Money Flow Trading Method along with Risk Management

https://www.zerohedge.com/markets/lu...ops+to+zero%29

Luongo: Merkel's War For Germany Is Nearly Over

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BY TYLER DURDEN

MONDAY, FEB 22, 2021 - 3:30
Authored by Tom Luongo via Gold, Goats, 'n Guns blog,

I give German Chancellor Angela Merkel a lot of grief, and with good reason. She’s the main conduit through which every bad idea in Europe flows.
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=HLe5TvFX

Merkel, as an agent for Klaus Schwab and the World Economic Forum, is a ruthless destroyer of human potential. Hence, that’s why she’s in charge.

I truly despise everything about her.

But as a political animal she has no peer in Europe. None. Not because she’s so supremely talented but because everyone else is a literal idiot, placed in important positions with the help of the WEF to ensure EU policy conforms to their vision of the future.

Merkel, like the rest, was chosen.

In fact, Merkel’s ineptitude is always on display once she is forced to dabble outside of the EU itself. She rules it with an iron fist but when confronted by nearly anyone else, including a madman like Turkish President Recep Tayyip Erdogan, she falls on her face spectacularly.

Merkel is a wholly constructed persona whose job it is to keep the ship of the nascent EU state trudging right towards that iceberg of The Great Reset.

The forces behind the ouster of Trump and the selection of Joe Biden did this with the intent of completing the task of subordinating the U.S. (and its military) to EU control through policy normalization on domestic spending, production, taxes, etc.

That’s the 40,000 foot view of the mountain of executive orders issued by Biden in his first month in office. That’s what the proposed tax plan is for, why the stimulus bill is structured the way it is, and why EU policy towards Russia also has not changed for the better.

It’s also why the second Trump impeachment ended with a whimper. None of that would occur if the Senate was bogged down for months calling witnesses.

With Biden as the PFOTUS – President Fungus of the U.S. – the WEF has exactly what it always wanted, a weak U.S. acting as the spear pointed at Russia to subjugate it to the Great Reset.

I’m sure the thinking in Davos is that once Russia is subordinated then China can then it can be tamed.

By the way, I didn’t say this policy made any sense, just that that is what I think is happening because it fits the data better than any other theories.

It’s been Merkel’s job as a head of state and diplomat to sell this Hybrid War with Russia as not her preference .
She’s always talked the good game to Putin that she has to go along with the sanctions to keep the U.S. placated. They are the bad guys, we the poor EU are trapped by their belligerence.

But I think that dynamic changed last year with the Navalny ‘poisoning’ and the attempted coup in Belarus. The question is why?

In hindsight the WEF-aligned forces in the U.S. and Europe expected a Biden presidency. And it was that expectation that let the cat out of the bag as to who was really in charge vis a vis Russia.

Hint: it’s not the U.S.
Because Merkel would have never allowed herself to get so obviously dirty on these two issues if she wasn’t convinced she would have the upper hand over U.S. policy come January 20th.

This is a part of the story I think a lot of commentators are missing in the the U.S./EU/Russia power dynamic. That the goal here, as Pepe Escobar gets close to in his latest article, is not just a restoration of German sovereignty out from under the yoke of the U.S. occupation, but a reversal of the power dynamic completely.

Now imagine a hegemonic Germany in Europe forging closer trade and investment ties with not only Russia but also China (and that’s the other “secret” inbuilt in the EU-China trade-investment deal).

So whoever is lodged in the White House, there’s nothing else to expect from the US Deep State apart from the “maniacal” push towards perennial, accumulated sanctions.

The ball is actually in Berlin’s court, much more than in the court of eurocratic nightmare Brussels, where everyone’s future priority amounts to receiving their full, fat retirement pensions tax-free.

Pepe still thinks there is any room at all between the “Atlanticists” controlling U.S. policy and Merkel’s pro-EU policy. I don’t anymore. I don’t think the U.S. Deep State can or will do anything else to undermine Germany and that all the U.S. posturing about Nordstream 2 is just that, posturing; policy inertia of the Cold War.

I’ve been making Pepe’s point about Nordstream 2’s political implications within the EU since the day it was announced and Poland through a hissy fit.

Germany at the heart of EU energy distribution cements its position as the de facto ruler of the EU in a way that makes it even more difficult to counter.

This is why Spain, Italy, Greece, Portugal and the rest are not allowed to have governments who go against Merkel and will be destroyed in the next eighteen months. Italy is especially vulnerable because new Prime Minister Mario Draghi, was put in place now to finish the job he started with TARGET2 and negative interest rates when he ran the ECB.

In my mind, the battle for Germany’s sovereignty was won the day the Supreme Court denied Texas’ lawsuit against Pennsylvania thus cutting off any legal path to Trump’s election challenge.

Simply putting a puppet like Biden in the White House, who is a stand-in for Obama whose foreign policy was all about boosting Europe in hindsight, was all that was needed.

Merkel, to give her credit, played the Coronapocalypse well. She used the crisis to revive her flailing political prospects, salvaging her CDU party’s position.

Then again, she also was handed a pair of aces in the hole and knew one was coming on the flop, so giving her too much credit is, at best, dubious.
In short, all she had to do was not screw it up completely by not over-betting her hand. But, she did with Navalny, badly.

And Putin finally sniffed out what was really going on.
In recent months Putin and Russia have stonewalled the EU on every issue of contention between them. Putin issued the bluntest opposition to the Great Reset uttered by any world leader. It was a speech for the ages.

EU bureaucrats go to Moscow and come home whining in their Chablis. Meanwhile Putin and his Foreign Minister Sergei Lavrov make clear statements of ever-escalating import that the EU’s behavior is unacceptable and diplomatic ties between Russia and it are now at an ebb.

Why does anyone still think that this isn’t an expression of EU/German independence and ‘sovereignty’? Have we all become so lazy in our analysis and opposition to U.S. hegemonic behavior that we excuse the same behavior from Europe, especially Germany?

Have we, by degrees, been snookered by Merkel’s apparent weakness for all these years or did we not look far enough into the future because we never really considered a bunch of eugenicist oligarchs trying to pull off something so monumentally stupid as The Great Reset?

These are good questions and I’m as guilty of missing the bigger picture as anyone. For a long time I believe even Putin and Lavrov didn’t understand what was really the plan in Brussels all along.

So, given that Germany’s independence, and by extension the EU’s, is accelerating towards its conclusion with the Obama Restoration and Biden as PFOTUS, where do things sit?

In my opinion, just as badly for Europe as they were before this happened. Because as I said, beginning last year Putin and Russia have given Merkel nothing.

She’s tried to play her game of making big promises to Putin and then never following through and failed. It’s forced Germany to back down on more sanctions over Navalny and Russia’s involvement in keeping Lukashenko in power in Minsk.

Moreover, Russia’s return to the Council of Europe saw them remove all further action there over Russia’s reunification with Crimea from the agenda.

The EU having to accept Russia’s Sputnik V COVID-19 vaccine is yet another example of who wears the pants (not pants suit) in Russian/German relations.

Merkel needs Nordstream 2 now more than ever. She needs Russia now more than ever. The problem for her and Germany is that Russia is now on a path to a more dynamic and interesting economic arena than Germany is.

She’s slowly losing the support of the German people, who come out in greater numbers each week against the lockdown policies, while in Russia even the U.S. and European intelligence and diplomatic corps can’t generate anything resembling a protest against Putin.

Merkel is destroying the strong social contract bond between the German people and the government while Putin has only enhanced it between Russians and the Russian state.

She’s ground Germany to a halt with draconian GDR-style lockdowns. Putin left Russia’s economy mostly open and is now coming out of the Coronapocalypse at a much quicker pace than expected despite increased sanctions.

The last round of economic statistics from Russia released this week for January are impressive considering these are year-over-year at pre-COVID levels when oil prices were above $65 per barrel.

1. Unemployment continuing to fall, now at just 5.8%.
2. Retail sales nearly flat year-over-year to pre-COVID levels
3. Real Wage Growth in January at 4.6%.
4. PMI indicating expansion, not recession.
5. CPI running hot at 5.2%

And as long as Putin continues to promote Russian sovereignty he will be forgiven his mistakes. And in the foreign policy arena, Putin’s Achilles’ heel with his people has been his willingness to compromise with Europe and the U.S. in the past.

Since that is no longer the case and he led the opposition to the Great Reset I only see his political positioning strengthen into the Duma elections later this year.

Merkel has the opposite problem, she’s in hiding now, but there is no credible opposition to her that isn’t just as much in the pay of Klaus Schwab as she is.

Her political capital can only go down.

Since AfD – Alternative for Germany — is in disarray and incapable of leading a political revolt at this point, this year’s elections in Germany look right now a walk for Merkel’s CDU to formally create an open alliance with the Greens like she’s had in the German Upper House, the Bundesrat, for years, but things can change a lot in eight months.

What’s clear to me at this point, however, is that while Merkel may have been handed Germany’s new found sovereignty from the U.S. to throw around at her European ‘partners,’ she has no power to influence how things play out in the future with either Russia or China.

And that was the point of giving her this power in the first place.

They will dictate terms to her and to whoever comes after her on a ‘take or leave’ basis.

* * *
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Von Greyerz: How Will It All End?

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BY TYLER DURDEN

MONDAY, FEB 22, 2021 - 5:00
Authored by Egon von Greyerz via GoldSwitzerland.com,

Akhlys, the Greek goddess of Misery and Poison, is exerting a major influence on the world currently. And sadly the dosage of misery and poison will increase in coming months and years.

What is now crystal clear is that this excess dose of fake assets and fake liabilities will totally poison the financial system and the world economy.

As Paracelsus, the renowned 16th century Swiss physician said; “all things are poison, it is the dosage that makes it either a poison or a remedy.”

When a world already in trouble was hit by a severe financial crisis in September 2019, the dose of debt was already excessive. But as the Fed and the ECB opened the money spigots fully, they filled the world with poisoned or fake money. The BY team (Biden & Yellen) will now be certain to finish this process with their profligate spending plans.

MAJOR CENTRAL BANKS BALANCE SHEETS UP 6X SINCE 2006
The financial system has been poisoned for decades by governments’ excess spending and central banks’ prodigal printing of toxic and worthless money.
And now, with Covid, they have the perfect excuse to senselessly create trillions of dollars, euros, yuan or yen. The world doesn’t realise that this money, fabricated by pressing a button, is no different from the Monopoly board game money.

Just look at the balance sheet of the four major central banks – the Fed, ECB, Bank of Japan and the People’s Bank of China.
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=UEuDevCT

As the graph above shows, these central banks’ balance sheets have exploded almost 6x since 2006. In 2008-9, their total balance sheet were $9 trillion and now they are $29t.

CALLING THE HOLDINGS OF CENTRAL BANKS “ASSETS” IS A TRAVESTY.
Business assets are defined as items of value. So how are these “assets of value” created in the financial system?

Firstly the central bank creates toxic money out of thin air. By definition, money that has been fabricated without real labour or production of goods or services must have ZERO value.

Secondly, the central bank purchases “poisoned” assets in the form of debt that cannot and will not ever be repaid. These debts are issued by bankrupt governments and other insolvent debtors who can only repay their debts by issuing more debt.

So this whole corrupt and circular system should be defined as “Poison in – Poison out”.

The poison in is the fabricated fake money which has ZERO value. The poison out are the assets/debts bought with fake money which will all expire worthless.

And it is on this construction of toxic assets and liabilities that the whole financial system rests.
It is totally absurd to swallow that such a system can survive.
Hmmm…….

THE 2nd WAVE OF GREAT FINANCIAL CRISIS IS HERE
We were told that the crisis was over in 2009 and still the balance sheets of these central banks are up more than 3x. Hmmm……
The reason is simple, the Great Financial Crisis in 2006-9 was never solved, the can was just kicked down the road. But this time the can is too big.
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=xJq5PUs3


A WORLD DROWNING IN DEBT
And now 12 years later the whole world is drowning in $280 trillion debt – up 3x this century.
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=08Jo_SDT

The illustration above shows global debt reaching $360 trillion by 2030.

This assumes a simple extrapolation of current trends. In my view, there is a major risk of a hyperinflationary debt explosion in the next 4-9 years to $2 quadrillion or more. Probably it will take a lot less than 9 years.

DERIVATIVES – WEAPONS OF MASS DESTRUCTION
So how is this massive increase of debt to $2 quadrillion possible? There are at least $1.5 quadrillion of derivatives outstanding today. Derivatives are an incredible gravy train for banks in rising and liquid markets.

But with crashing stock markets and massive pressures in debt markets, there will be little liquidity in derivatives. This will likely lead to central banks printing enough money to buy most of the derivatives of ailing banks. This is what would create $2 quadrillion or more in global debt.
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=OcU_3T8L

THE MORE DEBT THE MORE ASSET MARKETS INFLATE
So what is happening to all this debt based money created. Well almost none of it reaches the real economy but instead it stays with the banks and is used by private and institutional investors to buy assets like stocks, bonds and property.

So while there is very little that reaches the ordinary man, the wealthy can take advantage of this massive liquidity to further expand the already epic bubble in asset markets.
The graphs below, showing total US M1 money supply and its velocity, illustrate this perfectly.
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=Fnv1cK6G

As Money Supply surges 5x from $1.3t in 2005 to $6.8t in 2021, the Velocity of Money crashes from 10 to 3. This means that the money printed does not reach the real economy but instead is just used to inflate asset prices.

Since all this money is created out of thin air and is just toxic or worthless, it would have little effect in simulating the real economy.

But investors are under the illusion that this toxic liquidity is actually creating wealth!

No wonder they are under that illusion since global equities have increased in value by $24 trillion since March 2020. That is a staggering 30% of global GDP.

Why should anyone work when by printing money and investing, the world can create 30% of GDP in just 10 months by buying stocks?

Sadly, investors neither see nor worry about that stocks are going up just because they are going up rather than due to rising profits or improving fundamentals.


GLOBAL ASSET CRASH AHEAD
What they don’t realise it that a global crash is right ahead – a crash that will destroy 90-95% of their illusory wealth.

Since the latest phase of the stock market rise started in the early 1980s, investors have forgotten to take profits. Even though there have been some nasty corrections, investors have been saved by central banks every time. Therefore why should they take profit?

“The market always goes up! So it is always right to be in the market.”

They have forgotten that in 1929-32, the Dow fell by 90% and that it took 25 years to recover. And this time the bubbles of debt and assets are far greater.

So now we have toxic valuations created by toxic money.

BOSSES EARNING 357X MORE THAN WORKERS
The rich are also getting substantially richer which is what creates revolutions. Just take the average chief executive of an S&P 500 company.
He now earns 357x as much as the average worker. Back in the 1960s he earned 20x! And in the mid 1980s it was still only 28x.

The graph below illustrates this phenomenon very clearly.
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=3Vknzm67

At the beginning of the 1900s, the top 10% received between 40% and 50% of total income. Then came the Wall Street crash and the 1930s depression, followed by WWII.

The consequences were that between 1940 and 1985, the top 10% went from as high as 50% of total income down to just over 30%.

GREENSPAN – MANNA FROM HEAVEN
But then things improved for the top earners again in the mid 1980s. First stock markets started booming. Then, once Greenspan became chairman of the Fed, that was like manna from heaven for investors.

The programme of producing manna money has just got better with every new Fed chief. Tens of trillions of dollars of debt has been created to boost the stock market. But once the 2000s got going, manufacturing money wasn’t sufficient. No, the money had to be free also or even better, you got paid for borrowing money. Well at least banks and central banks do.

HOW WILL IT ALL END?
Debt bubbles can only end in one way. With imploding debt and crashing asset markets.

But before that there will be a final overdose of poison in the form of massive money printing. This in a last and desperate attempt to solve a debt problem with more debt.

Sadly central bankers never studied Paracelsus theorem that all things are poison if the dose is too high.

They will soon find out……..

As the last overdose of debt hits the world, most currencies will finish their journey to ZERO, leading to hyperinflation.

HYPERINFLATION IS A CURRENCY DRIVEN EVENT
Many economists and commentators are certain that the world will not see inflation or higher interest rates for years. They can’t see a demand led inflation.
Let’s go back to history again. History helps us to predict the future but very few so called experts understand the significance of history.

Virtually every major debt bubble in history has ended in a currency collapse and hyperinflation. Few understand that hyperinflation is a currency driven event and not demand driven.

With most currencies down 97-99% since Nixon’s fatal decision in 1971 to close the gold window, the world will soon experience the final move to ZERO.
But remember that this move involves a 100% fall of the currencies from today. This is what will lead to hyperinflation. Just study history.

Hyperinflation normally only lasts a short period like 1-3 years. Thereafter the world will experience a deflationary implosion of debt and asset prices. The banking system is unlikely to survive such a collapse.

HISTORY TELLS US TO TAKE PROTECTION BEFORE THE EVENT
This scenario is obviously based on assumptions and probabilities. It is also based on history.

No forecast can ever be certain until afterwards. But at that time it will be too late to protect yourself.

What we know today is that risk is at a maximum. We also know that to protect against this uber-risk is not just wise but absolutely critical.

History tells us that in every major economic crisis, physical gold and silver has been the ultimate protection.


DON’T EXPECT IT TO BE DIFFERENT THIS TIME!

That's all my Forex trading for today. I have now traded this account for two weeks. I have earned just over $3000.00 Canadian dollars or 6% Return on Investment. My target for the month will be 25%. I will probably do more than just the one Forex trade per day.

Please post any questions on my thread. I soon will be posting the URL for my new corporte website.


Aviel Forex Learning Edge Corporation
514 247 0775

Good morning Forex trader's

Here is the daily 5 minute chart of US30 (Dow 30) and as on most days at around the 2:00 AM Eastern Standard Time which is 7:00 AM in Frankfurt , Germany when European markets get open with the CAC and the DAX and the FTSE all open and trading at 3:00 AM.

https://finviz.com/futures_charts.ashx?t=YM&p=m5

Right now the German DAX is at 13,751.03 and the UK FTSE is at 6,75.40 with the French (France CAC is at 5,745.96 at this time which is now 6:13 AM.

Color Charts of the Futures markets from WWW.FINVIZ.COM

https://finviz.com/futures.ashx

News from around the world as it happens.

https://finviz.com/news.ashx

We have Risk Off at the moment and the US30 (Dow 30) is now down 70.69 in the Futures markets.

Have a positive trading day.


Bruce

Good Morning Mr Bruce,

I've made TWO SHORT trades of US30 after 8.30am today and made $1647.00 in total. You don't have my USER ID & PW. This is different account.

https://www.zerohedge.com/crypto/can...ops+to+zero%29

Can Governments Stop Bitcoin?
https://zh-prod-1cc738ca-7d3b-4a72-b.../picture-5.jpg

BY TYLER DURDEN

TUESDAY, FEB 23, 2021 - 18:05

Authored by Alex Gladstein via Quillette.com,

Since its creation more than 12 years ago, Bitcoin is undefeated. Its price has leaped from $5 to $50 to $500 to $5,000 to now past $50,000. The number of global users has eclipsed 100 million. The system’s network security, number of developers, and new applications are at all-time highs. Dozens of companies including Tesla and Square have started to add Bitcoin to their corporate treasuries.

https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=lQwhFv85

This worldwide success doesn’t mean that people haven’t tried to stop Bitcoin. The digital money project has in fact survived a variety of attacks which in some cases threatened its existence.

There are two main vectors: network attacks on the software and hardware infrastructure, and legal attacks on Bitcoin users.
Before we explore them and consider why they failed, let’s start at the beginning.

In January 2009, a mysterious coder going by the name of Satoshi Nakamoto launched Bitcoin, an open-source financial network with big ambitions: to replace central banking with a decentralized, peer-to-peer system with no rulers. It would use a programmable, highly-fungible token that could be spent like electronic cash or saved like digital gold. It would be distributed around the world through a set-in-stone money printing schedule to a subset of users who would compete to secure the network with energy and in return, get freshly minted Bitcoin.

Initially, most were understandably skeptical, and very few paid attention. There had been attempts at creating “ecash” before, and all had failed. No one had been able to figure out how to create a decentralized, incorruptible mint, or how to grow a system that couldn’t be stopped by governments.

But a small community grew around Bitcoin, which promised just that. Led by Satoshi and Hal Finney, this group of iconoclasts discussed, tinkered with, and improved the software in its first year, using their computers to mine1 50 worthless Bitcoin every 10 minutes. Eventually, someone decided these virtual tokens were worth enough to accept in return for a real-world good. On May 22nd, 2010, a developer named Laszlo Hanyecz paid 10,000 Bitcoin for two Papa John’s pizzas, at an exchange rate of .1 cents per Bitcoin. No one could have predicted that Laszlo’s pizza order would one day be so costly: today, this order is worth more than $500 million.

Since the early days of PC mining and the Silk Road, Bitcoin has become a global phenomenon. No one knows who Satoshi is, but if their creation was a company, it would be one of the world’s top 10 most valuable. Its fan base has grown from a few pseudonyms on Cypherpunk messageboards to including the likes of Twitter CEO Jack Dorsey, Tesla CEO Elon Musk, Harvard professor Niall Ferguson, Fidelity CEO Abby Johnson, actress Lindsay Lohan, singer Soulja Boy, skateboarder Tony Hawk, and investor Paul Tudor Jones. It has its own unicode character, the ₿. An industry conference held this month focusing on how to add Bitcoin to corporate treasuries drew more than 6,000 companies. MIT boasts a research center contributing to long-term Bitcoin security.

Bitcoin markets have popped up in virtually every country and major urban area on Earth, with local traders eager to buy Bitcoin in exchange for local currency everywhere from Caracas to Manila to Moscow. Millions of people in Nigeria, Argentina, Iran, Cuba, and beyond are now using Bitcoin to escape their local currency system, and opt into something with a better track record as a store of value than the naira, bolivar, rial, or peso. They can control their Bitcoin with a private key (think: password) that they can store on a phone, USB stick, on paper, or even with memorized wordlists, and send the currency to family or friends anywhere on Earth in minutes, with no permission from any authority required.

The mainstream media typically portrays Bitcoin as a penny stock gone wild, or a new kind of digital tulip mania. But the reality is Bitcoin is a political project that threatens to fundamentally disrupt the Davos-led economic system, with everyone from Janet Yellen to Christine Lagarde expressing fear about its rise and demanding it be regulated.

Governments retain their power in part by issuing and controlling money. Bitcoin is a new model that mints and secures money without governments. So the big question is: Why haven’t governments or megacorps stopped it? And if they try to attack Bitcoin in the near future, what would that look like?
There is an enormous amount of speculation on the Internet about how Bitcoin might be attacked, but few stop to think about why it hasn’t already been destroyed. The answer is that there are political and economic incentives for more and more people to push the system forward and strengthen its security, and strong political, economic, and technical disincentives that discourage attacks.

Certainly, Bitcoin isn’t too small to draw the attention of governments. Previous attempts at parallel online digital currencies, like e-Gold and Liberty Reserve, were shut down by the US government before even making it to $10 billion in market capitalization. Bitcoin now has a market cap north of $1 trillion. Every day Bitcoin survives, it becomes stronger, and for many attack vectors, the windows are rapidly closing.

One reason that Bitcoin is so tenacious is that it is a globally-distributed phenomenon. The vast majority of mining takes place outside of the US in China and central Asia. But the vast majority of Bitcoin holders and buyers appear to be US and EU entities, and the software’s core developers and node-runners (who host Bitcoin’s servers) are scattered throughout the world. The most important person in Bitcoin—its inventor—is no longer relevant, and could even be dead.

Coding, mining, infrastructure, and markets are all independent, happening in competing jurisdictions and geopolitical rivals, often done by anonymous or pseudonymous actors, all with different philosophies and goals, but with one uniting motivation: to keep Bitcoin going.

Unlike every other cryptocurrency, there is no central point of failure. Bitcoin has no Vitalik Buterin, no Ethereum Foundation, no Deltec bank like Tether, no fancy offices in San Francisco, no team of lawyers, no governance token, no VC-backing, no pre-mine, no small council, and no whales able to manipulate the system. This decentralized architecture has already insulated Bitcoin from attacks at the highest levels. No matter how much Bitcoin you own, you can’t change the rules, print more, censor, steal or prevent others from using the network.

Arguably the most powerful financial force in the world—the US government led by then-Treasury secretary Steve Mnuchin—just launched an attack on Bitcoin in December 2020. It was not a particularly strong one, but still, an attack nonetheless, which would have forced US exchanges to gather more information about individuals withdrawing their Bitcoin to wallets they control than even mainstream banks collect, handing the surveillance state much more intricate knowledge of Bitcoin’s flow of funds. But the crackdown failed, stymied by a broad coalition of opposition, and Mnuchin is now gone.

The new US regulatory regime might be less aggressive. In fact, incoming SEC chairman Gary Gensler once taught a class about Bitcoin. Cynthia Lummis, a freshly elected Senator from Wyoming and passionate Bitcoin supporter, has been named to the Senate Banking Committee. That means one of the most powerful bodies in the US financial system now sports a member who recently tweeted about Bitcoin: “I came for the store of value. I stayed for the censorship-resistance.” Lummis joins Warren Davidson and others in Congress who have vowed to defend Bitcoin.

The biggest attack in Bitcoin’s history came in 2017 at the software level. That spring a handful of the most important industry actors gathered and signed what is called the New York Agreement. The authors boasted more than 83% of the global mining hashpower, more than 50 total companies, more than 20 million wallets, and a huge share of the payment infrastructure. It was an alliance between Chinese miners, Silicon Valley, and Wall Street, and their goal was to change Bitcoin to allow it to process more transactions per second, at the cost of sacrificing decentralization and the ability of users to audit the monetary supply from home.

Despite the odds, a handful of grassroots activists ended up building a movement that stunningly defeated this New York alliance. By November 2017, the corporate “SegWit2X” plan was dead, and Bitcoin remained decentralized. The lesson from these “scaling wars” is that neither miners nor corporations control Bitcoin. Yes, miners process transactions, and developers propose upgrades to the software, but tens of thousands of users running nodes actually decide what transactions are valid and what software version is adopted.

Even if a government took control of a majority of the Bitcoin hashrate, this doesn’t enable them to change the Bitcoin consensus rules or print more Bitcoin or steal anyone’s holdings. The worst they could do is use their power to mine new versions of Bitcoin (which, in the case of BCH or BSV, has failed spectacularly), or burn billions of dollars to temporarily damage the network in what’s called a “51% attack.” In such an attack, a majority of miners could team up and use their superior hashrate to momentarily overwhelm the network. The price of the hardware required would exceed $5 billion.

Even if a government did want to risk that much on such an exotic assault, it is unlikely that they would divert the precious fabrication capacity of the world’s few semiconductor manufacturers to this very speculative purpose. For China or the US, disrupting existing semiconductor orders during a global shortage could put national security at stake. An alternative would be to seize a majority of the world’s mining equipment in a military operation. But the logistics of trying to locate and violently capture hundreds of thousands of 5-pound machines owned by often pseudonymous actors across dozens of jurisdictions would be hugely prohibitive.

Speculation about other technical attacks on Bitcoin abounds: mining pools censoring transactions (miners make more money from not censoring, can quickly switch to non-censoring pools, and may adopt software that makes censorship impossible), a global internet shutdown (could be disruptive, but not fatal), mining hardware backdoors (this actually happened, but was not exploited, and the threat is now fading), quantum computers breaking Bitcoin’s cryptography (not to be taken seriously according to experts), and even bad actors making harmful updates to the codebase (this wouldn’t stand a chance against hundreds of watchful developers).

The fact is, despite constant fear-mongering about how Bitcoin could fail, all users have always been able to transact. There have been no significant acts of censorship. Attempts to disrupt the protocol or the network infrastructure would be incredibly difficult and costly to attempt, and have no guarantee of success. As we saw in 2017, even if powers are able to amass a super-majority of the hashrate, they could be defeated by the network’s decentralized architecture. Far easier and far more likely are attacks on users themselves.

There are several nightmare scenarios that Bitcoiners fear that don’t involve science fiction around governments teaming up in a Mission Impossible-style mission to seize billions of dollars of energy and mining equipment.

One such fear is four numbers: 6102.

In 1933, the FDR administration passed Executive Order 6102, which banned citizens from holding gold and forced them to turn in any gold to the authorities. The US government, or any other government, could try doing the same, giving citizens a window to declare and sell their Bitcoin to the government, or else face jail time.

The Bitcoin community is already preparing for such an attack. One reason 6102 was so successful is that the government could just go to banks who held gold on behalf of citizens, and seize at point of custody. So every January 3rd, users celebrate “proof of keys” day, where it is customary to withdraw any Bitcoin they own on exchanges or in the custody of third parties to wallets that the end users control. “Not your keys, not your coins,” first popularized by Bitcoin educator Andreas Antonopoulos, is a community mantra. With more than 10 percent of the American population using Bitcoin, if enough people self-custody, then a 6102 attack would be of limited effect. Given that the keys to your Bitcoin account are typically in the form of 24 seed words that can be written down, hidden, encoded, or memorized, a military home-by-home raid couldn’t work very well and would constitute a mass set of human rights violations.

Another regulatory threat would be a new unrealized gains tax on Bitcoin, which would be devastating to long-term savers, or new strict “know your customer” rules making it a crime to buy Bitcoin through an unauthorized issuer. But such rules have many obstacles: first and fourth amendment protections; numerous senators and congressmen pushing for a more Bitcoin-inclusive policy; and a large and growing cryptocurrency industry that would vigorously lobby against such rules.

Governments could try to marginalize Bitcoin by introducing a competitor: a Central Bank Digital Currency. Most central banks worldwide are experimenting with the idea of replacing banknotes with digital tokens that citizens could hold in mobile wallets. One argument that promoters of these systems make is that they could help check the thirst for Bitcoin. Ultimately, however, CBDCs like China’s DCEP can’t compete because their floating global price will be tied to the existing fiat currency, which will inevitably fall in relative purchasing power. Meanwhile, Bitcoin’s purchasing power continues to rise over time, and it offers a level of transactional freedom and privacy from the state that no CBDC could ever boast.

Another attack vector could be a ban on the act of Bitcoin mining itself inside democracies. Today, many mainstream media articles describe Bitcoin as an environmental disaster. In reality, it relies heavily on renewable energy (estimates range from 39 percent to 74 percent), consumes a lot of stranded or excess energy, and could very well have a mostly green future. But given the poorly-informed narratives around the subject, one could imagine a world in which the Biden Administration restricts Bitcoin mining as part of a Green New Deal.

The “two-Bitcoin” problem is perhaps the biggest existing threat to Bitcoin users today. If the top 25 global exchanges in the US, EU, and East Asia agreed to end user withdrawals, then that would effectively bifurcate the system. Bitcoin inside the bubble would be “whitelisted” and Bitcoin outside could be “blacklisted” — meaning, if a merchant accepts Bitcoin from you that is not on a certain list, they’d be running a risk. No matter how private you are with your Bitcoin, it wouldn’t matter. You’d need to find people willing to accept your Bitcoin with no trail. Such laws would force users into peer-to-peer markets, where buyers don’t care about coin history.

Even still, there are lots of barriers to this attack. Exchanges would lose millions of customers and billions of dollars of business. The “DeFi” ecosystem would potentially collapse, given it relies on users being able to purchase ETH with dollars on big exchanges and then withdraw to trading platforms like Uniswap. Companies in this space would vigorously resist any change that would prevent citizens from withdrawing Bitcoin or any cryptocurrency to self-controlled wallets.

As these examples show, there are plenty of kinds of regulatory attacks that should concern Bitcoin users, and they are much more likely than cryptographic or hashrate attacks on the network, but the reality is that many legal attacks have already happened, and they have been ineffective.

In 2017, the Chinese Communist Party restricted the ability of its citizens to exchange RMB for Bitcoin. Shortly thereafter, the Indian government did the same, followed by the Pakistani government and several others. In other words, the two largest governments in the world tried to cut off Bitcoin access to their citizenry at the most obvious point: the on and off ramps where citizens exchange local currency for Bitcoin through exchanges.

Last year, the Indian Supreme Court reversed this rule, and Bitcoin is no longer restricted. The government is again seeking to pass a bill prohibiting Bitcoin and all non-state cryptocurrencies, while also launching a digital currency to be issued by the Reserve Bank of India, but in the meantime, local usage grows. In China after the 2017 restrictions, some companies moved to other countries in east Asia, but continued to do business with Chinese customers. Two of the biggest exchanges for the Chinese market, Huobi and OKCoin, still service millions of Chinese. In Pakistan, Bitcoin is de facto banned, but adoption is exploding.

In Nigeria, the government is currently promising to freeze the bank accounts of any citizens who are identified as buying or selling Bitcoin. This regime has tried similar tactics before, but all have failed. What these actions actually accomplish is to drive citizens into harder to control peer-to-peer markets, and into the arms of risk-tolerant entrepreneurs committed to helping their fellow citizens access a better financial system.

In the United States, the recent last-minute attack by Secretary Mnuchin aside, American financial activity is increasingly monitored under laws like the Bank Secrecy Act. In line with this trend, cryptocurrency exchanges have introduced more stringent identification requirements for their customers, as well as increasingly small withdrawal limits. So far though, Americans are still easily able to buy Bitcoin and withdraw it to wallets they control, and this will be defended by new powerful allies.

Senator Lummis and Congressmen Davidson, McHenry, Emmer, and Soto, as well as state leaders like Miami mayor Francis Suarez, have all come out in support of Bitcoin, whether by hosting the whitepaper on their websites, promising to fend off overly-restrictive regulation, or pledging to make their jurisdictions hotspots for Bitcoin entrepreneurial activity and innovation. Mayor Suarez, for example, is pushing for employees of the city of Miami to earn a percentage of their salary in Bitcoin, for residents to be able to pay taxes in Bitcoin, and to include Bitcoin as part of the city’s investment portfolio.

Some argue that corporate America will try to attack Bitcoin. But so far, it seems that big companies are instead trying to join the party. In the past few months, Tesla, Microstrategy, Square, Grayscale, and others are buying up billions of dollars more Bitcoin than the amount being produced through mining. And, as savvy investors will realize, ultimately you can’t separate Bitcoin from its cypherpunk nature. Bitcoin is only valuable as an asset because of its decentralization, since no one can arbitrarily change its rules or decide to print more. Driven by self-interest, Wall Street may ironically end up being one of the biggest cheerleaders of this new technology that Washington can’t control.

So far, it seems that when governments try to ban or restrict Bitcoin, it ends up merely accelerating the adoption of the currency inside their countries. Governments that have failed miserably with their Wars on Drugs may find stopping people from holding something that’s invisible, borderless, and teleporting much more difficult. In democracies, governments will face major obstacles from the tech and financial industries, but also from the fact that restrictions on Bitcoin ownership can clash with free speech, privacy, and private property protections. Confiscation will require brutality, and it’s not clear that all governments have the stomach or ability.

In the end, Bitcoin’s biggest defense is human nature itself. We are greedy and self-interested, and this applies to our governments. Already, some authorities are starting to mine or are encouraging mining. This is happening everywhere from Beijing to Kentucky to Siberia to Ukraine. As the price rises, more and more are buying into Bitcoin’s value as a long-term store-of-value and inflation hedge. Just as some governments with weak currencies have been forced to dollarize, others in the future could be forced to accumulate Bitcoin. It’s a rivalrous planet.

Why would a government attack Bitcoin if it could gain more from using its energy monopoly or ability to print fiat to buy some? The rich and powerful will always design systems that benefit them before everyone else. The genius of Bitcoin is to take advantage of that very base reality and force them to get involved and help run the system, instead of attacking it.

In a world with friendly US regulators, rogue regimes mining Bitcoin to print dollars, and citizens of the world demanding an asset that can’t be inflated away, the incentive to attack Bitcoin is dwindling.

In the end, the only way to kill Bitcoin may be to make it so that people don’t need it anymore. If no one wants a devaluation-proof, censorship-resistant, permissionless, borderless, non-discriminatory, teleporting financial asset, then no one will feed it energy, and it will die. Perhaps humanity can come up with another technology that addresses these needs.

But until then, Bitcoin will thrive.

* * *
Alex Gladstein is chief strategy officer at the Human Rights Foundation, a non-profit that supports civil liberties in authoritarian societies. You can follow him on Twitter @gladstein

Two more successful trades, @1.00am EST, US30, SHORTED both and in 15 minutes, I closed both with$1000+ profit

Good morning

You are not trading real funds are you ? You do not know how to post a screenshot of your Forex trades ? Do you think it is right to take other people's work and not pay for it ?

I soon will not be posting much here anymore as will be moving soon to my company website to give my Forex courses and charge users $50.00 Us dollars monthly for 24/7 access.


Aviel Forex Learning Edge Corporation.

Good Morning,

Let me double my account to $100,000, then I would send you the statement & user ID & PW.
I need to prove that I am your smart/brilliant student.

I shorted US30 @8.45, and [email protected] with$700+ profit. I don't know how to upload screen shot.

https://www.jsmineset.com/

Posted February 24th, 2021 at 9:10 AM (CST) by Bill Holter & filed under Jim's Mailbox.

Our friend Keith from the North checks in to remind us we may have one doozy of a delivery month at COMEX!

Bill

Bill,
Comex…Friday being the First Notice Day for the March Precious Metal Deliveries. We also have 59,937 contracts (controlling 299,685,000-ounces) in March Silver, still in trade…Gold follows Silver, for some reason. If Comex is Bust by the standing Ag Contracts, all Hell will beset Us.
Keith

https://www.goldmoney.com/research/g...-money-is-gold

This article explains why the successor money to failing fiat is gold, not cryptocurrencies. Cryptos can only act as stores of value so long as fiat exists. I describe how a world transacting with monetary gold and properly constituted gold substitutes works. It explains how and why unbacked bank credit expansion, which in natural Roman law was ruled to be fraudulent 1,800 years ago, can and should be eliminated in a post-fiat world, thereby ending destructive credit cycles.

Gold exchange standards, which are comprised of gold-backed money administered by the state, worked extremely well when properly implemented, and it is the siren songs of inflationism that are at the root of the current crisis. If the transition from worthless fiat back to gold standards is handled properly, an initial recovery to fully functioning economies need not take more than a year or so.

The pressure on future governments to reject inflationism in favour of free markets and sound money should not be underestimated. It is not rocket science. All we need are politicians in whose interests it is to see the light and have the determination to take their electorates with them. It will require them to hand back to individuals the responsibility for their own actions, enabling the requisite cuts in government responsibilities and expenditures to be made.

That child of fiat money, the welfare state and all the government actions to protect it will have to end, with the exception of the absolute basics.

The politicians to facilitate these changes do exist, though their voices are not heard. But the moment fiat collapses, we have good reason to believe they will re-emerge from under the misguided consensus they had been elected to deliver. It will be in their clear interest to do so, and monetary collapse giving birth to civil disruption can be avoided.


Introduction

While there is a growing consensus that the days of fiat currencies are finally drawing to a close, the debate about their successor is misinformed due to a lack of understanding about the qualities required of money. This growing consensus is still a minority view, triggered by cryptocurrencies and bitcoin in particular, with enthusiasts claiming bitcoin to be the money of tomorrow.

To be long-lasting, stable and practical, the choice of money should be down to its users. But governments have imposed state money on their populations for over a century now, half of which time they pretended their currencies were gold substitutes. That was until President Nixon ended the fiction by suspending the Bretton Woods agreement, and the unbacked dollar fully replaced the dollar notionally backed by gold as the international standard.

Bitcoin hodlers now like to claim that people will choose bitcoin to replace fiat, ignoring the impossibility of a completely inflexible settlement medium acting as money.

In recent months bitcoin and other distributed ledger cryptocurrencies have acted as effective stores — even enhancers — of wealth at a time of developing hyperinflation of fiat money quantities. Assuming governments do not act to squash this upstart rival to their own currencies, bitcoin’s price could continue to rise. But make no mistake, the bullish argument is no more than one of a comparison between a restricted and capped issue of bitcoin against an ever-increasing issue of fiat. As long as fiat exists, so will the differential between rates of issue.

But a store of wealth is not the same as a medium of exchange. Bitcoin’s success as a store of wealth discourages its circulation as money. In a world of fiat, who in their right mind would want to use bitcoin to acquire goods and services, when on a mathematical projection its value measured in fiat would be greater tomorrow? And following the demise of fiat, the argument against the circulation of bitcoin as the world’s medium of exchange would then apply directly to its exchange value for goods and services. Any propensity for economies to grow would then be hampered by rapidly falling prices. Furthermore, its circulation as a medium of credit, vital for entrepreneurial innovation, would prove to be impossible.

These are the practical reasons why cryptocurrencies, backed by nothing more than their strictly limited issuance, cannot act as money. To this we must add a further impediment. Central banks do not possess bitcoin, but they do possess gold. Their last resort is to replace their fiat money not with a bitcoin standard but with their gold reserves. Only then can their governments pay their essential bills in a post-fiat world.

It is difficult to justify the existence of cryptocurrencies following the demise of fiat, except, perhaps, in the form of central bank digital currencies fully exchangeable into gold coin. In monetary terms, that would be little different from converting existing fiat into gold substitutes. But distribution of money in this form becomes radically different, removing commercial banks from being intermediaries between the central bank and the public.

Necessary changes in the role of commercial banks are addressed later in this article. Meanwhile, of one thing we can be certain, and that is the state will do everything in its power to retain control over money. It knows of nothing else, and both politicians and economists take government control over money for granted, after decades of so-called progress following the abandonment of classical economic theory.

Having dismissed distributed ledger cryptocurrencies, and specifically bitcoin, from becoming the replacement for fiat currencies, we know that gold must return as the core of future money. Even if the immediate statist reaction to a fiat collapse is to clamp down on the freedoms inherent in society in a last-ditch attempt to retain control over prices, these restrictions will fail. But the collapse of fiat currencies will be so traumatic for nearly everyone, that attempts to return to unbacked fiat will obviously not be an option and can be ruled out. Bitcoin’s pretence to be a store of value ceases when a transition from fiat to gold-backed currencies emerges.

For everyone, it will be back to the classroom to learn the basics of money.


The basic function of money

Money’s basic function is to facilitate the exchange of goods and services, its role always being temporary. Both parties in a transaction must have faith that the money is readily accepted by everyone with whom they transact, and that means that all those counterparties must have faith that their extended counterparties will accept it as well. This has always been gold’s strength. It is a considerable disadvantage for fiat money, whose acceptance is confined by national boundaries.

We exchange goods and services because it is infinitely more efficient to buy from others that which we cannot easily provide for ourselves. It is the basics behind the division of labour, which extends beyond national boundaries and upon which international trade is based. We specialise in our own production, maximising the quality and volume of our output and selling it for money so we can buy those other things we do not provide for ourselves. It means we must keep a float of money, or at least retain a facility to access it at short notice, in order to satisfy our daily needs and wants. And who sets that amount? Well, we each do as transacting individuals.

When we have a temporary surplus of money, such as from the sale of an asset, we reinvest or spend it. We might buy another asset or lend it to someone else (usually through an intermediary) for interest. But other things being equal, we always return our balances to a customary level of money liquidity, informed by our preceding habits.

The general level of prices is set by the purchasing power of the money in which it is measured. The two most important variables are changes in the quantity of money in circulation, and changes in the preferences that people have for holding money relative to goods. Of the two, changes in relative preferences can have the greater immediate impact on prices. If people decide as a whole to reduce their preference for money, then the general level of prices measured in their money will rise. Indeed, hyperinflation, conventionally described as a catastrophic rise in prices, is the visible symptom of a widespread flight out of money. In other words, it occurs when preferences evolve towards not holding any money at all and to get rid of it as quickly as possible.

Alternatively, if there is an increased preference for holding money, prices will fall. This additional preference for money can be expressed in two ways. It can be held as physical cash, but as we have seen above people tend to retain a level of spending liquidity, deploying any excess. More commonly, in this case people increase their savings. An increase in savings generates a shift in production methods to compensate for the lower prices of consumer goods which are the consequence of an increased preference for money. The greater supply of capital for investment tends to reduce interest rates and alters the businessman’s calculations in connection with his production. Lower interest rates will increase his deployment of monetary capital, investing in machinery and other cost-saving factors at the expense of other forms of capital deployment, such as labour costs.

These are the considerations behind the deployment of money in a community, whether it is fiat money or gold. It is the way economic actors make best use of the various forms of capital available. In free markets, which have proved to be the most consistently progressive of systems, production does not need the stimulus of additional money to that already in circulation. That is a Keynesian myth.

But the basic function of money is to act as the objective value in all transactions, for which it must be widely available both for day-to-day transactions and in capital markets. And it is the loss of the certainty of its objective value that is now leading to the end of fiat.

Trading with gold as money

As a circulating medium, gold and its properly established and exchangeable substitutes have proved to be the most effective lubricant for economic progress. It behoves us to take a moment to understand why this is the case, and why its circulation as money was central to the rapid and unprecedented improvement in living standards in the nineteenth century.

People in a community, town, city or even a nation set their own monetary requirements and the level of their trade. Let us assume that in doing so, the general price level differs from that of a neighbouring population. The conditions then exist for an arbitrage to take place, whereby gold payments will flow to the community with the lower prices when economic actors in the community with higher prices take advantage of them. Price differentials will tend to close to a level that reflects transaction and transport costs, so the purchasing power of gold in the two communities converge. This understanding in classical economics is the basis behind purchasing power parity theory.

Additionally, savings in gold will seek out the higher investment returns between the two centres. It is likely that the centre with lower costs will offer the greater attraction to capital flows, but this is less certain. However, the quantities of gold held as savings are always significantly less than the quantities spent in consumption in an economy that uses monetary capital efficiently. The arbitrage takes place both through the trade of goods and also by the deployment of capital exploiting interest rate and opportunity differentials, so that a convergence in both prices and interest rates is achieved. And what applies between two communities using gold as money applies between them all, so that across all unfettered, free market economies which maximise the benefits of the division of labour, the benefits of gold as money are enjoyed by all.

It is therefore easy to see that in a commercial world with effective transport and communications, whatever the local preferences for holding money relative to goods may be, multi-centre arbitrage tends to produce a common price level and a common level for interest rates. These adjustment factors are conducive to trade, not only between communities but between nations. And trade priced and settled in gold is, all else being equal, far more efficient than when individual fiat currencies are involved, because with gold as the common money national boundaries are no longer barriers to payments and trade is truly global.

Given gold’s ubiquity as money, the effect of localised changes in general preferences for holding gold relative to goods can be regarded as minimised. An additional but unrelated factor is the inflation of above-ground stocks of gold through mine supply, but this is broadly offset by population growth. And a substantial element of gold usage is non-monetary, mainly for jewellery, which becomes a flexible source of monetary gold if markets demand it.

Technological innovation and improvement in production methods as well as competition all tend in the long run to reduce the general price level of goods and services measured in gold. So, while there is little change in the general level of prices from the money side, there can be a significant reduction in prices over long periods of time from the goods side. The effect is to enhance the purchasing power of savings, leading to stable, low interest rates and improved living standards for all but the indolent.

In summary, when gold is the basis of all transaction settlements, economies become self-regulating and self-correcting. Successful economic activity is rewarded with profits and the opportunity to accumulate wealth. In every respect, government intervention and regulation results in the opposite.

The role of bank credit

In our sound money ideal, Schumpeter’s process of creative destruction ensures that all capital resources tend to be deployed efficiently. Failing projects are abandoned and capital reallocated to those that promise better returns. And those returns are only achieved by entrepreneurs who realise that to achieve profitable sales to consumers they must regard the customer as king. It may seem utopian, but it is not a fantasy and it contrasts with the current fiat dystopia.

A common source of economic disruption comes from the expansion of bank credit, which always results in a destabilising business cycle. Along with central bank fiat money, the ability of commercial banks to create credit money out of thin air has no role in a sound money environment. Under Roman, or “natural” law, the practice of taking in deposits and lending them out in the bank’s name conflated two separate functions. The Roman jurist, Ulpian (130—233AD), commented that “To loan is one thing and to deposit is another”, drawing the distinction between property upon which no interest is paid and property upon which it is paid.[i] Today, the distinction has shifted. Now it is made between custody under licenced contract, and with all other banking deposits, including cash balances upon which no interest is paid.

This elision of practice away from natural law has shifted further to the creation of loans by banks without having interest bearing deposits to back them. Instead, banks rely on the drawing down of loans to create those deposits, including additional cash balances which Ulpian deemed to be fraudulently deployed. This use of funds was enshrined in the English Bank Charter Act of 1844, upon which today’s global banking practices are based.

It is variations in this form of unbacked money which lies behind the business cycle. When business conditions appear to be improving, bankers naturally wish to increase their loan business. They do this not by deploying their own capital, but those of their depositors and would-be depositors, with any mismatches addressed through the interbank money markets. Hence the term, fractional reserve, being the ratio of balance sheet liabilities to the bank’s own capital.

Additional bank credit leads in time to increases in the general level of prices and higher interest rates. Higher interest rates undermine business calculations, which results in bankers’ concerns about the security of their lending. They then withdraw circulating capital upon which businesses rely for the circularity of their cash flow, leading to a business slump.

This description of the flow and ebb of bank credit is deliberately simplistic, but the disruption to the process of Schumpeter’s concept of creative destruction becomes obvious, with the credit crunch taking down viable businesses along with the zombies. Central banks then attempt to support the economy to offset the depressing effects of bank credit being withdrawn, calling a halt to the process of creative destruction. All they succeed in doing is to encourage even more bank credit creation in subsequent credit cycles, keeping the zombies afloat, and leading to a series of increasingly destabilising credit contractions as the quantity of debt increases over the cycles.

As an essential part of the return to sound money, waves of unbacked bank credit must be stopped. Already, this appears to be a long-term objective of central banks with their proposed digital currencies, which will bypass commercial banks entirely. But where this concept fails is CBDCs are seen by policy makers as an efficient and targeted means of more monetary expansion. Instead of this inflationary course, Ulpian’s words should guide us, splitting the deposit function from lending, turning banks into either pure custodians or arrangers of loans — and never should the twain be mixed.

An alternative and perhaps more practical alternative is to encourage banks to reform on these lines by removing the limitation on banks’ corporate liabilities. The tendency for bankers to get carried away with gearing up their balance sheets in the good times would be moderated by knowing that in doing so they personally risk losing everything. With unlimited liabilities, the oft-used shelter of limited liability incorporation is removed. And many banks can be expected to evolve back to partnerships, arranging loans and lending partnership capital in the manner of earlier investment banks, but without taking in deposits.

Pricing in gold

In order to understand how prices are set in markets where gold is money, we must assume there are strict rules put in place so that circulating currency is gold and not fiat masquerading as gold. First among these is that the central bank can only issue fully backed gold substitutes, and the mints provide gold and silver coins. For every additional unit of currency issued it must acquire gold to cover. Secondly, as described above the licence given to banks to create money in the form of credit out of thin air must be rescinded: it is this facility that has led to the boom-and-bust cycle, mistakenly attributed by Keynes to businesses and not to fluctuating credit.

The starting point for the relationship between gold reserves and circulating currency need not be total, the key being that further issuance of currency must be fully backed by additional gold reserves, while sufficient gold is held as a base to give the markets confidence that the ratio of currency units to gold weight will be easily maintained. What would otherwise be fiat becomes a gold substitute, and to seal the deal it must be convertible into gold coin at the public’s option.

When gold is money and if unbacked bank credit is eliminated, persistent trade imbalances cannot arise. This is because the credit is not available to finance cross-border purchases, other perhaps than self-extinguishing trade finance specifically for the purpose of facilitating a payment settlement chain. Imports, including oil and other commodities, have to be paid for on an aggregate basis by exports, except when there is an arbitrage between centres to adjust price levels, as described above. Trade imbalances cannot persist between nations because net importers will suffer a drain on their gold reserves, reducing domestic prices. Government spending is restricted to being financed by taxation and genuine savings, otherwise in time markets will force it to devalue its currency against gold. The inflationary financing of government deficits will no longer be an option.

Without the dominating presence of commercial banks in regulated and unregulated financial markets (which finance their trading positions by the expansion of bank credit), gold-backed money means commodity speculation becomes restricted to matching settlements between commodity producers and speculators. Therefore, hedging for agricultural products in futures markets still function, but the suppression of other commodity prices by expanding their paper representations to soak up speculator demand will cease.

Commodities priced in gold will therefore be more stable because destabilising trends set in motion by credit flows disappear. Instead, it is the shifting patterns of genuine demand and their effects on supply that set individual prices for raw materials and the various sources of energy required for an economy to function.

Government finances

When the principles of sound money are understood and accepted by a reformed government, it follows that they have no option but to discard inflationism and the policies of monetary cranks. There will be a better appreciation of the difference between productive private sector activity and the distorting effects of government intervention, which by their nature do not satisfy the needs and wants of consumers, but those of special interest groups. And we must hope that those who understood sound money and free markets before they were elected remember them despite denying them subsequently while in office.

We observe the return to free markets and sound money as the prospective future from our current standpoint. Today, we have only intrusive statist intervention with its propaganda and find it hard to imagine a state motivated to travel in the opposite direction from the increasing suppression of individual freedom. States will have to discard widespread welfarism, other than to a strictly limited extent, which is inconceivable to all who have grown up with it. But we are talking about a future where the principal means of financing welfarism — debilitating taxes on the fruits of production and destructive inflationism —have been proved to be disastrous and must be abandoned.

A new financial environment will exist with all the consequences and benefits that flow from it. Any relapse into the old ways of believing in mythical money trees will be punished. In the past, the reversion to sound money has always led to prosperity relative to the previous economic condition. We may not get there in one bound: the socialists will continue to push for their policies of failure. They will be a minority threatening to grow again once the monetary situation is stabilised. It will take leadership to ignore these siren voices and argue a convincing case for sound money. Many nations will doubtless fail in this quest; but the success of those states which return freedom to their peoples and oversee sound money is likely to place limitations on socialistic ideals elsewhere.

Historians have concluded that monetary and economic failure lead to revolutions and wars. That is a mistake. More correctly, it is the subsequent mishandling of the aftermath that leads to civil strife. Reading Hayek’s The Road to Serfdom, this becomes clear. It is the failure of the post-crisis government which leads to cries for strong leadership, likely to end with a dictatorship. But the principal difference between the rise of the Nazis, upon which Hayek’s analysis was based, and that of the collapse of a worldwide currency system is that everyone is in the same boat. There is no offset of stable foreign currencies to rely on for economic activities during and following the collapse, which has the effect of creating a division between big business and foreigners on the one hand and domestic citizens living entirely with a collapsing currency on the other. The division will hardly exist — billionaires and speculators will be levelled along with everyone else.

The political class worldwide will be forced to relearn its craft very quickly. Politicians will have the advantage of starting with a blank sheet of paper and the opportunity to carry their electorates with them. It will allow them to tackle today’s economic and monetary fallacies head on, particularly the belief in the existence of a magic money tree. With that taken away, it becomes clear to all that welfare obligations will have to be radically cut to an affordable level, returning responsibility for the consequences of their actions to individuals. The size of the state administration also must be cut by ruthlessly examining which governments functions are necessary and which are not. Crony capitalism ends, as does pandering to the unions. A state which reduces its financial burden on the economy to 20% or less will see a rapid recovery under sound money, with new and existing suppliers of products freely demanded by consumers driving it.

So, I opened this $50,000.00 Canadian dollars Demo Friedberg trading account on February 8, 2021.

I did my first Forex trade on February 11, 2021 and the profit was $127.06 Canadian dollars. I did the trade in the evening in order to show Julian how I trade Forex.

From February 12, 2021 until today, I did 14 more Forex trades and I had 2 losing trades.

One for $50.99 Canadian dollars and my largest loss was $1834.48 Canadian dollars on February 17, 2021.

I teach everyone to put their STOP LOSS in at $1000.00 Canadian dollars on any Forex trade that they do. Being the Master Forex Trader, I sometimes let my maximum loss be $2000.00 Canadian dollars only in exceptional situations that only I am able to decide on. Regardless, $2000.00 Canadain dollars is MY MAXIMUM because the Markets are always right.

So, I have done 15 Forex trades with 2 losses and 13 wins. I started with $50,000.00 Canadian dollars on February 8, 2021 and here we are 17 days later and the Net Profit is $3575.08 Canadian dollars or a return on investment of just over 7% in just the 17 days so my target for the whole month will be 20% which is my usual Return on Investment. That amounts to 240% on a annual basis.

My UNIQUE METHOD of Money Flow along with Superior Risk Management is what allows me to do this and also to teach this only to Forex trader's that can control their fear and their greed and hardest of all, their EGO.

They also must have the DISCIPLINE to invest the time and energy to be at the top of their skills 24/7 with 8 hours a day of rest.

Not everyone can do that however at age 77, it is easy for me. However if you achieve 5% monthly Return on Investment you will become very wealthy over the next three years.

Aviel Forex Learning Edge Corporation
President/CEO
Bruce Warren Margolese
514 247 0775
Email: [email protected]

Good morning

How to do a Screenshot of your Forex trading platform.

Step 1 - Put your cursor over the live Forex trading platform.

Step 2 - Hold down the Control Key then Touch Your F Key on top of your keyboard where it says "Print Screen"

Step 3 - Go to the Forex Factory thread and put your cursor on your new post and click Upload Screenshot and hold Control Key and touch letter V.

Step 5 - This will post your screenshot then enter save post and there you are with the screenshot on the thread.

Aviel Forex Learning Edge Corporation