AuthorTopic: Listing Some Interesting Trends (And Interesting Anomalies)  (Read 639 times)

Offline Eddie

  • Master Chef
  • *****
  • Posts: 19515
    • View Profile
Listing Some Interesting Trends (And Interesting Anomalies)
« on: October 12, 2018, 10:20:22 AM »
If you have read Zero Hedge on a regular basis for years, like I have, you know that it started out as a pretty good alternative news site for financial and economic information, but it's always had the same kind of right-wing bias as sites like TBP.

As someone who gets that an economic system based on sucking the last drops of resource juice out of the planet and burning maximum FF's into climate change oblivion, and watching the last bits of wealth trickle upward might eventually run into problems, that huge blind spot of the Tyler Durdens  always bothered me, and it's gotten much worse since Trump was elected. I have cut back on my reading there, but I do try to drop in when things get interesting in the global markets, like they have this week.

In general, the people who write there claim to all be clever soothsayers who called all the turns in the markets in 2008, and spotted all the important trends.

I think it's worth noting that when things do get interesting, all that brain power and market savvy disappears. This week the markets are in turmoil, and, to me, the overall quality I see in the posts on ZH is just....NOISE. The usual piling on of the short side traders who dominate the ZH list of paying sponsors, and not much else. Just sayin'. No clarity at all.

I don't know if this is a bull market correction or the beginning of the end, myself. It doesn't look like a bull market correction, but we do need to remember that as unsustainable systems move toward their limits, volatility is likely to be much greater than what history might suggest. I'm not jumping to the conclusion that the Big One is here...but it might be. I really would rather keep an open mind. In any case, I'm hedged in the way I planned to be. I might lose a lot of equity, but I doubt I'll go broke. I don't have a dime in stocks, and the real estate market here is not as subject to collapse as most other places.

But something does seem to be in the air. As GO pointed out the other day, funny things are going on with money, specifically the Chinese fiat Yuan, which is clearly tracking gold very closely. As is the SDR, which is the "currency" sovereign nations use to settle their tabs at the IMF.

It appears that China is printing Yuan and conducting open market operations to successfully control the price of gold and the US dollar both. This is denied, of course, but it looks pretty clear.

As far as I can tell, there are two benefits to China. It keeps gold low so they can continue to accumulate physical metal at what are likely to be viewed someday as bargain prices....and it gives them a lever arm to potentially devalue their own currency at will, and by a lot if they so choose....which tends to be a trigger that crashes Western equity markets.

Right now, with the US tariffing the shit out of Chinese trade goods, they have the incentive to devalue and to crash the US markets....just sayin'.

At the same time, noticeable world-wide de-dollarization continues to make more dents and dings in the reserve currency status of the USD. But short term radical power shifts really don't look likely, from what I can gather. But I could be wrong.

I continue to read what I can find that looks to shed some light on the current shifting landscape. This thread is being started to archive what I find. This is not some magnum opus that puts together the pieces. It's just going to be a collection of things I find that don't quite fit the prevailing narratives.....maybe over the days or weeks ahead i can connect the dots. Stay tuned.

First, gold does play a big part in this. As far as I can tell, China has one clear goal here. They want to own more gold than the US. Gold might be a barbarous relic to most people, but the Masters of the Universe have been using it to keep score for centuries, and it continues to be important enough for countries that are up-and-comers to want to get their piece of it.

So gold needs to be watched. Until this week, I did not really understand this currency manip that helps them keep gold price low. It explains a LOT. It explains why, in times of great uncertainty, when I would assume gold would be way up, that it stays low and range-bound.

Worth mentioning is that doing this COSTS the Chinese people a lot. I admire the Chinese, who are consummate savers who are constantly trying to figure out ways to preserve their savings as their government taxes them by currency devaluations that eat at their assets. They do pretty well, although they are limited in their avenues of fighting back. We here have (slightly) better ways to keep from getting screwed, but we don't take advantage like the Asians, who have the collective experience of being screwed forever.

Anyway, the phenomenon charted below makes me go Hmm. I don't know what it means. If you have an idea, please comment.

This info coms from a goldbug site run by Sir Charles Volllum, called pricedingold.com, that tracks everything under the sun against gold.



Half-Life of the US Dollar

Since 2001, the US Dollar has lost half of its value every 4 years. Of course, its actual value dithers about, sometimes more than this theoretical value and sometimes less, but as you can see from the chart below, it tracks very close to this decay line. The chart below also projects this line into the future, giving a reasonable guess at what the continuation of the last decade's policies will do to the USD's value in gold terms.

Let me be clear: there is nothing "natural" about this decay curve. It is the result of carefully crafted monetary policy. Central banks wield huge power over the value of their currencies. This is particularly true of the Fed and the USD.

Will these policies continue? There is no way to be certain; if debasement is pushed too hard, people may lose confidence, leading to a dollar collapse. But to reverse the trend would push interest rates sky high, and result in budgetary and monetary chaos as well. Thus a continued steady devaluation of the dollar is likely the "best case" central bankers can achieve.

USD Forecast:
 


When the USD moves much above or below the forecast value, there is a tendency to revert to the predicted value.  As the chart below shows, deviations more than 10% seldom last very long. These extremes may be tradable if you are willing to wait a year or two before taking profits.

USD Actual vs Forecast:



This is a very cool website. Worth perusing, for anyone who wants to see how various assets are moving against gold.

http://pricedingold.com/
 
« Last Edit: October 12, 2018, 10:28:34 AM by Eddie »
What makes the desert beautiful is that somewhere it hides a well.

Offline Eddie

  • Master Chef
  • *****
  • Posts: 19515
    • View Profile
Re: Listing Some Interesting Trends (And Interesting Anomalies)
« Reply #1 on: October 12, 2018, 11:11:58 AM »
Some fundamental change happened in late 2012 or so, that wrecked the Fed's inflation plan, which was on track until then.

What was it?

If we could answer that question it would be a start.

Any ideas, smart people?
What makes the desert beautiful is that somewhere it hides a well.

Offline Eddie

  • Master Chef
  • *****
  • Posts: 19515
    • View Profile
Re: Listing Some Interesting Trends (And Interesting Anomalies)
« Reply #2 on: October 12, 2018, 11:31:37 AM »
One thing worth noting is that when gold topped at 1900-ish and then started to correct, it made another run up, making a double top, more or less. That SECOND, slightly lower top happened at the precise exact time that the USD started to surge against gold.



I still don't understand, but the picture changed at that time. More study of the macro picture at that time might reveal something.

It's Friday afternoon, and I'm taking the dogs to the stead and maybe to the lake. It's a gorgeous early fall day here, and the rains have done their magic and the Texas Hill Country looks like paradise today. Please comment if you read this and want to weigh in. I will be back later to keep digging.

My best to all the Diners. Have a great weekend.
What makes the desert beautiful is that somewhere it hides a well.

Offline Eddie

  • Master Chef
  • *****
  • Posts: 19515
    • View Profile
Re: Listing Some Interesting Trends (And Interesting Anomalies)
« Reply #3 on: October 13, 2018, 09:09:24 AM »
The changes do roughly coincide with the period at which bitcoin got so popular with Chinese savers that the PBOC made it illegal inside China. This ultimately didn't slow down the traffic, as they just moved to sites in Japan to do their business.


Not sure that plays here, but I'll post a couple of interesting charts.




Since early 2013, the PRICE of bitcoin has been up and down, but the NUMBER of bitcoin transactions has steadily risen.




The dollar broke its downward trend when bitcoin clocked 1 million transactions per month. It has risen steadily since then.

My uneducated guess is that the dollar anomaly and the bitcoin anomaly are not CAUSE, but rather both are EFFECTS of something else.

« Last Edit: October 13, 2018, 09:47:08 AM by Eddie »
What makes the desert beautiful is that somewhere it hides a well.

Offline Eddie

  • Master Chef
  • *****
  • Posts: 19515
    • View Profile
Re: Listing Some Interesting Trends (And Interesting Anomalies)
« Reply #4 on: October 13, 2018, 09:29:16 AM »




Getting back to the long term gold chart.

Since gold fell precipitously in 2013, the initial dollar surge was just the reciprocal of that, just another way of viewing the same chart.

But...looking carefully at the next inflection point around year end 2015 or early 2016....this is where the charts really start to look manipulated to me. Both gold and the dollar start to get range bound.

So maybe I was looking back too far before.

Did something else notable happen about the time gold finally bottomed in 2015?
« Last Edit: October 13, 2018, 10:07:06 AM by Eddie »
What makes the desert beautiful is that somewhere it hides a well.

Offline Eddie

  • Master Chef
  • *****
  • Posts: 19515
    • View Profile
Re: Listing Some Interesting Trends (And Interesting Anomalies)
« Reply #5 on: October 13, 2018, 09:44:03 AM »
It doesn't line up perfectly, but the Gold-Yuan daily price fix in the Shanghai gold market began in April 2016. Since then gold has been more volatile against the USD that it has the yuan.





It looks like you can see a definite trend whereby gold denominated in yuan has just steadily declined, slowly enough not to be extremely noticeable if you only track gold price in dollars or Euros.

I think I'm getting warm.

Now, here's something worth considering. The charts above are of the morning price fix. Now look at the pm charts.





Specifically, look at 2018. See all those crazy down spikes?

What does that look like? Guesses?

Spoiler: To me it looks like typical algo driven volatility. After watching the Comex do the same thing for years, it surely does look suspiciously like the kind of manips that people like Paul Mylchreest have been writing about for years.

« Last Edit: October 13, 2018, 10:07:39 AM by Eddie »
What makes the desert beautiful is that somewhere it hides a well.

Offline Eddie

  • Master Chef
  • *****
  • Posts: 19515
    • View Profile
Re: Listing Some Interesting Trends (And Interesting Anomalies)
« Reply #6 on: October 13, 2018, 09:57:30 AM »
Okay, it's time for one takeaway. There appears to be a brisk trade whereby Chinese use Yuan to buy bitcoin, and then convert that to US dollars using informal networks. While this might raise official eyebrows if the transactions are huge, it seems to be tolerated up to a point, and it's a popular way to get out of Yuan.

I ran across this on the question and answer site Quora:



Do wealthy people use Bitcoin to get money out of China?


Answer

Joseph Wang
Joseph Wang, http://www.bitquant.com.hk/

Answered May 23, 2017
 
Yes, and Iím running a business out of Hong Kong that handles this sort of thing.

Bitcoin is often used by upper middle class or lower upper class people to move money out of China for investment overseas. Iím working with some immigration brokers in order to create ways of moving money for EB-5 visas. There are about a dozen different ways of moving money out of China, and bitcoin is just one of them.

It turns out that itís legal to buy bitcoin, itís legal to sell bitcoin. Converting forex is illegal, but if you do the sale outside of China, then it goes into a legal gray area which the government has not clarified. It turns out that Chinese government is pretty aware of what is going on, but if you are an upper middle class person that wants to buy a house in California or wants an EB-5 immigration visa, the government doesnít have much of a problem with what you are doing.

The people that the government really wants to keep track of are politically connected officials that are trying to get money out of China before the government cracks down on them. These people might be trying to use bitcoin, but no one is going to be helping them. If someone shows up wanting to move USD 2 million to buy a house in California or to invest a factory in Ohio, Iíd be glad to help them. If someone shows up wanted to move USD 25 million to Panama, then Iíd ask them to find someone else.

It turns out that using bitcoin to move money is really painful, but Iíve got a solution that fixes a lot of the problems. I know of a people that have USD that want Chinese currency in order to pay their suppliers in China. So ideally you send them Chinese currency in China, and they send off USD outside of China to your account.

The problem is that you donít know if the trader is going to run away with your money, and the idea is that the trader deposits bitcoin with a trusted third party. If the trader runs away with your money, you get his bitcoin.

I donít touch the money myself, but I just get everyone involved in chat group, and we make the magic happen.

Also, just to address another point. I am very careful not to violate the laws of either the United States or Hong Kong, and not to go against government policy in Mainland China. It turns out that in Mainland China, you have a lot of rules that everyone (including the government) thinks are silly, and so often the government will give you hints that they do or donít want you to do something, and you listen carefully to those hints.

Bitcoin is absolutely terrible if you are trying to do anything too sneaky. Itís easier to trace than cash, and whoever is interested in money flows can easily trace them. One reason I post as much as I do is that if any government official really wants me to stop doing something, they can just find me, and if they give me a good reason why what Iím doing is not good for society, Iíll stop.

I used to work in an investment bank, and I happen to believe that the money that flows through the bitcoin system is a lot cleaner than the money that goes through the banks. One of the reasons I do bitcoin, was that I ended up disgusted at how much legal corruption there is in the world, and how well the hyper-rich get treated. If you are really well connected, you donít need bitcoin.

The people I work with are wealthy, but they arenít hyper-rich, and one of the things that I want is to have the middle class be able to enjoy the financial services that the ultra-rich get. Wouldnít be great to talk to someone and not have them automatically assume that you are a terrorist or a drug smuggler?

As far as hiding from governments. I donít mind telling the US or Hong Kong governments everything since they have rules in place to keep bad things from happening to me, and if I donít like the rules, I vote for someone that has rules that I like more.

As far as the Russian or Chinese governments, well if someone knocked on my door and asked me what I really thought about Xi Jinping and the Communist Party of if I have any friends that are engaged in subversive behavior, you donít think Iíd really tell them, do you?


https://www.quora.com/Do-wealthy-people-use-Bitcoin-to-get-money-out-of-China

Could the dollar strength be driven solely by this back door form of Forex trading? I wonder how big this trade really is.
« Last Edit: October 13, 2018, 10:10:44 AM by Eddie »
What makes the desert beautiful is that somewhere it hides a well.

Offline Eddie

  • Master Chef
  • *****
  • Posts: 19515
    • View Profile
Re: Listing Some Interesting Trends (And Interesting Anomalies)
« Reply #7 on: October 13, 2018, 10:17:18 AM »
The dollars often go to buy real estate in the US and the UK. The preferred markets are those near the most prestigious  institutions of higher learning.

China's Crypto Millionaires Are Using Bitcoin to Buy Real Estate Abroad

Wolfie Zhao and Leigh Cuen
 
 
 Jul 21, 2018 at 09:30 UTC  |  Updated  Jul 23, 2018 at 18:04 UTC

The chives growing in one crypto tycoon's California mansion carry a hidden message.

Guo Hongcai, a beef salesman turned early bitcoin adopter from China's Shanxi province, is one of many freshly minted millionaires funneling parts of their wealth out of the country by purchasing real estate abroad.

In April, Hongcai sold 500 bitcoin in the U.S. then used that money to buy a 100,000-square-foot mansion in Los Gatos, a 90-minute drive from San Francisco, California. His Rolls-Royce, also purchased with the fruits of bitcoin arbitrage, sits in the driveway close to a small chives garden.

"It's very normal to sell bitcoin in the U.S. After selling bitcoin, you can just buy anything you want," he told CoinDesk.

Guo calls this secondary residence his "Mansion of Chives," because the vegetable is also Chinese slang for crypto investors who prove vulnerable to big sell-offs.

As Chinese regulators clamp down on industry business on the mainland, crypto millionaires are turning to foreign real estate markets to diversify their holdings. Some purchase property directly with crypto, others like Hongcai use bitcoin to gain foreign currencies without going through a bank.

The founders of the U.S. crypto real estate startup Slice told CoinDesk roughly one-third of their prospective users hail from Asia, figures which include Chinese investors seeking tokenized property rights through Hong Kong securities brokers.

According to the South China Morning Post, real estate purchased in Hong Kong doesn't require the same taxes and documentation as other financial assets held abroad. Chinese investment in foreign real estate, often through Hong Kong brokers, has been rising for years. Now early bitcoin adopters are utilizing new wealth for familiar patterns.

"The requests we have from them start at $50,000 or $100,000 up to, the latest one was $3 to $4 million for Silicon Valley," Natalia Karayaneva, CEO of Propy, another crypto-powered real estate marketplace, told CoinDesk.

She added:

"We're seeing that more and more people are willing to buy properties with cryptocurrencies because it's getting easier to get their money out of the country using bitcoin, rather than establishing a bank account based in Hong Kong and getting their money out of the country using business channels."

Crypto hubs

According to Karayaneva, the U.S. and the U.K. are the most sought-after locations for real estate, especially fintech hubs like London or California's Bay Area.

"They were mostly interested in residential properties next to good education, like Stanford," she said. "Also, they want to diversify. They want to have parts of their assets abroad in more stable countries."

So far, around half of the traffic to Propy's website comes from China, out of 50,000 monthly views.

It's a trend that has implications far beyond China, though, especially in California, where, according to statistics gathered over a decade by ATTOM Data Solutions, nearly a quarter of all single-family homes are now purchased in all-cash transactions without a mortgage.

According to CEO Roy Dekel at SetSchedule, a California-based startup helping licensed real estate agents connect with buyers and homeowners, it's more common for Chinese bitcoin veterans to convert cryptocurrency into cash than to buy property directly with it.

"We have noticed a drop in Chinese interest, but certain cities like Los Angeles, San Francisco, and New York remain strong," he told CoinDesk. "The ultra-wealthy Chinese have used this source as a diversification of investment."

High rollers
On the other hand, Dekel also noticed "many blockchain enthusiasts" are buying second homes or investment properties, leading to an uptick in sellers interested in accepting cryptocurrencies directly from international buyers.

Since platforms like Propy are compliant across jurisdictions, the reason behind this trend may go beyond tax evasion, speaking to real pain points in legitimate markets.

In January, The New York Times asserted that China's exorbitant housing market is "like a casino." Further, Reuters reported property development restrictions continue to tighten, such as reduced subsidies for housing developers.

"In Beijing, only last year they saw a 40 percent rise in price," Karayaneva said. "Historically, real estate investors from China are very active abroad because their own property market is going crazy."

All things considered, Chinese buyers are hardly the only ones purchasing property with cryptocurrency. In 2017, Europeans used bitcoin to buy luxury apartments in Dubai's Aston Crypto Plaza, a project spearheaded by British Baroness Michelle Mone.

Wherever it's taking place, though, it has become increasingly clear that crypto wealth could have a real impact on global real estate patterns.

https://www.coindesk.com/china-bitcoin-crypto-millionaire-real-estate/


New York, San Francisco and Los Angeles made up 72% of deal volume from Chinese investors in 2017, according to Cushman & Wakefield Senior Managing Director, China Direct Investment Xinyi McKinny. Chinese investors have historical ties to these cities and many prefer to invest large amounts of money in cities with which they are familiar, she said. ďOver the years they will start to look at other cities,Ē she said. ďCulturally, they are not familiar and Ö not comfortable with secondary and tertiary markets.Ē Cities such as Washington, D.C., Houston, Dallas and San Antonio are starting to pique the interest of investors, according to the report. McKinny said investors are starting to consider Austin and Denver, but Chinese investors will remain committed to the markets they know well.

 https://www.bisnow.com/national/news/capital-markets/chinese-investors-still-prefer-real-estate-in-these-popular-us-metros-86776?utm_source=CopyShare&utm_medium=Browser
« Last Edit: October 13, 2018, 10:21:20 AM by Eddie »
What makes the desert beautiful is that somewhere it hides a well.

Offline Eddie

  • Master Chef
  • *****
  • Posts: 19515
    • View Profile
Re: Listing Some Interesting Trends (And Interesting Anomalies)
« Reply #8 on: October 13, 2018, 10:36:05 AM »
I'm trying to ascertain exactly how big Chinese capital flight in bitcoin is getting. It would be a good metric to track. I think it can be estimated fairly closely, and maybe charts are out there...but I haven't found them yet. I'm still looking.

It explains bitcoin's endurance and growth in spite of crazy volatility. The idea is to buy some bitcoin with Yuan, and then very quickly use it to buy a tangible asset or at least get it into another currency. Based on the USD chart, I'd bet a fair amount sits in cash US dollars, at least while the owners are shopping for a better asset.

If you can get in and out of bitcoin quickly, then the volatility won't hurt you, unless you are unlucky and buy on a really bad day and get creamed. This is a completely different strategy than buying and holding bitcoin, which tends to wipe people out.

It makes great sense, and since it's digital, it beats the shit out of gold as a way to move money across borders.



Bitcoin Is The New Flight Capital
 Intelligent Investing

Clem Chambers Contributor
Intelligent Investing
Contributor Group

 
Bitcoin has replaced gold as a safe haven

Most people love gold. It is simply an emotional commodity where there is a deep-seated allure and lust. Gold used to be money and it was great money for its times. It was one of the few resistant, standardizable, rare things that was any good for storing value. In a primitive world gold is great as currency; its only drawback being its high value. That was where silver and copper stepped in and filled the gap. However, it wasnít long before paper and credit took over from metals and a promise even when it hasnít been as good as gold has ruled money as the main source of wealth and transaction far back into history.

That doesnít stop goldís modern fan base believing that gold should once again be the basis of our monetary system. It makes sense for them as they own some and remonetization would shoot gold to the moon faster than any crazy cryptocurrency. Yet back in the 19th and early 20th century, industry and society was crucified on a cross of gold, as the anti-gold standard people would have it and it took the First World War to kill gold as money for much of the world, and the great depression in the U.S. to see it out of peopleís pockets and into government reserves for good.

Gold is terrible money in these times; itís insecure, volatile and canít be easily digitized. Making more gold puts mining Bitcoin to shame when it comes to environmental damage. Not only does it use five times as much energy to mine one single yearís more supply, it rips up huge swathes of the environment to do so.


Yet tearing up the globe for gold is nothing new, with the disastrous destruction of North California by gold rushers and the consequent silting up of the Sacramento river, one of the initial impulses for the environmental movement as we know it.

However, there is no shaking goldís investment audience. Itís the same old types since when I was a small child, grisly old guys awaiting Armageddon and a global comeuppance. Like stock market crashes it has to happen, history is littered with such moments, but I believe if one was to come about these days, gold would not zoom to the skies.


Gold is caught in a very narrow range and has been going nowhere for years now. Having a basement of gold bars has not been a great investment even with interest rates near zero, a good environment for gold, at least in theory. The stock market has trounced gold, pretty much most assets have in this era of QE. Will gold have its day when this merry-go-round shudders to a halt?

I believe that one of goldís most powerful use cases is gone and as such gold is now only any use outside of its industrial and commercial uses as the currency of war. Governments keep gold in reserve because in war gold is what you pay with. Itís no good having soldiers if you canít trade with gold, because pretty soon if the stakes get high, your paper wonít be accepted and only bullion will buy you what you need in trade.


That use case is still in place, but what has gone away is the use of gold as flight capital.

When Little Rocket Man was wrestling Big Rocket Man, gold didnít react, but Bitcoin went off the dial every night. You canít head for the airport with gold bars these days, and opening a foreign bank account is a thankless task that can take months or never get done. A normal person sweating a war isnít a billionaire with a private office, but in the old days they might have stashed a few thousand or even hundreds of thousands in gold if they thought the balloon was going up.

Today youíd stash it in Bitcoin and be safe in the knowledge that you could fly away on holiday somewhere safe for a few months and your stash would be as safe as the place your hid you private keys.

This is a blow to gold so that for now when a war breaks out or a conflict starts to brew, donít expect gold to spike like the old days. Now Etherium, Bitcoin, Ripple, Litecoin and a myriad of crypto will get the attention that gold once enjoyed.

Its bad news for grumpy old men but good news for crypto-believers and a new trading opportunity for us.

---

Clem Chambers is the CEO of leading private investors Web site ADVFN.com and author of Be Rich, The Game in Wall Street and Trading Cryptocurrencies: A Beginnerís Guide.

I am the CEO of stocks and investment website ADVFN . As well as running Europe and South Americaís leading financial market website I am a prolific financial writer.

https://www.forbes.com/sites/investor/2018/04/30/bitcoin-is-the-new-flight-capital/#409669067320
What makes the desert beautiful is that somewhere it hides a well.

Offline Eddie

  • Master Chef
  • *****
  • Posts: 19515
    • View Profile
Re: Listing Some Interesting Trends (And Interesting Anomalies)
« Reply #9 on: October 13, 2018, 01:11:50 PM »
It is known that China intends to bring the first sovereign blockchain currency into the world. I would say that this is more by necessity than by any drive to lead the world. They have steadily been trying to outlaw bitcoin and other cryptos that might be used to circumvent their capital controls since 2013, with what appears to be very limited success, so far.

Lots of rich Chinese started speculating in bitcoin years ago, and it isn't illegal to own bitcoin. But their government has tried to make it harder to buy. The way it's done now is partly peer-to-peer, but the more popular way is to buy some kind of cash denominated gift card and use that to buy cryptos, because it can't be traced back to the individuals bank account.

So you have these people who own lots of bitcoin using it to offshore money, and you have a once-again growing trade in grey market bitcoin.

The government doesn't want to crack down too hard, because blockchain is something Xi recognizes as a huge part of the future of money and perhaps the internet itself, and the Chinese powers-that-be want the Chinese blockchain innovators to keep on innovating.

So here's a scenario to consider.

The Chinese come up with a state run crypto. All Chinese (and Silk Road?) commerce can be conducted in this currency. They make all other cryptos REALLY illegal (by means of the typical communist gentle forms of punishment). The Chinese, being no dummies, get out of bitcoin later that same day.

Since bitcoin runs on China, it goes to zero fast, or close enough to make it useless. Ditto the major worldwide competitors.

Could that happen?

The immediate large benefit to the government would be to close down the capital flight through bitcoin.

Then if they could manage to peg their new crypto to gold???

Just thinking out loud here (he says, realizing he has wandered far out into cyberspace and noticing that nobody else seems to be around.)




« Last Edit: October 13, 2018, 03:10:59 PM by Eddie »
What makes the desert beautiful is that somewhere it hides a well.

 

Related Topics

  Subject / Started by Replies Last post
17 Replies
3416 Views
Last post July 23, 2015, 05:27:17 PM
by Eddie
4 Replies
794 Views
Last post January 02, 2016, 12:11:46 PM
by Eddie
0 Replies
462 Views
Last post February 29, 2016, 07:14:08 AM
by Eddie