Thursday, March 21, 2019

On Repairing/Rebuilding 100,000+ Damaged Houses

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by Charles Hugh Smith, Of Two Minds:

Almost lost in all the dollar estimates of property damage is the human loss, suffering and stress.

I am not an expert in repairing flood damage, or in dealing with insurance companies, FEMA or all the other pieces that will go into homeowners getting the funding needed to repair or rebuild their homes.

But I do know a bit about construction after 44 years in the field, and I have been soberly reflecting on the many hurdles that face everyone involved in restoring / repairing tens of thousands of homes, more or less all at the same time.

Preliminary estimates set the number of flood-damaged homes in Houston at around 100,000. More recent estimates put the number at around 40,000.

No one yet knows how many homes in Florida have been damaged by Hurricane Irma, but the number will undoubtedly be a big one.

Here are some semi-random thoughts on the challenges of repairing/rebuilding so many dwellings in as short a period of time as possible:

1. The average cost of homes in Houston is reportedly around $300,000. Many coastal areas in Florida are similarly valued. Just as a guess, many of the affected homeowners probably have mortgages in the $200,000 range.

It’s been reported that only 1 in 6 in the affected areas of Houston have flood insurance, suggesting 85{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of those whose homes were rendered unlivable will need to borrow money to fund the repairs.

It seems federal agencies offer homeowners loans for this purpose, or access to what is effectively a second mortgage.

If the repaired home will be worth $300,000–questionable, perhaps, for those houses which have been repeatedly flooded by lesser storms–then how much money will homeowners be willing to borrow to keep the home?

If a homeowner has $50,000 equity and a $200,000 mortgage, and he has to borrow $100,000 to make the home livable and replace all the ruined contents, does it make financial sense to have $300,000 in mortgages on a house that’s worth $250,000? How much is the emotional connection to the home and neighborhood worth?

How many homeowners simply can’t afford to borrow the sums needed?

If the homeowners affected by Hurricane Katrina are any guide, between a quarter and a third of those without flood insurance might “jingle mail” their mortgage/title to their lender, i.e. abandon the property via default, leaving the lender to deal with the repair or demolition costs.

Lenders are notoriously reluctant to dump tens of thousands of dollars into abandoned homes without a clear projection of the financial pay-off to investing substantial sums in defaulted properties.

2. What happens to property values in neighborhoods in which numerous homes are unrepaired or abandoned? If history is any guide, property values decline sharply until the point that the neighborhood has been restored to its pre-damaged state. That is typically several years at best and a decade or longer in sub-optimal conditions.

3. Every construction project will need plans and specifications, a building permit and inspections of the construction progress for both the city/county and the lender. Do the affected cities have enough building department staff and inspectors to handle this massive wave of permit applications and inspections of tens of thousands of scattered jobsites?

4. It’s much easier to build a subdivision of 100 nearly identical homes on a single parcel than it is to repair/rebuild 100 homes distributed over a wide area, each with a mix of unique problems to deal with.

In other words, it’s very difficult to achieve any economies of scale in repairs/rebuilds of thousands of homes of various ages and designs beset by varying degrees of damage.

5. The building materials industries of North America are large enough to ramp up production to supply whatever materials are needed, but the skilled labor required is another story.

Demolishing waterlogged drywall and paneling, removing ruined flooring, carpets and furniture, etc. are fairly low-skill tasks that can be completed by relatively inexperienced workers. But tasks such as removing and replacing electrical wiring and outlets, installing new panel boxes, reframing damaged roofs, etc. do not lend themselves to lightly trained, inexperienced workers.

It seems likely that the local experienced work force will quickly be committed (at much higher rates of compensation, of course), leaving many homeowners scrambling to find contractors who can restore their house to livability.

6. It can be very difficult to tell the difference between a fly-by-night “contractor” who smells opportunities for fraud and a legitimate builder who moves in seeking legitimate work. All sorts of verifications of legitimacy can be faked: contractors’ licenses, referrals, etc.

7. Even experienced contractors can get over their heads if they take on more work than they can manage. In times of high demand, contractors can accept jobs that they would be able to complete in normal times. But all sorts of contingencies can arise that make it difficult for contractors to perform all the work they committed to: subcontractors can suddenly announce they’re no longer available, workers can quit to go out on their own, financing and permits can languish and then all get approved at once, materials can suddenly become scarce–the list is long.

8. Each of these challenges could become a logjam that delays the rebuilding:some homeowners will contest insurance claims, others will find the permit process has slowed to a crawl, others will struggle to get the second mortgage process completed, and still others will have the money lined up but be unable to find an experienced contractor to do the work.

9. How committed are homeowners to their neighborhood if it is in a flood plain? how old is the neighborhood? How many residents have lived there for decades? These are seemingly ephemeral issues in the dollars-and-cents calculations of total losses and insurance claims, but they matter to those making the decision to stay and rebuild or pull up stakes and move to less vulnerable locales.

10. Disposing of the enormous quantities of construction debris generated by widespread flooding and other damage is another process we typically take for granted: debris boxes appear and are hauled off to some faraway place for disposal. But existing facilities might well be overwhelmed by the sheer mass of construction-related debris.

11. How many workplaces, schools and other institutions will be shuttered for repairs? How many people will be displaced as a result? Unemployment insurance is rarely a full replacement for wages/salaries lost to layoffs. Small business owners face the same calculus as homeowners–is it worth repairing the existing place or is it financially wiser to simply close up shop and move on?

12. The higher costs imposed by rebuilding and insurance claims will extend far into the future. Homeowners who have to borrow money to repair/rebuild will have less disposable income going forward, as the second mortgage will siphon cash from their earnings.

Insurers and re-insurers will raise rates to recoup their losses and recalculate the potential for future losses from super-storms that seem to be becoming more common–i.e. “100-year floods” that now seem to occur every 10-15 years. These higher rates will siphon additional funds from homeowners and businesses, leaving less disposable income for other consumption/ investment.

13. In the judgment of many observers, housing in much of the nation is overvalued, i.e. in a bubble driven by cheap, abundant credit. The timing of sinking serious sums into housing for repairs might be unfortunate if housing rolls over and loses 20{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}+ of its bubble-top valuations. Valuations may be recalibrated on a secular economic-cycle basis and by a reassessment of demand for homes facing near-certain risks of future flooding/storm damage.

Though the media will quickly move on to new crises, scandals and disasters, the process of repairing all these tens of thousands of homes will not be quick. The second-order consequences will stretch on for years: insurance losses, mortgage defaults and foreclosures, neighborhoods scarred by abandoned houses, cities and various government agencies dealing with thorny decisions about buying the most flood-prone homes, expanding drainage systems and so on.

Almost lost in all the dollar estimates of property damage is the human loss, suffering and stress. I’m not sure I could muster the emotional and financial stamina required to get through a long and often frustrating rebuilding process.

Read More @ OfTwoMinds.com

Blowing Off The Roof

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by Peter Schiff, Euro Pacific Capital:

Of all the absurd Washington pantomimes none has been as reliably entertaining and maddening as the annual debates to raise the debt ceiling. Although the outcome was always a foregone conclusion (the ceiling would be raised), the excitement came when fiscal conservatives bemoaned the perils of runaway debt and “attempted” to exact spending restrictions through threats “to shut down the government,” (which often led to news coverage of tourists being turned away from national parks.) On the other side of the aisle Democrats would rail that the ceiling must be raised “because America always pays her bills.” Lost was the irony that “paying” bills with borrowed money was fiscally responsible, and that raising the ceiling actually enabled America to continue to avoid paying its bills. After these amateur theatrics, the ceiling would be lifted and Washington would go on as if nothing happened. But at least the performance threw occasional light on the nation’s debt problems.
  
But this week the news dropped that President Trump had made a “gentleman’s agreement” with Senate Minority Leader Chuck Schumer to permanently scrap the“debt ceiling” so that government borrowing can occur perpetually without the need to air the nation’s fiscal dirty laundry. Given how much the national debt has exploded in recent decades, and how reluctant Congress has been to address the problem, it should be no surprise that the proposal has finally been made. The only shock is that it happening when the Republicans control the White House and both houses of Congress.

The news came just a day after the President stunned the Republican party by abruptly siding with Congressional Democrats over the best way to deal with current debt ceiling negotiations. These developments should make it clear, as I described in the weeks after Trump moved into the White House, that budget deficits during the Trump administration will be far larger than just about anyone predicted. In fact, the self-proclaimed “King of Debt” is reaching for his crown and the coronation profoundly affect the fate of the U.S. dollar and the American economy.

Trump came to the White House with essentially no history of stated aversion to government spending and debt accumulation. Instead, he won the votes of Republicans and some independents by staking out extreme positions on immigration, terrorism, and economic nationalism, and by thumbing his nose at a political establishment much deserving of ridicule. Unlike almost all other Republicans, he had nothing to say about fiscal prudence, limited government, entitlement reform, spending cuts, or balanced budgets. In fact, he very rarely criticized government for being too large, but simply for being too stupid.

But as a businessman Trump had made his successes by borrowing, and then by borrowing even bigger when his ventures fell deeply into the red. There really should have been no doubt that he would bring those instincts with him into the Oval Office. Republicans who thought otherwise have no one but themselves to blame for what the future holds. 

The debt ceiling came into existence just a few years after the Federal Reserve was created in 1913. At the time that the bank was established many politicians, and certainly many citizens, were concerned that it could potentially lend unlimited funds to the government, a capacity that could short-circuit constitutional checks and balances and lead to the development of a Federal behemoth. As a result, the Fed’s original charter prevented the bank from buying or owning obligations of the U.S. Treasury. This provision allayed the fears of unlimited borrowing and it helped Congress approve the Act.

But just a few years later the United States entered the First World War. The massive expenses associated with quickly waging war on an unprecedented scale was too much for the government’s ability to tax or borrow directly from the public. Instead Congress changed the charter to allow the Fed to buy debt from the government. But to prevent this power from being absolute, Congress set limits. This “debt ceiling” has been with us ever since. But since it has been raised so many times in the past 100 years (every time the issue has come up), the intent of the law has been essentially neutered and now appears to be an archaic vestige with no real purpose; the fiscal equivalent of an appendix.  

But in reality it is much more than that. For years Republicans have paid mountains of lip service to the need for a Balanced Budget Amendment as the only way to force government to live within its means. But the existence of the Debt Ceiling had given them that power all along. Like Dorothy in the Wizard of Oz, all conservatives had to do was click their heels together three times and not vote to raise the debt ceiling. And just like that our budgets would have had to be balanced. But Republicans just like to talk about balanced budgets. They never really wanted to actually balance them. 

 

But even the possibility helped. One of the primary reasons that annual government deficits declined by two thirds between 2010 and 2015 (from $1.4 trillion to $450 billion) was because the Republican-controlled Congress was able to get the Obama administration to agree to the so-called “sequester” which capped the level of growth in a variety of Federal programs, including social programs and the military. Absent the leverage provided by the debt ceiling, sequester never would have seen the light of day. It is clear however that most of those negotiations were political in nature: Republicans beating on a Democrat president with any club they could find. But the end result was good for the country. Now that a “Republican” is on the other end of Pennsylvania Avenue, no clubs are being sought.   

In fact, voting to raise the debt ceiling was always politically embarrassing for Republicans. To provide cover the measures were usually pared with some other politically popular legislation. In many cases some Republicans would be given the nod from leadership to vote no, as they could cast their votes against it knowing it would pass anyway. But eliminating the ceiling makes it that much easier for Republicans to campaign one way and govern another.

But the potential failure to raise the debt ceiling has never been the problem. It’s the debt that’s the problem, and the ceiling is a tool to solve the problem that vote-seeking politicians are afraid to actually use. If we eliminate the only tool, the problem will never be fixed. If the debt ceiling were to be cut out like an unneeded appendix, we should expect that America’s foray into debt creation, which has already been fantastical, to journey even farther into the looking glass. America’s funded national debt is already just a few clicks below $20 Trillion. If we were able to amass that much debt with a ceiling, even one that could be raised, imagine how much more debt will be run up with no ceiling at all! 

Read More @ Europac.net

Operation Freedom – Sunday, September 10, 2017 – Bill Holter

by Dave Hodges, Operation Freedom:

Topics Discussed: Cyber-Security, Globalist Syndicate, Direct Primary Care, Manipulation of financial markets, New World Order Syndicate, Obama Care, Free Market Health Reform, Putin, The Ukraine, ISIS, Syria, The Constitution, Natural resources, Reserve currency, Corruption, gold, silver, Global Elite, International Banking Cabal, debt, Federal Reserve, Too Big To Fail Banks, Crony Capitalism, Debt Ceiling, Financial implosion, Recession, Economic Depression, Freedom, Liberty

Click HERE to listen to Bill Holter.

Read More @ DaveJanda.com

Read James Rickards Warning Letter to President Trump About the SDR & The Death of the Dollar

Dear President Trump: America is in for a Rude Awakening in January

by James Rickards, Daily Reckoning:

Dear President Trump,

Over the last couple of years I’ve been all over TV… from Fox News to CNBC, CNN and Bloomberg. I’ve been telling our fellow Americans that the financial global elite was planning to issue their own globalist currency called special drawing rights, or SDRs.

And that those elites would use this new currency to replace the U.S. dollar as the global reserve currency.

I’ve even written about this extensively in my best-selling booksThe Road to Ruin and The New Case for Gold.

I’m sure some people in the mainstream media thought I was out of line — but the United Nations and the International Monetary Fund (IMF) have both confirmed this plan to replace the U.S. dollar is real. I’ve made this warning many times, but it seems to be falling on deaf ears. That’s why I’m writing directly to you.

Here’s the proof that the U.S. dollar is under attack, right in front of our eyes:

The UN said we need “a new global reserve system… that no longer relies on the United States dollar as the single major reserve currency.”

And the IMF admitted they want to make “the special drawing right (SDR) the principal reserve asset in the [International Monetary System].”

More recently, the IMF advanced their plan by helping private institutions, such as the UK’s Standard Chartered Bank, issue bonds in SDRs.

Although our mainstream media ignored this major event, the UK media reported:

This is all happening. And on January 1st, 2018, this trend to replace the U.S. dollar will accelerate. That’s when the global elite will implement a major change to the plumbing of our financial system.

It’s a brand-new worldwide banking system called Distributed Ledger Technology. And it will have a huge impact on seniors who are now preparing for retirement.

When this system goes live, many nations will be able to dump the U.S. dollar for SDRs.

For now, the U.S. dollar is still the world’s reserve currency. Other nations have to hold and use the U.S. dollar for international trade, instead of their own currencies.

This creates a virtually unlimited demand for U.S. dollars, which allows us to print trillions of dollars each year to pay for wars, debt and anything we want. It keeps our country operating.

Now, we can see that the global elites are working to unseat the U.S. dollar as the global reserve currency.

Here are the three key pieces of information that prove this will happen.

Fact #1 — The IMF issues a globalist currency called special drawing rights, or SDRs.

Fact #2 — The IMF has confirmed they want to replace the U.S. dollar with SDRs.

Fact #3 — The IMF has confirmed Distributed Ledgers can be used for “currency substitution”… and they’ve even set up a special task force to speed up implementation.

The IMF is using this technology to create an SDR payment system, because that’s the currency they issue.

As you know, Christine Lagarde, head of the IMF, is the woman in the middle.

When asked about the task force, she said:

“As I see it, all this amounts to a brave new world for the financial sector.”

Yes, a brave new world where the dollar is no longer the world reserve currency.

Barbara C. Matthews, a former US Treasury Department attaché to the European Union, has reached the same conclusion.

She said the link between the globalists’ currency and Distributed Ledgers “is impossible to avoid.”

And that “the IMF seems to be exploring the possibility of permitting a broader use of [their globalist currency] beyond internal transactions among member central banks.”

Make no mistake, if the IMF is planning to use Distributed Ledgers to replace the U.S. dollar with SDRs. And just to be clear, when SDRs take over, the American people will be left with devalued dollars.

Read More @ DailyReckoning.com

Is There Any Validity to the Claim that Bitcoin Could Be a Trojan Horse?

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[NOTE: Re-published with the written consent of the author] A Critical Thinker’s Exposition of Bitcoin

by JS Kim, Smart Knowledge U:

As it stands right now, in August of 2017, I believe that the topic of cryptocurrencies is one that I can use to explore the realm of critical thinking that I stress throughout allSKWealthAcademy courses, as well as the topic of cognitive dissonance, which I explore in depth in a single course. In this case, I am going to explore a minority opinion that exists against a majority consensus in the realm of Bitcoin, as exploring an opinion that opposes the accepted narrative requires careful exposition to defend. Before doing so, let me provide a quick update regarding the status of SKWealthAcademy. Right now, the stumbling block in having even a soft launch of several of our SKWealthAcademy courses is an efficient distribution system, so we are working out the details of the best possible distribution system that will also efficiently connect all of our members in a global community. I have contacted several different companies regarding this development and once we can settle on a satisfactory solution, then I will finally launch my SKWealthAcademy. I have spent the last 10 years developing all the coursework for SKWealthAcademy, so delaying its launch by a few months to find an adequate solution to this obstacle makes the most sense to us. Now back to the topic at hand.

The topic of cryptocurrencies is an ideal topic to illuminate critical thinking and cognitive dissonance because it is one that is often overrun with cult-like emotions, in which many cryptocurrency owners and advocates are not only unwilling to consider the possibility that cryptocurrencies may be used to provide a much more damning financial control mechanism of humanity than even fiat currencies, but also are often compelled to attack those that propose this very realistic probability with attacks rooted in emotion, but devoid of facts. If you make it to the end of this article, you will actually discover that I believe that a cryptocurrency, but only one that fulfills all the qualities of sound money, can liberate humanity and that I furthermore am a big fan of the untapped, yet undeveloped applications of blockchain technologies. In addition, I also believe that BTC prices could move even higher from this point. Of course, they could also crash. But the point is no one knows where the price is headed and some falsely extrapolate that just because I have some valid criticisms of the group-think mentality that often surrounds BTC, that I necessarily must believe that prices will crash. Whether prices rise or crash from this point forward depends on how Central Bankers’ plans fit into the unknowns of the BTC universe at the present time. However, that does not negate the current problems I still have with the current state of cryptocurrencies, as the cryptocurrency I advocate must possess very specific parameters, as I will reveal. To me, critical thinking is not just about being able to construct a logical, fact-based argument to prove one’s point, but it is also about being smart enough to understand when positions are indefensible due to a lack of supporting evidence. In this investigation of BTC, I myself do not have the answers to the questions I am broaching, so I am willing to state that I definitively do not know the answers, and can only offer my thoughts and speculations. However, in the cryptocurrency world, specifically in regard to Bitcoin, I have encountered many Bitcoin owners that emotionally defend what I find to be indefensible positions with declarations of zero doubt about their declarations, despite no concrete evidence or proof of their allegations.

Before I continue, let me stress that I am not referring to all Bitcoin advocates. I have met a few Bitcoin advocates that have conveyed to me that they will convert BTC into physical gold after very large spikes in price for the very reasons I am raising in this article. On the other side of the spectrum, there are BTC advocates that state they will never ever sell BTC because they agree with John McAfee’s proclamation that BTC will rise to $500,000 by 2020. However, the majority of BTC advocates I’ve spoken to, which number in the dozens of people, embrace beliefs about BTC that they defend as facts even though I find many faults with the claims that these beliefs are indeed facts.

Is Bitcoin Definitively an Invention Outside the Realm of Central Banking?

Many Bitcoin advocates provide some iteration of the same response when I raise the possibility with them that Central Bankers could possibly be behind the origins of Bitcoin as a ploy to spread acceptance and adoption of a 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} digital currency worldwide. In response to this possibility, almost all BTC advocates to whom I’ve spoken immediately deny that this scenario is even possible with cult-like fervor, stating that because the creation of BTCs is a decentralized process, it is impossible for Central Bankers to have created BTC. What I found odd was that nearly every single Bitcoin owner provided some type of variation of this same answer, as if they had all been programmed to provide the exact same response if questioned by anyone about Bitcoin possibly being a tool of Central Bankers. Normally, when people overwhelmingly give the same objection to a possibility, and not a varied range of objections, this objection is being programmed into the populace, much as there is a very large group of people that refuse to view gold as money because they believe it is a “barbarous relic.”

I also found it interesting that almost every single Bitcoin owner who I questioned about this topic also provided some iteration of the exact same answer to further probing questions I posed. For example, if I asked a Bitcoin owner why they believe that Bitcoin was an invention to fight the current Central Banking fiat currency system, most replied that its decentralized creation meant that no central organization or entity could control the flow of Bitcoin in the global economy. Decentralized, open source creation meant it was the people’s money, I was informed. On the surface that explanation sounds great. A central organization that has a monopolistic control on currency creation and flow in a nation is a central tenet of Communism, and if decentralized creation indeed meant decentralized control, then this would at least be a start for the creation of “free” money. However, I also found it interesting that over the years, this narrative became much louder and stronger the more the price of BTC rose. Again, if you are reading this article, you may very well have been an early adopter of BTC that decided to buy BTC because you believed its origins were anti-Central Banking from the start, but regarding my experiences with some of the same BTC owners over time, which I realize is a very tiny sample size, I never heard them mention the anti-banking narrative as a reason to buy BTC until the price started going parabolic, which led me to conclude that they were repeating a narrative they had been told instead of this narrative being one which they had formulated on their own from the start.

To be equally fair, I am also not raising the questions in this article because I heard other people raise them, but I have had these same questions, which I have been unable to definitively answer, for many years. In fact, I first proposed that the end game of Central Bankers would be to push the entire world on to a 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} digital currency platform more than 15 years ago in a screenplay I wrote called “Vipers and Thieves”, several years before BTC was even invented (a Creative Artists Agency executive based in Los Angeles that read my screenplay in 2005 in which I discussed this concept can confirm this). Though he didn’t read my screenplay until 12 years ago, I had completed writing it 15 years ago, and this was my vision for where Central Banking was heading way back then, as my screenplay was set in the future in the year 2020. Then, after BTC was invented, I wrote another article online, reiterating my belief that the end game for the global banking cartel was to ban all cash and coins and to eventually push the entire global economy onto a 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} digital currency platform. In any event, when many BTC advocates told me that control of BTC’s price was totally decentralized, this concept, of course, interested me, and I read several white papers about the invention of cryptocurrencies to further understand exactly how they worked. If BTC operated under total decentralized control, then indeed, this currency would offer a far superior system than a centrally controlled currency. However, just like the insistence of early BTC adopters that BTC users would always remain 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} anonymous turned out to be untrue, I was likewise disappointed by my findings when I investigated claims that decentralized creation of BTC meant decentralized control.

 

Is Control of Bitcoin Definitely Decentralized?

After researching this topic, here is what I discovered about Bitcoin’s decentralized control allegations. There is no evidence that proves this allegation to be false and no evidence that proves this allegation to be true. Therefore, this belief is not a fact but it is mere speculation. Nearly all, but not all Bitcoin owners, acknowledge my argument that the anonymity of its inventor, Satoshi Nakamoto, likely a conglomerate of people and not a single person, is problematic for the following reason. Without any verified proof of Satoshi’s identity, one cannot know whether Satoshi is someone with close ties to Central and commercial banking, or someone completely independent from the influence of the same bankers that have subjected us to their immoral fiat currency system. Some Bitcoin owners vehemently insist Satoshi’s anonymity proves that Bitcoin is an anti-banking invention, because they insist Satoshi remains anonymous for his own safety, and if his identity were known, that he/they would be murdered, or at a minimum, jailed. And this reason for Satoshi’s anonymity is offered up as “proof” that BTC is anti-banking. However, this explanation is mere speculation and speculation can never serve as “proof” of one’s thesis. No one knows why Satoshi has remained anonymous, and that is a fact.

In any event, let’s return to the argument that I’ve heard from nearly every single Bitcoin advocate that Bitcon’s decentralized creation process equates to decentralized control. Again, the fact that I’ve heard so many Bitcoin advocates make a claim that is entirely unprovable at the current time, leads me to believe that false narratives around Bitcoin are being created to encourage widespread adoption of it. A quick look at the gold market would quickly dispel the notion that decentralized creation/production equates to decentralized control. Production of gold is decentralized throughout the world, but yet, for decades, Central Bankers centralized control of gold’s fiat currency price through their executed dumps of billions of paper gold and paper silver in London and New York futures markets. But let’s return to why this equation is unprovable for BTC as well. My research uncovered that during the first year of Bitcoin mining in 2009, 1.5 million BTCs were created, of which BTC’s inventor, Satoshi Nakamoto is alleged to possess up to 1 million of these 1.5 million of BTCs. As of June 2017, 16.4M of the total limitation of 21M BTCs had been mined. If Satoshi indeed owned 6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the total BTC supply, this amount would be the equivalent of several billions dollars in US fiat currency valuation as of August 2017.

With control of 6{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of all BTC supply, Satoshi could likely significantly move the price of BTC up and down by himself during thinly traded market times, and by colluding with a few other large BTC holders, this possibility would become a certainty. Furthermore, as far as anything publicly reported on the internet, though I haven’t confirmed this myself (and someone can correct me if this next statement is wrong), but there isn’t any evidence from tracking BTC transaction records, that anyone has cashed out several hundred million or a billion of BTC at this point, even if such large transactions had to occur across multiple BTC wallets. If I were Satoshi, and Satoshi’s identity were a single person, wouldn’t it make sense to at least cash out of several hundred million or even one billion dollars at this point with such a massive parabolic rise in price, and let my other several billion dollars in BTC ride at this point? The fact that there is no evidence to massive withdrawals at this point, for someone that likely owns several billion dollars in BTC today, also supports my contention that Satoshi is not a single individual, but likely an institution.

Some people inquire why nobody knows the exact amount of BTCs owned by Satoshi or the largest amount of BTCs held by a single individual, but the answer is simple. The identity of BTC wallet holders remains unknown from the general public, and Satoshi is alleged to possess his BTCs across several wallets. Though one of the prime benefits of using BTC that was marketed to users of BTC was complete anonymity, by now this myth has been completely debunked, as not every part of the BTC transaction chain, in the manner in which most people buy and sell BTCs, is anonymous. Consequently, there are vulnerabilities at certain points in the transaction chain that governments can exploit to pin an identity to most BTC owners and can do so quite easily. Because most BTC users, in the way they conduct BTC transactions, expose their identity to anyone with a vested interest in identifying them, alphabet agencies probably have a good read on the possible identity of Satoshi Nakamoto, if they themselves are not part of his identity. However, to the non-hacker, and non-alphabet agency employee, most BTC users will still remain anonymous to the general public. Thus, there is no way to prove if there is a small group of people controlling most BTC flow, or not, as the largest owners of BTC could be the same person or part of the same institution.

If a small group of people control a significant portion of all existing BTCs, and work together to control its price, then by definition, its price is under central control, and it does not matter at all if its creation is “open source” and “decentralized”, which are two terms I constantly hear as the reasons that control of BTC cannot possibly be centralized. Though I certainly have not provided a single piece of evidence that control of BTC is centralized in the hands of a few people or a single institution, the lack of this evidence does not disprove this possibility either. Nor does the anonymity of Satoshi Nakomoto serve as proof that BTC control is decentralized, though I have also heard this claim as well. What we do know, beyond a shadow of a doubt, is that the answer to this question remains an unknown. This much is a fact.

 

Is Bitcoin an Anti-Banking Industry Currency?

Finally, let’s look at the last argument that I’ve often heard from BTC advocates regarding their belief that BTC is a currency whose purpose is to liberate humanity and that it is anti-New World Order, anti-establishment and anti-Central Banker. This argument is built on the following faulty thesis. Since the blockchain software on which BTC runs exists on the internet, governments and bankers can never stop BTC from trading unless they ban the internet, which will never happen. We only need to extrapolate this argument to gold to reveal the faults of this argument. Though no one really knows the private gold holdings of citizens around the world, as there is no public ledger of private gold transactions at the retail level, the World Gold Council has estimated Indian citizens cumulatively hold between 18 to 20,000 tonnes of gold (of course I don’t find the World Gold Council’s numbers to be credible as it is not a credible organization, but this is an argument for another day). According to “official” numbers, Japan is often reported as having the largest retail demand for gold and may be the number one country in the world in terms of private gold ownership. If so, then citizens of Japan and India would comprise the largest subset of private gold holders in the world, even cumulatively owning perhaps more than the PBOC (People’s Bank of China), which is believed at the current time to own at least 20,000 tonnes of gold. Despite “official” gold reserve numbers placing the United States on top of the State gold holdings list at 8,133 tonnes of gold, anyone that has performed any critical research into these “official” gold reserve holdings can poke enough holes in Central Bankers’ reporting procedures to cast serious doubts as to the legitimacy of these reported numbers.

In any event, the black market of smuggled gold in both Japan and India has been so large in recent years, that again, the unknown data of this market makes it next to impossible to compile accurate numbers regarding the cumulative private holdings of gold in these countries, and all numbers are estimates based upon speculation. However, if the argument that it is impossible for governments to stop BTC use without declaring use of the internet illegal were viable, then this same argument should apply to physical gold use as well. Because there is no possible way in which governments can stop people from the act of using their private physical gold reserves to buy and sell goods in private unreported transactions, then there should be no feasible way for governments to stop a movement towards the widespread use of gold as sound money in the economy. But yet governments have done so, and we must then come to an understanding of how they have accomplished this. To explain how governments and bankers have prevented the use of sound money like gold from gaining systemic acceptance and use by the citizens they control in their nation States, they merely only had to pass regulations to prevent gold not from being traded or owned, but from being accepted as money in their State run and planned economies. In every nation in the world that has a Central Bank operating within it (which is nearly every nation in the entire world), Central Bankers have made the use of any currency they do not 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} control illegal. Thus, they only had to make the use of gold illegal as payment for goods and services to kill its use in the economy without ever having to kill the ability of anyone to freely own and trade gold.

Governments and bankers cannot stop people in their countries from buying gold, and even when they attempted to kill retail purchases in India by increasing gold import taxes a whopping tenfold in just 19 months, from a negligible 1{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in January 2012 to a ridiculous 10{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} by August of 2013, people still found a solution around this regulatory attempt to prevent retail ownership of gold. When these regulations were enforced, gold smuggling to circumvent this tax soared in India, and citizens still continued to trade crumbling rupees for gold. Thus, I understand the argument that governments and bankers cannot stop people from buying and trading BTC, because similarly, they cannot stop people from buying and trading physical gold. However, to prevent gold’s use as money in their economy, Central Bankers simply only had to declare gold as illegal to use as payment for goods and services to ensure that they maintained an iron fist of control over their currency monopoly in every nation in the world. By declaring gold illegal as a payment source, bankers still cannot actually prevent a private party from accepting physical gold as payment for goods and another private party from using physical gold to pay a merchant. In fact, doing so in India didn’t work and Indian citizens still used gold as payment in the economy.

To prevent this from happening, PM Narendra Modi, had to take cash off the streets of India by declaring the 1000 and 500 rupee note illegal at the end of 2016 in order to get this cash to return to Indian banks, and then engage in a plot to convert what had been a nearly pure cash based economy in India a year ago into a digital currency based economy. Before Modi’s ban, 98{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of India’s economy ran on cash-based transactions, but Modi’s ban on 1000 and 500 rupee notes banned 86.4{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} of the total cash in India at the time (Source: the Reserve Bank of India). This deviously caused an immediate surge in the adoption of BTC use in India in November of 2016 as Modi imposed a cash liquidity crisis overnight on India. Furthermore, even though a Mastercard report in 2015 named India as one of the countries least ready in the entire world to adopt digital cash, after the Modi cash ban, $80 billion of cash was removed from the streets in just 6 months, and the RBI and PM Modi continue to push India into the fastest transition ever from a nearly 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} cash based economy into a purely digital currency based economy. The single fact that bankers and the elite like Bill Gates are pushing a false narrative that 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} digital currency will help the poor get out of poverty is enough to make me distrust any 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} digital currency that is not backed by anything. However, Bill Gates also stated in 2015 that BTC is not the solution, so this statement is either a reverse psychology ploy, or an affirmation that while Central Bankers definitely want to ban cash and coins all over the world, they are not behind the development of BTC, but are only using its success to gain acceptance of the idea of a 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} digital currency world.

However, given the very high distrust Indians have for bankers, though the RBI and Modi are pushing very hard to transition India into a 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} digital currency economy, I still have massive doubts as to whether this scheme can ultimately succeed. I suppose that bankers want use India as a testing ground to prove that if they can transition/force the ultimate skeptics of modern day banking, Indian citizens, into a 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} digital currency economy, then they can replicate this achievement in any nation State in the world. Remember, this is not my first warning to Indian citizens to view all government-sponsored programs sold to them as being for their benefit with heavy suspicion, as I warned Indian citizens of Modi’s wolf-in-sheep’s clothing plan to forever confiscate their physical gold holdings one year prior to his rupee ban, in this article here. Of course, it was the very failure of Modi’s plan to confiscate Indian citizens’ massive private gold holdings that led him to then enact the harshly punitive-on-the-poor rupee ban just one year later in November of 2016.

The fact that no Central Bank in the history of the world has ever allowed a competitive form of currency to exist in the economy that posed a threat to their fiat currency monopoly alone should be extremely worrisome to those that believe that BTC is an invention independent of Central Banking. Again, this is not proof that Central Bankers have a hand in the creation of BTC at all, but it is a fact that BTC is the first currency in the history of the world that Central Bankers have not only allowed to co-exist with their monopolistic fiat currencies, but have also aggressively encouraged people to adopt on a more widespread basis through their minion global commercial banks like Goldman Sachs. For those that point to the period of time known as Bretton Woods and state that gold was allowed to exist as an alternate currency during this time, these people have only adopted the banker promoted view that Bretton Woods was a “gold standard” and do not understand how the Bretton Woods system operated at all.

I find it extremely odd that more BTC advocates do not even consider the possibility, just the mere possibility, that Central Bankers could be behind the creation of BTC and its growing acceptance among global citizens, especially since I predicted today’s popularity of cryptocurrencies more than 15-years ago in my screenplay, Viper and Thieves. In fact, in my screenplay, State officials rejoiced and declared the adoption of 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} digital currency that backed my hypothetical National Electronic Monetary Act (NEMA) as the greatest advancement in US history since the Industrial Revolution and declared that the people’s acceptance of 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} digital currency would create an unprecedented economic boom for everyone, even the poor. This is exactly how bankers and politicians are promoting digital currency to people everywhere around the world today, 15-years later. However, the reality is that transition to 100{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} digital currency would compound economic hardships for the great majority of those that live in poverty, a conclusion backed by former Indian PM Manmohan Singh for the exact reasons I outlined in my 2012 critique of this end game. Singh called Modi’s ban outrageous “legalized plunder” that “caus[ed] grievous injury to the honest Indian who earn[ed] his/her wages in cash and a mere rap on the knuckles to the dishonest black money hoarder”, and one that thrust grave, undeserved and unnecessary hardships upon the poor.

To add fuel to the speculative fire, I find it very curious as to why Goldman Sachs is so hell-bent on promoting BTC, even predicting that BTC would recover to $4,000 at the exact time it fell to the $1,830 level just four weeks ago. Then, when BTC recovered all of its losses in no time at all after their prediction of a $4,000 price and cleared the $3,000 level, this inspired Goldman Sachs’s Sheba Jafari to increase her BTC forecast from $4,000 to $4.800. Given that Goldman Sachs bankers are known for releasing notoriously poor and wrong, but very public forecasts, year after year after year, I find it extremely curious that their BTC predictions have been spot on (see this article titled “Goldman Capitulates: Closes out 5 of its Top 6 Trades for 2016 [By February] at a Loss” , including a recommendation to short gold at the start of 2016 as a top trade idea, after which gold promptly rose 30{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in the first six months of the year). It’s not that I think Goldman Sachs bankers are dumb and that is the reason why year after year, most of their top recommended trades spectacularly fail. To the contrary, I believe that they know exactly what they are doing, and very publicly release such doomed “top trades” in an attempt to dishonestly fleece the very naïve segment of their clients that they derisively refer to as “muppets”. In fact, this theory has been confirmed in past years, as various entities discovered that Goldman Sachs bankers historically made “fortunes” by betting against their clients’ positions. So again, I ask, “Why have Goldman Sachs bankers gone against their modus operandus with public forecasts and why have their forecasts about BTC’s price movements been the only publicly made forecasts in recent years that have been spot on?”

Read More @ SmartKnowledgeU,com

Keiser Report: RIP, Petrodollar? (E1121)

from RT:

In the second half, Max interviews Michael Pento of PentoPort.com to discuss the oil-gold-yuan futures contract, North Korea, hurricanes and coming market meltdowns.

YOU HAVE BEEN WARNED: The Situation In The Markets Is Much Worse Than You Realize

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by Steve St. Angelo, SRSrocco:

It’s about time that I share with you all a little secret.  The situation in the markets is much worse than you realize.  While that may sound like someone who has been crying “wolf” for the past several years, in all honesty, the public has no idea just how dire our present situation has become.

The amount of debt, leverage, deceit, corruption, and fraud in the economic markets, financial system, and in the energy industry are off the charts.  Unfortunately, the present condition is even much worse when we consider “INSIDER INFORMATION.”

What do I mean by insider information… I will explain that in a minute.  However, I receive a lot of comments on my site and emails stating that the U.S. Dollar is A-okay and our domestic oil industry will continue pumping out cheap oil for quite some time.  They say… “No need to worry.  Business, as usual, will continue for the next 2-3 decades.”

I really wish that were true.  Believe me, when I say this, I am not rooting for a collapse or breakdown of our economic and financial markets.  However, the information, data, and facts that I have come across suggest that the U.S. and global economy will hit a brick wall within the next few years.

How I Acquire My Information, Data & Facts

To put out the original information in my articles and reports, I spend a great deal of time researching the internet on official websites, alternative media outlets, and various blogs.  Some of the blogs that I read, I find more interesting information in the comment section than in the article.  For example, the Peakoilbarrel.com site is visited by a lot of engineers and geologists in the oil and gas industry.  Their comments provide important “on-hands insight” in the energy sector not found on the Mainstream Media.

I also have a lot of contacts in the various industries that either forward information via email or share during phone conversations.  Some of the information that I receive from these contacts, I include in my articles and reports.  However, there is a good bit of information that I can’t share, because it was done with the understanding that I would not reveal the source or intelligence.

Of course, some readers may find that a bit cryptic, but it’s the truth.  Individuals have contacted me from all over the world and in different levels of industry and business.  Some people are the working staff who understand th reality taking place in the plant or field, while others are higher ranking officers.  Even though I have been receiving this sort of contact for the past 4-5 years, the number has increased significantly over the past year and a half.

That being said, these individuals contacted me after coming across my site because they wanted to share valuable information and their insight of what was going on in their respective industires.  The common theme from most of these contacts was…. GOSH STEVE, IT’S MUCH WORSE THAN YOU REALIZE.  Yes, that is what I heard over and over again.

If my readers and followers believe I am overly pessimistic or cynical, your hair will stand up on your neck if you knew just how bad the situation was BEHIND THE SCENES.

Unfortunately, we in the Alternative Media have been lobotomized to a certain degree due to the constant propaganda from the Mainstream Media and market intervention by the Fed and Central Banks.  A perfect example of the massive market rigging is found in Zerohedge’s recent article;Central Banks Have Purchased $2 Trillion In Assets In 2017 :

….. so far in 2017 there has been $1.96 trillion of central bank purchases of financial assets in 2017 alone, as central bank balance sheets have grown by $11.26 trillion since Lehman to $15.6 trillion.

What is interesting about the nearly $2 trillion in Central Bank purchases so far in 2017, is that the average for each year was only $1.5 trillion.  We can plainly see that the Central Banks had to ramp up asset purchases as the Ponzi Scheme seems to be getting out of hand.

So, how bad is the current economic and financial situation in the world today?  If we take a look at the chart in the next section, it may give you a clue.

THE DEATH OF BEAR STEARNS: A Warning For Things To Come

It seems like a lot of people already forgot about the gut-wrenching 2008-2009 economic and financial crash.  During the U.S. Banking collapse, two of country’s largest investment banks, Lehman Brothers, and Bear Stearns went belly up.  Lehman Brothers was founded in 1850 and Bear Stearns in 1923.  In just one year, both of those top Wall Street Investment Banks ceased to exist.

Now, during the 2001-2007 U.S. housing boom heyday, it seemed like virtually no one had a clue just how rotten of a company Bear Stearns had become.  Looking at the chart below, we can see the incredible RISE & FALL of Bear Stearns:

As Bear Stearns added more and more crappy MBS – Mortgage Backed Securities to its portfolio, the company share price rose towards the heavens.  At the beginning of 2017 and the peak of the U.S. housing boom, Bear Stearns stock price hit a record $171.  Unfortunately, at some point, all highly leveraged garbage assets or Ponzi Schemes come to an end.  While the PARTY LIFE at Bear Stearns lasted for quite a while, DEATH came suddenly.

In just a little more than a year, Bear Stearns stock fell to a mere $2… a staggering 98{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} decline.  Of course, the financial networks and analysts were providing guidance and forecasts that Bear Stearns was a fine and healthy company.  For example, when Bear was dealing with some negative issues in March 2008,  CBNC’s Mad Money, Jim Cramer made the following statement in response to a caller on his show (Source):

Read More @ SRSrocco.com

Market Report: Have we lift-off?

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by Alasdair Macleod, GoldMoney:

As can be seen in our headline chart, gold and silver powered ahead further this week, and appeared to be undergoing a rerating. Gold this morning in early European trade was trading at $1354, up from $1320.80 at last Friday’s close. Gold is now up 17.5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} on the year so far. Silver this morning is trading at $18.16, up from $17.73 last Friday, and is up 14{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} on the year. Silver still has some catching up to do, and appears cheap relative to gold.

Continuing weakness in the dollar, notably against the euro, is being reflected in higher prices for precious metals. At the same time, commodity prices are rising, led by demand from China. China is offsetting some of the higher dollar prices for raw materials by allowing the yuan to rise against the dollar, which is up 8{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} this year.

Is this another overbought situation for gold, and an oversold dollar? There is no doubt that gold is now very overbought, having been heavily oversold only six weeks ago. The simplest indication is open interest on Comex, which is our next chart.

Open interest is not yet at the record levels seen in July 2016, when it was at 657,776 contracts. The price then, coincidently, was the same as today at $1353. Today’s OI is 581,304 (preliminary figure, 7 Sept.). The conditions appear to be set up for the bullion banks to smash the price, taking out the stops, and recover their losses.

On the plus side, the current active contract is December, so there are still eleven weeks trading until the final dealing date. It is when a contract begins to run out of time that an overbought gold futures market is at its most vulnerable. Silver’s active contract is also December, so the same condition applies.

Prospects for the dollar are equally important, and currency markets appear to be waking up to the dangers facing the dollar. Traders, particularly on Wall Street, have taken the view volatility is in other currencies rather than the dollar. It is also a common view that China’s credit bubble will implode, while analysts don’t seem to realise the credit cycle equally applies to the dollar, with an important difference: yuan credit is applied to economic progress, while USD credit ends up as unproductive debt.

Read More @ GoldMoney.com