US
Government Begins BitCoin Crackdown
15
May, 2013
The feds
took action against Mt. Gox,
the world’s leading Bitcoin exchange. Many people use Dwolla, a
PayPal-like payment network, to send dollars to their Mt. Gox
accounts. They then use those dollars to buy Bitcoins. On Tuesday,
Dwolla announced that it had frozen Mt. Gox’s account at the
request of federal investigators.
It’s
the first federal action against the currency. CNet
has confirmed that
the asset seizure was initiated by Homeland Security Investigations
(which among other things is responsible for enforcing the laws
associated with money laundering and drug smuggling).
As
this crackdown begins, many argue that "you can’t put the
genie back into the bottle," as far as shutting down the
'network' of open source transactions; but as one Bitcoin enthusiast
added (sadly), "I hate to say it, but the Bitcoin community
needs to start lobbying, it needs to start educating policymakers,
lobbyists and influencers about the pros of Bitcoin and the
impossibility or the difficulty in getting rid of all the bad uses."
Considering
the great antipathy the central planners have toward such legacy
money as gold and silver, is it any surprise that they would move
aggressively and rapidly to halt the emergence of yet another
alternative to fiat, especially one which the ECB made it very clear
will not be tolerated in an insolvent world. Because
all is fair in preserving the FIATH...
...
Sen.
Chuck Schumer (D-N.Y.) described Bitcoin as an “online form of
money laundering” and
called for the authorities to shutter the Bitcoin-based drug market
Silk Road. Yet until recently, the feds have taken a relatively
hands-off posture.
...
That
hands-off stance may have started to change this week when the feds
took action against Mt. Gox, the world’s leading Bitcoin exchange.
Many people use Dwolla, a PayPal-like payment network, to send
dollars to their Mt. Gox accounts. They then use those dollars to buy
Bitcoins. On
Tuesday, Dwolla announced that it had frozen Mt. Gox’s account at
the request of federal investigators. It’s
the first federal action against the currency.
CNet
has confirmed
that the asset seizure was initiated by Homeland Security
Investigations,
a division of Immigration and Customs Enforcement. Among other
things, that agency has the power to enforce laws against money
laundering and drug smuggling.
...
Jerry
Brito, a scholar at the libertarian Mercatus Center at George Mason
University, urges federal regulators to tread lightly.“Bitcoin
has the potential to be a boon to the economy and a boon to
merchants,” he
argues.
...
Moreover,
he says, “You can’t put the genie back into the bottle.” In
his view, the federal government would have as much difficulty
shutting down the Bitcoin network as major content companies have had
shutting down peer-to-peer file sharing. A
major crackdown would merely drive the network underground, where
it would continue to be used for illicit transactions but would be
off-limit to ordinary consumers.
...
“I
hate to say it, but the Bitcoin community needs to start
lobbying,” he
says. “It needs to start educating policymakers, lobbyists and
influencers about the pros of Bitcoin and the impossibility or the
difficulty in getting rid of all the bad uses.”
What’s
next for the silver price?
14
May, 2013
Looking
back at the articles I've written about silver over the years, if
there's one theme that keeps recurring, it's the word: 'frustrating'.
Silver
can meander about and do nothing for years. Then, when your back's
turned, it’ll suddenly spike to unheard-of levels, making its
owners rich.
Then,
just as suddenly, it'll plummet, leaving all those who hold the metal
heading for the poor house.
Yet,
for all its volatility, for all the dark rumours of shortages and
manipulation, it trades in a remarkably symmetrical pattern.
For
a few brief hours in the spring 2011, it cost $50 an ounce. Now it’s
less than half that price, at $23.
So
is it time to be playing the silver game once again?
Silver
promises something for everyone
Silver's
unique selling point is that it's both a monetary and an industrial
metal.
If
you get terribly excited by the progress human beings are making in
the world of electronics, you might want to invest in silver. Its
high conductivity means it finds all sorts of increasing usage in
computers, mobile phones and screens.
Or
perhaps you're excited by the possibilities in the worlds of
nanotechnology, green technology, and even medicine. Well, silver is
finding more and more use there too – the path from solar
technology to water purification is lined with silver. Then there are
the ball bearings, the batteries, the soldering and brazing –
silver remains a key industrial metal.
Perhaps
you think that soaring stock markets are telling us that the world's
economic woes are now behind us. Greater prosperity leads to greater
buying of jewellery, which means greater buying of silver.
Or
perhaps you're more of the mind that systemic debasement of money is
going to lead to some kind of currency crisis. In that case you want
to be investing in tangible, monetary metals. Cue silver.
You
might look at the fact that annual global silver production currently
stands at around 24,000 tonnes, but demand stands some 33% higher, at
32,000 tonnes. (The shortfall is met by recycling, scrap sales,
stockpiles and central bank sales).
Then
you might look at the cumulative effect of this shortfall, as
depicted below by Nick Laird (www.sharelynx.com), and once again
you've got that itch to buy silver.
Global
silver production
Cumulative
production less cumulative demand = cumulative deficit
Or
you might look at the fact that silver derivative trading can mean
that paper representing as much as 100 times physical production can
be traded on the futures exchanges in any given period. It’s not
hard to conclude that some sort of short squeeze is inevitable, as it
would be impossible to deliver all the silver that is actually sold.
You
might even consider the fact that there is about 16 times as much
silver in the earth's crust as there is gold. So arguably the silver
price is should be 1/16th the gold price: that’s $90 an ounce on
current gold prices.
There's
something for everyone with silver. Quick. Buy, buy, buy.
LATEST
WATERFALL SENDS GOLD & SILVER TO $1300 & $22 HANDLES!
Silver
Doctors,
15
May, 2013
Once
again after trading in a tight consolidation range throughout the
Asian and London sessions, gold and silver have just been greeted
with a vertical Demon Drop Waterfall smash, sending gold back to a
$1300 handle, and silver to $22.41.
A
re-test of the correction lows of $22.005 and $1320 appears imminent.
The
cartel has gone back to work the very morning after Jim Sinclair’s
chartist Bo Polny proclaimed that the turn date had passed and that
the bottom was in for both gold and silver:
Today’s
latest waterfall strongly suggests that the correction in the metals
is not yet exhausted, and that particularly in silver (but likely
also in gold) a re-test of the low of $22.005 is likely.
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