The so-called recovery is only built on debt and printed cash declares our own Byron King. In the long term, the only option for the government to continue financing it's operations is to print too many dollars. Money printing has it's limits, however. It's Byron's opinion that at some point, perhaps very soon, the government will have to turn to more desperate measures. Namely, capital controls. In the following featured essay, Byron outlines 4 probably ways the government will take your cash and one play you can buy through your broker to prepare today. Read on...
When’s the best time to invest in something? When everyone else is trying to get their money out of it. It might go against conventional thinking, but following the crowd usually makes you miss the real opportunities. At one monetary metal conference recently, the smartest guys in the industry sat down to discuss where these real hidden gems lay.
In a 2009 article, the Huffington Post went into considerable detail about the number of people with PhD degrees in economics employed by the Board of Governors of the Federal Reserve System. This is the government’s branch of the Federal Reserve. It is not one of the 12 regional Federal Reserve banks, all of which […]
Greetings from Maine! Right now, I’m writing from within foghorn distance of the sea. And this gives me an opportunity to tell you a down east tale that should serve as a warning to every investor: Maine’s Great Gold Swindle.I’m not talking about central banks, or manipulation of today’s markets. I’m talking about something from […]
The U.S. dollar is the dominant global reserve currency. All markets, including stocks, bonds, commodities, and foreign exchange are affected by the value of the dollar.The value of the dollar, in effect, its “price” is determined by interest rates. When the Federal Reserve manipulates interest rates, it is manipulating, and therefore distorting, every market in […]
Let’s head back in time…In 2004, a mere decade ago, the US national debt rang the register at $7.4 trillion. That represents “debt per citizen” of over $25,000. You, me, your neighbor, your 4-yr old grandson, you name it and they’re portion of the U.S. debt is $25k.But flash forward to today and you’ll see […]
Alexander Hamilton was America’s first Secretary of Treasury under President George Washington. When he first entered office in 1789, America was an agricultural nation of just 4 million still broke from its financially costly victory over the British Empire in the Revolutionary War.The states had accumulated relatively massive debts to finance that war, which mostly […]
Remember that correction we’ve been quietly talking about over the past couple of months?Well, it might be right around the corner. Stocks waited until the last day of the month to nose-dive. The S&P 500 posted its first 2% down day since April — and the Dow wasn’t far behind. Early this morning, futures continue […]
A great technology solves a problem that we didn’t know we had. It makes us aware of deprivations we didn’t know existed until we discover the new thing. Once discovered, we can’t go back.People in the 1950s, for example, never missed the smart phone. They were pleased to have a phone at all. But today, […]
In early July 1944, delegates from 44 countries gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire. A three-week summit took place, at which a new system was agreed to regulate the international monetary and financial order after the Second World War.The U.S. was already the world’s commercial powerhouse, having eclipsed the British […]
When you type a website address into a browser, you might have noticed that the letters “http” appear at the front. “HTTP” stands for Hypertext Transfer Protocol. In typing a Web address, you are actually sending an HTTP command to transmit that website to you. Hypertext Transfer Protocol is the means by which information is […]
In 2012, money mandarins running the European Union chose stagnation over restructuring. Here’s a consequence of that choice: expectations for a self-sustaining economic recovery keep getting crushed.Two years ago, European Central Bank (ECB) chief Mario Draghi promised to do “whatever it takes” to hold the eurozone together. He bluffed nervous investors into believing in a […]
Here’s a fun fact: Although we all hate the U.S. dollar, as it continues to hemorrhage wealth, its foothold as the world’s reserve currency isn’t going to disappear overnight.A Russian gas deal with China won’t change that — as we’ll highlight below.But before we get to the nitty-gritty, let’s dive into a story that’s right […]
Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]
“As the nation’s central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding […]
The Keynesian disaster recovery plan has been to lower rates, force people to take more risk in search of yield, and entice others to borrow and spend and, magically, more jobs will be created. If people won’t buy stocks, central banks will.Back in 2011, Ben Bernanke, when asked if QE2 was driving up stock prices, […]
According to the Bureau of Labor Statistics, consumer prices are rising at a 2.1% annual rate. This suggests to us that the current stock market boom will die with a bang, rather than a whimper.Fed economists say they don’t think inflation rates are rising. They think the most recent reading is a fluke. But why […]
Real progress happens through real people, ideas, and innovations. Not by legislation argued and debated in Congress. Right now, one of the most influential technologies is changing the way people do business. And reinventing the future in the process.
As the world gets more digital, people forget about the benefits of transacting in cash. And government officials know that.
The experts will tell you the recession is over, but they’re only torturing the data to hide the truth. The economy never recovered from the downturn it experienced. But the downturn happened in 2000, not 2008. The country’s been in the middle of a 14 year recession and hardly anyone knows the truth.
Every time Bitcoin crashes, it winds up at a price greater than it’s previous high. Yet the experts still call it a currency fad that will fade away. But a little over a year since it really took up, the digital currency is still going strong, and is once again seeing its price rise. But is there another reason why people are buying Bitcoins.
All paper currency has a shelf life. It could be 5 years or 500 years, but at some point, the value of any paper currency eventually reaches zero. That's why, for centuries, people have turned to one shiny metal to safeguard their personal store of wealth. And, as Jim Rickards explains, you still have that option. Read on...
Edward Snowden’s one year visa in Russia expires at the end of next month. With only a few weeks left before he finds himself without a safe country to live in, he sat down to give an exclusive interview. Here are the most important things he wants you to remember from his recent sacrifice.
It’s a destructive cycle that comes around everytime your politicians ask you to take to the polls. The government’s meddling creates unexpected problems that eventually overshadow the planners’ original intentions. But that only leads the way for even more interventions.
Politicians love inflation. It’s a way to pay for the government’s debts without upsetting the public by raising taxes, or their special interests by cutting government. So they’ll flood the economy with easy money and eat away at your savings. But that’s only part of the story...
Obama recently claimed this was the “Decade of the Brain”. But it not the first time the government made that promise. The last time they did it, they wasted millions of your tax dollars. Now they’re back for round two. But this time, their failure could mean more than squandered money. It could mean making Alzheimer’s even worse for those who suffer from it.
“So we have, indeed, had a disappointingly slow recovery, and our consistent expectations for a pickup in growth have been dashed over a number of years… And the labor market is behaving in some perplexing ways and showing patterns that are novel.”–Federal Reserve Chairperson Janet Yellen in a speech to the Economic Club of New […]
As someone who only recently dived into the rocky Bitcoin waters — and discovered a world I had never imagined — I enjoy talking to others who have been there longer. There are some amazing stories out there. We are sitting here today with Bitcoin comfortably trading at 1 BTC to $134, and we take it all for granted. But it was not always so.
Bitcoin came into the world worth absolutely nothing in January 2009, only four years ago. In late 2010, it started to move up in ways that blew the minds of innumerable skeptics. In February 2011, there was a milestone that stunned people who were paying attention. It seemed like the impossible was happening, or maybe it was just a crazy bubble.
It was in that month that Bitcoin achieved parity with the dollar. You could trade 1 Bitcoin for $1. It had officially arrived, or so it seemed. Some hyper-geeks who had been owners of thousands of Bitcoins figured that the moment had arrived. They sold their Bitcoins for dollars and made several thousands of dollars. That was the end. They congratulated themselves for being savvy speculators.
Whoops. If they had held on, what might have happened? Well, they would be millionaires today. But once they sold, they had to spend even more to acquire the same amount. Welcome to the real world of speculation. You win some and you lose some. Sometimes both happen with the same trade.
The “early adopters” know this sector very well. They are not shaken at all by the run-ups and sell-offs. They know not to panic in either direction.
One of the fascinating things about this market is how it has drawn in a younger generation to do boots-on-the-ground investing. It has taught people a number of important life lessons, such as to avoid doing the obvious. If you do what is obvious, you buy high and sell low. To do the opposite requires you to break from the pack and trust that your knowledge is better than that of the screaming mob out there.
If you talk to savvy Bitcoin people, they will be the first to tell you that the intense focus on the exchange rate — which afflicts virtually every “newbie” out there — is absolutely wrong. If anything, they say the exchange rate is a distraction.
The purpose of this virtual currency is not to be a speculative vehicle, but rather a means of exchange — a real money. Of course, it has to have value in terms of goods and services in order to achieve that, and that value can also be assessed in terms of existing government monies. But the real aim of this combination payment system and means of exchange is to go its own way as an authentic money.
If this happens, a new world opens up. Just imagine that a Cyprian-style haircut is scheduled in the United States. Ben Bernanke is plotting a press conference to announce an across-the-board tax on all bank deposits in order to refund the Federal Deposit Insurance Corp. This is not bad for you, he will point out, but actually good, because it saves the banking system, and therefore, 99% of your money. If you object, he reasons, you are being shortsighted.
But before he gives his press conference, he remembers that it is a new world. Vast numbers of people have already set up a direct link between their bank accounts and some Bitcoin exchange. As soon as the rumor leaks, people can easily log in and exchange dollars for Bitcoins. Billions could disappear from the money supply in a matter of hours — government money escaping to the private-sector cloud, where it cannot be traced or accessed.
What then? In this case, Bernanke’s plans all come to naught. He will fear his own policies could backfire simply by causing people to lose confidence in the system. By then, people will be aware that they can buy all the tools, groceries, and pharmaceuticals they need with Bitcoin. By that time too, Bitcoin debit cards will make it possible to get gasoline. Under those conditions, what is the point to keeping anything but the bare essentials in dollars?
Might Bernanke rethink his little press conference? Probably. In other words, Bitcoin has suddenly done more than the U.S. Constitution to restrain the state and its banking cartel. The people are no longer monetary prisoners; they have a means of escaping into a realm of monetary freedom. This escape hatch turns out to be a core guardian of freedom and prosperity.
Two years ago, this vision would have seemed outlandish, but today? It is an approaching reality. And unlike gold, which has the problem that it must be kept physically, Bitcoin can live in the cloud, out of the reach of all the bad guys, essentially forever. This is probably the most difficult aspect of Bitcoin for people to grasp.
Now, to be sure, I’m writing as someone only recently converted to the cause of digital currency, so I love nothing more than to talk with people with longer experience. They also have tales of losing money, not just in terms of its exchange rate, but actually losing real coins in the course of buying and selling. It can happen, and most every case I’ve heard of is traceable to user errors. You send money when you don’t mean to. You get your wallets tangled and find that you have mislaid them. This is a particular problem for people who keep their wallets physically on their hard drives and then suddenly find that their computer won’t boot up.
What’s the solution? Aaron Lasher of Real Virtual Currency talked to me at length about the merit of “cold storage.” By way of explanation, hot storage is what you have on hand to use in daily transactions. But cold storage is a way of keeping your coins offline and safe so that no one can access the stuff. You can bring the coins from cold to hot, but it requires a transaction. Many exchanges and client services now offer this feature.
There is an even deeper method of doing the same thing using what is called a “brain wallet.” Under this system, you come up with a 40-character phrase. It could be a poem or a series of random words. You put that into a converter union that changes it to a long private key. Then you move on with your life.
Should the time come when a solar flare hits, or you get in a shipwreck, or you find yourself exiled to Guantanamo Bay, your money is absolutely safe. When real life returns and you get back to normal — this could be years later — you only need to type in your brain wallet phrase, and your access is unlocked. All your money is there, all without having to hide it physically or launder money or any such thing. A brain wallet, then, is the most secure way that anyone can possibly imagine to keep coins.
And it addresses a fundamental fear that many people rightly have.
I’m most fascinated by seeing how the development in the Bitcoin world is proceeding in a beautiful way. We are seeing more retailers jumping onboard. We are see exchanges open up. Venture capital is pouring in. The Keynesian punditry class is furious and denouncing it. The theoreticians are taking up the cause.
On the latter point, I’m thrilled to see the author of one of my favorite books, George Selgin, weigh in on the Bitcoin issue. His book from Laissez Faire is called Good Money and covers the history of private coinage. His new paper on Bitcoin examines the viability of what he calls “synthetic money.” It’s the most coherent scholarly paper I’ve seen yet. You can access it here.
It was also my pleasure to interview Aaron Lasher on issues of security. There are some pretty geeky topics discussed here, but it is extremely informative.