Collectivist Banking

CRYPTO’S, ask not…from Rico

Crypto’s took a beating yesterday. Again.

– But ask not why they went down so much, but rather why the went up so much in the first place?

Unlike other investments/assets, Crypto’s have NO valuation metrics save for price. What does that mean?

– It means BTC at $20K is the same as BTC at $4.5K. Not much.

– It means Crypto’s are a self-growing Liability, not an Asset. [Think: A-L=E…Assets minus Liabilities equals Equity aka Net Worth.]

All that glitters

is not gold.

Collectivist Banking

Playing with fiat money produces inflation since one can spend with impunity. Playing with funny money guarantees at some point that you will lose your capital.

“People Have Panicked” – Crypto Collapse Accelerates, Bitcoin Plunges Towards $4,000

Having broken below 6k last week, and 5k yesterday, Bitcoin’s collapse is accelerating towards $4,000 as crypto-guru John McAfee wrote on Twitter, summarizing his thoughts: “People have panicked…” [snip]

Bitcoin traded to $4221 this morning before a brief bounce

As CoinTelegraph notes, the events mark a continuation of the unsettled conditions sparked Nov. 15 when altcoin Bitcoin Cash (BCH) experienced a contentious hard fork, which has since resulted in the emergence of two separate competing chains.

While BCH initially held onto much of its value, the 24 hours to press time saw a U-turn for investors, BCH/USD shedding almost 40 percent to test support at $200.

While BCH firmly took the lead as the worst performer of the top twenty cryptoassets, others also suffered heavy losses.

Ethereum (ETH) significantly widened its gap in market cap with Ripple (XRP), cementing its position as now the third-largest cryptocurrency. ETH/USD daily losses were circling 15 percent at press time, compared with XRP/USD’s 6.2 percent. [snip]

Bit coins have nothing to back up their value. This probably will prove to be louder than the bubble crash.

Historical happenings

9/29/1850 ~ Mormon leader Brigham Young is named the first governor of the Utah Territory.

9/29/1941 ~ 30,000 Jews are gunned down in Kiev when Heinrich Himmler sends four strike squads to exterminate Soviet Jewish civilians and other “undesirables.”

9/29/2008 ~ Dow Jones Industrial Average plummets 777.68 points in the wake of Lehman Brothers and Washington Mutual bankruptcies, the largest single-day point loss in Wall Street history.

Big Spenders

How are your taxes? A posting found on Drudge noted that you pay more in taxes than on your monthly utility and all your house bills combined. This will get worse as time passes.
What happens when you cannot pay for the mortgage, that new car, all those neat electronic gizmos, food and insurance? Your income  doesn’t cover all your debt, so you make payments when the collectors call up and finally : Bankruptcy>

Interest on the national debt now exceeds our spending on the Military.
At the rate of spending by the government increases, the interest also rises; any interest rate increases will require your taxes to rise to cover this cost. Then the government tries to pay the interest on those T-Bills that other countries bought.
It is your problem on a grand scale and we take it in the shorts, like Venezuela. Think about this in the upcoming Mid-term elections.

This post was cut short for the sake of brevity. Read the rest for I left out the really nasty parts about your life with out ll that government money sloshing around.

As Debt Rises, the Government Will Soon Spend More on Interest Than on the Military

The federal government could soon pay more in interest on its debt than it spends on the military, Medicaid or children’s programs.

The run-up in borrowing costs is a one-two punch brought on by the need to finance a fast-growing budget deficit, worsened by tax cuts and steadily rising interest rates that will make the debt more expensive.

With less money coming in and more going toward interest, political leaders will find it harder to address pressing needs like fixing crumbling roads and bridges or to make emergency moves like pulling the economy out of future recessions.

Within a decade, more than $900 billion in interest payments will be due annually, easily outpacing spending on myriad other programs. Already the fastest-growing major government expense, the cost of interest is on track to hit $390 billion next year, nearly 50 percent more than in 2017, according to the Congressional Budget Office.

“It’s very much something to worry about,” said C. Eugene Steuerle, a fellow at the Urban Institute and a co-founder of the Urban-Brookings Tax Policy Center in Washington. “Everything else is getting squeezed.”

Gradually rising interest rates would have made borrowing more expensive even without additional debt. But the tax cuts passed late last year have created a deeper hole, with the deficit increasing faster than expected. A budget bill approved in February that raised spending by $300 billion over two years will add to the financial pressure.

The deficit is expected to total nearly $1 trillion next year — the first time it has been that big since 2012, when the economy was still struggling to recover from the financial crisis and interest rates were near zero. [snip]

With this cost that MUST be serviced, money for programs to repair/replace infrastructure such as roads, bridges and government buildings.

What is never mentioned is the pressure to keep the fake entitlements and it will also crush the real entitlements: Social Security, Medicare and Medicaid. Thanks to LBJ, he funded the Vietnam War with money from the Social Security Trust Fund by putting it into the General Fund. Congress loved it and cheerfully started spending this new “revenue”.

Collectivist Banking

This could be called the Iron Pyrite market; it’s called by another name: Fools Gold.

Crypto’s 80% Plunge Is Now Worse Than the Dot-Com Crash

The Great Crypto Crash of 2018 looks more and more like one for the record books.

As virtual currencies plumbed new depths on Wednesday, the MVIS CryptoCompare Digital Assets 10 Index extended its collapse from a January high to 80 percent. The tumble has now surpassed the Nasdaq Composite Index’s 78 percent peak-to-trough decline after the dot-com bubble burst in 2000.

Like their predecessors during the Internet-stock boom almost two decades ago, cryptocurrency investors who bet big on a seemingly revolutionary technology are suffering a painful reality check, particularly those in many secondary tokens, so-called alt-coins.

“It just shows what a massive, speculative bubble the whole crypto thing was — as many of us at the time warned,” said Neil Wilson, chief market analyst in London for, a foreign-exchange trading platform. “It’s a very likely a winner takes all market — Bitcoin currently most likely.”

Wednesday’s losses were led by Ether, the second-largest virtual currency. It fell 6 percent to $171.15 at 7:50 a.m. in New York, extending this month’s retreat to 40 percent. Bitcoin was little changed, while the MVIS CryptoCompare index fell 3.8 percent. The value of all virtual currencies tracked by sank to $187 billion, a 10-month low.

Digital Gold

The virtual-currency mania of 2017 — fueled by hopes that Bitcoin would become “digital gold” and that blockchain-powered tokens would reshape industries from finance to food — has quickly given way to concerns about excessive hype, security flaws, market manipulation, tighter regulation and slower-than-anticipated adoption by Wall Street.

Crypto bulls dismiss negative comparisons to the dot-com era by pointing to the Nasdaq Composite’s recovery to fresh highs 15 years later, and to the internet’s enormous impact on society. They also note that Bitcoin has rebounded from past crashes of similar magnitude.

But even if the optimists prove right and cryptocurrencies eventually transform the world, this year’s selloff has underscored that progress is unlikely to be smooth. [snip]

The crash was caused by hype but it did have something material backing it: Technology. The Crypto’s have nothing backing them except hype. This could be a delightful new variation of the old scam: Pump and Dump. Crypto must be run by P.T. Barnum’s offspring.

Collectivist Banking

A gold rush is occurring and it isn’t in any of the mining places. The mining is taking place on the Comex where the usual bunch of manipulators are selling naked shorts on paper gold (ETF’s) driving the price down. Then the smart ones buy up physical gold at these ‘sale’ prices.

Rock beats Paper_COMEX vs Silk Road…from Rico

Watching the usual suspects monkey-hammer the COMEX spot for Gold and Silver by dumping phenomenal amounts of unbacked paper bullion [read: naked shorts] you have to ask “who ‘makes’ money by losing money on this massive scale?”

– Watch the scene from the film “Trading Places” where the Duke brothers explain to Valentine (Eddie Murphy) how they make their money on the Chicago Mercantile Exchange. It’s still one of THE best one-minute explanations of how the futures game is played by the ‘wise guys.’

Next consider what ‘dummies’ they are on the Silk Road (India, Turkey, Russia, China) to be buying physical bullion when it’s “on sale” like this, instead of ‘notional bullion’ [read: non-existent; paper] like the 40# brains in Chicago.

Remember, if you can’t hold it,
you don”t own it.

Collectivist Banking

Have you become rich in dealing cryptocurrencies? If not you either missed your change or didn’t. The results are very similar.

Cryptocurrency Market Plumbs New Depths in 2018

At $191 billion, the total market value of cryptocurrencies world-wide is at its lowest since November

A broad investor retreat has pushed the market for digital currencies down 70% from its January high, reflecting user frustration over their modest inroads into commerce and a general shakeout in speculative investments.

The value of all cryptocurrencies in circulation this week fell below $200 billion for the first time in 2018, its lowest since November. [snip]


Peccable reflections

Quite an upheaval is happening on the financial front. Facebook and Twitter are taking it in the shorts while the economy does well. The big news for today is the GDP numbers.

If the GDP meets the 4.2% growth rate, the market will surge.

Wall Street investors can’t remember the last time a GDP report was so crucial

Wall Street just traversed a gauntlet: the busiest week of corporate quarterly results, fresh developments in global trade relations and a historic stock tumble by Facebook Inc. However, the headliner of this jam-packed week may be GDP, the official scorecard of the U.S. economy.

As one fixed-income strategist put it, never has a reading of gross domestic product held so much significance, with the three main equity benchmarks—the Dow Jones Industrial Average DJIA, +0.44% the S&P 500 index SPX, -0.30% and the Nasdaq Composite Index COMP, -1.01% —as well as the U.S. dollar DXY, +0.12% and Treasury TMUBMUSD10Y, +0.13% TMUBMUSD02Y, -0.15%  markets primed for Friday’s highly anticipated print.

Here’s how Guy LeBas, head of fixed-income strategy for Janney Montgomery Scott, put it via Twitter on Thursday: “I can’t remember the last time the markets placed such importance on a #GDP number as they have with tomorrow. Given the perceived optimism, a miss could catch rates violently offside (i.e., rally risk),” he wrote. [snip]

Count on a raucous day no matter how that number comes in when reported.


This couldn’t have happened to a more deserving individual.

Facebook’s $100 billion-plus rout is the biggest loss in stock market history

Facebook on Thursday posted the largest one-day loss in market value by any company in U.S. stock market history after releasing a disastrous quarterly report.

The social media giant’s market capitalization plummeted by $119 billion to $510 billion as its stock price plummeted by 19 percent. At Wednesday’s close, Facebook’s market cap had totaled nearly $630 billion, according to FactSet.
No company in the history of the U.S. stock market has ever lost $100 billion in market value in just one day, but two came close. [snip]

Facebook’s enormous loss in value came a day after the company reported weaker-than-expected revenue for the second quarter as well as disappointing global daily active users, a key metric for Facebook. The company also said it expects its revenue growth rate to slow in the second half of this year.

Given Facebook’s scandal problems and lack of user security a bounce back becomes difficult. When those algorithms get changed under pressure, we shall see how many ‘friends’ are still there.


Twitter’s habit of shadow banning one political side does have an effect on the numbers.

Twitter shares drop 12 percent after reporting declining monthly active users

Twitter shares plummeted 12 percent premarket Friday after the company reported a decline in monthly active users and weak guidance.

Twitter reported second-quarter earnings before the bell on Friday:

Earnings per share: 17 cents vs. 17 cents, according to a Thomson Reuters consensus estimate

  • Revenue: $711 million vs. $696.2 million, according to a Thomson Reuters consensus estimate
  • Monthly active users (MAUs): 335 million vs. 338.5 million, according to StreetAccount and FactSet estimate
  • Shares were down as much as 18 percent when the report was released.

Twitter removed about 70 million accounts in May and June, however, Twitter chief financial officer Ned Segal said most of those were not included in its reported metrics because they were not active on the platform for 30 days or more. [snip]

Getting bit on the butt by one’s own practices is twice as painful

Collectivist Banking

If you are going to buy gold, watch for this manipulation and get a better price. DON’T BUY PAPER “GOLD.”

Gold Gunfight at the COMEX Corral…from Rico

CME’s COMEX has been manipulating the ‘spot’ price of Gold for years by dumping massive amounts of “Paper Gold’ naked shorts at strategic times (like O’my God it’s early, say 3:00 am before anyone is awake and trading) and seemingly on cue (NFP Fridays, FOMC, etc). This, combined with a chronic shortfall of physical metal that can be delivered to cover redemptions of paper contracts, has meant that as the price of physical Gold gets moved around the plate of the Bullion Banks, the only thing used to ‘settle’ these Paper Gold contracts has been unredeemable FRN’s (aka USD).
– The game appears to have changed suddenly.

Of late, the spot price of Gold has been moving in seeming correlation with the USD/CNY exchange rate instead of the COMEX. This suggests China has increasing influence over setting the Gold spot, while COMEX has decreasing influence.
– I’d suggest watching the USD/CNY exchange rate in future. Gold could reach $1400 if the US revalues to below 6 Yuan, and it could reach $1600 @ 6.25 Yuan if China revalues Gold to the Yuan.

Either way, owning COMEX Paper Gold is a lot like bringing a picture of a gun to an actual gunfight, and right now China-Russia-India have the real/physical Gold, COMEX does not.
– Decide for yourselves which you’d prefer to hold when this gets ugly. Paper is infinite, but the ability to pay with paper is not; on the other hand, physical is finite, but the ability to pay with physical is not.

Paper or physical?
– Now, just as an exercise in fun, consider the USD priced in Gold and then answer the above question.

Laissez le bon temps rouler

For a bit longer, they might.
At some point some one is going to point out the Bankers have no clothes. That will make the European Poobahs grab for their fig leafs right along with our Fed and Wall Street. “What’s in your wallet?” will take on new and virulent meaning.

BIS fears ‘snapback’ crunch as rising rates meet record global debt

World debt ratios have spiralled to record levels during the era of super-easy money and markets are showing tell-tale signs of late-cycle excess, leaving the international financial system acutely vulnerable to a jump in borrowing costs.

Any reversal in our fortunes could be “quick and sharp”, says the Bank for International Settlements, the venerable global watchdog based in Switzerland and the scourge of dissolute practice.

The warnings cascade from the BIS’s annual report released over the weekend, always a sobering read for investors and central bankers alike. [snip]

Fiat money is and was a Socialist joke that most didn’t catch and now are living the tag line. There is much more to come as Trump adjusts that unequal trade situation.

That great adage from when I carried the tin of the US Marshal’s Service comes to mind: “When you hear hoofbeats, think horses, not zebras. You won’t make a mistake of looking in the wrong direction.