Investment/Trends

Despite panic, China’s regulation of Bitcoin leaves room for optimism

"In the aftermath of the first official statement by the Chinese government regarding Bitcoin, the entrepreneurs in China’s Bitcoin industry are optimistic. As is common in China, the actual extent of these regulations will be worked out over time as the Bitcoin industry develops, giving the government room to respond to new threats. My view is that this notice represents an expected development that encouragingly stops short of more stringent restrictions or an outright ban on Bitcoin’s use, and tomorrow China will still be the biggest potential Bitcoin market in the world." Continue reading →

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China feeds bitcoin frenzy

"More than a third of the world's bitcoin transactions now flow through China's largest bitcoin trading website BTC China, according to bitcoin data websites. China has surpassed Japan's Mt.Gox and Europe's BitStamp, reaching 100,000 Bitcoins in daily trading volumes, or more than 400 million yuan (U.S.$65.7 million) in daily transactions. In recent years China has been pushing to internationalize the yuan, adding more value to the once tightly controlled currency on international markets. But despite the changes, controls mean individuals still find it difficult to invest in assets outside China. As a result, more Chinese are looking to invest in alternative assets like bitcoin." Continue reading →

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Fund Manager Hugh Hendry: I would buy Bitcoin if I could

"'This is the environment where Bitcoin could go to $1m. There is no qualitative reason, but it is trending. If I could own Bitcoin, I would. If I own 3D printing, it is just the same thing,' he said. Hendry added fundamentals do not matter at a time when policy is misaligned, emphasising instead the ‘feedback loops’ created by QE. 'There is no point arguing about the one-way causality we [as an industry] believe determines our processes. That is all about a belief this is rational. We want to believe markets go up because the economy is improving, because corporate cashflows are improving. But when you get monetary disturbances creating loops, it does not really matter.'" Continue reading →

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China central bank warns banks against use of bitcoin

"China's central bank warned on Thursday that financial institutions should not trade the digital currency bitcoin, saying that while it does not yet pose a threat to China's financial system, it carries risks. The central bank also said in a statement on its website that it would act to prevent money laundering risks from bitcoin, a prominent digital currency that is not backed by a government or central bank. The PBOC will require trading platforms that deal in virtual currencies such as bitcoin to register with telecommunications authorities, it said. The central bank did allow that ordinary individuals were free to use bitcoin, so long as they take on the risk themselves." Continue reading →

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PBS: It’s No Bubble – Why We Should All Give Bitcoin a Chance

"The long sweep of financial history tells us that many extremely valuable innovations were initially viewed with suspicion. But without them, we'd still be bartering. Bitcoins may well be one of the truly major financial innovations that brings the world together and forces long-needed fiscal and financial reform. Let's give it a chance." Continue reading →

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Proposals announced to boost Shanghai Free Trade Zone

"In a six-page report that included 30 detailed instructions, the People's Bank of China said yesterday it would allow residents of the zone - seen as a test bed for liberalising the financial sector - to set up 'resident free trade accounts' in both domestic and foreign currencies, and would allow yuan to be fully convertible under those accounts 'when the time is ripe'. The 29 sq km zone, the first of its kind on the mainland, was set up two months ago and the guidelines suggest it will offer benefits that Beijing has been reluctant to offer other pilot areas. For example, 'qualified' individual investors will be able to make various foreign investments, including trading overseas securities." Continue reading →

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Why You Shouldn’t Write Off BitCoin Just Yet

"BitCoin poses a pretty substantial challenge to business people: it requires sufficient understanding of computer science to appreciate its elegance and idiosyncrasies but, perhaps more importantly, it requires a sufficient understanding of finance to appreciate it vis a vis other fiat currencies and gold. Despite this complexity, business leaders are pressured to take a stance on this fledgling techno-currency. Most have chosen the safe approach writing it off as the latest Ponzi scheme with some even arguing that it will be the largest bubble burst in the history of Ponzi bubbles. I’m afraid I’m not so sure… And here’s why." Continue reading →

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Ukraine protests increase risks of currency crisis

"Massive protests against Viktor Yanukovich hammered Ukraine's financial markets on Monday, increasing the risk of a currency crisis as the president tries to hold on until an election in early 2015. Ukraine's debt insurance costs jumped and currency traders increased bets on a devaluation after 350,000 people protested on Sunday against Yanukovich's decision to ditch a trade pact with the European Union. Central bank Governor Ihor Sorkin backed up foreign exchange intervention by vowing to do everything needed to uphold financial stability. In an online video message, he urged savers 'to be confident in the banking system' and not to withdraw their deposits." Continue reading →

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Small Banks Disappear. So Do Loans to Small Businesses.

"The number of banks is down to just under 6,900. There were 7,000 a year ago. Banking regulation adds to costs. This wipes out small banks. It subsidizes big banks. Which banks caused the crisis of 2008? Large banks. Which banks got the lion’s share of the bailouts from Congress and the Federal Reserve? The top 6 banks. The crisis made them bigger, more powerful. The bailouts were subsidies for failure. Which banks hold 70% of all bank assets? The top 12 banks. Who loses? Small businesses. They get loans from small banks. Which businesses provide the vast majority of new jobs? Start-up businesses." Continue reading →

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Central Banking: Sterile as the Grave

"Central banking is a modern religion, a technocratic one. The world's top men, the ones who control banking, want to present central banking as a science. Any sense of spontaneity, gaiety or eccentricity is to be drained from the process. What is left is a dutiful acknowledgement that those minding the money store are the best of the best – and chosen for their fealty to honesty and their honest resoluteness in the face of the temptations of corruption. A straight-shooter, fearless, well-meaning, earnest ... even a bit nebbish. That's how the central banker is basically presented to the world. You don't usually see them in relaxed environments. You hardly ever see them at barbecues." Continue reading →

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