Here's our summary of key economic events overnight that affect New Zealand with news central banks are moving to design a stable crypto currency system.
In a week of wild-west volatility in the unregulated crypto markets, the US Fed has signaled it will have a lot to say soon about central bank digital currencies. They want to play “a leading role” in the development of international standards. Central banks around the world - most notably the People’s Bank of China - are moving ahead with digital currencies which could give them a head-start in how standards develop.
US jobless claims fell slightly more than expected to 454,000 last week, taking the total to just under 3.7 mln on these programs and the lowest since the start of the pandemic. In the equivalent week in 2020 there were 21.2 mln people on these programs. In 2019 it was 1.7 mln, so they still have a long way to get back to pre-pandemic levels.
The next regional Fed survey of manufacturers, this one from the Philly Fed region for May, has come in still very positive but a sharp downgrade from their prior April survey. New order levels and activity levels reduced, and price increases hit a 40 year high after sharp jumps. Although they are dealing with faster and widespread price increases, most firms remain optimistic.
The US Treasury offered US$13 bln in TIPS inflation-protected bonds today attracting US$32 bln in bids. The Fed took none. The median yield fell from -0.90% plus CPI from -0.63% at the prior equivalent event in March (an event in which the Fed did participate).
In Canada, the ADP employment report for April expanded with a +351,000 new jobs rise although that is a lower pace than the March rise of +635,000 gain. The only sector shrinking there was their IT sector.
Taiwan's export orders rose +43% from the same month a year ago, at first impression perhaps not that impressive given the pandemic base effects? But actually they are up more than +42% above the April 2019 levels which reveals an impressive real gain.
In the EU, they have voted decisively to freeze progress on ratifying in the China-EU investment Agreement (the CAI). Fundamental differences on human rights are behind the move. China's restrained response on the vote - and its complete absence from China media - indicates that Beijing is shaken by the move, one it was banking on the CAI being ratified.
In Australia, their unemployment rate fell to 5.5% from 5.6% but that was because their participation rate fell. Actually, employment fell by -31,000 which was much worse than the expected +15,000 rise and compares with a March rise of +77,000.
Although there are continuing threats of 'action' by Beijing, commodity prices are staying high even if they are day-to-day volatile. Both copper and iron ore prices are moving back up today. And global aluminium demand is said to be very strong.
The latest global compilation of COVID-19 data is here. The global tally is still rising, now 165,050,000 people have been infected at some point, up +662,000 in one day, and still largely driven by rises in India and Brazil. And an outbreak of black fungus is piling on the misery in India. Global deaths reported now exceed 3,420,000 and up +12,000 in one day. Vaccinations in the world are also rising fast, now up to 1.56 bln, and in the US almost half of their population (48.5%) have had at least one dose as they struggle to keep up the pace of vaccinations. Now approaching 40% of Americans have been fully vaccinated (127.1 mln people). The number of active cases there has fallen to 5,904,000 with fewer new infections than recoveries recently and steady progress.
Wall Street is back in risk-on mode, and the S&P is up +1.1% in afternoon trade. Overnight, European markets recovered all of yesterday's losses, up an average of +1.5% although there is some variation. Yesterday, Tokyo ended its session up +0.2%. Hong Kong was down -0.5%. Shanghai closed down -0.1%. The ASX200 ended +1.3% higher and that was matched by the NZX50 Capital Index which also ended up +1.3%.
The UST 10yr yield starts today down sharply at 1.63% giving up +6 bps from this time yesterday. The US 2-10 rate curve is at +148 bps and a little flatter. Their 1-5 curve is unchanged at +78 bps, while their 3m-10 year curve is flatter at +163 bps. The Australian Govt ten year benchmark rate is down -4 bps at 1.69%. The China Govt ten year bond is down -1 bp at 3.13%. And the New Zealand Govt ten year is also down -1 bp at 1.88%.
The price of gold starts today up +US$11 from this time yesterday at US$1874/oz. This commodity has also been volatile recently.
Oil prices start today another -US$1.50 lower at just under US$62/bbl in the US, while the international Brent price is just on US$65/bbl.
The Kiwi dollar opens today at 72 USc and little-changed since this time yesterday. Against the Australian dollar we are marginally softer at 92.6 AUc. Against the euro we are unchanged at 58.9 euro cents. That means our TWI-5 starts today still at 73.4.
The bitcoin price is now at US$39,793 virtually unchanged from this time yesterday. Volatility in the past 24 hours has still been extreme however at +/- 10.8%. The bitcoin rate is charted in the exchange rate set below.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
Daily exchange rates
Select chart tabs
159 Comments
And in NZ Labour has delivered a budget that works to entrench dependency, disrespects working, middle class Kiwis and offers little to no indication of building a robust and resilient economy for the future.
So far, if they do little else, Act and National won't have to do much to win the next election.
Not sure about "not much" National need to find a decent leader. Collins simply has to go, John Key is rating higher now and he is not even in the party anymore. Its pretty simple really, National need to pull a leader with a vision out of the bag just the same as Labour did at the last minute, however the difference is they will have to deliver.
Carlos, here is the Chris Trotter debunk of the Tova poll you refer.
https://bowalleyroad.blogspot.com/2021/05/the-tv3-poll-journalism-or-pr…
I’ve been talking to quite a lot of middle income centrist kiwis (most of whom voted labour) and a number are saying the same thing. Labour is pulling to the left and there is concern that labour is no longer governing for all and are now governing for a certain segment of the population. ALL of this is been said in hushed tones because people don’t want to be seen as “racist” and shouted down. Leading to the adage of you can stop people speaking but you can’t stop them thinking.
The only thing that is stopping people speaking is cowardice and lemming-like herd behaviour. If Chris Trotter can have the guts and integrity to speak up then it is the duty of all of us to do the same. If we don't then we deserve whatever horrendous eventuality that we end up with. It's pure cowardice to just hunker down and focus on bread & circuses rather than doing our duty as citizens. Either we care about our futures, or we don't.
I agree with you. Labour is definitely pulling to the left and I'm left wondering what National or Act are going to do to lift their ratings. They definitely need to wake up to the fact that climate change is a real deal and get away from their open door policy on immigration. I know a number of hard working kiwis who are battling to make ends meet - yet this Govt is rewarding those who don't work.
Act is an interesting proposition - increasing their head count in parliament last election from 1 to 10. David Seymour increasingly seems like a much more effective leader of the opposition and could position his party in a strong position come the next election. If National don't sort themselves out, they could find that they are no longer the dominant right wing party in parliament. Chris Bishop, Simon O'Connor, Nicola Willis and the other young turks need to band together, get their culture sorted and clean house.
Fantastic article from Trotter. He is on the Left of the political spectrum but is clearly a man with integrity who is not afraid to tell the truth. The media truly are the enemy. I think democracy has been totally subverted in our country, the media is too concentrated here in a few powerful entities. There is no competition, just 'groupthink' and - as Chris clearly demonstrates - blatant propaganda.
Even so National has much to do to restore credibility and regain the confidence of the electorate. For that they need a new team that looks energetic, professional and capable. A clear example of the opposite of that is the retention of relics such as Brownlee & Smith. The former’s electorate simply booted him out and remember that seat, the Christchurch Fendalton catchment, had been held by National since it was won by Sydney Holland National’s very first Prime Minister. It was sacred ground yet Brownlee contrived to lose it and yet is still in parliament. Well he certainly didn’t get the message and whatever way you look at it that, even on its own, is no signal to the electorate that the party is redressing ithe culture so emphatically rejected at the last election.
Conversely, just rewarding Labour for 3 years of non-delivery & moreover handing them a mandate to do carte blanche whatever they like - that is speaking to a situation where group-think and acting like a herd of sheep is encouraged. You see it everywhere from 'Team of 5 Million' to everyone all-in on the property Ponzi. You act like the only options for our society are to vote for Labour or National. There are a myriad of other options.
Not at all and either way that is not how I voted last two elections. What has been overlooked is that in 2017 National returned to parliament with more seats than any other party. That provided a platform to mount a very effective opposition, which NZ needed, and rebuild for the next election. Instead National degenerated into a squabbling, spoiling pack of self serving identities. By the time they got to 2021, given Ross,Walker/Boag, Falloon and the antics such as Adams and Kaye afraid to say they had overcooked their own goose.
I don't think Reti will have had the time in the public eye to carry it, I think Bishop has been useful but not that electable (think a louder Simon). Honestly I don't think they have the right leadership to win the next election but it is so far away its hardly worth talking about - 2023 right?
Idiot comment. I am a boomer and I don't like them. I am not politically aligned, like many of the commentators who contribute here, and consider their policies critically. I don't disagree with the comments here that challenge mine, in that National will need to find an acceptable leader, and come up with policies that don't rely on immigration. But from the current position the policies should be very hard to formulate. As to a leader? Good luck - no one stands out for me, but Act is looking better all the time.
Because we have a very high level of people on benefits and other dependent needs. Many Maori are from a traditional Labour background, not to mention a large portion of our Maori population have suffered under bad socio-economic policies for generations. Plus this Government is spending more on subsidising landlords than the last national Government did, and they are pandering to calls for Apartheid like separatist policies that do not actually address the root cause of inequity in our society. And finally we should not forget that JA is still the darling of many for her responses to national emergencies.
But in the end a Government must deliver for it's population, and in this budget it is not.
I disagree with both of you that it at all matters.
You need to be very careful here about what you are implying regarding beneficiaries and ethnicity.
The fact that the Labour party is polling like it is is not because of the sentiment of only ~16% of the population.
I'm not implying anything. The fact of the matter is that Maori overwhelmingly support Labour. It's not racist to state a fact.
Here's the views of Willie Jackson. Is he being racist? Are Maori poor, or very wealthy? Let's look at the value of their financial assets, and consider.
https://www.stuff.co.nz/business/124983357/iwi-havent-given-enough-back…
The Minister for Māori Economic Development Willie Jackson says iwi organisations have been too focused on building up their asset base rather than looking after their people.
“Iwi have some way to go,” Jackson said on the sidelines of a breakfast event in Wellington on Thursday to discuss the findings of BERL’s Te Ōhanga Māori report on the Māori economy. “They are improving but they have let their people down and they have been too slow with their investments.”
The report, published in January, found the value of financial assets in the Māori economy increased from $42.6 billion in 2013 to $68.6b in 2018, with $21b of that held by trusts, incorporations and other Māori entities.'
16.5% of 4,941,200 people (Dec 2018) is 815,298 maori so their share of the 68.6B is $84,141 each. A nice house deposit to put towards the $380M dollars to be exclusively spent on their housing needs. And now their own health care system with $242.8 m funding (or $297.80 per Maori).
Good times to be Tangata Whenua.
the biggest proportion of people on benefits are on super, its over 600k thats 11% of the population so a massive voting block when it comes to election time and now NZ first are gone a lot of votes to pick up. its something that national should target if they were not so all over the place at the moment
Re super, I agree with you. I believe that this should be means tested and eligibility should be 20 years of paying NZ tax. Super should also begin at age 67, but this should be announced early enough to give people time to prepare. None of this of course will happen as all three suggestions are necessary, but not popular.
@Nifty. I'm a boomer Nifty, and I detest this Government. I think Murrays comment above is worth reposting.
".... in NZ Labour has delivered a budget that works to entrench dependency, disrespects working, middle class Kiwis and offers little to no indication of building a robust and resilient economy for the future...."
In addition I am seriously worried for the future of New Zealand as they embed separatism.
Labour has done wonders for boomers who own property. If they own investment propertt they've just stung them with interest deductibility, but at the same time they've just handed out money to some of their tenants - (beneficiaries) to pay increased rent.
Let's not forget pensioners in which NZ super has risen under labour...winter energy payments etc.
The majority of boomers are loving it and couldn't care less about the middle class young who have no benefits.
I don't know where you are drawing your experience from? Yes, there are a number of boomers who have rental properties, but the ones I meet had TDs (now earning almost nothing) and they are in modest homes watching every cent spent. This divide between boomers is played out with FHB's who are struggling to purchase and those who can access the bank of mum and dad.
Am I so out of touch with my class I cannot relate to this boomers me me me rhetoric? Are all the middle class suffering and need government help and handouts to stay afloat?
I thought from all the expenditure on goods, and supply shocks going on most were doing quite well given the consumer thirst that seems to be apparent...
you're not the only one. While i am a Boomer, I can't get over the pure self interest that so many exhibit. My desire/wish/expectations are a society where everyone has a good living standard, where there are opportunities for everyone not just a few, where rank greed and selfishness is not rewarded at the expense of everyone else and fundamentally where basic standards of decency are up held in government policy and laws. Most if not all of this has fallen by the way, more rapidly since the 1980s, but it started before that.
I dislike intensely that the young who are prepared to try are still being largely shut out of the housing market, that having a roof over ones head is no longer considered a basic necessity of life, that ordinary school leavers with little to no qualifications cannot expect to get a job that have decent pay and conditions (assuming they want to work), and that our Governments seem intent on entrenching dependency and therefore poverty, while sucking up to the wealthy.
It's the 'wealth effect' & central banks that got us here. Boosting asset prices to a massive extent and now you have this huge gap between the haves and have nots, and a government intent on bridging the gap with taxpayer (and borrowed / printed) dollars. There will be no winners out of this in the long run, the young and productive will leave NZ in droves. We'll end up with a huge structural bubble in property assets which will require constant defending as the real economy withers....heck, we are already seeing it playing our before our eyes. Treasury comments yesterday about the effect of a mooted dwindling in house price growth astonished me....the 'wealth effect' is supposed to be a continuous process whereby enormous onging increases in asset prices power the economy. The plan is unbelievable, as it is / was always going to be totally unsustainable. Incomes will never rise at the same incredible rate, so the 'fuel' for continuing stellar price rises must eventually be exhausted.
David Rubenstein...crypto is here to stay.
https://twitter.com/squawkcnbc/status/1395354887966412801?s=21
Agreed Crypto is here to stay but not as you currently now it. The FED will release an entirely new version and shit can the rest of them buy creating separation and killing the link between them. You can buy Bitcoin with Fiat but what happens if the newly created Crypto cannot be traded for Bitcoin ? You don't even need to make other Cryptos illegal, that alone will kill them all overnight.
Frazz - can you enlighten me please on how bitcoin is going to take over the world as i think I'm clearly missing something.
What happens if the US, Chinese, Eurozone etc all come out and say that it will be illegal for any publicly listed company to trade in any digital currency that they don't issue/control. I.e. you cannot buy any goods and services you need to live via that store of wealth. How do you buy your groceries - do you want to be paid in bitcoin or the government backed digital currency? Or do you live your life on some black market where people illegally grow corn to sell to bitcoin owners? Be like people growing weed now.
It essentially pushes private crypto onto some form of black market.
Or am I missing something?
Well if you can't explain it in simple terms (to average people like myself) on a forum like this, do you actually understand the bigger macro picture yourself?
As i say, it sounds more like a fanatical cult - like people backing internet IPO's in the build up to the dotcom bubble, than anything based upon long lasting principles that are best for all of society.
Here you go IO - this should be about the level you're looking for mate - https://youtu.be/cbI31x3FpS0
I thought I was missing something from the research that I done - but its clearly not the case.
Quite a lot of people who once they've purchased a coin, become an agent for that coin, and try to get as many people to buy into it as possible, primarily for their own financial gain.
Nope. It was much like when my friends and family weren’t on Facebook (or any other network you’d like to substitute here) in the early days, and I wanted to share photos and memories, etc with them. It’s all about growing the network. The beauty is that everyone can peacefully opt in or out of the network at any time. Like the adoption of email though, it does take time, and the perseverance of existing users to help onboard those who are aren’t on yet.
https://en.wikipedia.org/wiki/Censorship_of_Facebook
And I thought you said you weren't replying to bitcoin bashing posts any longer? Not intending to troll but your self control has let you down on this occasion! What was that...30 minutes :-p
Is that it Frazz? I think its a great idea and i think what central banks are doing is wrong. But I still don't understand why anyone would want to buy a bitcoin or dogecoin if in the future governments decide its illegal to trade in that store of wealth? And if you can't use it to trade for anything, what store of wealth does it have at all?
Got to say, you're sounding like more of a cult that central bankers themselves!
Strangely thinking you have the moral high ground, yet showing the same self interested tendencies in equal, if not more quantity, than the thing you tell others you despise. Its quite bizarre.
Central bankers and those who back fiat also have significant influence over politicians. See history.
I think what Central Bankers have done is horrible - yet I can see the same problems with what crypto currencies are now standing for. Good luck!
Crypto fans: "Buy crypto! Free yourself from the evil and stupidity of central banks, hedge funds and Wall Street!"
Also crypto fans: "Buy crypto! Its credibility is proven by the involvement of central banks, hedge funds and Wall Street!"
Crypto fans: "Fiat money has been destroyed by greed and manipulation!"
Also crypto fans: "Buy crypto! It's up 300% this week! Pump and dump schemes are the *real* free market in action!"
That seems to be your standard go-to now IO. There’s nothing cultish about it. If you don’t like it, don’t put any money in it. You make comments wanting to understand why people believe so strongly in the tech, but then ridicule them when they put their views across. It’s exciting because it has massive potential for positive change and we’re right at the beginning of mass adoption. We live in a digital world and you seem to be clinging to the analogue. Good luck to you with that.
I've never said I don't like it! I think its a great idea. But like anything, if its going to be a store of wealth, and it threatens the goals of central banks, its likely going to be outlawed.
If that makes you uncomfortable, that's not my problem. I'm not looking to ridicule, I'm looking for an actual reasoned argument. if you can't provide one, then there might be flaws in your logic - but like Ezy you can just tell me 'I don't understand the tech' which is a bit of a weak answer!
I've worked for tech companies in the past - please don't imply I'm stuck in the analogue because that is a very false narrative and weak argument.
Sounds like a Tui ad. If a government can successfully agree on monetary policy at a single point in time, to be baked into a blockchain forever, leaving it unchanged for more than a year or two I will eat my hat. What happens when they update their monetary policy around budget time? Are they going to hard fork the currency every time a new government get into power? Who will be in charge of validating and securing the network? Have you seen or used any IT related government services lately? Most people only use them because they have to IME, and 98% of systems look like they were built back when Adam was boy. Blockchain is purely democratic by design - it doesn't need a 3rd party to govern it which is the whole point.
Any government can create a currency, but if people won't use it and they prefer the black market then a true democratic government has no mandate. The only option from there is for a govt to completely oppress their citizens as Galloleous has so excellently described, or capitulate to the status quo as many countries are already starting to do.
There are an exponential number of hurdles for a centralised organisation to jump over in a rush to get a crypto-currency out the door before BTC and the rest of the decentralised blockchain solutions completely eat the entire worlds financial system. Anyone who sees technology as magic and doesn't understand the complexity of implementing the protocols into an already extremely complex govt env has NFI what the FED can and can't do.
Central bank digital currencies are the exact thing an Orwellian future will be based around.
Unlike the current digital system where my digital dollar in my bank account is fungible with yours, a CBDC will be bale to track each individual dollar, what it was spent on, how quickly it was spent etc.
The world will turn into China, oh yoursocial score has dropped? well you get $50 less this week and you only have 2 weeks to spend it instead of 3.
Damn the economy is slowing down, guess what we have moved the expiery date of all your CBDC forward by 5 days so you have to go out and spend!
It can also provide a massive help: You earn this much, we can track that and heres a tax break. Your a student? we will taylor some low interest rates for any lending you might want, but give you a higher one for savings. Your a retired boomer, we dont want you saving, you get negative interest rates so you have to go and spend.
We have another pandemic, direct deposit from the central bank into everyones Central bank account.
It might start well, but the more power that is available to grab, someone will step up and abuse it.
THat is why Bitcoin is king and always will be, it is decentralised with no one in control, and intricate relationship between node owners controlling what ultimately happens with the code base, while miners secure it. And it is globally distributed so no single government can attack it.
Bitcoin is the soundest money this planet has ever seen, and the hardest money always wins.
"Moving from physical laws to man-made rules is the crux of the matter. Man-made rules can be bent and broken, physical laws not so much. For example, you can’t simply “make up” a physical gold coin. You have to dig it out of the ground. You can, however, absolutely make up a gold coin on paper. To do this, you simply add an entry to the ledger and give yourself a couple of coins. Or, in the case of central banks, simply add a couple trillion with a few computer keystrokes. (Fancy financial people call this “Rehypothecation,” “Fractional Reserve Banking,” or “Quantitative Easing” — but don’t be fooled, it’s all the same: making up money.)"
At what point do you say you longer hold allegiance to a country? I'm a NZ'er but screw their monetary system. I'm on my own. Or I'm American, but %#@#$ the USD.
Part of living in a country is backing the currency of the state you live in. Wars and won and lost over the superiority of currency and ability to set monetary rules (see Bretton Woods).
Perhaps bitcoin'ers need to find a deserted island somewhere and build an army so they can fight a war with China or the US and then say their 'currency' is legitimate, not just something that lives in the imagination of people (primarily as a gambling mechanism for their own personal financial gain).
Thats the whole point of Bitcoin, it is a peaceful revolution. A voluntary opt in where no one is forcing you to use it. People will come to understand with time that all centrally controlled currencies are losing value over time. Therefore the safest place to store your hard earned wealth, where it can not be debased or stolen from you is on the Bitcoin network.
Sure you will continue to use fiat as your day to day means of transaction, but you will save in the hardest currency ever to exist. We dont need to fight a war to force it onto people, the central banks are doing it to themselves. BRRRRRR
I am interested in BTC but certainly no expert.
I think as a store of wealth BTC makes some sense but not as a currency, transactions are currently not more than 7 per second so even as a store of wealth that is pretty limiting in terms of trades.
However, as a store of wealth, it has a challenge in the value of the holding being represented by a "proof of work" token. Like sea shells whilst this has some logic to it, it can be replaced by a replicant or alternate token. How is the substitution risk managed?
*Facepalm. By your rationale, a Picasso is just paint on a canvas, and requires a greater fool to pay a higher price for it to maintain it’s value? There are hundreds of thousands of artists out there who can also apply paint to canvas, so it doesn’t even have scarcity on its side. Your argument is weak and been re-hashed (pun intended) ad nauseum.
What makes you think a bitcoiner can’t be patriotic? I own my own fiat-generating business, pay my business and personal tax in fiat, employ local staff and pay them in fiat, spend in the local economy with fiat. I just choose to NOT let a bank dictate where I can store my wealth. I also enjoy supporting a growing financial network of tech that can provide a permission-less way for billions of the un-banked world to have access to a savings account on their mobile phone. I like that I can send bitcoin to my kids crypto accounts 24/7 instantaneously.
Ok, you guys go get 'em pacman. Just don't be surprised that the state wants control over a store of wealth when its destroying the value of its fiat currency - similar to gold in the 1930's.
But it would need to be recognised as a legitimate store of wealth before even that would happen.
Bitcoin isn’t destroying the value of their fiat currency...they’re doing that themselves. Bitcoin is the only thermometer in the room that’s working. I think the problem is that most people lump bitcoin into the crypto currency category. The FED and the ECB have on numerous occasions called bitcoin NOT a currency, but rather a crypto asset more likened to digital gold.
Let’s say hypothetically it goes the other way, and rather than try and “ban” it, they incorporate as a treasury reserve asset, much like they have gold on their balance sheets? Makes more sense to let it play out, build up a bigger market cap and liquidity, and harness its network effects. I agree 100 percent that there are plenty of shady s**tcoins that are masquerading as digital currencies, and they need to be regulated properly. Gary Ginsler understands the difference and will act accordingly
Thanks pacman - good insights.
How would central banks go about 'incorporating it' onto their balance sheets - what would that look like in your mind? Would they need to buy it from someone first to incorporate it onto their balance sheet, or are you and your bitcoin friends just going to donate it to the central banks?
And if they do decide to buy it from you, and you agree to sell it to them so it can be recognised on their balance sheet, what payment would you like to receive for it? Gold, fiat, share options?
Since they have access to their own money printers, it seems pretty logical that they would begin accumulating it in much the same way as gold. There will be institutional grade brokers and custodians such as NYDIG to facilitate this. All currently very regulated. Game theory would suggest that the counties that are the most progressive and adopt early, will be in the strongest position. This by the way has nothing to do with their native fiat currency use or issuance. I think this is where most people fall over with the concept.
The price will always be determined by market forces, and the beauty is the open source public ledger, defended by walls of encrypted energy, preserves the value of that asset and the integrity of the protocol (no forks/roll backs/pre-mined shenanigans/uncapped supply, that are common in many alt coins). There is volatility at the moment as there are whales buying the dip and making large withdrawals off the exchanges (verifiable with on chain analysis). Sadly many retail investors are in it for the wrong reasons (ie the speculative nature of ‘price only go up’), and are easily shaken out of their positions by bullies in the market. Hence the HODL mentality. If you’re buying the asset for the longer term duration, then the short to medium term volatility shouldn’t rattle you. Much the same with Amazon stock in the earlier days. Many of the truely wealthy are those that just held their stock (eg Gates/Bezos/Musk) for a long time.
Maybe I’m completely wrong, but at some point, you have to back the leading horse, and Bitcoin is the dominant digital monetary network, with the largest market cap, and the most secure network defence. All my eggs are definitely not in one basket, but this is the one I’m most excited about.
But why would central banks buy someone else's when they can just create their own? Especially if the only thing they can use to buy it is fiat, which those who own Bitcoin in theory or principle don't want to own? Seems very counter intuitive.
Hypothetically the moment that it become public that a central bank is buying up bitcoin there would be a run on fiat currency - which is the completely opposite of the aims of any central bank.
So I'd need a strong argument as to why a central bank would want to destroy themselves? (i.e. by buying bitcoin they will self destruct).
I've said it before, digital currencies are a means of escaping the kleptocratic central banks. We already have fedcoins and rbnzcoins and they are junk.
The flash crash yesterday was a buying opportunity that only comes along every so often.
Vaccine rollout in the UK now 56% of the population.
a year ago bitcoins were $10k now they are $40k and what has changed?
Only that the US has printed $7T fueling the speculative craze into the everything bubble resulting in ridiculous pricing, cryptos included
If you think $40k for a useless token is a bargain, knock yourself out.
To me its like saying Telsa shares are a bargain at $600, Gamestop shares are a bargain at $170, or $1million for a falling down shack in Otara represents good value.
When people start coming to their senses, there will be some serious pain
In the EU, they have voted decisively to freeze progress on ratifying in the China-EU investment Agreement (the CAI). Fundamental differences on human rights are behind the move. China's restrained response on the vote - and its complete absence from China media - indicates that Beijing is shaken by the move, one it was banking on the CAI being ratified.
EU Parliament pleases itself halting China deal: Global Times editorial
The conditions imposed by the European Parliament for resuming ratification process are rough and arrogant. It demands that "China lift the sanctions before Parliament can deal with the CAI." These sanctions imposed by China are actually countermeasures against the EU's sanctions over Chinese officials and entities.
There is no way China will lift those sanctions under pressure from the European Parliament. The European Parliament said in the motion that it "calls on the Commission to use the debate around the CAI as leverage to improve the protection of human rights" in China. Such an intent will be resisted and despised by China.
It took China and the EU seven years to conclude negotiation of the CAI. After both sides had reached a consensus, the European Parliament created a disturbance. This is a flaw of the EU - it is incapable of fully complying with the rules. It shows the uncertainty that the EU, as an economic partner, may make an issue due to political considerations.
Germany will not let any dispute interrupt it's export business to China. Same with the importation of Russian gas to run it.
If New Zealand can set aside moral concerns to do business with the Chinese why can't the EU? Typical Europeans up on their high horses, refusing to benefit from or be complicit in ethnic cleansing and slave labor.
http://www.thecivilian.co.nz/ardern-says-china-differences-becoming-har…
Seems EU wishes to politically cleanse Russia.
EU Parliament report says regime change needed in Russia, recommends Brussels launch propaganda TV channel to help it happen
At the moment that digital money you use is digital FIAT controlled by your bank. Central bank will issue their own - bypassing the bank. They will monitor all your spending and print as much Digital tokens as they see fit (but if you are a bad camper they will shut you out and you get nothing)!!
..and as some suggest further, deliver helicopter money with an expiry and with the ability to direct the spend into specific areas. Eg we have just credited your 'coin' with $1k, it must be used within 1 month on donuts, following which it will decline at 20% per day. Full control. Conspiracy..maybe?
Central bank digital currencies are the exact thing an Orwellian future will be based around.
Unlike the current digital system where my digital dollar in my bank account is fungible with yours, a CBDC will be able to track each individual dollar, what it was spent on, how quickly it was spent etc.
The world will turn into China, oh your social score has dropped? well you get $50 less this week and you only have 2 weeks to spend it instead of 3.
Damn the economy is slowing down, guess what we have moved the expiry date of all your CBDC forward by 5 days so you have to go out and spend!
It can also provide a massive help: You earn this much, we can track that and here's a tax break. Your a student? we will tailor some low interest rates for any lending you might want, but give you a higher one for savings. Your a retired boomer, we don't want you saving, you get negative interest rates so you have to go and spend.
We have another pandemic, direct deposit from the central bank into everyone's Central bank account.
It might start well, but the more power that is available to grab, someone will step up and abuse it.
So basically they plan to replace cash, a bearer instrument, with a digital version (hence why the need the blockchain) except they have the ability to track every single transaction. So effectively removing the ability of people to transact anonymously. As you can imagine, this just opens the doors for control by a bad actor.
You send $1000 from your bank account to mine, its just a number. You send $1000 of CBDC to me, it is a collection of 100,000 individual cent "tokens" where they know the exact history of each cent, who it has previously come from, how long you have had it, and where/who you have sent it to.
That is why Bitcoin is king and always will be, it is decentralised with no one in control, and intricate relationship between node owners controlling what ultimately happens with the code base, while miners secure it. And it is globally distributed so no single government can attack it.
Bitcoin is the soundest money this planet has ever seen, and the hardest money always wins.
You have thought that out in detail Galloleus. But it seems to me that if they were interested in doing that they could do it already with the current system. Lots of transactions flow about me. 99.9 percent of them are electronic. Not hard to track if those big bad actors lurking in the shadows really wanted to set it up.
So we're all getting the 'rona then. Nicely played by pharma. The JINOs missed this bit?
"Although the RRR considers only participants who could benefit from the vaccine, the absolute risk reduction (ARR), which is the difference between attack rates with and without a vaccine, considers the whole population. ARRs tend to be ignored because they give a much less impressive effect size than RRRs: 1·3% for the AstraZeneca–Oxford, 1·2% for the Moderna–NIH, 1·2% for the J&J, 0·93% for the Gamaleya, and 0·84% for the Pfizer–BioNTech vaccines."
https://www.thelancet.com/journals/lanmic/article/PIIS2666-5247(21)0006…
Maybe it could work if it was a globalised, Blockchain-enabled trading currency to replace the Eurodollar. If it were maintained by central banks collectively rather than just one, it would be less susceptible to jiggery-pokery and there would be better oversight (I'm thinking the PBOC, the Fed, etc., all keeping an eye on each other...)
The IMF's SDRs should be the worlds currency and has been suggested before (as it kind of is now). Blockchain it and use a basket of goods to calculate it's value, not currencies. Then open it up to people and payment providers to become a currency. That would throw the cat among the pigeons... governments would have to be very careful about printing money as people in any country could decide to pay in local currency or SDRs... (would need a name change though "Special Drawing Rights" is about it's current use).
In any case, we need a new Bretton Woods agreement, where the US dollar (nor anything else) holds a special position.
Why the USD? Surely China now holds the rights to set the rules going forward?
Not that this is what I want, but what I see unfolding around us. The US to me looks like the Germany of the 1920's that is about to get desperate and might be forced into aggression in order to protect is currency - and go from being the 'good guy' into the 'bad guy'.
But isn't that how humanity works youngdumbandbroke?
Humans like order and control. With that comes bureaucracy. That isn't a modern issue. It goes back thousands of years. Its in our DNA.
The owners of crypcurrency appear to be no better than the system they are trying to escape. They're attempting to play games in order to enrich themselves - just go and look at #bitcoin on twitter or wall st bets. Just as the central banks appear to be playing games in order to enrich those who are already wealthy, owners of bitcoin appear to be promoting that system in order to make themselves more wealthy. I don't see the difference. One is state governed and regulated, the other is not. I don't think either can take the moral high ground.
The difference you dont seem to be able to see is: Bitcoin the network runs independently of what humans attribute to it. It is a honey badger that doesnt care what it is being used for. The network just continues to produce a block of secured transactions every 10 min on average, regardless of if the people creating the transaction are criminals, presidents or plebs as these are just human allocated titles.
Just like how every bitcoin is as equal to any other bitcoin to the network. Only humans allocates some a title of a black/bad bitcoin, depending on how we have seen it used eg. if a bitcoin was stolen from an exchange, that can be tracked and rejected by other exchanges, but it can still be sent from wallet to wallet on the network as long as they pay the fee. The network doesn't care.
And that gives everyone in the world a means to store and control their wealth, whether their government likes it or not. True freedom.
Change your base of value. 1 BTC is always equal to 1 BTC regardless of what the fiat price is.
Great post thanks Galloleous. But what is stopping governments and central banks creating their own network and make the one you buy into illegal?
That for me, is the key point which nobody seems willing to answer - just turn into cry babies and tell me to do 'research' which usually is what I get told when I'm getting close to a truth which a person doesn't want to acknowledge.
That's a real possibility. But other countries have tried to do exactly that before, particularly with the USD in their own country being used instead of their own currency (Vietnam/Argentina and now I think Venezuela?). It was almost impossible to do, and those are physical notes. With crypto currencies, you cannot see them, you won't even know people have them because they are carried on their locked phones or on USB wallets. The only thing they need to exist is the internet, which no country can now shut down internally without massive economic carnage. Even China who has the best internet tracing system in the world can't stop VPN use. Because all packets running across the network that are encrypted are impossible to distinguish.
So while countries might be able to ban their conversion to it's currency in it's banking system and extraction from ATMs, it can't really stop people trading them for goods and services. If you have been to a country like Vietnam, they prefer to trade in USD (especially big things), but will also accept local currency. But the locals will give you a USD price first and hope you pay in it. The only reason they will accept local currency is you can call the police and tell them they aren't letting you pay in Dong, which (of course) is illegal. So they have to take the local currency, but want the scarce currency that doesn't inflate away. Scarcity and retained value is the key here, the USD notes are scarce and retain their value. With crypto's, that's theoretically the same advantage.
People talk about 1BTC=1BTC because the conversion to USD or any local currency won't matter once it's widely adopted. Tomorrow if you can buy 1000 bananas for 1 BTC, it's likely the next day you will be able to do the same, or actually more. I believe that's the point people are making. And it's much like the USD in Vietnam, it doesn't get much inflation, but when you see the number of 000's on the end of your Dong denominated notes, it certainly gives you pause to wonder if it's going to retain it's value.
Currency is all about CONFIDENCE. Enough people believe in it and it becomes a medium of exchange. The beauty of crypto's is they cannot be reproduced/copied etc and are highly transactable.
Great summary Bobbles.
We as a first world country have the luxury of a stable currency. try going to any of the hundreds of countries that has a shit currency losing value so fast you have to change your prices every day to week.
Of course they can try and ban it, just like the US tried to do with gold back in the day. That only succeeded because it was stored in centralised banks/vaults. So they just sent a fed agent to stand at the door and confiscate anything people tried to withdrawal it.
But that ultimately failed because people just worked around it.
Now imagine trying to do that with a digital token that can not physically be confiscated, but is stored on any digital device, or in you head if you memorise the words. Impossible to take away, or even know that they own any.
Would severely hamper adoption for several years, until they come to realise how futile their attempts are and reverse course.
Another example is the war on drugs....hows that going? and that involves moving tones of physical goods, and the corresponding amounts of cash.
We DO NOT have a stable currency. Maybe relatively stable compared to the worst, or relatively stable compared to other currencies. But definitely not stable internally when trying to purchase goods/services. How many NZD tokens did it take to buy a house 10 years ago and how many NZD tokens does it take to buy a house today? That's real inflation for one of the necessities of life, despite what the CPI tells you. But you can do the same with a block of cheese or a kg of meat or a haircut and the answer will be about the same - over 10 years the cost of those has doubled at least, probably tripled. Yet wages in the same NZD tokens haven't, hence peoples angst and hence people losing trust in NZD tokens as they (just like people always have) try and get their hands on something more stable.
While the NZD won't collapse any time soon, the reckless actions of central banks is forcing people to look for alternative tokens. Devaluing their currency through horrendous policy that seems designed to make people lose confidence in that currency is a massive mistake being repeated again and again.
It will be a real turning point if one of our banks ever starts valuing debt in a crypto currency like bitcoin, even if it's not official. It would rightly shake the foundations of the monetary system, but may be the only thing that wakes the idiots up from their slumber.
Full agree mate, but stable is a relative term when compared to other fiat currencies.
https://medium.com/original-crypto-guy/as-bitcoins-price-hits-a-new-all… really love this article, puts everything into perspective
Anyone read 'The 4th Turning'? Just came across this after watching the latest George Gammon youtube.
https://www.advisorperspectives.com/articles/2020/05/20/neil-howe-the-p…
https://www.businessinsider.com.au/biden-new-economic-regime-fourth-tur…
A very interesting and surprisingly accurate theory. Question is, how quickly are the boomers going to step aside and how much of a fight will they put up against the millennials, who the authors claim are the new leaders of society (from around 2026). Given the pain that older generations have inflicted, either consciously or unconsciously on younger generations, one hopes that the millennials aren't after revenge but instead show true leadership that's been missing in their lives so far.
IO I'm a little surprised at this comment you include "Given the pain that older generations have inflicted, either consciously or unconsciously on younger generations" As Boomers we didn't inflict the pain, it was the politicians. You can argue that we voted for them, but we were not given a large range of policies to select for them to implement. It's a bit like a restaurant, you only get to pick what's on the menu. If it's not there it's not available. As we see today the pollies ask to be elected based on a set of promises and criticism of the incumbents and history, be they policy based or otherwise. Once in they generally do any damn thing they please and until the next election there is no way at all to hold them to account. And then the cycle starts all over again. To turn around and say it is my generation's fault, or any other is just wrong because as a percentage, a long way less than 1% of the boomers, or other generations actually served in Government. Besides, consider this, what generation are JA and GR? And what damage is their policies doing to people of all generations today?
i would prefer a bit better and more insightful discussion than just blaming, unfairly, groups that had no more control than the people of today.
I don't intend to take sides in either direction murray! Millennials in control might be even worse than boomers! All I know is that young people who can't afford to buy a house, or who now have a million dollar mortgage with the risk of rising interest rates, often have a lot of anger towards older people (boomers) who are seen cruising around the country in campervans, receiving superannuation as well as rental income from the multiple properties they own....(and could afford their own home on a single income in their 20's).
One hopes that millennials create a system that is beneficial for the people that come after them. The evidence of the boomers at the present is not that. They created as system that benefits themselves. If you claim you have no responsibility for that - that is fine, then I'll say that boomers aren't responsible people. They take no responsibility for the environment they live in or create. But they are one that maximises short term wealth for ones own benefit - either on purpose, or by chance.
Regarding the restaurant analogy - the millennial generation may just build a new restaurant if the food they don't like isn't on the menu. While the boomer generation will continue going back to the same restaurant to eat food that they don't like (which is actually insane - because they wil complain about it as well). Perhaps that is the difference between these generations. And with respect to government and the 1% - so are boomers simply sheeple that just vote for the 1% to benefit themselves? Are you saying you are just passive generation that went with the flow and had no power for meaningful change? What about the revolution/change in the 1960's/1970's? I know that your generation can get what you want - perhaps you've got it! (as I say consciously vs unconsciously creating pain for other generations).
Those young people with that anger? They need to direct that towards the real cause - the politicians. I know more landlords with multiple properties who are the generation after boomers (Gen X?), than boomers. I must admit I do know a few who sold up their house (singular) and bought a campervan to tour in. Not sure I could do that, I need a little more security, but I only own the house I live in.
You're blaming the boomers again, consider my analogy about the restaurant again.
And yes, we were just as much sheeple then as many of the current population are. But we had a better reason, as the internet didn't exist we were very reliant on the radio, TV and newspapers and the educated who were very much an elite. Were we lied to? Very likely at least fed an unbalanced, and incomplete view on which to make a decision, if not outright lies, with very little to no means of validating what we were told. So blaming boomers is not only unfair but just wrong.
The current generations don't have that excuse. There is much more information just a click away from their brains, so why do they still behave like that?
I’m not taking sides Murray - just pointing out a view I think boomers are missing - and by missing it it may comeback to hurt you. You can claim to be a victim of a system, but when your generation lose control of society, the next generation may not have any sympathy for that perspective.
I don't believe my generation has control over society. If anything yesterday's budget suggests an entirely different group has, and it is not generational. I don't think Boomers are missing it, I do think you view is based on myths that do not stand up to scrutiny. Everywhere in society you will find groups and individuals who are benefiting from Government policy, but it is virtually never a generational group.
An earlier comment you made about being able to get into a home on just one income. that wasn't boomers. It was our parents largely, and was expected for that time as the woman was the 'home maker'. We boomers were looking at 23% interest rates on our mortgages, so a single income was never an option, and then there was the '87 crash and a few i knew lost their homes in that.
The new thinking now clearly leaves out the Human experience of the individual, as in parents's, neighbourhood, job's, love, violence, travel, integrity, time period you were born, war, famine, work ethic, health, children, honesty, etc...
Now in today's ideology we lump the individuals age, sex, religion, sexual preference and the popular one race. If you belong to one of those groups you are A = oppressed, victim, discriminated, life is constant struggle B= Racist, rich, oppressor, life is so easy. There is no debate now as its heresy to do so.
Student allowance increase and similar increase will help Landlords as it indirectly lands in their pocket :
https://www.landlords.co.nz/article/976518654/govt-reckons-it-s-tamed-h…
something both ACT and national hammered home in the debate after the budget reading, But sorry national you are hypocrites as it was your party that started the housing allowance and made private rental ownership very beneficial then your MP's jumped on and have battled to protect it for years. the only solution is to go hard like ruth richarson and turn off the housing allowance, build a massive amount of state housing and FHB houses using that money (3 billion a year) cap rentals costs at 30% of income. you will still have private rentals maybe not as many mum and dads but you will find new vehicles arriving to own a lot of houses that they can invest a smaller amount into and get a return, similar to commercial property
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.