My colleague at BOOM Finance and Economics posts a weekly editorial Hat Tip: Gerry: http://boomfinanceandeconomics.com/#/
BOOM seeks out the very best information from authoritative sources and strives for consistency in its quality and trustworthiness. In evidence of this, BOOM has developed a loyal readership which includes many of the world’s most senior economists, central bankers, fund managers and academics. We strive to always have good relationships with our readers. If you want a real edge in understanding the complex world of finance and economics, subscribe to BOOM as a Follower on LinkedIn or as a Subscriber (Free) to the BOOM Newspaper at http://boomfinanceandeconomics.com/#/
THIS WEEK’S EDITORIAL
CHINA KILLS CRYPTO CURRENCIES STONE DEAD: BOOM has often referred to Bitcoin and other so-called “Cryptocurrencies” as US Dollar Proxies, a novel methodology to help expand the supply of US Dollars outside the control of the United States. Such US Dollars are called Eurodollars (wherever they are) and are mostly created by tax haven banks when they create loans denominated in US Dollars.
The continual production of Eurodollars is essential as they are used in global trade and capital settlements and when such offshore loans are paid off, Eurodollar volumes decline. Thus, the need for continual replenishment.
It is now clear that China has finally run of all patience with the Crypto “currency” strategy and decided to kill the world of Crypto both inside its nation and (presumably) in all of the nations allied with it in opposition to the global dominance of the US Dollar. This is very big news and a major blow not just to the world of Crypto but also, in the very long run (over the rest of this century), to the US Dollar as the so-called Global Reserve Currency.
On Friday, a Legal Notice dated 15th September, was issued by the Central Bank of China, the Central Internet Credit Office of the Supreme People’s Court, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Supreme People’s Procuratorate General Administration of Market Supervision, the Banking Regulatory Commission and the Foreign Exchange Bureau.
The Notice was “on the further prevention and disposal of the risk of speculation in virtual currency transactions“. It stated that “the speculation of virtual currency transactions has risen, disrupting the economic and financial order, breeding illegal and criminal activities such as gambling, illegal fund-raising, fraud, money laundering and seriously endangering the safety of people’s property.”
Then it referred to the “Chinese civil bank law of the people’s republic of china, the commercial bank law of the people’s republic of china, the securities law of the people’s republic of china, the cyber security law of the people’s republic of china, the regulations of the people’s republic of china” and stated that “virtual currency does not have the same legal status as legal tender“, is “not legal, should not and can not be used as currency in the market circulation” and “virtual currency-related business activities are illegal financial activities“.
It went on to describe “the illegal issuance of token coupons, unauthorized public issuance of securities, illegal trading of futures business, illegal fund-raising and other illegal financial activities involving virtual currency-related business activities such as legal tender and virtual currency exchange business, virtual currency exchange business, trading virtual currency as a central counterparty, providing information intermediary and pricing services for virtual currency transactions, token issuance financing and virtual currency derivatives trading are strictly prohibited and firmly prohibited“.
Further — “it is also illegal for an overseas virtual currency exchange to provide services to residents in china through the internet. Financial institutions and non-bank payment institutions shall not provide services for virtual currency-related business activities. Financial institutions and non-bank payment institutions shall not provide account opening, fund transfer and settlement services for virtual currency-related business activities“.
It warned of a “crack down on illegal financial activities related to virtual currencies” and a “crack down on criminal activities involving virtual currency“.
Link: http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4348521/index.html
BOOM PREDICTION: Two months ago, on 25th July, BOOM’s Editorial referred to the recent near death experience of Bitcoin as the Bitcoin price had fallen below US $ 30,000. BOOM stated — “BOOM expects the $ 30,000 support level to be challenged again in the near future.”
It looks to BOOM like that challenge will occur very soon after such a decisive Legal Notice from China, effectively banning Crypto in the second largest national economy on Earth.
On 12th May the Total Market Capitalization of the Crypto Universe reached over US $ 2.5 Trillion. Four months later, it is now below US$ 1.855 Trillion and falling fast. Any Chinese holders will be bailing out desperately, seeking refuge, paradoxically, in US Dollars.
The US Dollar price of Bitcoin is now falling towards US $ 40,000 after its recent peak above $ 52,000 in early July. It looks like the game is over now for long term Chinese “Hodlers” and for any Bitcoin miners inside China.
The US$ 30,000 price for Bitcoin will probably be broken this week. Long term BOOM readers will not be surprised. Watch the fireworks with interest.
ORIGINS OF THE VIRUS: The origins of the SARS Cov2 virus that causes the disease we now know as Covid 19 have been deliberately obfuscated by the mainstream media, by politicians and by the WHO. They have desperately tried to promote the “Bat Soup in the Wuhan Wet Market” theory and the World Health Organization even sent in a team of “investigators” in January this year to find (what else?) that it was most likely of natural origin and was not man made. A Sub Goup Leader was the now infamous Peter Daszak.
Almost nobody believed the subsequent 193 page report released by the WHO in collaboration with the Chinese.
The well known scientific journal — The Lancet — has just released, on September 17th, an article titled — An appeal for an objective, open, and transparent scientific debate about the origin of SARS-CoV-2.
This report states — “there is no direct support for the natural origin of SARS-CoV-2, and a laboratory-related accident is plausible” and “There is so far no scientifically validated evidence that directly supports a natural origin“.
“Although considerable evidence supports the natural origins of other outbreaks (eg, Nipah, MERS, and the 2002–04 SARS outbreak) direct evidence for a natural origin for SARS-CoV-2 is missing. After 19 months of investigations, the proximal progenitor of SARS-CoV-2 is still lacking. Neither the host pathway from bats to humans, nor the geographical route from Yunnan (where the viruses most closely related to SARS-CoV-2 have been sampled) to Wuhan (where the pandemic emerged) have been identified. More than 80 000 samples collected from Chinese wildlife sites and animal farms all proved negative.”
STRICTLY VERBOTEN: So — we are still none the wiser as to where this Virus came from. Nobody wants to admit that it was released accidently from a laboratory somewhere, anywhere. And the possibility of deliberate, malevolent release is Strictly Verboten — not to be discussed. The latter possibility would be immediately condemned as a “conspiracy theory” — whatever that means — if anyone was brave enough to suggest it. Conspiracy facts are, of course, always discredited by the “fact checkers” who now appear in abundance on all Google searches about any controversial subject. And nobody in the mainstream wants to consider that the Virus was in existence before the Wuhan incident.
The Lancet Report states — “science embraces alternative hypotheses, contradictory arguments, verification, refutability, and controversy. Departing from this principle risks establishing dogmas, abandoning the essence of science and, even worse, paving the way for conspiracy theories“. But it does not mention the possibility of deliberate release.
BOOM suggests you look under the carpet. However, the Lancet article makes for interesting reading. Here is the Link.
https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(21)02019-5/fulltext
In economics, things work until they don’t. Until next week ………… Make your own conclusions, do your own research. BOOM does not offer investment advice.
SUBSCRIBE — FREE AT THE BOOM NEWSPAPER: http://boomfinanceandeconomics.com/#/
CLICK HERE FOR PODCASTS: OUR BRAVE NEW ECONOMIC WORLD
EMAIL: gerry {at} boomfinanceandeconomics.com
Disclaimer: All content is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the authors alone on the current and future status of the markets and various economies. It is subject to error and change without notice. The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.
Neither the information nor any opinion expressed constitutes a solicitation to buy or sell any securities nor investments. Do NOT ever purchase any security or investment without doing your own and sufficient research. Neither BOOM Finance and Economics.com nor any of its principals or contributors are under any obligation to update or keep current the information contained herein. The principals and related parties may at times have positions in the securities or investments referred to and may make purchases or sales of these securities and investments while this site is live. The analysis contained is based on both technical and fundamental research.
Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.
Disclosure: We accept no advertising or compensation, and have no material connection to any products, brands, topics or companies mentioned anywhere on the site.
Fair Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of economic and social significance. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.
Bitcoin is a financial instrument dependent on the US dollar. China feels strong enough to ban it but they don’t have the strength to kill it. If US and EU ban it they might kill it but they won’t until they have a working alternative to a Chinese CBDC. Bitcoin is their fallback if they can’t get CBDC running before China. They need a counterbalance to prevent China from replacing the US as monetary world hegemon.
As to the virus its origin is irrelevant. The virus is nothing. The virus policy is doing the real damage and that has clear origins.
Presidents of two fed banks announce their retirements: https://news.yahoo.com/second-fed-president-leaves-amid-204500090.html
At last, after years of public-private service, they can now spend more time with their families.