State Issued Crypto Currency Propaganda Continues


Bloomberg published a new article, On Digital Currencies Central Banks Should Lead, discussing central bank issued crypto currency.

A few key points were noticed. First, they refer to it more as digital currency rather than crypto currency, even though it is clear they are referring to the latter. This is likely to ease readers into the concept.  Readers will think "what's the big deal, we already have digital currency".  Second, they frame China as leading the charge, a situation which will compel American’s to wonder why the Fed isn’t showing more progress with this innovation. Finally, the article makes state issue crypto currency seem more like an inevitability rather than a possibility.

These points smack of propaganda rather than informative news.

For a warning from this path rather than propaganda watch The Reset’s original video on the subject below.




Is r > g Really the Reason for Recent Income Inequality


Meet Thomas Piketty the new poster child of socialists that supposedly proves the unfairness of capitalism with his book Capitalism in the 21st Century.

The Financial Industry Just Held A Secret Meeting to Test a Crypto Dollar

The Reset Original Video 

This site has been discussing the possibility of the E Dollar to get us out of the monetary and economic mess we find ourselves in for a while now.

The E Dollar is simply a digital currency that has an exchange rate with cash. The central bank would set a rate at which old paper dollars would lose value against E Dollars held in a bank account. Under an E-Dollar system any physical cash removed from the banking system would lose value against the E Dollars retained in an account, this would effectively eliminate the zero lower bound. Central banks would be free to implement significantly negative rates.

Ultimate Insider Larry Summers Joins Bitcoin Firm

Larry Summers, former US Treasury Secretary and Fed president contender, has just joined the Digital Currency Group along with bitcoin developer Gavin Andresen as senior advisors. Digital Currency Group studies blockchain technology and finance and has recently acquired Coindesk, the largest bitcoin news site as well as Consensus, the largest bitcoin conference in the world.

Larry Summers is the ultimate insider and one of the most respected personalities in the Keynesian economic world. In 2013 he was the far and away favorite to become the next Federal Reserve president as Ben Bernanke’s successor. For some reason he declined the coveted and most powerful position in economics opening the door for Janet Yellen. This is his statement for declining the nomination: "I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration or, ultimately, the interests of the nation's ongoing economic recovery."

Socialism is a Kneejerk Reaction to Rising Income Inequality but Does Nothing to Address the Root Cause

Recently I stumbled across an LA Times story entitled: America's Explosion of Income Inequality, in One Amazing Animated Chart. The chart shows what many of us know, there is rising income inequality, but beyond a huge picture of Bernie Sanders to start off the story, does little to identify a solution. I actually appreciate very little meaningful commentary; the data point is quite enough as long as you're willing to do your own research. And while the Sanders pic was a thinly veiled hat tip to the author's solution, Socialism, he did nothing to address the root cause. Luckily I had done my own research, and feel confident that I know the cause and thus I should be much more equipped than the author to determine the best solution. Instead of making a snarky comment I took the opportunity to reach out to the author with the email and questions below.

Gold Bashing Now Pure Counterfactual Propaganda



The Reset Original Video 



"Gold is widely seen as a safe-haven investment, but that's not always the case. This is why gold presents such immense danger for investors over the next few years. The reason for this is that we're currently in a deflationary environment. Gold is only safe in inflationary environments." Dan Moskowitz via Investopedia Story Is Gold Still A Safe Haven?


I have written in past on gold bashing stories and in that post I said of the gold bashing writers "Their goal is not to objectively offer the facts to let the reader, who may or may not hold precious metals, determine what a logical portfolio may be. It is to convince those who don't own precious metals, themselves included, that their choice not to own any is the right one." Many of the past stories denouncing gold bend facts to make their readers and themselves feel better about not owning gold, but there is another kind of gold bashing story.

Beware Economists Bearing Multiple Reasons

"If you have more than one reason to do something (choose a doctor or veterinarian, hire a gardener or an employee, marry a person, go on a trip), just don't do it. It does not mean that one reason is better than two, just that by invoking more than one reason you are trying to convince yourself to do something. Obvious decisions (robust to error) require no more than a single reason."
Not only do people use multiple reasons for doing something to convince themselves, but also to convince others. Recently Bloomberg borrowed my work (without citing) to discuss the Crypto-E-dollar. My piece was a warning, but Bloomberg portrayed the E Dollar as a viable solution strictly for economic reasons. Today they ran a new story on banning high denomination cash to aid law enforcement. They cited a paper done by a Harvard economist, Peter Sands, entitled Making it Harder for the Bad Guys: The Case for Eliminating High Denomination Notes. Here is an abstract of the paper.

Gold for a Finite World


"Now, the gold bugs will no doubt reply that under a gold standard big bubbles couldn't happen, and therefore, there wouldn't be major financial crisis. And it's true under the gold standard America had no major financial panics other than in 1873, 1884, 1890, 1893, 1907, 1930, 1931 and 1933. Oh wait. The Truth is that returning to gold is an almost comically (and cosmically) bad idea." Paul Krugman

This quote is the typical opinion of economists with a Keynesian bent. The only problem is it has no bearing in real economic history.

E Dollar Concept is Being Pursued by The BOE, PBOC, and Yes, The Fed.

The Reset Original Video 

Update: Bloomberg published a story 24 hours after my post that is suspiciously similar to what you will read below. They only differ in that Bloomberg poses the E Dollar as a wonderful monetary innovation whereas I outline the possibility as a warning. They almost certainly took the idea from my post without offering credit, but here is the link to the Bloomberg story, you be the judge...

Central banks are planning to implement a new form of currency that has the potential of being an even more profound change than 1913, 1933, 1945, or 1971. Back in early 2014 I wrote what is now How they got us into this mess. In it I discussed an option that the government and banks might use to get us out of the monetary mess we find ourselves in, it was called the E Dollar. The E Dollar is simply a digital currency that has an exchange rate with cash. The central bank would set a rate at which old paper dollars would lose value against E Dollars held in a bank account. Under an E-Dollar system any physical cash removed from the banking system would lose value against the E Dollars retained in an account, this would effectively eliminate the zero lower bound. Central banks would be free to implement significantly negative rates. The E Dollar would also a carry the added optional benefit of a gradual debt jubilee if the powers that be decided to allow old debt to remain denominated
in old dollars.

Yet Another Way Excessive Debt Hinders Capitalism (Oil Edition)


Early in the year we did a root cause analysis that determined that the initial drop in oil prices was caused by manipulation of interest rates resulting in malinvestment and overproduction. As we drilled down we found the root cause to be the debt based monetary system itself. Full post here.

Since that time oil prices have languished, taken another leg down, and again it appears to have some roots in our debt based monetary system, but for surprisingly different reasons. There is a second flaw in societies that is also causing related havoc in the oil market, socialism.