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UK financial official: Monetize state debt when deflation risks persist

"There is no need for central banks’ balance sheets to shrink. They could stay permanently larger; and, for some countries, permanently bigger central-bank balance sheets will help reduce public-debt burdens. Even when permanent monetization occurs — as it almost certainly will in Japan and possibly elsewhere — it may remain forever the policy that dare not speak its name. Such reticence may serve a useful purpose. But it must not blind central banks and governments to the full range of policy tools available to address today’s severe debt overhangs." Continue reading →

Continue ReadingUK financial official: Monetize state debt when deflation risks persist

Incredible confusions: Why ‘austerity’ if we can just print the money?

"Debt can either be repaid or be defaulted on. Destroying the purchasing power of money through inflation is one way to default on the debt. Simply not paying the debt is the other option. In both cases, savers, ‘thrifty pensioners’, and the customers of banks, insurance companies, and pension funds will suffer, and in the inflationary scenario everybody will suffer greatly. Sadly, the massive printing of money and accumulation of debt that has occurred since the termination of the gold standard and the adoption of limitless state fiat money and pro-growth central banking has now brought us to a point where defaults appear to be unavoidable. This is not some great reset. It is a man-made catastrophe." Continue reading →

Continue ReadingIncredible confusions: Why ‘austerity’ if we can just print the money?

Bitcoins are like ‘glass beads’, warns Danish national bank

"The Danish national bank has released a briefing note firmly declaring bitcoin to not be money, noting that the currency is more like 'glass beads'. Denmark’s national bank is just the latest central bank to inveigh against bitcoin. In January, Malaysia’s central bank warned citizens that 'the Bitcoin is not recognised as legal tender in Malaysia… the public is therefore advised to be cautious of the risks.' In December 2013, the People’s Bank of China banned the country’s financial institutions from trading in the currency, shortly after the former president of the Dutch Central Bank said the currency’s boom was 'worse than the tulip mania'." Continue reading →

Continue ReadingBitcoins are like ‘glass beads’, warns Danish national bank

Ukraine Goes Cyprus 2.0, To Tax Deposits Over 100,000 Hryvnia

"Ukraine's parliament is to consider draft laws which would ban foreign-currency bank deposits and introduce a 25% tax on interest on deposits in banks and other financial institutions in circumstances where the interest received is more than 5% above the rate set by the National Bank of Ukraine. The proposed amendments to banking and tax legislation were put forward by Yevhen Sihal, who is a member of the country's ruling Party of Regions. In an explanatory note submitted with the drafts, he argued that the higher tax rate will encourage consumer spending, reduce the cost of business loans, and provide extra funding for the country's Pension Fund." Continue reading →

Continue ReadingUkraine Goes Cyprus 2.0, To Tax Deposits Over 100,000 Hryvnia

Visa, Mastercard block US-sanctioned Russian banks

"International payment system Mastercard has stopped serving clients of seven Russian lenders, after the US issued sanctions against it regarding Russia’s position over the Ukrainian turmoil. Rossiya Bank was blocked by both Mastercard and Visa, with the latter also cutting ties with Sobinbank, SMP Bank and Investcapitalbank. Washington’s move is meant to put pressure on people they see as members of President Vladimir Putin’s 'inner circle'. The bank’s owner, Yury Kovalchuk, is on the list as well, as an individual. Visa and Mastercard have a record of bowing to political decisions from Washington, most notably in blocking donations to the WikiLeaks whistleblower website." Continue reading →

Continue ReadingVisa, Mastercard block US-sanctioned Russian banks

Startup of the Week: CurrencyTransfer

"CurrencyTransfer is a business foreign exchange price comparison marketplace. International business payments can be expensive and opaque, with hidden markups of up to five percent of the value of transfers. CurrencyTransfer aims to bring transparency and impartiality to the market, by getting currency specialists to lifestream their tradable rates -- which are usually decided 'manually' over the phone depending on the client -- in a transparent market. It was set up by computer scientist Stevan Litobac, who was born in Sarajevo but fled to the UK when the Bosnian war started, and Israeli-Brit Daniel Abrahams." Continue reading →

Continue ReadingStartup of the Week: CurrencyTransfer

Appeals court upholds Fed’s 21-cent cap on retailer ‘swipe fees’

"A Federal Reserve rule allowing banks to charge retailers 21 cents to process debit-card transactions has been upheld by a federal appeals panel, a blow to big merchants such as Wal-Mart Stores Inc. and Target Corp. The dispute stems from a Dodd-Frank provision that required the Fed to set the so-called interchange fees, known colloquially as swipe fees, at a level reflecting the actual processing costs. The Fed's staff recommended cutting the fee from 44 cents per transaction on average to just 12 cents. But after heated protests from the financial industry, the Fed in June 2011 set a cap of 21 cents per transaction." Continue reading →

Continue ReadingAppeals court upholds Fed’s 21-cent cap on retailer ‘swipe fees’

Jeff Berwick: Bitcoin Is Equivalent to the Internet in 1993

"Perception of Bitcoin now is like of the Internet in 1993. Mt Gox, Tesla and the free market. US government pressuring foreign governments making it harder to get foreign citizenship. Staggering fraud in the banking sector and banker suicides. Crazy Keynsian thinking. Russia and China more free market than the West. Disaster brewing for the West. The move into precious metals stocks." Continue reading →

Continue ReadingJeff Berwick: Bitcoin Is Equivalent to the Internet in 1993