Economics

Economics
Max and Stacy give you all the financial news you need as the Global Insurrection Against Banker Occupation gathers pace. Occupy Wall Street, Crash JP Morgan, Buy Silver and DEFINITELY visit MaxKeiser.com!
Updated: 4 hours 39 min ago

The Looming Energy Shock

2-Jul-2017

There will be an extremely painful oil supply shortfall sometime between 2018 and 2020. It will be highly disruptive to our over-leveraged global financial system, given how saddled it is with record debts and unfunded IOUs.

Due to a massive reduction in capital spending in the global oil business over 2014-2016 and continuing into 2017, the world will soon find less oil coming out of the ground beginning somewhere between 2018-2020.

Because oil is the lifeblood of today’s economy, if there’s less oil to go around, price shocks are inevitable. It’s very likely we’ll see prices climb back over $100 per barrel. Possibly well over.

The only way to avoid such a supply driven price-shock is if the world economy collapses first, dragging demand downwards.

Not exactly a great “solution” to hope for.

Click here to read the full article

[KR1091] Keiser Report: ‘Oligarchic America’

2-Jul-2017

We discuss the emergence of ‘oligarchic America’ as Amazon eats Whole Foods. In the second half, Max interviews economist and columnist, Alejandro Nadal, about Trump’s wall and exiting from the Nafta trade deal.

Pay for Pittsburgh Airport Parking with Maxcoin @Tairportparking

1-Jul-2017

Top Airport Parking announced that it will be accepting Maxcoin for its Pittsburgh Airport Parking. Travelers simply visit their cyrptocurrency page on the site, reserve their parking space, and then make a Maxcoin transfer through Top Airport Parking’s cyrptocurrency payment integration.

This news comes almost two months after Top Airport Parking decided to launch out their cyrptocurrency acceptance at Denver International Airport. Patrick Murray, the company’s CEO said, “We’ve had a great response in Denver after we launched our cyptocurrency special, and saw reservations come in right away. We wanted to make sure we took care of bugs and made iterations to the platform before moving forward. We’re excited to now share the news that we’re live in Pittsburgh!”

Top Airport Parking is known in the Pittsburgh area for their affordable parking deals. Similarly to some hotel booking websites, Top Airport Parking shows certain details about their airport parking deals online, but only lets travelers know where they’re parking after they make their purchase. That deal can be paid with maxcoins.

“Pittsburgh is becoming a new hub for technology, and we are happy to reach out to that community and hopefully accommodate the geeks (like us) that want to spend some of their cyrptocurrencies.”

Top Airport Parking currently accepts also Bitcoin.

More about Maxcoin

MK EXCLUSIVE: The Blockchain is Transforming the ‘Attention Economy’

30-Jun-2017

“Attention is a resource—a person has only so much of it,” as Matthew Crawford succinctly put the notion that human attention is a scarce commodity. Blockchain applications in this Attention Economy space have put such principles into action: Brave, Steemit and Synereo.

Brave has designed a browser to improve the ad experience and help internet users earn more with its “Basic Attention Token”. (BAT) Steemit offers a social blogging platform with its own native digital currency, Steem. Synereo, with the help of its native token ‘AMP’, has developed an agnostic value-transfer layer for content distribution platforms.

Most recently, the Tel Aviv-based Synereo released its first product, the WildSpark Beta, which allows content creators, curators and audiences to join together to create and promote content, and of course earn ‘AMP’. The platform works when users “Amplify” content.

“Amplifying means teaming up with a content creator and becoming their partner,” writes Synereo in its blog. “After choosing the desired amount of AMPs to be invested in a piece of content, [WildSpark] generates a unique link, associated with your account, which you can then share on social networks or otherwise distribute as you see fit. If more people use the link and ‘Amplify’ the content, the curator responsible for content discovery gets a share of the contribution.”

The Wildspark Beta is an Internet meta-layer for equitable, decentralized content creation and distribution. “Allowing a platform-agnostic monetization model can radically shift the balance of power in favor of content creators,” said Anderson McCutcheon,

“Allowing a platform-agnostic monetization model can radically shift the balance of power in favor of content creators,” said Anderson McCutcheon, Co-Founder and CMO of Synereo. “Creators no longer have to be entirely dependent on the model provided by the platform and can invite fans to support them directly, regardless of where the content is published.”

CEO Dor Konforty adds: “We aren’t competing with YouTube for hosting the content — we are introducing a way for curators and creators to monetize their existing activity, outside of the platform itself.”

Synereo, which raised $5 million in a 2015 crowdsale, and whose digital token at the time of writing trades at USD 62 cents makes no secret its goal of bringing down mega-corporations like Facebook and Google.

“We’re not rewarded in any way for creating all this value, for organizing the information on the internet as it is today,” Konforty recently told CNBC.

Social news service Steemit, a blogging and social networking website atop a blockchain database called ‘Steem,’ was founded in 2016 by Ned Scott, as well as BitShares founder Dan Larimer, who later left the project.

Creators of posted content on Steemit, which is saved in a blockchain, receive tips for posts and comments with the native digital token currently trading at $1.73. Authors whose comments and posts are upvoted receive cryptocurrency monetary rewards. People can also be rewarded for curating content. Reputation on Steemit is managed by upvotes and downvotes to incentivize etiquette, like Reddit.

Steem’s blockchain and transferable tokens allow account holders to transact and interact atop the database. Steem’s consensus method, delegated proof-of-stake, stems from BitShares. In this system, “Witnesses” are elected by Steem stakeholders, and block producers receive a portion of rewards per block, while the rest goes to authors and curators.

Brave is a free and open-source web browser based on Chromium web browser. Founded by the Mozilla Project co-founder Brendan Eich, Brave is designed to block website trackers and internet advertisements. The Brave Browser also released its own crypto-token, called the Basic Attention Token, so creators and audience members can receive value for their online activity.

“User attention being an indefinitely preyed upon good has led to ad blocking, which is reducing the funding which supports the free web,” Mr. Eich told me for industry publication Crypto Insider.

As the Brave CEO stated in a press release: “We aim to privately monitor and anonymously confirm user intent at the browser level, which allows for the development of rich metrics for user attention. Attention is measured as views of content and ads in real time, and only in the browser’s active tab. The Attention Value for the ad will be calculated based on incremental duration and pixels in view in proportion to relevant content prior to any direct engagement with an ad.”

Brave, Steemit and Synereo are showing the way forward for ‘Attention Economy’ businesses and participants thanks to their unique implementations of blockchain technology. It is likely the development and release of native crypto-tokens – like AMP, BAT and Steem – that attracts users to such platforms.

Justin O’Connell is a financial technology researcher focusing on blockchain. He founded the companies Gold Silver Bitcoin and Cryptographic Asset, as well as helped to launch the largest Bitcoin ATM software provider in the world. His work has appeared in Bitcoin Magazine, Coin Desk, Crypto Coins News, Hacked, Merry Jane, NASDAQ and VICE. 

Pensions Timebomb In America – “Global Crisis” Cometh

30-Jun-2017

Pensions Timebomb – Pensions “Are Going To Be A National Crisis”

– America’s underfunded pension system is “not a distant concern but a system already in crisis”…

– Tax may explode as governments seek to bail out insolvent pension plans

– Illinois, California, New Jersey, Connecticut, Massachusetts, Kentucky and eight other states vulnerable

– The simple mathematical mismatch at the heart of the pension crisis…

– Why the pension crisis really is “America’s silent crisis”…

– Pensions timebomb confronts Ireland, UK and most EU countries


By Brian Maher, Managing editor, The Daily Reckoning

“This is going to be a national crisis…

“This” being America’s woefully underfunded pension liabilities, according to Karen Friedman. She’s the executive vice president of the Pension Rights Center.

(A place called the Pension Rights Center does in fact exist. We checked.)

MarketWatch columnist Jeff Reeves howls in confirmation that “collapsing pensions will fuel America’s next financial crisis.”

“This is not a distant concern,” warns he, “but a system already in crisis.”

According to data supplied by the Federal Reserve, pensions — public and private combined — were roughly 27% underfunded at the end of last year.

By some estimates, America’s………….

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ICO Watch: Introduction: Apptrade ‘The stock market for Apps’

30-Jun-2017

Owing to their low transaction fees and high transactional speed, cryptocurrencies are finding many applications in various industries. Due to the mentioned factors, investing in the markets or cryptocurrency projects has become very easy and hassle free. This is exactly what ‘Apptrade‘ leverages in its functioning. There are a lot of Mobile and Computer application commonly termed as ‘Apps’ that surface every day. Each of them has the potential to become the next ‘Snapchat’ or ‘Instagram’ and provide large streams of revenue. ‘Apptrade’ helps you invest in such ‘apps’ or ‘portfolio of apps’ and reap the benefits of investing just like in stock markets. 

What does ‘Apptrade’ do?

‘Apptrade’ is a platform which enables you to have apps in your portfolio and to trade them like the stock market. Hence it has been branded as the “Stockmarket of Apps” The value of an app changes over time depending on the number of users, funding received for the app and valuation of the app. Hence just like stocks in the stock market, when linked, a portfolio of apps has the potential to become a competitive asset. Hence through ‘Apptrade,’ these apps would have two streams of revenue, one from traditional venture capital funding and the other through investors on ‘Apptrade.’ Hence either stream of investments would increase the value of the apps or linked portfolio of apps which can be traded over a decentralized exchange.

How does ‘Apptrade’ function?

Apptrade is powered by OpenLedger, as its parent company. OpenLedger’s CEO Ronny Boesing believes that since this is a new pioneering class of allocation of investments, Apptrade would become a digital trust backed by app revenue streams. Already available ‘app portfolios’ are designed to ensure that every app is supporting all others through regularly scheduled updates, highly visible cross promotion and high standards for quality. However, investors can customize and select their own set of apps for their portfolio. The value associated with the apps is issued in the form of tokens called ‘APPX’ whose value fluctuates with the increase in the value of the digital trust. These tokens can be exchanged, bought and sold on the decentralized blockchain OpenLedger has provided for the project.

The Crowdfunding and its dynamics

The minimum goal of the crowdfunding is $1 Million with a cap of $5 Million with a total of 8.25m APPX tokens available for sale. The APPX tokens are the master tokens that can be used to transact while investing, selling or buying the app portfolios. The tokens entitle investors to 20% of the net market value and revenue of the Apptrade portfolio ecosystem. All the apps are on an individual payment level. Each publisher will see their tiered payment rate decrease as the value of their app increases. 80% of an app portfolio’s earnings are distributed to portfolio token sponsors and 20% to holders of APPX.

The founders of the project and OpenLedger are confident that the project will be a huge success. The venture seeks to penetrate 1.4 % of the $30 billion dollars growing app market in the span of 3 years. The project has high potentiality and is all set to revolutionize app funding in the years to come. You can read the white paper here.

If We Don’t Change the Way Money Is Created, Rising Inequality and Social Disorder Are Inevitable

29-Jun-2017

Everyone who wants to reduce wealth and income inequality with more regulations and taxes is missing the key dynamic: central banks’ monopoly on creating and issuing money widens wealth inequality, as those with access to newly issued money can always outbid the rest of us to buy the engines of wealth creation.

History informs us that rising wealth and income inequality generate social disorder.

Access to low-cost credit issued by central banks creates financial and political power. Those with access to low-cost credit have a monopoly as valuable as the one to create money.

I explain why in my book A Radically Beneficial World: Automation, Technology and Creating Jobs for All.

Compare the limited power of an individual with cash and the enormous power of unlimited cheap credit.

Let’s say an individual has saved $100,000 in cash. He keeps the money in the bank, which pays him less than 1% interest. Rather than earn this low rate, he decides to loan the cash to an individual who wants to buy a rental home at 4% interest.

There’s a tradeoff to earn this higher rate of interest: the saver has to accept the risk that the borrower might default on the loan, and that the home will not be worth the $100,000 the borrower owes.

The bank, on the other hand, can perform magic with the $100,000 they obtain from the central bank. The bank can issue 19 times this amount in new loans—in effect, creating $1,900,000 in new money out of thin air.

This is the magic of fractional reserve lending. The bank is only required to hold a small percentage of outstanding loans as reserves against losses. If the reserve requirement is 5%, the bank can issue $1,900,000 in new loans based on the $100,000 in cash: the bank holds assets of $2,000,000, of which 5% ($100,000) is held in cash reserves.

This is a simplified version of how money is created and issued, but it helps us understand why centrally issued and distributed money concentrates wealth in the hands of those with access to the centrally issued credit and those who have the privilege of leveraging every $1 of cash into $19 newly created dollars that earn interest.

Imagine if we each had a relatively modest $1 million line of credit at 0.25% interest from a central bank that we could use to issue loans of $19 million. Let’s say we issued $19 million in home loans at an annual interest rate of 4%. The gross revenue (before expenses) of our leveraged $1 million would be $760,000 annually –let’s assume we net $600,000 per year after annual expenses of $160,000. (Recall that the interest due on the $1 million line of credit is a paltry $2,500 annually).

Median income for workers in the U.S. is around $30,000 annually. Thus a modest $1 million line of credit at 0.25% interest from the central bank would enable us to net 20 years of a typical worker’s earnings every single year. This is just a modest example of pyramiding wealth.

Next let’s say we each get a $1 billion line of credit which we leverage into $19 billion in loans earning 4%. Now our net annual income is $600 million, the equivalent income of 20,000 workers. We did nothing to improve productivity, nor did we produce any goods or services. We simply used the power of central banking and fractional reserve lending to skim $600 million in financial rents from those actually producing goods and services.

Note that we are not uniquely evil or avaricious in maximizing our private gain from the central bank system; we’re simply responding rationally to the system’s incentives.

The system concentrates wealth and subverts democracy not because participants are different from the rest of us but because they are acting rationally within a perverse, exploitive system. Would you turn down $600,000 a year? How about $600 million a year?

It makes no sense for banks and financiers not to maximize their gains in this system. Those who fail to maximize their gains will be fired.

I hope you understand by now that the current system of issuing money and credit benefits the few at the expense of the many. The vast privilege and the equally vast inequality it generates is the only possible output of the system.

This inequality cannot be reformed away; it is intrinsic to centrally issued money and private banking with access to central bank credit.

The problem isn’t fiat money; it’s centrally issued money/credit that is distributed to the few at the expense of the many. If we want to limit the subversion of democracy and reduce wealth inequality, we must decentralize and democratize the issuance and distribution of money.

In the current system, money isn’t created to reward increasing productivity. It is created to increase the wealth and power of the privileged.

If we want to connect the creation and distribution of money/credit with productivity, we must issue new money directly to those creating value and boosting productivity, bypassing the privileged few in central and private banks.

By concentrating wealth and power, centrally issued and distributed money doesn’t just subvert democracy. It also optimizes inequality, monopoly, cronyism, stagnation, social immobility and systemic instability.

The status quo “solution” is Universal Basic Income (UBI), a form of subsistence designed to quell the righteous urge to throw off the monetary yoke of the privileged financial Elites. If scraping by as a debt-serf on UBI is the New American Dream, we need a new economic/social system. 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

The Over-Criminalization of American Life

29-Jun-2017

While the corporate media devotes itself to sports, entertainment, dining out and the latest political kerfuffle, America has become the Over-Criminalization Capital of the World. The proliferation of laws and administrative regulations, federal, state and local, that carry criminal penalties has swollen into the tens of thousands.

The number of incarcerated Americans exceeds 2.3 million, with the majority being non-violent offenders–often for War on Drugs offenses.

Holly Harris has written an important summary of this profoundly destabilizing trend: The Prisoner Dilemma: Ending America’s Incarceration Epidemic (Foreign Affairs, registration required).

The over-criminalization of America is a relatively recent trend. As Harris notes:

It wasn’t always like this. In 1972, for every 100,000 U.S. residents, 161 were incarcerated. By 2015, that rate had more than quadrupled, with nearly 670 out of every 100,000 Americans behind bars.

The over-criminalization of America is rooted in federal laws and regulations, and state and local governments have followed suite. here is Harris’s account:

The burgeoning U.S. prison population reflects a federal criminal code that has spiraled out of control. No one—not even the government itself—has ever been able to specify with any certainty the precise number of federal crimes defined by the 54 sections contained in the 27,000 or so pages of the U.S. Code. In the 1980s, lawyers at the Department of Justice attempted to tabulate the figure “for the express purpose of exposing the idiocy” of the criminal code, as one of them later put it. The best they were able to come up with was an educated guess of 3,000 crimes. Today, the conservative Heritage Foundation estimates that federal laws currently enumerate nearly 5,000 crimes, a number that grows every year.

Overcriminalization extends beyond the law books, partly because regulations are often backed by criminal penalties. That is the case for rules that govern matters as trivial as the sale of grated cheese, the precise composition of chicken Kiev dishes, and the washing of cars at the headquarters of the National Institutes of Health. State laws add tens of thousands more such crimes. Taken together, they push the total number of criminally punishable offenses in the United States into the hundreds of thousands. The long arm of the law reaches into nearly every aspect of American life. The legal scholar Harvey Silverglate has concluded that the typical American commits at least three federal felonies a day, simply by going through his or her normal routine.

Federal policies reward states for building prisons and mandating harsher sentences:

…federal incentives for states that safely decrease their prison populations and reconsider ineffective sentencing regimes…would represent a stark reversal of legislation signed into law by President Bill Clinton in 1994, which did just the opposite, offering federal dollars to states that imposed harsher criminal penalties and built more prisons, which contributed to the explosion of incarceration rates during the past two decades.

How did we become a Gulag Nation of tens of thousands of laws and regulations and mandatory harsh sentences for non-violent crimes–a society imprisoned for administrative crimes that aren’t even tried in our judiciary system? I would suggest two primary sources:

1. The relentless expansion of central-state power over every aspect of life. As I describe in my book Resistance, Revolution, Liberation: A Model for Positive Change,the state has only one ontological imperative: to expand its power and control.There are no equivalent mechanisms for reducing the legal/regulatory burdens imposed by the state; various reforms aimed at reducing the quantity of laws and regulations have not even made a dent in the over-criminalization of America.

The second dynamic is the political reality that the easiest way for politicos to be seen as “doing something” is to pass more laws and regulations criminalizing an additional aspect of life. The state and its elites justify the state’s relentless expansion of power and control by claiming problems can only be solved by centralizing power further and increasing the number and severity of penalties.

Criminalization is the ultimate expansion of the state’s monopoly on coercive violence. As the state expands its power to imprison or punish its citizens for an ever-wider range of often petty infractions, increasingly via a bureaucratic administrative process that strips the citizens of due process, another pernicious dynamic emerges: the informal application and enforcement of formal laws and regulations.

In other words, the laws and regulations are enforced at the discretion of the state’s officials. This is the systemic source of driving while black: a defective tail-light gets an African-American driver pulled over, while drivers of other ethnic origin get a pass.

This is also the source of America’s systemic blind eye on white-collar crimes while the War on Drugs mandates harsh sentences with a cruel vengeance.When there are so many laws and regulations to choose from, government officials have immense discretion over which laws and regulations to enforce.

Prosecutors seeking to increase their body count will use harsh drug laws to force innocents to accept plea bargains, while federal prosecutors don’t even pursue white-collar corporate fraud on a vast scale.

The over-criminalization of America has undermined justice, the rule of law and the bedrock notion that everyone is equal under the law, i.e. legal egalitarianism.

The over-criminalization of America breeds corruption as the wealthy and powerful evade the crushing burden of over-regulation by either buying political favors in our pay-to-play “democracy” (money votes, money wins) or by hiring teams of attorneys, CPAs, etc. to seek loopholes or construct a courtroom defense.

Meanwhile, the peasantry are offered a harsh plea bargain.

The over-criminalization of America is one core reason why the status quo has failed and cannot be reformed. That is the title of one of my short works, Why Our Status Quo Failed and Is Beyond Reform, which explains why the ceaseless expansion of centralized power leads to failure and collapse. 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

START mining!

29-Jun-2017

STARTCOIN is the second most profitable crypto to mine. Max Keiser, creating value wherever he goes.

[KR1090] Keiser Report – Drooling at the Slot Machine is ‘the American Dream’

29-Jun-2017

We discuss ‘Molar City,’ the Mexican town on the U.S. border where American ‘dental refugees’ arrive in the thousands for medical care because ‘drooling at the slot machine’ is the American Dream and that don’t pay the bills. In the second half Max continues his interview with Jose Rodriguez, VP of payments at Bitso, about bitcoin, ethereum, cryptocurrencies and the local economy in Mexico.

London Property Bubble Bursting? UK In Unchartered Territory On Brexit and Election Mess

29-Jun-2017

– London property bubble bursting? UK in unchartered territory on Brexit and election mess
– Evidence of downturn in London housing market

– Over 75% of London homes now selling below asking price
– Prime north London property down 6 per cent annually
– House prices have not fallen for three consecutive months since the 2009 crisis
– Bank of England report expresses worry over UK property market
– ‘Adverse shock’ to UK economy may amplify negative feedback loop

– Increased political and economic uncertainty has weakened fragile London buyer sentiment
– Bank of England Financial Stability Report: “Mortgages are the largest loan exposure for UK lenders”
– BOE FSR refers to a “self-reinforcing feedback loop” that, if triggered, would cause another 2008-style crisis in the UK


Is the London property market heading for tough times? The most recent housing figures and a new Bank of England report suggest it may well be.

Recent figures show that 77% of London houses sold in May went at below asking price, up from 72% in April. London as the capital of UK reflects international market but international investors have major concerns over uncertainties namely Brexit and the current state of the government. As a result London house prices are rising at their weakest rate in five years (if they are rising at all).

In prime estate London things are particularly bad, with prices in prime north and north west London falling by 6% in the last year.

Across the country, price drops in May signalled the third consecutive monthly drop, something which has not been seen since the 2009 crisis. Banks are well aware of what this could mean for them and as a result are now offering mortgages that scream……

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ZENGOLD -The first physical gold backed crypto-asset platform

29-Jun-2017

Gold has been a very invaluable asset that has been used as a store of value from times immemorial. Owing to its scarcity and specific value-add characteristics, it has become the yardstick for bartering, pricing, and bartering goods and services. This eventually led to the development of ‘Gold Standard’- a monetary system where a country’s currency or paper money has a value directly linked to gold. As valuable as it may seem, usage of Gold as a means of payment has become increasingly difficult owing to the difficulty in transferring the physical asset. While this has been a problem in the past, Viewfin has launched a blockchain based token that is backed by Gold reserves. Hence in totality, it provides mobility for Gold over blockchain through this token called ‘Zengold.’ Let’s look into how Viewfin has planned the entire ecosystem over the metaverse blockchain.

What is ZENGOLD?

Zengold (ZNG) is a digital currency developed with blockchain technology and is backed by gold reserves in Shanghai Gold Exchange vault. Users can transfer ZNG using Metaverse blockchain wallets without any particular network conditions. Just like other digital currencies, ZNG is a secure token, which generates lower transaction costs and has an ability to be used as a payment at any time. Each ZNG token represents one gram of Gold and is divisible into 0.0001 gram. 0.1% of the total value of each transaction is the fee paid by the users of the network and has a cap of 1 ZNG. In this fashion, Gold can be digitally tokenized and transferred over Blockchain. This puts an end to the traditionally existing problem of Gold when it comes to transactions and payments. You can read the full Zengold whitepaper here.

How is ZENGOLD profitable?

The network generates profits by the transaction fee imposed on each of the transactions happening over the Zengold network. ZGC represents the right for its holders to receive a share from the generated profit of the ZenGold network. By coupling the newest and most innovative medium of exchange with the oldest form of transactional value, ZenGold combines history with technology, creating a new financial reality. ZenGold tokens will enable its holders to use gold as an efficient payment mechanism and credit system while benefiting from the transactional functionalities of Blockchain technology. With this unique confluence and a precious asset backing the token value, the network looks promising and has the potential to become even more trusted medium of exchange then cryptocurrencies.

Launch dynamics of ZENGOLD and its performance

The ICO campaign for Zengold was initiated on May 26th, 2017 and ended in just under 30 minutes raising over 2,000 BTC in a record time. A recent partnership with Chinese Viewfin is enabling the OpenLedger decentralized exchange to offer an additional reserved number of tokens for investors worldwide. During the ICO a total number of 63,000,000 tokens were distributed for holders to receive profits from the network. Out of the 100 million tokens planned, 70% of ZGC would be released to the market, while 10% will be reserved for the ZenGold developing team for future operation and project development, 20% will be assigned to the ZenGold foundation to ensure sustainable growth and development of the ecosystem.

The tokens are currently being exchanged on OpenLedger DEX with each token priced at $ 0.36 at the time of writing this post.

[KR1089] Keiser Report: Green Gold (RE-UPLOAD)

29-Jun-2017

From Mexico City, we discuss ‘green gold’, grasshoppers and inflation in Mexico. In the second half Max interviews Jose Rodriguez, VP of payments at Bitso, about bitcoin and other cryptocurrencies impact on the Mexican markets. They discuss initial coin offerings, hard forks, soft forks and crypto euphoria.

This is a re-upload including the ending which was accidentally cut on the previous upload.

Sovereign Debt Jubilee, Japanese-Style

28-Jun-2017

Japan has found a way to write off nearly half its national debt without creating inflation. We could do that too.

Let’s face it. There is no way the US government is ever going to pay back a $20 trillion federal debt. The taxpayers will just continue to pay interest on it, year after year.

A lot of interest.

If the Federal Reserve raises the fed funds rate to 3.5% and sells its federal securities into the market, as it is proposing to do, by 2026 the projected tab will be $830 billion annually. That’s nearly $1 trillion owed by the taxpayers every year, just for interest.

Personal income taxes are at record highs, ringing in at $550 billion in the first four months of fiscal year 2017, or $1.6 trillion annually. But even at those high levels, handing over $830 billion to bondholders will wipe out over half the annual personal income tax take. Yet what is the alternative?

Japan seems to have found one. While the US government is busy driving up its “sovereign” debt and the interest owed on it, Japan has been canceling its debt at the rate of $720 billion (¥80tn) per year. How? By selling the debt to its own central bank, which returns the interest to the government. While most central banks have ended their quantitative easing programs and are planning to sell their federal securities, the Bank of Japan continues to aggressively buy its government’s debt. An interest-free debt owed to oneself that is rolled over from year to year is effectively void – a debt “jubilee.” 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%). BoJ holdings are part of the consolidated government balance sheet. So its holdings are in fact the accounting equivalent of a debt cancellation. If I buy back my own mortgage, I don’t have a mortgage.

If the Federal Reserve followed the same policy and bought 40% of the US national debt, the Fed would be holding $8 trillion in federal securities, three times its current holdings from its quantitative easing programs.

Eight trillion dollars in money created on a computer screen! Monetarists would be aghast. Surely that would trigger runaway hyperinflation!

But if Japan’s experience is any indication, it wouldn’t. Japan has a record low inflation rate of .02 percent. That’s not 2 percent, the Fed’s target inflation rate, but 1/100th of 2 percent – almost zero. Japan also has an unemployment rate that is at a 22-year low of 2.8%, and the yen was up nearly 6% for the year against the dollar as of April 2017.

Selling the government’s debt to its own central bank has not succeeded in driving up Japanese prices, even though that was the BoJ’s expressed intent. Meanwhile, the economy is doing well. In a February 2017 article in Mother Jones titled “The Enduring Mystery of Japan’s Economy,” Kevin Drum notes that over the past two decades, Japan’s gross domestic product per capita has grown steadily and is up by 20 percent. He writes:

It’s true that Japan has suffered through two decades of low growth . . . . [But] despite its persistently low inflation, Japan’s economy is doing fine. Their GDP per working-age adult is actually higher than ours. So why are they growing so much more slowly than we are? It’s just simple demographics . . . Japan is aging fast. Its working-age population peaked in 1997 and has been declining ever since. Fewer workers means a lower GDP even if those workers are as productive as anyone in the world.

Joseph Stiglitz, former chief economist for the World Bank, concurs. In a June 2013 article titled “Japan Is a Model, Not a Cautionary Tale,” he wrote:

Along many dimensions — greater income equality, longer life expectancy, lower unemployment, greater investments in children’s education and health, and even greater productivity relative to the size of the labor force — Japan has done better than the United States.

That is not to say that all is idyllic in Japan. Forty percent of Japanese workers lack secure full-time employment, adequate pensions and health insurance. But the point underscored here is that large-scale digital money-printing by the central bank used to buy back the government’s debt has not inflated prices, the alleged concern preventing other countries from doing it. Quantitative easing simply does not inflate the circulating money supply. In Japan, as in the US, QE is just an asset swap that occurs in the reserve accounts of banks. Government securities are swapped for reserves, which cannot be spent or lent into the consumer economy but can only be lent to other banks or used to buy more government securities.

The Bank of Japan is under heavy pressure to join the other central banks and start tightening the money supply, reversing the “accommodations” made after the 2008 banking crisis. But it is holding firm and is forging ahead with its bond-buying program. Reporting on the Bank of Japan’s policy meeting on June 15, 2017, The Financial Times stated that BoJ Governor Kuroda “refused to be drawn on an exit strategy from easy monetary policy, despite growing pressure from politicians, markets and the local media to set one out. He said the BoJ was still far from its 2 per cent inflation goal and the circumstances of a future exit were too uncertain.”

Rather than unwinding their securities purchases, the other central banks might do well to take a lesson from Japan and cancel their own governments’ debts. We have entered a new century and a new millennium. Ancient civilizations celebrated a changing of the guard with widespread debt cancellation. It is time for a twenty-first century jubilee from the crippling debts of governments, which could then work on generating some debt relief for their citizens.

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Shrinkflation – Real Inflation Much Higher Than Reported

28-Jun-2017
  • Shrinkflation – Real inflation much higher than reported and realised
  • Shrinkflation is taking hold in consumer sector
  • Important consumer, financial, monetary and economic issue being largely ignored by financial analysts, financial advisers, economists, central banks and the media.
  • Food becoming more expensive as consumers get less for price paid
  • A form of stealth inflation, few can avoid it
  • Brexit is the scapegoat for shrinkflation by the media and companies
  • Consumers blame retailers rather than central banks
  • Gold hedge has doubled in value since 2007 

Editor: Mark O’Byrne

Shrinkflation: no one left untouched

600 new words entered our official lexicon this week as the Oxford English Dictionary announced the latest new additions to their online records.

One of the words reportedly up for consideration was shrinkflation. It did not make the final cut and as a result continues to be defined by the authority as ‘a portmanteau, made from combining shrink: ‘to become or make smaller in size’, with the economic sense of inflation: ‘a general increase in prices and fall in the purchasing value of money’.

In order for a word to be accepted into the OED it must have been in use for at least five years. But the latest list suggests that this isn’t the case and exceptions can be made. The inclusion of ‘superbrat’, a word which is usually associated with the behaviour of …..

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GetGame – Turning your game ideas into “Reality”

28-Jun-2017

When Rockstar Games released ‘GTA V’ in 2013, the whole world was awestruck as they got a glimpse of the future of the gaming industry. From that point on the gaming industry progressed in an unprecedented fashion as GTA V became the fastest selling entertainment product by earning $1 Billion in sales in 3 days. Later in 2015-2016, the Multiplayer Online Battle Arena games (MOBA) gained an excellent reputation and held 20% of the total market share of the gaming industry. With the projected estimates of the revenue from the gaming industry touching $110 Billion in 2017, it is now the cynosure for investors.

However, the industry requires substantial funding and is not easy for amateurs to get a platform to develop their games independently. Likewise, it’s hard for small – medium scale investors to invest in the development and reap industry profits. However, a decentralized platform called ‘GetGame‘ is trying to bridge the gap between the developers and the investors. Let’s dive deep into how ‘GetGame’ is bringing the much-needed disruption in the modus operandi of the gaming industry. 

What is GetGame?

GetGame is a platform where developers and investors come together for the successful launch cycle of a game. The platform offers developers a chance to receive the necessary funding for the game, incubate, develop, market and reap profits of their hard work. The platform enables investors to invest in a multitude of projects and even create partnerships and portfolios. The added advantage of the decentralized marketplace to trade game tokens gives the comforts of traditional equity markets while supporting the change in the gaming landscape.

Before being accepted by the GetGame platform, each game must be validated and agree to share 10% of their future revenue with GetGame and all its ITO tokens, REALITY (REA), holders. This way, investors can own a part of GetGame and be part of the future success of the collective while the developers can see the dreams of their becoming ‘Reality.’

Above is an example of a GetGame game in development. The game is called DinoMess and is already live in Australia and the Philippines. You can see the full DinoMess prospectus here.

Ekaterina Samedova, DinoMess GeoGame developer said this about his new game. “Game developing is always a challenge. You try to catch the best trends and merge them carefully to get the successful product. For me DinoMess is more than just a mobile game. It reveals the opportunities, that have been unknown before. It embraces real life activities, it penetrates deeply into business processes, it provides powerful edutainment possibilities. I think that DinoMess is one of the projects, that will get gaming experience to the new level.”

How is ‘Reality’ profitable?

With an end to end service platform that monitors the launch and marketing of the game, ‘GetGame’ is your one stop decentralized marketplace for starting or investing in games. The GetGame platform provides unique opportunity to step into VR market as an investor. The platform offers support for the high-end mobile game titles and builds an ecosystem for both publishers and game developers. With Virtual and Augmented Reality games poised to be the future of the gaming industry, GetGame offers you a piece of this lucrative pie. Specializing in these verticals, GetGame is all set to become the platform that would nurture the future of hardcore gaming.

GetGame ICO launch

The tokens distributed in the ICO launch of GetGame will trade under the name ‘REALITY’ using the symbol REA. On purchasing the tokens, investors reserve the right to invest in the projects on the GetGame platform in the future using the tokens. This token is backed by the OpenLedger DC and the Danish company behind it all OpenLedger ApS. The planned supply of tokens is 2,000,000 REALITY and might go up to a max quantity of 10,000,000 REALITY. While the early bird offer to avail the tokens is over, the ICO is scheduled to be sometime in December this year. With such promising features, the platform is all set to disrupt the gaming industry in all sectors unequivocally.

You need to have a verified account on OpenLedger. If you do not have an interest in any future ICO, it is possible to buy without validation as well.

[KR1089] Keiser Report: Green Gold

27-Jun-2017

In this episode of the Keiser Report from Mexico City, Max and Stacy discuss ‘green gold’, grasshoppers and inflation in Mexico. In the second half Max interviews Jose Rodriguez, VP of payments at Bitso, about bitcoin and other cryptocurrencies impact on the Mexican markets. They discuss initial coin offerings, hard forks, soft forks and crypto euphoria.

[Sorry, but whoever uploaded the video messed up because it does cut out suddenly at 18.08; here is the video in Spanish, if you can speak that.]

Goldman, Citi Turn Positive On Gold – Despite “Mysterious” Flash Crash

27-Jun-2017

Goldman and Citigroup Turn Positive On Gold – Despite “Mysterious” Flash Crash

– Gold bounces higher after “mysterious” one minute “flash crash” mistake

– $2 billion, 50 tons or 1.8 million ounces “fat finger” trade blamed

Gold in USD – 1 Week

– Massive selling at 0400 EST when U.S. markets closed and  thin trading amid holidays in Muslim countries including Turkey, Singapore and Malaysia.

– Mystery is that “fat fingers” in gold market are always sell trades that push prices lower

– Traders or market ‘muppets’ frequently push gold market lower … not other markets

– Only small 0.9% loss on the day and bounce back shows deep liquidity and robust nature of gold market

– Similar massive selling of bitcoin or other crypto currencies would likely lead to massive price fall

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What is the difference between cryptocurrency Maxcoin and digital currency?

27-Jun-2017

The mistake that a digital currency and a cryptocurrency are the same things, is made often.

It is true that Maxcoin is both, a cryptocurrency and a digital currency.

But what exactly is a digital currency?

And what is a cryptocurrency?

What exactly is the difference between those two currencies?

Read more: What is the difference between cryptocurrency Maxcoin and digital currency?

Will Bitcoin survive it’s faster competitors like Maxcoin?

27-Jun-2017

Is Bitcoin really fast enough for it to be considered “instantaneous”?

Will it survive it’s faster competitors like Maxcoin? Is it a realistic platform for on-site transactions on the retail and on-trade environment?

Will it work alongside with faster coins as the “safer” and more “vintage” cousin of the family?

Or is it doomed to fall to faster and more modern competitors like Maxcoin?

Read more: Will Bitcoin survive it’s faster competitors like Maxcoin?

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