Cryptocurrency Bank AriseBank To Acquire 100 Year Old FDIC Bank; Partner With BitShares.

Intro by Vince Lanci

via the Soren K. Group at Marketslant.com

The Next Revolution is already Happening

Over the past few weeks, I"ve had the pleasure of meeting the next revolutionaries in the democratization of money. This was while looking to understand better the guts of the blockchain tech and how it differed from crypto to crypto. I had the  pleasure of meeting with and  speaking to several people involved with Bitshares and those  involved  at the  periphery with Arisebank. During that time, by coincidence, Arisebank was in the process of doing the deal described in the headline. And I was able to look through the glass at this event where people were ,to my eye, looking to facilitate the transition from intellectual ideas to applications in reality. That is what Capitalism is in part about. Providing a service that fills a need and makes it easier which  gets you paid. Not making a dollar and being apathetic if the service actually helped someone. Free market capitalism allows for new ideas to make it (or not) on their own merits. That is what I saw. The potential  for self-clearing markets to  reassert themselves and for money to get to where it is needed most without incumbent toll booth operators throttling ideas fortheri own benefit.

I saw people who will make a bundle of money by adding value to a system in need of overhaul. i spoke wit ha few on a guarantee of anonymity. One key person said to me  in response ot me pointed question that blockchain is the beginning, Bitcoin may be the early pioneer, but like the Palm pilot, it was replaced by better tech. Why wed yourself to Blockchain?:

"Look, the tech is evolving, and we are already looking at how Quantum computing will make different types of tech more palatable than blockchain. I agree with you. In a few years at most, something better will come along. And that is a good thing. Because the goal here is to use these new tools to remove the friction in all things that prevents ideas from getting their chance to make it or not on their own merits. If you ( he was addressing me directly here) have an idea that will make a market more efficient and serve the greater good, I want to hear about it. Because now, I can help you get it into "production" much easier because  of what we can  do."

My response was: Sure, I feel intermediaries in general that do not add value need to be removed. Frankly, I feel Precious metals producers"  have been victims of their own ignorance for years. As a result they are captive clients to intermediaries who tell them when to hedge in order to maintain their credit line. Meanwhile those same firms that manage the producer"s banking, LOC, ISDAs, and production hedging are making money not just from those services, but on the prop-side of being able to benefit from the natural sell order flow captive producers provide. This is too much friction from production to user. It"s like a poorly connected pipeline slows waterflow"

His response was simple:

"Exactly. And we are already working with someone who is working on solving that problem right now. You should connect with them. "

And in 24 hours I was involved in a pressure cooker with a couple geniuses having conceptual discussions on how to use the available tech to make more precious metals distribution from producer to end user more efficient. The point is, the man quoted above was all about making  it happen. And it likely will if the people I"m now talking with and learning from get their wish. i hope to be sharing more on this topic soon. Moving on to the event at hand today.

Better Money Needs a Better Banking Model

If money is the life blood of capitalism, then banks are the valves that control the flow of that blood. In this way, traditional banks can sometimes make errors in allocation of investment capital, errors in custodial trust, and due to their centralized “gatekeeper” status have a Fed sponsored franchise that can be a deterrent to efficient, free markets. If you had the time to listen to my podcast yesterday on this topic you can see where I was coming from in light of today"s events.

This is actually why crypto currencies are vulnerable. They are not regarded as money officially, like Gold is not anymore either . They are also in the process of being regulated via futures listing and “crackdowns” to protect us so we are told; also what happened to precious metals. 

There are many of them, and this fragmentation itself has risk that comes with its promise of economic freedom. Many will not make it. And they exist outside the banking network. 

But what happens if a crypto (or all crypto currencies) gets access to the circulatory system itself? What happens when a cryptocurrency, due to Blockchain’s distributed ledger accounting tech, obviates the need for those custodial trustee valves that  exist like manned toll booths when ez pass exist? They unionize in a panic to protect their jobs. That is what happens. And that has begun. 

To digress a second, we actually pay to get access to our money now. Cash Remember the advent of the ATM? It was heralded as a cost reducer for banks and a convenience for the client. Now, it is a profit center where people frequently are charged to get their money. This is basically cash trading at a discount to digital cash. You are paying the bank money to use your money in private transactions . But Quick-Pay, in which they monitor all cash use and collect data from, is free; for now. 

Supply Side Scalability is No Longer a Viable Business Model in a World Without Scarcity. Demand Side"s Network Effect Model Is

Banking’s centralized method of  “service” which at one time was necessary for orderly and counter-party trustworthiness in markets, has either outlived itself or become easily abused in its use. The trust resided in the person who did the  custodial duties.  Their supply side-market structure based on scalability, key to the industrial revolution, is no longer the most efficient. Scarcity is not the problem anymore. Distribution is. And that means another business model applies more efficiently. It is the demand side market structure model based on the network effect. And  to implement that, we need  a better way of mitigating counterparty trust that removes the  human element and bottleneck that comes along with its centralized systems. 

Traditional brick and mortar centralized Banking, like every industry before it, is jeopardized by the most important concept behind the current disruptive technological movement: decentralization. The problem with decentralization for banking until the advent of Crypto and blockchain tech is: it was not compatible with mitigating counterparty risk.  Therefore a centralized authority was needed. Distributed ledger accounting tech removes the need for a central custodial trustee to protect you from counter-party risk. This is what tech geeks say when they refer to a "trustless" transaction. They mean; there is no need for a human to verify the authenticity of the deal. The trust is verified at its DNA level so to speak.

The Bank Teller"s Revenge

When they fired the tellers it was a good thing for everyone but the tellers. What happens when the credit officers are not needed in a few years? What happens when those technologies that banks use to lower costs actually replace their revenue streams like Letters of Credit, banking fees and other overpriced franchises? White collar people get fired, that"s what happens. Credit lawyers alongside operations managers. The corporation will triage every extremity it has to, to continue to perpetuate its own incumbent authority and existence. It could get very weird. Call it the Teller"s Revenge if it plays out as it could.

The replacement is not crypto per-se; it is Crypto , Gold, Fiat, or anything that people agree is money but in a decentralized system where perfect money (whatever that may be) can exist in a perfect banking system. One that does not need to violate privacy to ensure custodial trust anymore.

Centralized Clearing will be less needed like centralized execution was obviated before it by things like Globex.  Electronic trading platforms removed the need for Central Limit Order Books (CLOBberred Clients) in commodities. CLOBs were comprised of resting orders entrusted by clients and handled by their bankers who traded both principle and agency. This was how the Gold , Silver and LiBor Fixes were run, and we now know how that worked out.

Specifically, a decentralized crypto-exchange that operates network across the borders of nation states on combination with decentralized bank with FDIC approval? Globalism without centralization, organically better for all and a remover of walls for the flow of free capital would be possible. Enter Arisebank in partnership with Bitshares..

- Vince Lanci

contact Vince at vlanci@echobay.com

Cryptocurrency Bank AriseBank To Acquire FDIC-Insured Bank; Partners With BitShares.

Written by Michael Taggart at Huffington post

 

Arise Bank offers a myriad of services to consumers looking for a banking alternative. 

 

Dallas, TX —- AriseBank announced that they have reached an agreement with an FDIC insured bank, that has been operating in the United States for over a century, that they will acquire them before the end of the year. This comes on the heels of their record ICO launch, where AriseBank plans to raise one billion dollars, which would end up being a record in the ICO investment space. 

“We are very excited to be at the forefront of history today. We feel like this was going to happen eventually and wanted to get the process started for the industry as a whole. There are certain people who may disagree with this move but, it has to happen eventually. The bank we are acquiring has hundreds of banking partnerships across the world and many certifications and licenses that make sense when it comes to interacting with our decentralized cryptocurrency platform”, said Jared Rice Sr., a co-founder and current CEO of AriseBank. 

 

Arise Bank is the worlds first decentralized bank.

 

With this acquisition, AriseBank, the world’s first decentralized cryptocurrency bank, now has the full financial capabilities of traditional banking coupled with the power and platform of real-time crypto-banking including a global network of ATM’s, debit cards and an AI trading platform. 

“The world’s first federally compliant, decentralized bank invites visionary strategic partners from all countries”, said Eddy Taylor a BitShares partner and a current advisor to AriseBank. “Arise features will include quantum computer-safe operating systems, multi-crypto debit cards, cell to satellite global outreach and much more”, he said. 

Also included in the acquisition is a 25-year old investment bank that Arise plans on converting to a crypto-investment house for consumers around the world. “We plan on growing investor confidence outside of our decentralized platform, which will enable many other outside services in areas like real estate, among many others on a global scale. 

 

Bitshares DEX is the worlds first decentralized cryptocurrency exchange.

 

This acquisition is happening concurrently with the announcement of a strategic partnership with BitShares, the world’s busiest financial blockchain as seen on blocktivity.info. AriseBank, the first decentralized bank is teaming with BitShares, the first decentralized exchange to provide a comprehensive platform for real-time delivery of incorruptible financial products and services. 

BitShares (BTS), with a market cap of $680M, is also a smart coin factory with hundreds of innovative financial products and compliant ICO offerings. It currently holds the record for over one million blockchain transactions per day dwarfing the performance of Bitcoin and all other blockchain networks. BitShares has in turn, teamed with the United Precious Metals Association (UPMA) to bring real-time metal-backed digital currencies into the mainstream. 

 

Gold and Silver can be used as legal tender in many states in the US, and other countries around the world.

 

The combined strengths of a conventional bank + decentralized bank + decentralized exchange + smart coin factory + gold depository + enterprise integrator makes the first full service alternative financial system to offer honest money and a level the playing field for all mankind. 

For more information contact:

Eddy Taylor (310) 940-2404 or visit SovereignHero.com.

John 469-71-ARISE or visit AriseBank.com

Risk Of Online Accounts Seen As One of Largest Brokerages In World Temporarily Halts Online Trading After "Glitch"

- "Technical issue" at Fidelity blocks access to online accounts, stops online trading
- Fidelity is 3rd largest brokerage by client assets: $1.7 trillion at the end of 2016
- NatWest, RBS, Ulster Bank  have experienced online banking "issues" in November
- Clients left without access to funds & failed payments & little to no recourse
- Social media exposing the banks" and online trading platforms" shortcomings
- Reminder that online accounts can be rendered non-viable and vulnerability of absolute dependence and digital cash, digital gold etc

Editor: Mark O"Byrne

Yesterday, customers of Fidelity, the third largest brokerage in the world, found themselves unable to access their online accounts.

The company is responsible for an estimated 8% of total US wealth management. With such a huge responsibility, Fidelity,  like most companies, works hard to ensure clients have access to online accounts at all times.

Yet it still happened, reminding investors of the risks posed by digital assets - be they stocks, gold or indeed deposits - held solely through online accounts and platforms - the "Single point of failure".

Fidelity is just one of many online "outages" or "glitches" reported by financial institutions in the last year. In Europe, particularly the United Kingdom, banking customers have found themselves regularly facing bank account "glitches". It is thanks to social media that some of these even come to the fore, with many organisations keen to sweep them under the carpet.

Investors, savers and, in fact, any user of online services needs to be aware of the risks and how to protect themselves in the case of a sudden "access denied" message or worse, a prolonged period of not being able to access, trade and or withdraw funds from an online account.

Not like the old days...

Prior to online accounts it rarely occurred to users that they could suddenly be without access to funds, unable to make transactions or even receive their wages. Sadly, with the dawn of the internet and growing cyber security risks this is something no-one can afford to be without a plan-B for.

Outages can happen for a number of reasons, but many result in customers being unable to transact and being without funds.

In the case of Fidelity, it appears to have been an internal error, which also seems to be the common thread among many banking outages. However, cyber security is a major threat to any account that involves personal data and financial information.

Just this week Uber finally admitted exposing hackers to over 2.7 million customers" data, putting savings and futures at risk.

We must also consider what happened in Puerto Rico for a lesson in how vulnerable we are should natural disasters impede access to much needed personal funds for days and weeks.

Absolute reliance on online accounts and digital cash and digital gold is not prudent. When such accounts can be rendered non-viable in a matter of seconds, there is little recourse for the digital saver and investor should they not also own some tangible assets.

Social media prevents cover-up

Online account failures are becoming more common. We are increasingly aware of this thanks to social media. Whilst the majority of outages experienced in the West are resolved within a few hours (in the case of Fidelity it was hours) or days, customers are left feeling nervous and frustrated and in some cases they experience real repercussions. Rents are not paid, important direct debits fail and charges are incurred.

This last month Lloyds and Halifax Bank of Scotland experienced major issues with accounts. Some account holders not only found transactions weren"t processed but also logged in to be told they no longer had an account with their bank.

Many customers in the recent Natwest outage were particularly frustrated at the bank"s lack of communication and failure to alert account holders to the problem.

“Not just an online problem, my bank card is not working now as well for online payments! People have bills to pay, how much longer?”

“You were acknowledging this problem over an hour ago but only to those that tweeted you directly. Why has it taken so long for a public tweet?”

Also this week Nationwide customers found themselves embarrassed when their funded accounts suggested they had no money:

Banking outages are becoming so common that we no longer hear reports in the mainstream media of them. Users report to feeling "embarrassed" but the reality and severity of the situation and can have far-reaching complications.

One would have thought that banks would have learnt from the 2012 disaster that was seen in the summer of 2012 for customers of RBS, NatWest and Ulster Bank. Users found they could not access funds for a week or more as account balances had to be manually updated. RBS was fined £56m for the inconvenience and risk placed on account holders.

Complacency amongst bank and online account users

I don"t think I am aware of a single person who has not experienced problems with bank or financial account services. Whether access to, payment issues or information failure everyone I know has come up against such issues in the past.

Concern regarding the risks to online customers is so high that the European Banking Authority this week mentioned the growing reliance on online digital platforms as a major risk to customers.

What do the majority of people do? Get a bit annoyed then shrug their shoulders and make some comment about "banks today". The same goes for the likes of Fidelity, Uber and TalkTalk, non-banks who have also exposed their customers with little to no recourse for the end user.

The lethargy regarding customers" switching banks is astonishing when one considers the problems that have been caused in recent years. This is for two reasons, the first is because there is little knowledge of the alternatives out there and secondly, because there is a belief that this is just what you have to put up with these days.

This is a sad state of affairs. Those who earn and save money have every right to be able to access their funds at all times, for whatever purpose. It is tragic that the digital, online economy has made many feel otherwise. For something that was heralded as giving customers so many more options, it is instead making many feel trapped and without options.

Cyber-attacks, natural disasters and technical errors are all very good reasons for those who wish to hold money and data with an organisation to seek out ways to diversify their investments. This is not just in terms of spreading the risks between digital accounts, but also away from solely digital assets.

Non digital gold cannot be exposed to "glitches" 

Gold and silver often get a bad rap when it comes to discussions about their role as money. Both are pushed to the bottom of the pile when you consider the convenience of spending on a card, paying out wages or making quick gains when trading stocks and shares.

But one thing that is guaranteed with physical, allocated and segregated gold and coins and bars for delivery as offered by GoldCore, is that you know you will always have access and liquidity due to outright legal ownership of bullion. Either with bullion in your possession or with direct ownership in some of the safest vaults in the world. That is not the case with fiat electrons bank accounts or online trading accounts, whether in times of crisis or technical outages.

In addition many such platforms force you to only buy and sell through their online account and their online platform and website. Such digital platforms are “closed loop systems” where liquidity and pricing are dependent on a single platform, website and large corporation. A buyer can only buy and sell through that one online platform. An investor is in effect “captive” and massively dependent on that one counter party and a single point of failure.

No matter the town, city or country you find yourself in, times such as these pose multiple threats whether military, natural or just digital.

Today we still assume banks, companies and governments are competent and will look after our accounts. We cannot bring ourselves to imagine electricity systems and our banking systems including ATMs going down and not having access to our hard earned savings. This is despite it clearly happening increasingly frequently.

News and Commentary

Gold volatility "breakout" coming soon to ‘eerily quiet’ market - Metals Expert (CNBC.com)

Gold inches up as dollar weakens after U.S. Senate tax bill stalls (Reuters)

Dollar Dips as Tax Bill Hits Snag; Stocks Decline: Markets Wrap (Bloomberg.com)

U.S. Mint American Eagle gold, silver coin sales fall sharply (Reuters)

Turkish gold trader implicates Erdogan in Iran money laundering (Reuters)

Source: City AM

"There will be pain": Bank of England"s Carney warns against no deal Brexit (City AM)

Chance of US stock market correction now at 70 percent: Vanguard Group (CNBC)

4 habits that will make you poor (SBCH)

How central banks paved the way for bitcoin’s birth (MoneyWeek)

Sharia-compliant gold standard - Response from Muslim investors has been positive (The National )

Gold Prices (LBMA AM)

01 Dec: USD 1,277.25, GBP 946.57 & EUR 1,072.51 per ounce
30 Nov: USD 1,282.15, GBP 952.64 & EUR 1,084.06 per ounce
29 Nov: USD 1,294.85, GBP 965.70 & EUR 1,092.46 per ounce
28 Nov: USD 1,293.90, GBP 972.75 & EUR 1,088.95 per ounce
27 Nov: USD 1,294.70, GBP 969.73 & EUR 1,084.83 per ounce
24 Nov: USD 1,289.15, GBP 967.89 & EUR 1,086.37 per ounce
23 Nov: USD 1,290.15, GBP 969.93 & EUR 1,089.40 per ounce

Silver Prices (LBMA)

01 Dec: USD 16.42, GBP 12.16 & EUR 13.80 per ounce
30 Nov: USD 16.57, GBP 12.32 & EUR 14.00 per ounce
29 Nov: USD 16.90, GBP 12.60 & EUR 14.26 per ounce
28 Nov: USD 17.07, GBP 12.84 & EUR 14.36 per ounce
27 Nov: USD 17.10, GBP 12.81 & EUR 14.32 per ounce
24 Nov: USD 17.05, GBP 12.80 & EUR 14.38 per ounce
23 Nov: USD 17.10, GBP 12.84 & EUR 14.43 per ounce

Recent Market Updates

- Low Cost Gold In The Age Of QE, AI, Trump and War
- Own Gold Bullion To “Support National Security” – Russian Central Bank
- Bitcoin $10,000 – Huge Volatility of Cryptocurrencies and Risky Fiat Making Gold Attractive
- Financial Advice from Dr Wayne Dyer
- Buy Gold As Fed Shows Uncertainty And Concern Over Financial ‘Imbalances’
- Brexit Budget – Grim Outlook As UK Economy Downgraded
- Geopolitical Risk Highest “In Four Decades” – Gold Demand in Germany and Globally to Remain Robust
- Gold Versus Bitcoin: The Pro-Gold Argument Takes Shape
- Money and Markets Infographic Shows Silver Most Undervalued Asset
- Is New Fed Chief A “Swamp Critter Extraordinaire”?
- Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe
- UK Debt Crisis Is Here – Consumer Spending, Employment and Sterling Fall While Inflation Takes Off
- Protect Your Savings With Gold: ECB Propose End To Deposit Protection

Related Reading

Puerto Rico Without Electricity, Wifi, ATMs Shows Importance of Cash, Gold and Silver

Massive Equifax Hack Shows Cyber Risk to Deposits and Investments Today

Internet Shutdowns Show Risk of Digital Gold Platforms

Yahoo Hacking Highlights Cyber Risk and Increasing Importance of Physical Gold

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

Credit, Crypto, & Kuroda's "Bat-Shit-Crazy Monetary Expansion"

Authored by Kevin Muir via The Macro Tourist,

Today’s post will be about Japanese yen vol, but I am sure to bore some readers with that topic, so I am starting with something a little more interesting.

 As many of you know, I am a little bit of a bitcoin skeptic. At the end of the day, I have trouble investing in the ledger in the sky.

Call me old-fashioned, call me a troglodyte, call me a bitter gold bug, call me whatever you want, I just can’t bring myself to get long bits in the cloud. And before you send me messages how I don’t understand it, don’t forget I was mining bitcoin before most of Wall Street had ever heard of it. So I am much more than just some trade-a-saurus that refuses to get with the times, I am the knob who passed on bitcoin at $5.

Yet I have the privilege of counting Tony Greer from TG Macro as one of my pals, and his enthusiasm about using crypto currencies for micro-payments has piqued my interest. From Tony’s great letter the other day:

For selfish reasons, this is the article that gets me most excited about bitcoin and the blockchain. The streamlining of media distribution is going to kick the door open for individuals to compete with publishing powerhouses and main stream periodicals.

Publishing content on Amazon, iTunes, even YouTube is extremely costly for the author/artist. Youtubers can’t earn money until they get 10,000 views. Apple and Amazon take between 30% and 75% for the right to their distribution networks. Since media consumption has gone digital, it’s been difficult to charge on a PER ARTICLE basis because of high transaction costs making it prohibitively expensive. All that’s about to change. The blockchain is going to allow thousands of transactions to be processed at low to no cost, it will preserve a record of all those transactions along with all the content, it provides transparency for the artist/author and consumer, and one day, it will make the Morning Navigator available to every single reader in the world for $1 per copy.

Take a moment to read the article Tony linked to. Yeah, I know. You would never expect me to be linking to an article in BitCoin Magazine, but life’s funny.

I have no real counterargument to the idea of using cryptos for micropayments. There is a real need for the ability to easily transfer small amounts of money. Given that it is simply a change in a ledger at a bank, it should be virtually free. Yet the banks, VISA and Mastercard, have for too long enjoyed oligopoly pricing, and just like the music industry fifteen years ago, they will not willingly lower their fees until it is too late.

The other day I was out with some bankers who were explaining Ben Davies’ newest project. Many of you will remember Ben as the CIO of Hinde Capital, but a year or so ago he left to devote his time to GLINT. Having a look at the prototype, I realized this product very well might change the way we think about global currencies and how we transact. I will not bother shilling their service (if you are interested click on the link to get to their website), but needless to say, existing financial institutions should be worried about the emergence of GLINT, Goldmoney, and all the other fintech startups that are nipping at their heels.

Up until now, the biggest beneficiaries of the move to digital cash have been VISA and Mastercard. And although I understand all the reasons why their point of presence will make de-throning them difficult, I just can’t help but wonder how long before their margins are threatened.

It’s not like their stocks are down and out…

I am not advocating investing in bitcoin, GLINT, or any other fintech startup. As I have shown, I am not smart enough to tell you who is going to win. But I am beginning to wonder if the easier trade is to short VISA and Mastercard. For too long they have enjoyed oligopoly style rents, and I just think that the real takeaway from all this new technology is that their day in the sun might soon well be over…

*  *  *

Japanese Yen Volatility

Between 1999 and 2012, the Bank of Japan increased their balance sheet threefold, raising it from 10% of GDP to 30%. Many a pundit screamed about Japan’s irresponsible monetary policy, but then the 2008 Great Financial Crisis hit, and suddenly the BoJ’s policies didn’t seem that extreme. The Fed embarked on a massive quantitative easing program, followed by most of the rest of the developed world. Next thing you knew, the Bank of Japan’s bloated balance sheet seemed like just one of many.

Post GFC, the rate at which these other Central Banks were expanding their balance sheet put extreme stress on the Japanese economy as the BoJ’s relatively tame quantitative easing policy was overwhelmed by the rest of the world. Global deflation was exported to Japan. And just when things couldn’t get worse, Japan was hit by the tsunami / nuclear disaster. Paradoxically, this caused a spike in the USDJPY rate down to 75, with the Yen hitting an all-time high value against the US dollar.

This proved the final straw for the Japanese people, and Prime Minister Abe was elected on a platform of breaking the back of deflation through innovative extreme policies. And just like that, Abeconomics was born.

Since then the Bank of Japan balance sheet has swelled from 30% of GDP to 95%!

It’s too easy to take this for granted. The blue tickets just seem to keep coming, and coming, and coming. Pretty soon, it all seems so normal.

But it isn’t. Not even close. This is bat-shit-crazy monetary expansion. Forget about arguing whether it is appropriate or needed. It doesn’t matter. The markets don’t give a hoot about your opinion. Nor does the BoJ. Heck, they barely even care what Yellen or Trump thinks. They are going to do what they think best for their people, and that means inflating the shit out of their currency.

What I find amazing is how complacent the markets have become about all of this. Sure when Abeconomics first came to pass there were tons of worrisome hedge fund presentations about the inevitability of disaster. But since then Kyle Bass and all the other Japan skeptics have moved on to China, or to the most recent hedge-fund-herding-theme-of-the-day. Yet at one point a few years back a reporter asked Kyle if he could put on one trade for the next decade and couldn’t touch it, what would it be? Bass answered gold denominated in Yen. I have this sneaking suspicion our favourite Texas hedge fund manager’s call was way more prescient than even he imagines (I just hope Kyle hasn’t taken it all off to bet on the China collapse.)

It’s not like the market hasn’t figured the short Japanese Yen trade out. Shorting Yen is one of the go-to carry trades for macro traders everywhere.

I am not adding much value by reiterating climbing aboard this trade. It’s a crowded trade, and most importantly, not that original.

The trouble with crowded trades is that the exit doors are always too small. And even the BoJ is worried about the possibility of a speculative unwind in the Japanese foreign exchange market.

It was with great interest that I read an article in the Nikkei Asian Review titled “Japan looking to tamp down leverage in forex trades”.

Japan is considering lowering the maximum leverage permissible in foreign exchange trading on grounds that both retail and institutional investors are facing greater risks should the market face sudden fluctuations.

Foreign exchange margin trading in Japan amounts to roughly 5 quadrillion yen ($44.2 trillion) annually. The lower cap would reduce the risk of a crisis originating in Japan, but will likely be met by resistance from industry players.

The Financial Services Agency has begun discussions with the Financial Futures Association of Japan on changing the rule. The leading proposal would reduce the maximum leverage ratio from 25 to 10. The cabinet could issue an order as early as next year to place the new ceiling into effect.

I don’t necessarily think this regulatory change will be something that causes the whole Yen carry trade to unwind, but it’s one piece of a puzzle that definitely seems precariously perched. The BoJ wants the yen to decline, just not too fast. The trouble is that markets don’t always let Central Bankers devalue currencies in a nice calm manner.

I have long held the view that most market pundits are expecting the next crisis to look just like the last. They are all shorting credit because that’s what worked last time. And it’s also why for the longest time, VIX was consistently trading at a higher price than realized volatility. Long equity volatility was the real big winner last time, so everyone loads up on VXX because after all, we all know the next 2008 style crash is right around the corner.

Well, I might not know much, but I know that the next crisis will not be the same as the last one. It never is.

So while everyone is busy loading up on VIX calls, or buying CDX protection, I am more interested in thinking about where the global financial system is most unbalanced.

And I can’t believe there is anything more frightening than the manic increase in the BoJ’s balance sheet. I don’t know if it is going to end in a stomach churning roller-coaster-style free fall where the BoJ loses control of their money supply and the Yen spikes to 200, or if some other event will cause a massive short covering rally of Yen that forces a rally back to 95 or even 85 before the BoJ steps in, and prints an even stupider amount. But I am convinced it is not stable.

You would think that given the massive money printing the market would have bid up the price of protection, but Japanese implied volatility is remarkably low. I have plotted the 6-month over-the-counter implied volatility level of the Yen over the past few years.

Of course, the 2008 crash caused a pick up in volatility, so the move to 22% does not seem unreasonable. And the ensuing move back to 8% makes sense. Then with the introduction of Abeconomics, the rally to 14% is easy to justify. But it’s the drifting back down to sub 10% that I think mispriced.

There is no way that the Yen has the same risk as the 2001-2006 period. It just ain’t so. Kuroda has taken Japan down a monetary path that is unprecedented. To think that this will road will not be filled with huge obstacles is naive. Yet here at 10% for six-month Yen vol, we are only a couple vol points away from the lower end of the range of the past couple of decades.

I am buying long-term Japanese yen volatility. No, I don’t trade OTC, so I am going to the CME and buying straddles, strangles, and every other long vol option spread I can think of. I wish there is was some way to just buy a VXX type ETF of the Yen, but there simply isn’t demand for this type of product. The inability to easily buy a hedge is precisely why it stands a much better chance of being the real risk you should be worried about.

Japanese yen volatility is too cheap given the dangers involved in this crazy monetary experiment. Just because all the hedge fund wise guys have forgotten about the trade doesn’t mean you have to.

Panics don’t occur when everyone is looking for them. I am not sure about the trigger, and heck, I am not even sure about the direction.

But I do know that you don’t print 65% of your GDP in 5 years and not affect markets.

There will be consequences, we just don’t know what they are yet. Get your insurance while you can, not when you have to…

Bitcoin's Biggest Bull Isn't 'Long Crypto', He's 'Short Government'

Six years ago, Kyle Bass provided a crucial context for the debt-laden world of ever-increasing sovereign debt:

"Buying gold is just buying a put against the idiocy of the political cycle. It"s That Simple"

And now, as interest in Bitcoin surges, Arthur Hayes, a former CitiGroup trader who runs BitMEX - a Hong Kong-based crypto exchange - asks an interesting question - In the coming war between digital currencies, which side will your money be on?

As CoinDesk reports, Hayes thinks blockchain is lighting a fuse that will ignite open combat between "true cryptocurrencies" (like bitcoin) and a new "digital fiat" controlled by central banks.

These two parallel currency systems are the inevitable outcome of his core investing thesis:

"A digital society needs digital cash."

In other words, bitcoin has brought the world cryptocurrency and institutions of all kinds will use the technology to their advantage.

Here"s what Hayes sees shaking out as a result: Governments will respond to the proliferation of cryptocurrency by withdrawing banknotes from circulation, and governments will issue digital fiat that functions similarly to cryptocurrency.

But don"t be fooled, according to Hayes, the similarities here are all on the surface.

Government-controlled digital fiat will be the antithesis of absolutely everything true cryptocurrency stands for. Central bank"s issuance of digital money will lead to a brave new world where governments are able to monitor and control every single transaction in an economy.

And countering that overreach is the reason Hayes believes bitcoin and other cryptocurrencies have a value proposition not just today, but for years to come.

When Hayes talks about digital money, he sees the scope of battle on a truly global scale, not just within the U.S., but all across Europe, in China and in India.

What all these country"s governments have in common, according to Hayes, is the desire to use digital fiat as a tool of economic control.

He sees digital fiat as an instrument that will allow governments and global central banks to monitor every financial transaction, tax every sale and even lock out people from the payment system if they don"t have the right government-issued licenses.

Shifting digital fiat into cryptocurrency, he reasons, will be the only way to preserve privacy. Plus, cryptocurrency will allow individuals and businesses to trade in jurisdictions where parties don"t trust electronic fiat – or each other, for that matter – because they know cryptocurrencies cannot be tampered with.

Hayes said:

"If you want to have a financial presence – and not have somebody else know what you"re doing at all times – then you"ll use a form of cryptocurrency."

A form of cryptocurrency that"s true, like bitcoin, zcash, monero or dash, he says, is one that offers users both privacy and security.

But there may be limits to the value propositions of even true cryptocurrencies today. For example, Hayes sees small value transactions are out of line with a once resounding narrative in the space, that bitcoin is – and should be – a payment system for consumers. Hayes told CoinDesk:

"I don"t think bitcoin is going to replace consumer facing activities, like buying a cup of coffee or buying a magazine at a 7-Eleven."

Hayes called bitcoin"s user experience "terrible" for these purchases, because public blockchains are slower than private payment systems. So, for a trip to Starbucks, buying coffee with Apple Pay is a better experience than paying with bitcoin, he contends. It"s an interesting observation in that many of bitcoin"s strongest proponents tend to envision a world where the cryptocurrency is used for everything. Even still, Hayes is just as bullish on bitcoin, as he continues to reiterate what a fantastic mechanism it is for online international payments and anonymity.

And "those trade flows are massive," he said.

Free State Bitcoin Shoppe: Interview With Co-Owner Derrick J. Freeman

Via The Daily Bell

Can you give me the rundown on your shop?

Derrick J: Free State Bitcoin Shoppe is a place for people to level up on their cryptocurrency knowledge and trade their digital cash for unique tech and freedom-themed souvenirs. Our mission is to help people use better money.

To a backdrop of dance-punk and electronic music, we offer one-on-one assistance to the bit-curious to help spread the crypto-economy in New Hampshire. It"s packed with seditious propaganda like libertarian art and literature, books on programming, and freedom tech like hardware wallets and USB thumb drives with TAILS Linux loaded on them (the operating system Edward Snowden uses to protect
his privacy online).

When we"re not busy teaching tourists and passers by about Bitcoin, the shoppe is an office for [co-owner] Zyler and me: where we do coding, writing, and video production. The Shoppe is right on the edge of New Hampshire at 56 State St in Portsmouth -- so close that both the water and Maine"s coast are visible from our front door.

What do you sell at the shop? Is there specific merchandise you hope to add?

Derrick J: We sell things you won"t find anywhere else: Doge curtains and pillows, 3D-printed combination locks to protect USB keys, Tesla T-Shirts, laser-cut wood boxes with secret compartments, BipCot Licenses, Bitcoin clocks, an Aztec calendar, build-it-yourself 3D-printer kits, and various New Hampshire-themed gifts. Next week, a unique Bitcoin vending machine will arrive at our store, offering the opportunity for people to trade in their Federal Reserve Notes for Bitcoin, Dash, and Monero.

Besides Bitcoin, what forms of payment do you accept?

Derrick J: Monero is preferred. We take all forms of cryptocurrency and offer 20% if you pay for the merchandise with that currency. Yesterday, a customer bought $85 of doge-themed merchandise with Doge-coin.

We don"t take Federal Reserve Notes, credit cards, or metals. (Sorry, silver bugs. Time to realize the silver thing is never going to happen.)

Since the value of Bitcoin fluctuates, how do you set the prices?

Derrick J: It"s easy. We set prices in Bitcoin. The bitcoin wallet on your phone will convert instantly so you can see how much things cost in terms of dollars or any other currency.

How did you choose the location for your shop?

Derrick J: We had been scouting locations for a retail shop for a month or two. While walking downtown in the Portsmouth Pride Parade this June, we passed some empty windows where a small boutique had been.

We said "This would be perfect!!" It"s 100 feet from the biggest park in town, where musical theater and concerts play daily and nightly, visible by the water, plenty of parking across the street, and adorable tourist-trap stores nearby that attract lots of foot traffic from international guests. It"s one of the busiest corners in one of the wealthiest and most happening places in the Shire. It"s the perfect location to draw in people to learn about Bitcoin.

You have long been a liberty activist. You have committed acts of civil disobedience (Derrick J"s Victimless Crime Spree), challenged unjust laws in court, and even spent some time in jail. Does this shop mark a shift in tactics for gaining individual freedom?

Derrick J: Yes, totally. I"ve learned through trial and error what works and what doesn"t.

Civil disobedience may be moral and make me feel good, but it is ineffective at achieving more freedom unless others participate en masse. Good luck with that -- most people aren"t courageous enough to take any risks and would prefer comfortable slavery to dangerous freedom.

Instead, I am taking the entrepreneurial route: offering political art and freedom-enhancing tools in exchange for cryptocurrency. The mission isn"t as much to "make money selling merchandise" as it is to grow the value of my cryptocurrency holdings by growing the network. As more and more people use bitcoin, the value of the crypto-economy grows, and the power of the central banks shrinks.

This is the best way I"ve discovered to empower myself and others, by taking a small, low-risk baby step toward more financial independence (which is the most important type).

Do you consider Bitcoin and other cryptocurrencies the best hope for freeing individuals from the unjust power of the state?

Derrick J: Oh, lord no. Philosophy is the best hope for freeing individuals from the power of the state, because the power and the state only exists in their heads. Without philosophy, people are doomed to continue on whatever path their ancestors" trajectory put them on.

Fortunately for New Englanders, our ancestors placed us on a slow vector toward ever-increasing respect for property rights, which continues today (in New Hampshire especially).

Bitcoin is packed with philosophy, whether users are aware of it or not. Bitcoin empowers the individual with privacy over their money (if they want it), reduces the power of international central banking cartels with every dollar that exits into the crypto-economy, and ultimately helps end wars as people quickly become accustomed to a deflationary currency (rather than the inflationary currencies used to finance the wars of the 20th century).

[caption id="attachment_23891" align="aligncenter" width="300"] A mug depicting Bitcoin smashing the Fed.[/caption]

Do you have any advice for people who want to be free, but feel it is impossible? What can people do to free themselves in your opinion?

Derrick J: Read books that inspire you. Fill your brain with ideas that energize you. Pursue happiness through a virtuous life. Challenge yourself. No matter my current situation, behind bars or on a deserted island, my journey to freedom has been one of personal growth.

So far, what is your favorite part of running the shop?

Derrick J: My favorite part of running the shop is seeing libertarians walk in and watching their faces light up as they realize what the store is. They see Ayn Rand, Ron Paul, and Ludvig Von Mises, a Bitcoin symbol, Gandhi, Thomas Jefferson, and "Live Free Or Die" signs plastered everywhere, and they all say some variation of "I"ve never seen a store like this before!"

Those interactions make my day.

Thanks so much for sharing your experience!

Derrick J: Thank you for asking!

Why India's Attempt To Digital Will Fail

Authored by Jayant Bhandari via Acting-Man.com,

India Reverts to its Irrational, Tribal Normal (Part XIII)

Over the three years in which Narendra Modi has been in power, his support base has continued to increase. Indian institutions — including the courts and the media — now toe his line.

The President, otherwise a ceremonial rubber-stamp post, but the last obstacle keeping Modi from implementing a police state, comes up for re-election by a vote of the legislative houses in July 2017.  No one should be surprised if a Hindu fanatic is made the next President. India is rapidly entering a new phase.

Indian Prime Minister, Narendra Modi on the cover of an Indian magazine in 2002, when he was the Chief Minister of the Indian province of Gujarat. During his reign in Gujarat, a civil-war like situation erupted, which seriously segregated the province’s society. It brought Hindus into a state of trance and excitement and provided them with the fake-security of the collective. Alas, wealth and civilization are created by an intense focus on value-addition, not from the short-term escapist excitement of mobs expressed through riots and rape. Destructive endeavors are a major vulnerability of poor societies, given their irrationality and lack of foresight and planning, and their short-sighted focus on high time-preference, pleasure-centered activities.

Modi, a major world-traveler, who has run around quite a bit to please foreign governments and win the support of identity-lacking non-resident Indians, is no longer going abroad with the same abandon. Historically and even today, whatever gained approval in the West is what Indians have looked up to.

But Modi has matured. Modi has directed the attention of Indians to nationalism, Hindutava (fanatic Hinduism), the army, the flag, the anthem, and other superficial collective “causes” not underpinned any values or wealth-creating, civilization-producing objectives. Behind this is an empty arrogance pumped up by having grown relatively richer (still with GDP at a mere $1,718 per capita) over the last several decades due of the free gift of western technology.

If all this reminds you of the early days of the Arab Spring, you are right on track  with respect to understanding what is happening in India.  India is an extremely irrational, superstitious and tribal society, which I have discussed in great detail in earlier articles, the last one of which is linked here.

War of Attrition

Modi has infused so-called educated Indians with a sense of confidence and identity. It does not matter that this is all fake. To a man with a tribal, irrational mind incapable of thinking about tomorrow, throwing furniture onto the bonfire is not a problem, for today’s excitement is all that matters. Lacking empathy and compassion — another tribal “quality” — he pays no heed to the suffering of his fellow man.

It seems possible that Modi is focused on the wrong statistics [PT]

In the deeply irrational society of India, the institutions of liberty that the British  left behind were slowly but surely hollowed out. That had to happen, as the glue and the foundations of reason needed to sustain these institutions do not exist in Indian society. The tribal instincts of Indians are diametrically opposed to the concept of liberty. The concept of free speech, a remnant of the intellectual climate fostered by the British, survives for a small fraction of society – but even that is receding rapidly.

Compared to what happened elsewhere in South Asia, the Middle East and Africa, India was — on a relative basis — a beneficiary of its ethnic diversity. This diversity ensured that a collective approach to destroying institutions of liberty and the rule of law worked only slowly, due to infighting.

Isn’t it racist to call Indians irrational? Political correctness has indeed made people come to believe that we are all blank slates, which merely need to be reprogrammed through training. The reality has been quite different, as our everyday experience in this globalized world shows. Cultures are so resilient that even after people from these poor societies have migrated to the West, they not only fail to assimilate but more importantly, often regress.

Modi’s focus is on centralizing Indian society, increase the State’s control over the individual, increase taxes and compliance, and force people’s attention on collective goals. The tribal instincts of Indians are finally getting the upper hand, as the institutions left by the British come to the end of their lives. India’s chaos means that its totalitarianism will not be like that of Nazi Germany, but similar to that of Zimbabwe.

Modi’s totalitarian agenda also finds support among the IMF, the World Bank and the similar globalist institutions, which appear to be rather simplistic in their thinking. There is a strong belief among these institutions — as they lack understanding of the differences between cultures — that what works in the West must also work in India and other wretched societies.

That may have been possible as long as the British ran India. Without them, fragmentation of the unnatural nation-state of India, or at least aggressive decentralization is the only practical option.

In India where an organization of two people has one person too many, the forced centralization that Modi is undertaking is bound to lead to massive chaos, civil war, turmoil, and the eventual disintegration of India into its tribal constituents. India has chosen a painful path to revert to its tribal normal.

Colonization by the British was the best thing that happened to what came to be known as India. Without the sanity provided by British supervision or the institutions left by them, Indian tribes will forever be engaged in a war of attrition against each other.

Yogi Adityanath, a Hindu fanatic and the new Chief Minister of Uttar Pradesh, the most populous province of India, distributing goodies, while security personnel restrain citizens from throwing themselves at his feet – a favor citizens gratefully bestow, and those in any kind of power expect. Does anyone really think India is “independent” or “democratic”?

Will digital technology alleviate their pain and drudgery? Or will it actually make it worse? (Photo credit: P. Sainath, whose work exposes the suffering of the otherwise invisible poor people of India)

Dysfunctional Organizations Have Become Worse

On 8th November 2016, Modi declared 86% of the monetary value of India’s outstanding currency illegal. Even today, ATMs remain cashless. The banks are clogged with throngs of people. Small businesses — the backbone of India’s economy — keep failing, because people continue to avoid discretionary spending.

People have suffered economically as the smooth flow of the economy was disrupted, and transaction costs for businesses have increased. Food prices have recovered a bit recently, but are still at about half their previous levels. Unfortunately, this is not because production has increased, but because demand has collapsed, with many of the poorest people likely unable to buy food.

A sign adorning the entrances of banks in India with depressing regularity.

Photo credit: Ajay Verma / Reuters

India is one of the countries with the highest traffic-related deaths in the world. This happens despite its slow-moving traffic. India has been an utter failure in providing basic government services. Ambulances are often not available at all, or if they exist they are used for the private purposes of those in authority.

In the rare cases when they do arrive, it takes them forever and even then they almost never have paramedics. They often refuse to take the injured to a hospital unless a close relative goes along. The hospitals are either ill-equipped or disinterested in taking such patients if they are not accompanied by a relative.

If one is incapacitated in an accident for any reason, the chances of getting emergency aid are extremely low. One is quite likely to simply die on the roadside. The situation is similar with the police and other emergency service providers.

The Indian government completely fails at its most important job.  Indians simply do not have the capacity (given their irrationality) to build and maintain such basic organizations. This happens even when they spend massive amounts in order to maintain such organizations.

India has almost never undertaken a big project and completed it. None of this has discouraged the dreamer Modi. The demonetization effort, in which the government  merely had to replace old notes with new ones, has been an utter failure. It is an ongoing pain which has left the economy in shambles, despite the rosy growth figures reported by the government.

Asian bureaucracies compared: a score of 10 is the worst possible (it means your country is drowning in red tape and corruption). India has a score of 9.21 – making it a world leader in red tape. [PT]

The Realities of Going Digital in India

Over a billion people in India have no access to internet. When it is available, it is often very slow. Electricity is unreliable. Bank websites are extremely unwieldy. To make an online transaction, the login process is usually very complicated, often requiring several steps and verification codes sent as text messages.

More than a month ago, I paid online for a flight ticket from Delhi to London. The money left my account, but I never got the ticket. It was virtually impossible to get in touch with the Indian company I had bought the ticket from. When I did finally manage to contact them, they told me that they had refunded the money. The bank says it never got the refund. Of course, I have had to personally visit the bank every time and spend a long time waiting to talk to someone. In this electronic day and age, more than a month after the event, no-one knows where my money is.

It is hard to pinpoint who deserves the blame. Indians are extremely unskilled, uneducated (despite paper certificates aiming to prove otherwise), and lack work ethics. They almost never have passion for their jobs or an interest in providing  good services to their clients. This is the main feature characterizing many Indian companies. Management and owners lack professionalism and are singularly focused  on the bottom-line, by hook or by crook, eschewing true value-addition.

And then a discovery was made amid the rubble and the ruins – let’s focus on that… [PT]

I know many people who refuse to use an ATM card. People refuse to make credit or debit card transactions, as they cannot trust the system. Many years ago my Indian credit card company refused to reverse an unauthorized charge. When I asked them to cancel my card, they upgraded my card and imposed a yearly fee. I had no choice but to stop making payments to end a never-ending cycle of problems.

Given the risks involved, many people simply walk down to the bank branch to make an online transaction, which obviously defeats the whole purpose of going digital. When Indians buy something online, they tend to use the “cash on delivery” option, a unique option for buyers in India, where people have no work ethics or trust in each other.

Both the lack of trust and the lack of digital infrastructure are reflected by the fact that 98% of all consumer transactions in India are carried out in cash. Yes, banning most outstanding cash currency was probably a tad disruptive… [PT] – click to enlarge.

Virtually anyone one meets in India is perplexed about the charges banks impose on accounts these days. There are non-agreed fees and commissions that appear regularly, and on top of those, service taxes are charged. There are tens of charges which no one knows the reason for or is able to explain.

Bank employees favor you with a blank stare when you ask them for an explanation. Even Modi fans finds themselves boiling in anger when their bank statements arrive.

India’s attempt to go cashless will fail. India’s e-commerce companies will fail. The skills and ethics required to run big organizations simply do not exist in India. In the meantime, the forceful imposition of cashless transactions will only succeed in imposing massive costs on society.

Other Forced Digitalization Will Fail

There has been much talk about the newly imposed national ID system, Aadhaar, and the GST system that is expected to be rolled out in a few months.

Errors are an all too common feature of digital India. Aadhaar is used for purposes it was allegedly not intended for.

Aadhaar will fortunately not lead to a Nazi-style police state. India is too chaotic and undisciplined for that. India will be a Zimbabwe-style police state. The stated purpose of Aadhaar was to provide assistance to the poorest people in  society. You often see them sitting outside bank branches, begging to get the equivalent of a few dollars that are due to them, for the money often isn’t in their accounts or simply untraceable.

Mistakes and disappeared money that should be highly unlikely happen all the time in India, as the kind reader by now surely understands, given India’s cultural underpinnings.  Data breaches and leakages from the Aadhaar system are becoming everyday news.

Even in a perfect system, which is anyway not possible, Indians will still engage in data breaches for bribes, etc., as they simply do not have respect for their own professions or pride in what they do.  Despite the fact that it is unconstitutional, India’s government is making Aadhaar compulsory for filing tax returns, using government services, salary payments, etc.

A rather perceptive cartoon about the Aadhaar card. In the meantime India’s Supreme Court has ruled that Aadhaar cannot be made mandatory. The government seems set on ignoring this ruling and is pressing ahead with the scheme anyway. [PT]

India’s much talked about GST system is to roll out in July. GST will impose a massive need to create audit trails. The simple movement of a good by a transporter to someone’s house will require an electronic document to be produced. Couriers who have so far not had any involvement in this process will be entrapped. Similar e-way bills will have to be created as goods moves from  couriers to trucks or change hands in any other way.

These documents will have limited validity, so if a person has a possession of a good for more than a certain time while it is in transit, a new e-way bill will need to be created. Any movement of inventory within the same company will have to be documented and filed. Even very small companies will have to file three documents every month and another document every year.

No one knows for sure how GST will be implemented. I doubt that the government itself actually knows it — in fact, of course they don’t. It will definitely create a new wave of chaos and many aspects will likely need to be reversed.

India has a serious skills shortage. Indian companies can e.g. not find skilled accountants. Most will find the costs associated with implementing such a rigorous system far too high anyway. Increased demand for tax officers and accountants will reduce the pool of workers available for productive activities.

Anxiety is a Way of Life in India

India’s attempt to go digital will fail. Digital cash will fail. E-commerce companies will fail. In India, the national ID-card system, Aadhaar, will fail. The GST system will likely fail, or it will at least create massive problems in implementation. All these programs will impose huge costs on the economy and the well-being of entrepreneurs, including the wretched poor in the large informal economy.

India is looking for totalitarian solutions to deal with problems created by totalitarianism and tribalism. India is trying to use the the facade of the technologically advanced West hoping that the packaging will automatically deal with the lack of inner substance. Fail even with respect to superficial issues seems preordained

India’s government cannot provide basic services to its people. Ambulances are conspicuous by their absence. But Modi wants to move on to doing bigger things. In the last 70 years of independence, Indians have systemically destroyed the institutions of the rule of law that the British had bestowed on the country.

Cash is king in India, in every respect – click to enlarge.

There is a lot of pain and no gain facing India. If they had any sense they should be begging the British to return and rule the country. That is the only option apart from chaos, disintegration, and eventual never-ending tribal infighting among the fragments.

Dollar Vigilante tells Americans to get assets out

Contributed by Sprott Money

Click here for original

The Trump Administration"s big government, anti-trade and
border wall-policies, have generated surprising support from
Republicans, the Alt-Right, and even libertarians. But Jeff
Berwick, publisher of the Dollar Vigilante newsletter, isn"t
having any of it.

Berwick this week reiterated his call for US clients to hold at
least part of their assets outside the country, and to consider
getting a second passport in case the worst occurs.   
"The American government has been increasingly curtailing
personal, political and economic freedoms," said Berwick.
"This has happened under all administrations; Bush, Obama
and now Trump. Don"t forget: a wall built to keep people out,
can also be used to keep people in." 

Berwick isn"t alone. This week, the New Yorker Magazine
published a piece titled "Survival of the Richest," which
discussed how some of America"s richest people, such as
Reddit founder Steve Huffman,  are prepping for disaster.
"Faced with evidence of frailty in the American project, some
are permitting themselves to imagine failure," notes staff
writer Evan Osnos. "It is gilded despair."

One particularly popular locale for second homes is English-
speaking New Zealand, which has the rule of law, an upper-
middle class culture and is off the beaten path. According to
the New Yorker, 13,401 Americans registered with New
Zealand"s immigration authorities, during the first seven days
after Trump"s election.

Is Acapulco safer than most US Cites?
Investors like to pride themselves as "out of the box thinkers."
However Berwick, an anarcho-capitalist, goes a lot farther
than most.

"The US government is already going to extraordinary lengths
to track American"s assets, and herd them into safe places
where they can be seized," says Berwick. "These include
moves towards digital cash, exit taxes, FATCA (the Foreign
Assets Tax Compliance Act) and global taxation policies. Now
is not the time to take chances."

An Internet pioneer, and founder of Stockhouse.com, one the
world"s first financial news-sites, Berwick now holds fort in
Acapulco, which, surprisingly, he claims is safer than most US
cities.

There from offices overlooking the Pacific Ocean, he runs the
Dollar Vigilante newsletter and its fast-growing UTube
channels.

The offices are also headquarters of the TDV
Internationalization and Investment Summit, and
Anarchapulco, both which take place later this month.
Berwick, a shameless promoter, bills the latter event, which
attracts an eclectic crowd ranging from mining investors, to
Bitcoin and yoga fanatics as "the world"s largest anarcho-
capitalist conference."

What scares Berwick and free market advocates the most, is
not the US government"s attacks on financial freedoms, it is
the attacks on personal freedoms. Trump"s threats to
institutionalize torture, legitimize religious discrimination and
criminalize free speech are particularly jarring.

When Trump floated the idea of taking away US citizenship
from those who burn the flag, Berwick reacted by posting a
video, which later went viral, of himself burning the flags of
several countries, including Canada, where he was born, to the
sound of "Freedom," a song popularized by the late George
Michael.

Heir to Doug Casey and The International Man
Berwick"s nervousness about the direction of US policies,
while radical, flows in a long tradition of free thinkers of all
kinds, who were forced outside their home countries. Voltaire,
Rousseau and more recently Alexander Solzhenitsyn, all got
out of Dodge at some point in their lives.

However Berwick"s ideas most resemble those of global
investor Doug Casey, author of Crisis Investing and whose
book The International Man, published about 40 years ago,  
first introduced the general public to the idea of keeping one
foot outside the United States.

Indeed Casey was one of the first people that Berwick sought
out, when he founded his UTube channel six years ago.
Berwick flew down to Casey"s Argentina estate for a series of
interviews and over the years, Casey has defended his
controversial protégé.

Lessons from the old Soviet Union: broadening the ideas
horizon
The idea that the United States is anything else other than a
"shining city on a hill," is likely anathema to most Americans,
despite the tough times that many are experiencing right now.
That opinion is likely correct. America has gone through
rough patches in the past and has always bounced back.

However gold investors think over a far longer time horizon.
Many remember policies in the old Soviet Union, which
curtailed comments against the state, imposed restrictions on
citizens moving assets aboard and foreign travel.

For example when Simon Mikhailovich, who is now managing
director at TBR Bullion Reserve, left the Soviet Union, his
family"s assets were essentially all confiscated in the form of
an "exit tax," which is in some ways similar to what the US
IRS, is currently levying on Americans who want to renounce
their citizenship.

Critics like Berwick aren"t for everyone. But investors need
second opinions now, more than ever.

-30-