END the FED

Alleged Silk Road founder: If Bitcoin isn’t money, how did I launder it?

"Ross Ulbricht, who stands accused of running the Silk Road black market under the name 'Dread Pirate Roberts,' says that new federal bitcoin laws make the charges against him invalid. In a filing over the weekend, Ulbricht's lawyers defended him against charges of hacking, narcotics trafficking, operating a criminal conspiracy, and money laundering. The first three charges, his lawyers argue, are 'unconstitutionally broad' and can't be applied to the normal operation of a website, even one whose business is illegal goods. And the last charge, they say, makes no sense if there isn't actual money involved — a possibility implied by a recent IRS decision." Continue reading →

Continue ReadingAlleged Silk Road founder: If Bitcoin isn’t money, how did I launder it?

Bitcoin Prices Whipsawed by Looming China Crackdown

"While the PBOC doesn't appear ready to ban Bitcoin outright, they appear determined to drive it out of the Chinese banking system. The Chinese government apparently was concerned over investor speculation in the digital currency, and in particular in the use of Bitcoin to move money outside the country. Once people started using Bitcoin to bypass China's strict capital controls, the government almost had no choice but to cut it off from the banking system. For China's Bitcoin exchanges, which include BTC China and OKCoin, the news is bad but not necessarily fatal. But longer term, this is just another pebble in the stream." Continue reading →

Continue ReadingBitcoin Prices Whipsawed by Looming China Crackdown

Colombia Stops Short of Bitcoin Ban, Bars Banks From Industry

"Despite reports that the SFC could enact harsh restrictions on bitcoin – one report suggested it would go so far as to ban bitcoin transactions altogether, the SFC issued what amounted to a boilerplate warning to consumers, and blocked financial institutions from holding, investing in or brokering bitcoin transactions. The release indicated that bitcoin fails to meet the definition of a currency according to the criteria set forth by the International Monetary Fund (IMF), as it is not backed by a central bank. Further, the SFC reiterated that digital currencies can be used for illicit means, including money laundering and terrorist financing." Continue reading →

Continue ReadingColombia Stops Short of Bitcoin Ban, Bars Banks From Industry

Argentina inches toward economic crisis, again

"Inflation is accelerating and projected to hit 40% in 2014, according to Sergio Berensztein, director of Poliarquía Consultores. Unofficial estimates put the inflation rate at above 25% in 2013, much higher than the official government rate of 10.9% — a figure few believe, Berensztein says. A study from consultancy Estudio Bein estimates inflation has eroded wages nearly 10% over the past four months. The Argentine peso was devalued nearly 20% in January, further diminishing purchasing power and making imported items more expensive. Moody's downgraded Argentina's sovereign rating March 17 to Caa1, seven levels below investment grade status, Bloomberg reported." Continue reading →

Continue ReadingArgentina inches toward economic crisis, again

Western banking regulations could be ‘mutually destructive’: IMF

"Western governments have put in place banking regulations that could be 'mutually destructive' and undermine efforts to prevent bust banks from costing taxpayers billions of pounds, according to a report by the International Monetary Fund. Policymakers representing the world's biggest financial centres have failed to make the banking sector stand on its own feet by ending implicit subsidies and co-ordinating rescue plans when multinational banks go bust, the Washington-based lender of last resort said. Subsidies to the banking sector in some countries are as high as they were before the crash, amounting to $590bn (£355bn), with the eurozone the worst affected." Continue reading →

Continue ReadingWestern banking regulations could be ‘mutually destructive’: IMF

Federal Bank VP: Bitcoin Threat Means Banks Must ‘Adapt or Die’

"On 31st March, the Federal Reserve Bank of St. Louis – one of the 12 Federal Reserve banks – held a talk on bitcoin from a banking and economic viewpoint. The session, entitled ‘Bitcoin and Beyond: The Possibilities and the Pitfalls of Virtual Currencies’, was presented by economist David Andolfatto, who is Vice President at the bank and a professor at Simon Fraser University. Andolfatto is sure that, ultimately, new systems will upend the monetary hierarchy of today – eventually forcing substantial changes within the banking and payments industry." Continue reading →

Continue ReadingFederal Bank VP: Bitcoin Threat Means Banks Must ‘Adapt or Die’

Canadian Government to Divest ‘MintChip’ Digital Currency Program

"The Canadian government has announced that it will end its MintChip electronic payment system, and that it will look to sell the business to the private sector. Announced in 2012, MintChip was not a digital currency akin to bitcoin, but rather a digital payment mechanism meant to function as an electronic cash that could be transferred between users. MintChip used a silicon chip with a unique ID as a store of value, which was then to be sent to brokers who would trade them to consumers and businesses. Users could embed MintChip devices onto USB sticks, wallets, laptops and tablets, or store their digital cash with a third-party service provider." Continue reading →

Continue ReadingCanadian Government to Divest ‘MintChip’ Digital Currency Program

Bank of Montreal CEO: Bank is open to Bitcoin, conditionally

"If it was reliable and if it was regulated, 'then there’s no reason why we couldn’t be an intermediary in bitcoin-related transactions,' Bill Downe said in an interview after the company’s annual general meeting in Toronto. 'Because, if you wanted a Swiss franc transaction or a Japanese yen transaction or a U.S. dollar transaction, we can do that transaction for you,' he said. 'If bitcoin [can be] a reliable medium of exchange, then at that point in the future, we would be able to [conduct business] with bitcoin.' So far, however, almost every major banking chief in North America has either stayed mum on, or openly derided, the currency. Canada’s banking watchdog said it does not regulate bitcoin." Continue reading →

Continue ReadingBank of Montreal CEO: Bank is open to Bitcoin, conditionally

Yellen Surprise Suggests Investors Should Go On Defense

"Comments this week from Janet Yellen, who just took over as Fed chair, caught many in the market off guard when she suggested the central bank may be in a position to raise its key interest rate as soon as six months after ending its massive bond-buying stimulus. That could put the first rate hike on the table by the spring of 2015 compared with previous expectations for no sooner than the second half of the year. Indeed, rate futures markets now assign a 52 percent probability to the Fed's April 2015 meeting for the first rate hike versus just a 33 percent chance a month ago. Stocks such as utilities could be an option to steer clear of some of the hotter stocks and sectors of 2013 that are now richly valued." Continue reading →

Continue ReadingYellen Surprise Suggests Investors Should Go On Defense

Fund Manager Jeremy Grantham Blasts the Fed

"The Fed can manipulate stock prices. That's perhaps the only thing they can do. But why would you want to get an advantage from the wealth effect when you know you are going to have to give it all back when the Fed reverses course. At the same time, the Fed encourages steady increasing leverage and more asset bubbles. It's clear to most investing professionals that they can benefit from an asymmetric bet here. The Fed gives them very cheap leverage on the upside, and then bails them out on the downside. And you should have more confidence of that now. The only ones who have really benefited from QE are hedge fund managers." Continue reading →

Continue ReadingFund Manager Jeremy Grantham Blasts the Fed