The Bitcoin Hearing
The Chairman of the Senate Committee on Homeland Security and Governmental Affairs Tom Carper gathered a witness list for the hearing that went on for several hours that was a chain of people who reflect the new attitude within the Bureaucracy that lies beneath the surface. The list included:
- The Homeland Security committee
- Criminal Division of the US Attorney General’s Office
- US Secret Service Criminal Investigative Division
- The Financial Crimes Enforcement Network
- The International Center for Missing & Exploited Children
The message that came out loud and clear was that “anonymity” is evil and anyone who seeks it must be a criminal or terrorist (anyone who now disagrees with whoever is in power). WHY? The attitude that has emerged post-911 is they have a right to know what everyone is doing, thinking, or saying. Anyone who does not comply must be guilty of something.
For the last two years whenever I dealt with people on the Hill, I was told be careful what I wrote in an email even to members of Congress because the NSA was sucking up everything. Now I was told this not in the strictest of confidence, but as a matter of fact. When I asked even Congressional emails? They said yes.EVERYTHING! This is why Snowden had to go to the Guardian in the UK. Then once published, the US press says OMG – we had no idea! Right! Total bullshit. If I was being casually told for 2 years BEFORE Snowden, you can bet the press was told as well and did not print it. Welcome to PRAVDA – USA Style.
We are headed into an electronic currency regardless of what people say. Bitcoin will not survive, but it is useful to get people accustomed to a cashless society. The difference will be that the government version will be no ”anonymity” and what it being touted as a benefit is the elimination of crime – drug dealers will be eradicated (plus the government will get 100% of all its taxes).
This is why they have been waging war on gold. The only real role for gold will be as an alternative. currency not to the paper dollar – but to the electronic dollar. What maybe more practical is silver coins. But this is why Europe is also moved to a 19% tax on silver starting January 1st, 2014 (see former post). It is not that there is some dark sinister conspiracy against keeping gold prices down, the only concern about government with respect to gold is the untaxable underground economy. France has made it illegal to buy or sell gold for cash or to mail cash. The US has made it illegal to store cash in a safe deposit box. Even India banned gold sales without a license.
This is all about the Sovereign Debt Crisis, the collapse in socialism, and the driving deflationary trend as government clamps down on everything that moves. The precious metals are NOT going to be a hedge against the dollar, hyperinflation, or any of the other nonsense the gold promoters have spun to sell whatever they can like snake oil salesmen. What their role will be is an alternative currency to ELECTRONIC when they stop “printing” paper money. Wake up and stop listening to propaganda. Open your eyes and look at the real world. It is closing in a hell of a lot faster than people suspect.
Fracking Causes Earthquakes?
The preliminary evidence that continues to come in implies that fracking is causing earthquakes. I reported on this after some first hand investigation with people directly effected. Now, Reuters is reporting that the same trends in Pennsylvania appear to be showing up in Oklahoma. A study seems to be underway. This could have an impact around 2020 given the legislative cycle.
Global Market Watch Nov 19th Posted
The Global Market Watch has been posted for the close of November 19, 2013.
Latvia Joins Euro
On Jan. 1, 2014, Latvia will adopt the euro and another currency bites the dust. The lats currency will be gone and we must say farewell to the fulsomely bearded Krišjānis Barons, the collector of folk songs who graces the 100-latu note. The little Baltic nation is shucking a piece of its national heritage because its leaders think that joining Europe’s somewhat troubled common currency zone will lead to more trade, investment, and prosperity. “We are looking to growth,” Finance Minister Andris Vilks told reporters last June. I guess he does not read the same news we do. There are not many other events in 2014 that we can forecast with as much confidence as Latvia’s scheduled adoption of the euro and the economic troubles for Europe can only get worse. The good news, the Lats will be in time to have all their bank accounts raided by the proposed IMF wholesale confiscation of 10% of everyone’s account to pay for the Eurozone bank bailout that will not be enough either.
So . the Roman god Janus for whom January is named after who inspired the idea of one face looking at the past and the other forward at the new year ahead, must have a subtle smile down on Latvia now. The question simply remains – is it really a subtle smile or a smirk?
Congressional Hearings on BitCoin
On Monday, Congress held its first congressional hearing on virtual currencies focusing on bitcoin. As Congress discussed bitcoin, the price of one bitcoin soared to more than $750 apiece. Overlooked was the concern focused on anonymity and lack of regulation.
Personally, it is hard to imagine a world where they will allow bitcoin to survive when they are doing everything in their power to hunt down money. Canada is already looking at taxing it and the concerns expressed by Congress clearly place this within the legal definition of what they call money laundering. What once was real washing of illegal money for legal use like the mob buying old 1930s roadside motels and pretending they were fully booked every night to get illegal cash into the system, is now applied to even storing gold or cash in a safe deposit box. Having an account outside the USA is money laundering hiding untaxed money from the government. So bitcoin can fit into that category and what federal judge would rule against the government? NONE!
The downside of such schemes the government interprets as money laundering is they can wipe you out besides 25 year jail terms. There was the old tax-straddle of the ’70s where you sold December gold in a rising market and bought Feb gold. You could then move money from one year to the next to avoid taxes. When the IRS figured out the play, that gave birth to mark-to-market accounting and then they retroactively applied penalties, taxes, and interest. Brokers got sued over that and these trades, which were in the courts for years.
The IRS can claim you made a profit now just like stocks on a bitcoin. They can demand retroactive taxes and penalties. When you dance with the Devil, keep in mind he can say anything and do anything. If 25% of the population used bitcoin, you can imagine the loss in taxes and the chase would be off like a good old fashion English fox hunt.
There is no alternative to the dollar. They can change the rules at anytime and hiding money to them is now money laundering so they can take that position and confiscate the whole thing. We have to reform the system. These people will never go quietly into the night.
Do not get all excited that bitcoin will replace the dollar. Sorry, they are exploring the idea and allowing it to get press for one single reason – they intend to go to an electronic “virtual” currency so they get 100% of all taxes. In 1934, they printed $10,000 notes when a Cadillac was $600. Today, $100 is the biggest bill. The next phase is no bills. The euro tried to displace the dollar issuing €500 denomination notes. In Britain, they have made them illegal – it is all about taxes. The virtual dollar is coming. I would say after 2015.75 when the Fed has zero power and they will go electronic. So for now, bitcoin serves a purpose to get people use to the idea of a cashless society.
Excerpts from Bernanke’s September 6th letter released on Monday, in response to a letter from the Committee on Homeland Security and Governmental Affairs asking for information on virtual currencies:
“Historically, virtual currencies have been viewed as a form of “electronic money” or area of payment system technology that has been evolving over the past 20 years. Over time, these types of innovations have received attention from Congress as well as U.S. regulators. For example, in 1995, the U.S. House of Representatives held hearings on “the future of money” at which early versions of virtual currencies and other innovations were discussed. Vice Chairman Alan Blinder’s testimony at that time made the key point that while these types of innovations may pose risks related to law enforcement and supervisory matters, there are also areas in which they may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.”
“Although the Federal Reserve generally monitors developments in virtual currencies and other payments system innovations, it does not necessarily have authority to directly supervise or regulate these innovations or the entities that provide them to the market. In general, the Federal Reserve would only have authority to regulate a virtual currency product if it is issued by, or cleared or settled through, a banking organization that we supervise. Given the Federal Reserve”s authority and the manner in which virtual currencies have developed, the Federal Reserve has focused primarily on a supervised banking organization’s role in the products’ sale and distribution, as well as the applicable regulations, such as Bank Secrecy Act (BSA) /anti-money laundering (AML) requirements.”
“The Federal Reserve plans to work with other FFIEC member agencies on electronic cash and related issues such as virtual currencies, as needed, for banking organizations. The Federal Reserve will continue to monitor developments as part of its broad interest in the safety and efficiency of the payment system. We also stand ready to cooperate with other agencies in fulfilling their mandates, as appropriate.”