5 reasons why the gold bull market will continue
– Gold’s gains in 2016 dampened due to high expectations of Trump’s growth policy
– Gold still up 8.5% in 2016 and 10.2% since January 2017
– Attempt at normalization of U.S. monetary policy will be litmus test for US economy
– Bitcoin: Digital gold or fool’s gold?

Read full story here…

Access Award Winning Daily and Weekly Updates Here

ICOO Share Drop Alert, A Non-Etherium Based Token

13-Jun-2017
ICOO—One token to rule them all

The new age digital currencies and their underlying technologies have disrupted the financial world in ways unimaginable. Crowdfunding is one such vertical that has been revolutionized and simplified by Blockchain technology and Smart investments. OpenLedger and has developed an enterprise engine that enables one to invest in upcoming ICOs with additional benefits. The platform ‘Crowdfunding 3.0′ will host most promising ICOs at one place and allows investors to pick their choice even before the ICO launches. This is possible as OpenLedger will hold investments in escrow until the ICOs officially launch. Alternatively, the team of professionals will work with start-ups to get their crowdfunding campaign off the ground by providing appropriate guidance, advertising, and networking.as

How does ‘ICOO’ function?

ICOO majorly provides two services that cover the end to end necessities for active participants of ICO launches. First, they offer the opportunity to trade immediately every new coin even in the pre-launch phase. They can provide this service as the team will hold investments in escrow till the launch of the token. Secondly and most importantly, OpenLedger would provide complete promotional and professional services for issuers who want the marketing infrastructure to begin their project. The ICOO tokens derive their value from the revenue generated through the services provided by the services offered by the platform. The income generated is not only tied to the value of the tokens and their trading but is used to fund and promote the ICO projects that opted for the service.

ICOO Token sales and dynamics

The ICOO tokens will be tradable peer to peer and on exchanges where OpenLedger’s Decentralized Exchange (DEX) would be the first exchange to handle such transactions. A maximum of 20,000,000 tokens would be in circulation, and no further tokens would be mined post the ICO. The ICOO asset crowd sale began on May 20th and is set to take place for 42 days. The sale starts of with 1000 ICOOs priced for 1 BTC. The number gradually decreases over time in phases with finally 775 ICOOs priced for 1 BTC. To avoid any change of value to price fluctuations, the ICOO token sale would accept only Bitcoin. Any other cryptocurrency used will be liquidated immediately for the same reason. All the ICOs on the platform would b are executed in the same fashion.

ICO pre-launch trade and token sales on the platform

Token enthusiasts can subscribe to upcoming ICO alerts by signing up on OpenLedger, and from there it is easy to start purchasing immediately.

The platform provides a host of promotional and marketing services for the listed ICOs and hence makes sure that the positives of the project are highlighted to turn up the interest in the ICO. With low minimum thresholds of deposit, it makes it feasible for medium and small scale investments on the platform. Hence OpenLedger is one stop solution for investing and launching ICOs successfully.

Pension Funds, Sovereign Wealth Funds, Central Banks “Stock Up” on Gold “Amid Uncertainty”

12-Jun-2017

Pension Funds, Sovereign Wealth Funds and Central Banks “Stock Up” on Gold “Amid Uncertainty”

By Attracta Mooney
Financial Times, London
Sunday, June 11, 2017

The gold reserves of the world’s biggest public sector investors reached an 18-year high as they hoarded the precious metal after Donald Trump’s election and the Brexit vote added to geopolitical uncertainty.

State investors increased their net gold holdings by 377 tonnes to an estimated 31,000 tonnes last year — the highest level since 1999, according to a study of 750 central banks, public pension plans and sovereign wealth funds with $33.5 trillion in assets.

Danae Kyriakopoulou, chief economist at the Official Monetary and Financial Forum, the central bankers’ forum that compiled the research, said state investors had flocked to the precious metal because of its status as a “haven asset” and to take advantage of rising prices.

“There was a lot of political uncertainty in the past year. There were big political shocks with Brexit and Trump, which have driven investors back to gold,” she said.

The price of gold surged after the unexpected Brexit vote in June and immediately after the election of Mr. Trump in November, although it fell in the final weeks of the year.

Alistair Hewitt, head of market intelligence at the World Gold Council, said state-backed investors had also increased their gold stores as a hedge against the stronger dollar. The dollar is up 15 percent against the pound over the past year.

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Mr. President, Be Careful What You Wish for: Higher Interest Rates Will Kill the Recovery

11-Jun-2017

Higher interest rates will triple the interest on the federal debt to $830 billion annually by 2026, will hurt workers and young voters, and could bankrupt over 20% of US corporations, according to the IMF. The move is not necessary to counteract inflation and shows that the Fed is operating from the wrong model.

Responding to earlier presidential pressure, the Federal Reserve is expected to raise interest rates this week for the third time since November, from a fed funds target of 1% to 1.25%. But as noted in The Guardian in a March 2017 article titled “Trump Is Set to Win the Battle on Interest Rates, but US Economy Will Pay the Price”:

An increase in the base rate, however small, will tighten the screw on younger voters and some of the poorest communities who voted for him and rely on credit to get by.

More importantly for his economic programme, higher interest rates in the US will act like a honeypot for foreign investors . . . . [S]ucking in foreign cash has a price and that is an expensive dollar and worsening trade balance. . . . It might undermine his call for the repatriation of factories to the rust-belt states if goods cost 10% or 20% more to export.

In its Global Financial Stability report in April, the International Monetary Fund issued another dire warning: projected interest rises could throw 22% of US corporations into default. As noted on Zero Hedge the same month, “perhaps it was this that Gary Cohn explained to Donald Trump ahead of the president’s recent interview with the WSJ in which he admitted that he suddenly prefers lower interest costs.”

But the Fed was undeterred and is going full steam ahead. Besides raising the fed funds rate to a target of 3.5% by 2020, it is planning to unwind its massive federal securities holdings beginning as early as September. Raising interest rates benefits financial institutions, due to a rise in interest on their excess reserves and net interest margins (the difference between what they charge and what they pay to depositors). But borrowing costs for everyone else will go up (rates on student loans are being raised in July), and the hardest hit will be the federal government itself. According to a report by Deloitte University Press republished in the Wall Street Journal in September 2016, the government’s interest bill is expected to triple, from $255 billion in 2016 to $830 billion in 2026.

The Fed returns the interest it receives to the Treasury after deducting its costs. That means that if, rather than dumping its federal securities onto the market, it were to use its quantitative easing tool to move the whole federal debt onto its own balance sheet, the government could save $830 billion in interest annually – nearly enough to fund the president’s trillion dollar infrastructure plan every year, without raising taxes or privatizing public assets.

That is not a pie-in-the-sky idea. Japan is actually doing it, without triggering inflation. As noted by fund manager Eric Lonergan in a February 2017 article, “The Bank of Japan is in the process of owning most of the outstanding government debt of Japan (it currently owns around 40%).” Forty percent of the US national debt would be $8 trillion, three times the amount of federal securities the Fed holds now as a result of quantitative easing. Yet the Bank of Japan, which is actually trying to generate some inflation, cannot get the CPI above 0.2 percent.

The Hazards of Operating on the Wrong Model

The Deloitte report asks:

Since the anticipated impact of higher interest rates is slower growth, the question becomes: why would the Fed purposely act to slow the economy? We see at least two reasons. First, the Fed needs to raise rates so that it has room to lower them when the next recession occurs. And second, by acting early, the Fed likely hopes to choke off inflationary pressure before it starts to build.

Rates need to be raised so that the recession this policy will trigger can be corrected by lowering them again – really? And what inflation? The Consumer Price Index has not even hit the Fed’s 2% target rate. Historically, when interest rates have been raised in periods of tepid growth, the result has been to trigger a recession. So why raise them? As observed in a June 2 editorial in The Financial Times titled “The Needless Urge for Higher Borrowing Costs”:

In this context, the apparent determination of the Fed in particular to press on with interest rate rises looks a little peculiar. Having created expectations that it was likely to tighten policy with three quarter-point increases over the course of 2017, the Fed is acting more like a party to a contract that feels the need to honour its terms, than a central bank that takes the data as it finds them. [Emphasis added.]

In the six months since President Trump was elected, the Fed has pressed on with two rate hikes and is proceeding with a third, evidently just because it said it would. Impatient bond investors are complaining that it has found one excuse after another to postpone the “normalization” it promised when market conditions “stabilized;” and in his presidential campaign, Donald Trump attacked Janet Yellen personally for keeping rates low, putting her career in jeopardy. She has now gotten with the program, evidently to restore the Fed’s waning credibility and save her job. But the question is, why did the Fed promise these normalization measures in the first place? As then-Chairman Ben Bernanke explained its “exit strategy” in 2009:

At some point, . . . as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road. . . . [B]anks currently hold large amounts of excess reserves at the Federal Reserve. As the economy recovers, banks could find it profitable to be more aggressive in lending out their reserves, which in turn would produce faster growth in broader money and credit measures and, ultimately, lead to inflation pressures.

The Fed evidently believes that the central bank needs to tighten monetary policy (raise interest rates and sell its bond holdings back into the market) because the massive “excess reserves” held by the banks (currently ringing in at $2.2 trillion) will otherwise be lent into the economy, expanding the money supply and triggering hyperinflation. Which, as David Stockman puts it, shows just how clueless even the world’s most powerful central bankers can be in matters of banking and finance . . . .

Banks Don’t Lend Their Reserves

There need be no fear that banks will dump their excess reserves into the market and create “inflation pressures,” because banks don’t lend their reserves to their commercial borrowers. They don’t because they can’t. The only thing that can be done with money in a bank’s reserve account is to clear checks or lend reserves to another bank. Reserves never leave the reserve system, which is simply a clearing mechanism set up by the central bank to facilitate trade among banks. Technically, dollars leave the system when a depositor pulls money out of the bank in cash; but as soon the money is spent and redeposited, these Federal Reserve Notes go back into the banking system and again become reserves.

Not only do banks not lend their reserves commercially, but they do not lend their deposits. Banks create deposits when they make loans. As researchers at the Bank of England have acknowledged, 97 percent of the UK money supply is created in this way; and US figures are similar. Banks do not need reserves or deposits to make loans; and since they are now flooded with reserves, they have little incentive to pay interest on the deposits of “savers.” If they do not have sufficient incoming deposits at the end of the business day to balance their outgoing checks, they can borrow overnight in the fed funds market, where banks lend reserves to each other.

At least they used to do this. But since the Fed began paying Interest on Excess Reserves (IOER) in 2008, they have largely quit lending their reserves to each other. They are just pocketing the IOER. If they need funds, they can borrow more cheaply from the shadow banking system – the Federal Home Loan Banks (which are not eligible for IOER) or the repo market.

So why is the Fed paying interest on excess reserves? Because with the system awash in $2.2 trillion in reserves, it can no longer manipulate its target fed funds rate by making reserves more scarce, pushing up their price. So now the Fed raises the fed funds rate by raising the interest it pays on reserves, setting a floor on the rate at which banks are willing to lend to each other – since why lend for less when you can get 1.25% from the Fed?

That is the theory, but the practical effect has been to kill the fed funds market. The Fed has therefore implemented a new policy tool: it is “selling” (actually lending) its securities short-term in the “reverse repo” market. The effect is to drive up the banks’ cost of borrowing in that market; and when this cost is passed on to commercial borrowers, market rates are driven up.

Meanwhile, the Fed is paying 1% (soon to be 1.25%) on $2.2 trillion in excess reserves. At 1%, that works out to $22 billion annually. At 1.25%, it’s $27.5 billion; and at 3.5% by 2020, it will be $77 billion, most of it going to Wall Street megabanks. This tab is ultimately picked up by the taxpayers, since the Fed returns its profits to the government after deducting its costs, and IOER is included in its costs. Among other possibilities, an extra $22 billion annually accruing to the federal government would be enough to end homelessness in the United States. Instead, it has become welfare for those Wall Street banks that largely own the New York Fed, the largest and most powerful of the twelve branches of the Federal Reserve.

Paying IOER is totally unnecessary to prevent inflation, as evidenced again by the case of Japan, where the Bank of Japan is actually trying to fan inflation and is now charging banks 0.1% rather than paying them on their excess reserves. Yet the inflation rate refuses to rise above 0.2%.

Banks cannot lend their reserves commercially and do not need to be induced not to lend them. The Fed’s decision to raise rates by increasing IOER just increases public and private sector borrowing costs, slows the economy, threatens to bankrupt businesses and consumers, and gives another massive subsidy to Wall Street.

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[KR1082] Keiser Report: Middle East Diplomacy

11-Jun-2017

We discuss Donald Trump’s tweet diplomacy in the Middle East leading to possible war and Saudi Arabia’s coming IPO of Aramco which cannot happen in New York due to the nation’s alleged role in sponsoring the 911 attacks. In the second half, Max interviews former chairman of the North Carolina Democratic Party, Randy Voller, to discuss Hillary Clinton’s blame tour.

‘What connects Brexit, the DUP, dark money and a Saudi prince?’

10-Jun-2017

DUP!  Certainly not a gang I’d like to hang out with!

‘What connects Brexit, the DUP, dark money and a Saudi prince?

The story of a massive donation to the DUP is like a John le Carré novel – but voters need facts, not fiction’ — from the Irish Times June 10th.

Image from The Ulster Fry

We’re About to See Gold & Silver Trading the Way the Cryptos Have the Past 3 Months -Rob Kirby

9-Jun-2017

Are Gold & Silver Bullion Prices About to Make An EXPONENTIAL Move?

 

 

 

 

 

 

 

 

 

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