Tag Archives | Currency

Ending Currency Manipulation—Just Follow the Money

Dollar billsRobert Scott of the Economic Policy Institute has some ideas about how to end currency manipulation, posted at TradeReform.org:

Growing trade deficits have cost US workers millions of jobs over the past two decades, (these were good jobs in manufacturing industries).  Currency manipulation by more than 20 countries, of which China is by far the largest, is the single most important reason why U.S. trade deficits have not decisively reversed.  Currency manipulation lowers the value of foreign currencies, relative to the U.S. dollar, which acts like a subsidy to their exports, and a tax on U.S. exports to China and every other country where the U.S. competes with the exports of currency manipulators.

In an era of fiscal austerity, ending global currency manipulation is the best way to reduce trade deficits, create jobs, and rebuild the U.S. economy, as shown in Stop Currency Manipulation and Create Millions of Jobs.   Eliminating currency manipulation would reduce the U.S.

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Fragmentation of Bitcoin Community Begins after the Collapse of Mt. Gox and Secondmarket’s Wall Street Exchange Proposal

bitcoin wall streetvia chycho

A few comments regarding Bitcoin and the recent developments with Mt. Gox (2, 3, 4, 5, 6, 7, 8, 9) and the announcement that SecondMarket is stepping into the game and planning to launch the “first New York-based Bitcoin exchange” (emphasis added):

“SecondMarket CEO Barry Silbert says that he’s modeling it after the early days of The IntercontinentalExchange (ICE), and that he hopes to have a set of founding members in place by the end of March (i.e., a ‘seat’ model). These members are expected to include Wall Street banks and well-funded Bitcoin startups (think Circle and Coinbase). Non-member firms or individuals would not be allowed to trade — at least at the outset — but likely could do business via the member firms.

When Wall Street insiders announce that they are joining your game, but not allowing you to play on their field, which is what is implied with “Non-member firms or individuals would not be allowed to trade”, one should be concerned that the fundamental rules of the game may be changing, but, unfortunately, with fear running rampant within the Bitcoin community due to the collapse of Mt.

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The Fantasy Of Apolitical Money

moneyYanis Varoufakis on Bitcoin and the fruitless dream of a de-politicised currency:

The Crash of 2008 has infused our societies with enormous scepticism on the role of the authorities, both government and Central Banks. It is quite natural that many dream of a currency that politicians, bankers and central bankers cannot manipulate; a currency of the people by the people for the people. While it is true that local communities have, in the past, generated successful communitarian currencies (that enabled them to improve welfare in their midst, especially at a time of acute economic crises), there can be no de-politicised currency capable of ‘powering’ an advanced, industrial society.

Since the second industrial revolution made possible the emergence of large, networked oligopolistic companies (the Edisons and Fords of the 1900s, and the Googles or Apples of today), capitalism became dependent on large credit spurts for the purposes of financing these capital corporations’ needs.

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Bitcoin Smackdown: Kanye vs. Coinye

coinyeannounceLook for the launch of Coinye, a Bitcoin wannabe, to be moved up from the planned January 11, 2014 release date to as soon as 7 PM PST today, January 7. Unless Kanye West ruins the fun and succeeds in suppressing Coinye, that is. The Wall Street Journal reports on his legal foray thus far:

Lawyers for Kanye West filed cease-and-desist papers against the seven anonymous coders behind Coinye West, a virtual currency that went from chatroom joke to Internet sensation last week.

The legal document, dated Jan. 6, includes an image of Coinye – a cartoon representation of West on a gold medallion. West’s lawyer argues trademark infringement.

“Given Mr. West’s wide-ranging entrepreneurial accomplishments, consumers are likely to mistakenly believe that Mr. West is the source of your services,” wrote Brad Rose, a partner at Pryor Cashman LLP, which has previously worked for West.

Hoping to keep pace with the self-assured, brash West, the techies aren’t backing down.

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The Magical Thinking Of Bitcoin

bitcoinAlex Payne lays out the Bitcoin agenda:

Bitcoin has become synonymous with everything wrong with Silicon Valley: a marriage of dubious technology and questionable economics wrapped up in a crypto-libertarian political agenda that smacks of nerds-do-it-better paternalism. With its influx of finance mercenaries, the Bitcoin community is a grim illustration of greed running roughshod over meaningful progress.

A person’s sincere interest in Bitcoin is evidence that they are disconnected from the financial problems most people face while lacking a fundamental understanding of the role and function of central banking. The only thing “profound” about Bitcoin is its community’s near-total obliviousness to reality.

If Bitcoin’s strength comes from decentralization, why pour millions into a single company? Ah, because Coinbase provides an “accessible interface to the Bitcoin protocol”, we’re told. We must centralize to decentralize, you see; such is the perverse logic of capital co-opting power. In order for Bitcoin to grow a thriving ecosystem, it apparently needs a US-based, VC-backed company that has “worked closely with banks and regulators to ensure that the service is safe and compliant”.

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The Bitcoin Bubble, Or Is It? Two Charts, Historical Price Movement, and the Conspiracy

via chycho

800px-Stages_of_a_bubble

I wish I wasn’t making this post and I hope I’m wrong. I love the concept of Bitcoin and the prospect of the decentralization of power brought about by the introduction of “an open source peer-to-peer electronic money and payment network” and the inevitable collapse of fiat currencies that are controlled by central banks which are in the business of transferring wealth from main street to Wall Street.

I’ve been tracking bitcoin for almost three years, since it was trading for less than a dollar. I even mined it a little a couple of years ago and recommended friends to buy them. Now that bitcoin has breached $1,200 and counting, would I still be giving it a buy recommendation? Absolutely not. Would I be recommending friends to keep most of their bitcoins at these valuations? Absolutely not. I would be telling them to sell almost all of their holdings, letting 1% ride.

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PayPal And SETI Are Working On An Off-Planet Currency

off-planet currencyEarthly problems are being spread to outer space. The International Business Times reports:

On Thursday, the online payment giant PayPal announced PayPal Galactic, a collaboration with the SETI Institute aimed at developing new payment systems for the final frontier. The frontier is here: Virgin Galactic is launching its first public flight this Christmas, and space hotels could be in orbit around Earth as early as 2016.

“As space tourism programs are opening space travel to ‘the rest of us,’ this drives questions about the commercialization of space,” PayPal President David Marcus said. “One thing is clear: We won’t be using cash in space.”

There are lots of questions about what form a space-friendly money system might take. Will spaceships and habitats have the communications technology needed to transfer money? How will banks manage accounts for people living off-planet? How will government financial regulations pertain to people in space (perhaps to curtail a new kind of “offshore banking”)?

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Bitcoin Currency Tops $1 Billion In Total Value

Are we living in a video game? Quartz writes:

Digital currency bitcoin continues its remarkable and somewhat inexplicable run. It’s up 152% this month, and today the total value of all outstanding bitcoins topped $1 billion for the first time before settling back down.

That’s quite a milestone, considering bitcoin isn’t backed by any real asset or faith in any government. What makes bitcoin so maddening to explain—no, there’s no central bank; yes, it really is just a bunch of people creating money out of thin air—is precisely what makes it so powerful.

The estimated margin on “mining,” or creating, new bitcoins has already recovered from December, when the rate at which new bitcoins could be minted was cut in half, part of the currency’s intentionally deflationary design. Anyone, from hobbyists to bankers to thieves, can mine bitcoins, which requires raw computing power dedicated to solving cryptographic puzzles.

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