- “A shock-measure: civil servants and pensioners will be subject to stricter capital controls than the rest of the Greeks. They will be able to withdraw only €150 per week – with the cash withdrawal cap being €420 per week – that is a total of €600 per month. The rest of their wage or pension they will have to spend by using debit or credit card”
- “For sure the biggest winner are the banks: first of all, they will keep longer the amounts of pensions and civil servants salaries. It could be 1-1.5 billion euro per month. Secondly, because they charge 2 euro per transaction via debit or credit card”
- ‘The U.S. Mint sold 14.26 million ounces of American Eagle silver coins in the third quarter, the highest on records going back to 1986′
‘The global silver-coin market is in the grips of an unprecedented supply squeeze, forcing some mints to ration sales and step up overtime while sending U.S. buyers racing abroad to fulfill a sudden surge in demand’
- “The biggest shocker in today’s Fed announcement is not that the Fed did not hike: that was telegraphed far away. It is highlighted on the chart below in red: for the first time ever, one FOMC predicts negative rates in 2015 and 2016″
[Editors note] – Quite simply, due to the extreme growing levels of sovereign,corporate,financial and private debt world wide, at this point there is little to no chance that loose monetary policy such as low interest rate policy or Quantitative easing will be able to be reversed without a complete collapse of the global financial system.
Today was one of the biggest admissions yet (from the most influential central bank in the world), that there has been no real recovery since the 2008 crisis; as the most important economy in the world cannot even handle a 0.25% interest rate hike.
[Editors note] This is a significant development that could lead to more public funds gaining exposure to Bitcoin; which in turn could fuel retail investment demand in the future. Please also check out my article on Bitcoin retail investment, where I discuss this in more detail.
- “ARK believes that bitcoin, a digital currency, could disrupt the $500 billion intermediary payment platform industry which includes credit cards, electronic payments and remittances, and might empower the creation of a new group of companies and industries.”
- “ARK Investment Management LLC (ARK), an active manager of thematic exchange-traded funds (ETFs), is pleased to announce that the ARK Web x.0 ETF (NYSEARCA: ARKW) has become the first ETF to invest in bitcoin. ARK has made its investment for ARK Web x.0 ETF through the purchase of publicly traded shares of Grayscale’s Bitcoin Investment Trust (OTCQX: GBTC)”
Via Leon Pick @ www.financemagnates.com
“The fund is to be launched by Korea Investment Trust Management, a Seoul-based asset management firm overseeing over $20 billion in investments”
“The fund could become the world’s first bitcoin ETF to trade on a fully regulated venue”
“The ETF would launch sometime next year, subject to the the approval of the Financial Supervisory Service (FSS), the country’s financial regulator”
[Editors note].. The Secondary market funds competing to be the first to offer retail investors Bitcoin ETF investment vehicles, could be key to providing the extra liquidity needed in the next potential bull market run in Bitcoin.
Posted by Edward Blake..
As well as proposals for an ‘Australian tax on bank deposits’ set to start on January 1st 2016 (A tax on your money you have already paid tax on!); and plans for increased capital controls in France in September 2015, which includes increasingly draconian legislation such as the following (1):
- “Prohibiting French residents from making cash payments of more than 1,000 euros, down from the current limit of 3,000 euros.
- In addition any cash deposit or withdrawal of more than 10,000 euros during a single month will be reported to the French anti-fraud and money laundering agency Tracfin.
It appears that counterparty risk to the existing financial system is set to ratchet up across the entire world in Q3 and Q4, culminating with the EU’s Bank Recovery and Resolution Directive set to go into effect on the 1st Jan 2016.
Just to give you an idea of where capital controls are heading, especially in the EU. Included in the EU Bank Recovery and Resolution Directive legislation is the following clause:
68) “In order to ensure that resolution authorities have the necessary flexibility to allocate losses to creditors in a range of circumstances, it is appropriate that those authorities be able to apply the bail-in tool both where the objective is to resolve the failing institution as a going concern if there is a realistic prospect that the institution’s viability may be restored,”
To summarise, when banks and other financial institutions start to fail in the EU, your deposits will be directly on the line to temporarily sure up their balance sheets.
Due to the extreme amount of leverage, derivatives and potential contagion between sovereign states and financial institutions worldwide, I would argue that it is almost impossible to restore the ‘viability’ of highly leveraged financial institutions at this time. This could lead us into incremental never ending bail-ins that gradually erode the hard earned savings citizens have made over generations.
Greece could potentially see the first use of this directive as Zerohedge identifies (2). Whilst the third bailout package for European Banks/Greece is currently being finalised and stands no realistic chance of spurring enough economic growth to reduce Greece’s debt to GDP ratio. It is possible that any shortcoming in shoring up Greek bank balance sheets, could end up on the shoulders of depositors following the implementation of the EU Bank Recovery and Resolution Directive legislation on January 1st 2016.
However, comparing the current debt to GDP ratio of Greece to other countries within the EU and we can see that the risk of Bail-ins and capital controls is not just limited to the relatively fringe country of Greece. Several other heavily indebted EU countries below could be next in line to use these bail-in tools when potential economic crises strikes.
Source : McKinsey, Zerohedge
One of my main arguments for owning alternate currencies such as precious metals and Bitcoins has always been to reduce counterparty risk to the existing financial system; and we can see that this risk clearly seems to be in a up-trend as we go into the fall of 2015.
With 2015 world GDP growth estimates dropping and the continued rout in commodity & high yield credit markets indicating real weakness in global demand. We could soon see economic hotspots spreading around the world that could lead us to the very real implementation of capital controls & bail-ins on a global scale.
Looking at the effect the Cyprus bank bail-in of 2013 and the recent capital controls in Greece had on the price increase of Bitcoin, it could potentially be a opportune time to take advantage of the current price weakness we are seeing in the alternative currency markets.
Epicentre Bitcoin talks with Mike Hearn (Bitcoin developer) about ‘Bitcoin XT’ his modified version of the Bitcoin core protocol that could potentially facilitate larger transaction Block size’s in the future.
The talk centres around scalability of the Bitcoin network and the proposal to increase transaction block sizes from 1mb to 20mb. The potential benefits and risks of making such a change to the Bitcoin protocol are discussed.
Posted by Edward Blake;
Whilst its easy to get fixated on the speculative price movements of Bitcoin as a main indicator of the health of the Bitcoin economy (as we often see in the Main Stream Media).
In my opinion two of the most important metrics I personally pay close attention to in the is the direction of Venture capital (VC) and the number of Bitcoin transactions per day.
Both these metrics are very important indicators of the current health of the Bitcoin network & growing utility. In addition they are good for predicting future growth of the network that will ultimately affect the Bitcoin spot price in the future.
The chart below shows growing divergence between total VC investment and the market price of Bitcoin. The current and potential development of infrastructure, services and utility from VC investment could be starting to indicate that the current spot price of Bitcoin is currently trading, or soon could be trading under the Net Asset Value (NAV) of the Bitcoin economy.
— CB Insights (@CBinsights) July 31, 2015
In addition to this, since the 2014 Bitcoin highs which saw Bitcoin trade over a $1000, the number of Bitcoin transactions per day on a year to year basis are up around 100% from 2014. This is a really important metric showing that Bitcoin use is becoming more and more widespread.
Should these statisics continue to climb in the current manor, we should eventually see more and more of this activity and productivity from VC investment being priced into the market.