ANOTHER “WE TOLD YOU SO?”: U. OF TEXAS STUDY SHOWS ...

So many people shared this article that I have to pass it along. Most regular readers here know that I am not a fan of crypto-currencies. Like all cyber-systems, I do not view them as secure, and have blogged about some stories of hacking of crypto-currencies. At a deeper level, and in spite of the hype to the contrary, I've also viewed them as the latest brain child of Mr. Globaloney and Mr. Central Bank as a step to their goal of a cashless global society, with, of course, them firmly in control of that medium. I even blogged about the Bank of England experimenting with the idea. And finally, I've pointed out that it's the perfect vehicle for the hidden system of finance to launder money and to manipulate the crypto-currency markets and make even more money in an example of finance crapitalism on steroids.

Recently the new Italian coalition government sent another monkey wrench into the globalist cogs by announcing that there should be no restrictions on the use of cash. (Perhaps Mr. Modi in India can take a cue, since India's experiment with semi-cashlessness has been ... well, not "good." But now there's another indicator that my concerns are not without merit:

Bitcoin is slipping after a study found signs its 2017 bull run was driven by market manipulation

There are certain paragraphs here that say it all, including, of course, the predictable denials that any such manipulation occurred:

Academics at the University of Texas at Austin on Wednesday published a paper analyzing whether the cryptocurrency Tether "influences Bitcoin and other cryptocurrency prices during the recent boom."

The academics concluded that the price patterns were "most consistent with the supply-based hypothesis where Tether is used to provide price support and manipulate cryptocurrency prices."

Tether is a cryptocurrency supposedly backed by the US dollar one-for-one, offering the stability of the currency but the flexibility and functionality of cryptocurrency. The cryptocurrency was created by many of the same people behind the leading cryptocurrency exchange Bitfinex. (You can read a full explanation of Tether here.)

Bitfinex CEO JL van der Velde said in an emailed statement: "Bitfinex nor Tether is, or has ever, engaged in any sort of market or price manipulation. Tether issuances cannot be used to prop up the price of Bitcoin or any other coin/token on Bitfinex."

...

Last month the US Justice Department reportedly began investigating bitcoin price manipulation, focusing specifically on spoofing — the practice of placing fake orders to drive up or down a price — and wash trading — the practice of trading with yourself to simulate volume in a market.

The professor John Griffin and his graduate student Amin Shams concluded in their paper: "Our findings suggest that market surveillance within a proper regulatory framework may be needed for cryptocurrency markets to be legitimate stores of value and a reliable medium for fair financial transactions. Additional research is necessary to further understand these markets." (Emphasis added)

This paper highlights another problem I've blogged about in the past, and have raised with former Assistant HUD Secretary Catherine Austin Fitts in her quarterly reviews on Solari.com, namely, that all markets - from equities to sovereign or corporate bonds, to commodities - are now so driven by computer algorithms that they are no longer accurate reflection of human markets and conditions; if markets seem to make no sense any more, I suspect this is at the heart of it. Algoritmic-computer-driven trading serves but one purpose, to make massive amounts of money by minor fluctuations in the markets that occur within mere seconds. This phenomenon also has been responsible for the occasional "flash crash." This type of trading, and this type of "currency" really is nothing but finance crapitalism on steroids.

This brings up another central problem for me with the whole algorithmic trading phenomenon, and specifically, with crypto-currencies. There have been numerous stories on the internet about the massive amount of electricity and computing power that is required for trading. Which means, in effect, that Mr. or Mrs. John Q. Public with their desktop are at the mercy of the big institutions and investors with access to much more massive computing power, and with access to the "dark pools", the computer trading centers located close to the market exchanges.  In effect, by entering such activities, one is helping make that machine-like, transhumanist, anti-human future closer to reality.

What we need is not more speculation; what we need is real investment in real products, services, and infrastructure locally. Perhaps, just perhaps, it's time for the emergence of local and regional securities markets. As for the "big markets", I can but repeat the adage caveat emptor.

See you on the flip side...

19 thoughts on “ ANOTHER “WE TOLD YOU SO?”: U. OF TEXAS STUDY SHOWS ...”

  1. I’m with you Dr. F re: Crypto (take THAT Max Keiser!). Way too many unanswered questions, and the “buzz” about “blockchain” makes no logical sense because it doesn’t scale up and uses even MORE electricity as it matures and the ledger grows. And what happens when the last coin is mined? Where will the incentive come from to continue support of the diversified platform?
    The whole thing stinks like Corzine’s socks!

  2. cashless society is the perfect way to reduce population to hunger.
    In my perfect society must be a law that pose speculation as serious crime as homicide.
    in a livable society, cash cash must came back to the importance of 50 years ago. Wall street must be closed and shares on the stock exchange have to be only investment, not speculation, with inside trading as the normal mean to gain money.

    speculation, usury, embezzlement, and gain made with investment must be illegal. and treated as serious crime, with seizure of every good to those who practice it.
    banks must make only bank actions, not other things.

    this is the solution, money must came only by work, this is one of the pillars of every nations constitution.
    and not, I’m not communist.

  3. No, cryptos are not being hacked, otherwise Bitcoin would have a dollar value of 0 right now.
    End systems, such as the computer I am using to write this get hacked, trying to get between me and the blockchain. There are solutions for this.
    Exchanges get hacked, but one should understand that NO cryptocurrency is ever held on an exchange. Exchanges deal in hypothetical coins (hence how Mt. Gox was burnt). I suspect this excuse is used everytime ‘they’ consider that the market is too hot.
    Cryptocurrency never leaves the blockchain with which it is associated. Each blockchain is a single ledger, with many distributed copies. The ledger is very secure from manipulation.

    That said, you need to do your homework, as not all cryptocurrencies are equal.
    Some are being structured so that they can be ‘captured’ through voting right mechanisms.
    Others are being designed as digital fiat.
    By and large, I choose the mined coins, as the minting and maintenance of these is more equitable.
    Make your choice now or have China’s Social Crediting System foisted upon you.

    Finally, some points I never hear the naysayers address, even given that cryptos have been on the planning board longer than we have been told:
    -How can we go back to gold seeing as how it is all owned by the ‘elite’?
    -Why would we go back to gold seeing as how the holders always abuse their positions and issue multiple paper certificates for the same gold held?
    -What is your better system for reestablishing trust in financial transactions? I think we can all agree that the banks are a busted flush.
    -How can we use gold for trade as we are about to transition to a space economy? Or perhaps the increasing rocket launches and space ports is lost on you…
    -How do we prevent abuse of international sanctions such as cutting off SWIFT?
    -Given that the current advertising model is all but dead, point proven by patreon requests everywhere, how do we go about paying for internet content?
    I could go on…

  4. Live the life in your local area as far as you can, engaging with the local creative and/or business space; and maybe with a different geographical space too, as long as this does not end up keeping you glued to a little screen for half your life. And as C.A.Fitts repeats, pull the plug on those activities that drain you energetically and financially. You won’t regret it!

    1. Find a community with real wealth, i.e. clean water, clean agriculture, non-monolithic industry, and most importantly smiles.

  5. max igan has some input
    as with all anarchists (and all politicians come to think of it) i may or may not be down with what he’s driving at and expecting. either way i’m curiouser and curiouser at how he imagines his goals being executed.

    www dot u tube dot com /watch?v=wGiwL5Wh-f8&feature=em-uploademail

  6. In The Two Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash (2009), Charles R. Morris writes, p.146:

    “Consider: Financial markets built an investment paradigm that applied high leverage to long-term illiquid instruments. Then compounded the danger by funding those instruments in the short-term debt markets. Then doubled the bet again by building the base portfolios from unusually risky securities, like subprime mortgages and leveraged loans. Then, finally, embraced a class of credit derivatives that ensured the swift propagation of any local collapse through the whole system. If a band of brainy terrorists had been hired to destroy Western finance, they could hardly have designed a more efficient assault.”

    Morris takes a view that this state-of-affairs (which is still in place) is ‘accidental’, i.e., just an outgrowth of the finance world doing its thing. On the other hand, considering everything in the world has been weaponized, wouldn’t it be handy to have a financial system in place that was sooo interwoven that a butterfly flapping its wings in the Amazon rain forest could bring it down? (Not only a good strategic/tactical ‘tool’, but an excellent blackmail apparatus…)

    Now, add on to that, the extreme fluctuations of the Bitcoin market. What could go wrong?

  7. marcos toledo

    Country simple this is swindlers wet dream and the PTB say this safer than coins and paper money. What universe do they reside in but then these scumbags would put organized criminals to shame. Then there is the perennial question why do they need all this money it makes no sense unless they are uber addicts.

    1. Robert Barricklow

      No doubt they’re in the process of unveiling a digitized
      U.S.[or U.N. ?]Certificate of Authenticity backed by thin air.

    2. Robert Barricklow

      …and yes there is a very dark sinister purpose behind the curtain of all this electrical power being newly generated.
      Is it to be a portal is opening another dimension;
      locked away long ago and now AI[the key?] is back in action.

      1. Robert Barricklow

        Are CERN, D-wave, and other newly developed and energized tools, doing the devils work?

  8. Bitcoins were invented so that people (sometimes priests and politicians) could buy child porn on onion servers, which were invented by the navy, so politicians could look at child porn that was usually generated by finder networks and serial killers.
    Sounds crazy doesnt it?
    The blockchain technology will ‘normalise’ data input for AI processing.
    AI will be in charge of surveillance and tracking.
    https://www.theverge.com/2018/4/11/17223504/ai-startup-sensetime-china-most-valuable-facial-recognition-surveillance
    There are some, who think that the chinese space station burned to the ground because of this surveillance capability… Lets try not to think about AI’s and their inherent tendance of turning into nazi sympathizing lolitas…
    Bitcoins were also useful as tender for body parts, drugs, people.. anything that can fit in a pipeline. see DynCorp recently going up for sale……
    Personnally, I dont see the difference in a world where you can use pieces of computer code that mean you owe a debt, to pay for something.. or pieces of paper that mean you owe a debt (and interest as well) that aren’t real either. See Nazi’s making counterfeit money (and getting it right) See Monsanto being bought by Bayer in CASH.. (maybe they didnt want it showing up in the books….)
    Loko at credit cards today. Now you have the swipe option, you just pass the card, no need for codes, or signatures, you can use your phone to pay in some shops. Is this social preparation for computer chips? I certainly think so.. But not to worry…
    It’s been found out that the chips cause cancer, but watch out for Alcatel-Lucent (lucent meaning ‘they shine’ , the latin root also means Lucifer..The mark of the Beast.. without this mark, cant buy or sell stuff… ) The Celebrities would have been the first to have the chips to show how cool it is, there would have been plenty of social ‘advantages’ to reel in the fishes..

    1. it’s easier to reel in fishes (or herd in sheeple) than that. few years ago an etrade company i traded with insisted on electronic statements – or i needed to pay $1 or some such more in fees per month to continue paper statements. i withdrew all funds. they regretted the transaction and requested i not close the account. the account has zero funds. for at least 5 years, they sent paper statements saying zero funds. no charge on the paper statements.

      last week i noticed my cell phone bill went up $5 per cell line. i called. they explained that cell phone line costs changed and that everyone is paying $5 more per line. i explained to them that this is not an explanation. they acknowledged and countered that if i take auto pay and kill paper statements that i can save $5 per line (completely unrelated).

      kinda like the tollways. i can either pull up to tollbooths and lose 10 min on my trip and pay twice the price in cash or i can buy their transponder and pay half price at 80+ mph. hmm. tough choice.

  9. anakephalaiosis

    Returning to basics – meaning Runes – we learn, that tribal society needs sacred clearing space in the woods, to solve disputes and witness agreements between clans.

    A sheriff must be appointed as caretaker, to behead those, who violate against truce, by spilling blood on sacred grounds. Sheriff is forerunner of king.

    When clearing space is expanded into nation, then sheriff becomes king, within national borders of reign. At this point, king is still appointed by assembly of chieftains.

    Coup d’état happens, when king proclaims himself as divine appointee, and rules assembly of chieftains to be unlawful. That is civil war.

    When space of general clearing is outlawed by king, one specific aspect is ALWAYS kept intact, and that is the commercial clearing space.

    What crypto-currencies represent – for the first time in known history – is a distributed clearing space, that circumvents the coup d’état of corrupt kings.

    Some view Circus Jollycoin, as object of greedy speculation, whereas others view it as circumvention of tyranny. Give to Caesar, what belongs to Caesar etc.

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