Category: #IMF

Learn about Inflation Folks!

What Is Inflation?

Inflation definition

Inflation is a rise in prices, which can be translated as the decline of purchasing power over time.

The rate at which purchasing power drops can be reflected in the average price increase of a basket of selected goods and services over some period of time.

The rise in prices, which is often expressed as a percentage, means that a unit of currency effectively buys less than it did in prior periods.

Inflation can be contrasted with deflation, which occurs when prices decline and purchasing power increases.

KEY TAKEAWAYS

  • Inflation is the rate at which prices for goods and services rise.
  • Inflation is sometimes classified into three types: demand-pull inflation, cost-push inflation, and built-in inflation.
  • The most commonly used inflation indexes are the Consumer Price Index and the Wholesale Price Index.
  • Inflation can be viewed positively or negatively depending on the individual viewpoint and rate of change.
  • Those with tangible assets, like property or stocked commodities, may like to see some inflation as that raises the value of their assets.

Understanding Inflation

While it is easy to measure the price changes of individual products over time, human needs extend beyond just one or two products.

Individuals need a big and diversified set of products as well as a host of services for living a comfortable life.

They include commodities like food grains, metal, fuel, utilities like electricity and transportation, and services like healthcare, entertainment, and labor.

Inflation aims to measure the overall impact of price changes for a diversified set of products and services. It allows for a single value representation of the increase in the price level of goods and services in an economy over a period of time.

Causes of Inflation

An increase in the supply of money is the root of inflation, though this can play out through different mechanisms in the economy.

A country’s money supply can be increased by the monetary authorities by:

  • Printing and giving away more money to citizens
  • Legally devaluing (reducing the value of) the legal tender currency
  • Loaning new money into existence as reserve account credits through the banking system by purchasing government bonds from banks on the secondary market (the most common method)

In all of these cases, the money ends up losing its purchasing power. The mechanisms of how this drives inflation can be classified into three types: demand-pull inflation, cost-push inflation, and built-in inflation

Here is an interesting collection of books about inflation:

https://www.infobooks.org/free-pdf-books/business/inflation/

“According to Cantillon, the beneficiaries from the expansion of the money supply are the first recipients of the new money, who are able to spend it before it has caused prices to rise.

Whoever receives it from them is then able to spend it facing a small increase in the price level.

As the money is spent more, the price level rises, until the later recipients suffer a reduction in their real purchasing power.

This is the best explanation for why inflation hurts the poorest and helps the richest in the modern economy.”

Saifedean Ammous, “The Bitcoin Standard: The Decentralized Alternative to Central Banking”

“It is much more difficult to see how it will ever be possible to abandon a system of provision for the aged under which each generation, by paying for the needs of the preceding one, acquires a similar claim to support by the next.

It would almost seem as if such a system, once introduced, would have to be continued in perpetuity or allowed to collapse entirely.

The introduction of such a system therefore puts a strait jacket on evolution and places on society a steadily growing burden from which it will in all probability again and again attempt to extricate itself by inflation.”

Friedrich A. Hayek, “The Constitution of Liberty”

What with the doctrines that are now widely accepted and the policies accordingly expected from the monetary authorities, there can be little doubt that current union policies must lead to continuous and progressive infl ation.

The chief reason for this is that the dominant “fullemployment” doctrines explicitly relieve the unions of the responsibility for any unemployment and place the duty of preserving full employment on the monetary and fiscal authorities.

The only way in which the latter can prevent union policy from producing unemployment is, however, to counter through inflation whatever excessive rises in real wages unions tend to cause.”

Friedrich A. Hayek, “The Constitution of Liberty”

“Inflation destroys the value of your savings while Bitcoin protects them.”

Olawale Daniel

“To accumulate any wealth, you must invest at a growth rate higher than inflation.”

Naved Abdali

“An ounce of gold will always be an ounce of gold regardless of the length of possession.

The short-term value will go up or down, but gold prices will follow the general inflation rate in the long run.”

Naved Abdali

“… The Banks, as we now all too well know, must be rescued no matter what.

‘The value of commodities is thus sacrificed in order to ensure the fantastic and autonomous existence of this value in money.

In any event, a money value is only guaranteed as long as money itself is guaranteed.’

Inflation, as we also know, must be kept under control at all costs.

‘This is why many millions’ worth of commodities have to be sacrificed for a few millions in money.

This is unavoidable in capitalist production and forms one of its particular charms.’

Use values are sacrificed and destroyed no matter what is the social need.

How insane is that?”

David Harvey, “Marx, Capital and the Madness of Economic Reason”

“For one thing, this steady devaluation of the dollar is a new practice, relatively speaking.

For most of our country’s history, the dollar gained value.

The dollar was worth 75 percent more in 1912 than it was worth in 1800.

You know those stories your parents or grandparents tell about how they used to buy a sandwich and a fountain soda for a dime?

How everything was so much cheaper back in the day?

If you were around in 1900, for instance, the old folk didn’t tell those sorts of stories.

What cost a dime in 1900 probably cost fifteen cents in 1875, and twenty cents in 1800.

Of course, since 1912, the dollar has lost more than 95 percent of its value….

You will remember what happened in 1913: the Fed was created.”

Peter Schiff, “The Real Crash”

“We have gold because we cannot trust governments”

Herbert Hoover

“Inflation is taxation without legislation.”

Milton Friedman

“Inflation is always and everywhere a monetary phenomenon.”

Milton Friedman, “Money Mischief: Episodes in Monetary History”

“The arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislature.

The inflation tax has a fantastic ability to simply consume capital.

It makes no difference to a widow with her saving in a 5 percent passbook account whether she pays 100 percent income tax on her interest income during a period of zero inflation, or pays no income taxes during years of 5 percent inflation.

Either way, she is ‘taxed’ in a manner that leave her no real income whatsoever.

Any money she spends comes right out of capital.

She would find outrageous a 120 percent income tax, but doesn’t seem to notice that 5 percent inflation is the economic equivalent.”

Warren Buffett

“Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.”

Ronald Reagan

“The natural tendency of the state is inflation.”

Murray Rothbard

“The first panacea for a mismanaged nation is inflation of the currency; the second is war.

Both bring a temporary prosperity; both bring a permanent ruin.

But both are the refuge of political and economic opportunists.”

Ernest Hemingway

“Whoever controls the volume of money in our country is absolute master of all industry and commerce…when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.”

James A. Garfield

“Continued inflation inevitably leads to catastrophe.”

Ludwig von Mises

“The most important thing to remember is that inflation is not an act of God, that inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy.”

Ludwig von Mises

“Continued inflation inevitably leads to catastrophe.”

Ludwig von Mises

“When a business or an individual spends more than it makes, it goes bankrupt.

When government does it, it sends you the bill.

And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation.

Make no mistake about it, inflation is a tax and not by accident.”

Ronald Reagan

“Inflation is not caused by the actions of private citizens, but by the government: by an artificial expansion of the money supply required to support deficit spending.

No private embezzlers or bank robbers in history have ever plundered people’s savings on a scale comparable to the plunder perpetrated by the fiscal policies of statist governments.”

Ayn Rand

“Monetary inflation not only raises prices and destroys the value of the currency unit; it also acts as a giant system of expropriation.”

Murray Rothbard

“Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel.

These once unthinkable dosages will almost certainly bring on unwelcome after-effects.

Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation.”

Warren Buffett

“I believe that banking institutions are more dangerous to our liberties than standing armies.”

Thomas Jefferson

The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.

There is no safe store of value.

Deficit spending is simply a scheme for the hidden confiscation of wealth.

Gold stands in the way of this insidious process. It stands as a protector of property rights.

If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.

Alan Greenspan

“I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments.”

Friedrich August von Hayek

“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency.

By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.

By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some.

The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth.”

John Maynard Keynes

“Printing money creates inflation, which weakens an economy.

Unfortunately, this kind of common-sense thinking never seems to penetrate academic circles.”

Peter Schiff

“It is a sobering fact that the prominence of central banks in this century has coincided with a general tendency towards more inflation, not less.

[I]f the overriding objective is price stability, we did better with the nineteenth-century gold standard and passive central banks, with currency boards, or even with ‘free banking.’

The truly unique power of a central bank, after all, is the power to create money, and ultimately the power to create is the power to destroy.”

Paul Volcker

“Most people will see declining returns [due to inflation].

One of the great defenses if you’re worried about inflation is not to have a lot of silly needs in your life – you don’t need a lot of material goods.”

Charlie Munger

“Inflation is the true opium of the people and it is administered to them by anticapitalist governments and parties.”

Ludwig von Mises

“There are two main drivers of asset class returns – inflation and growth.”

Ray Dalio

“It’s hard to build models of inflation that don’t lead to a multiverse.

It’s not impossible, so I think there’s still certainly research that needs to be done.

But most models of inflation do lead to a multiverse, and evidence for inflation will be pushing us in the direction of taking [the idea of a] multiverse seriously.”

Alan Guth

“If the governments devalue the currency in order to betray all creditors, you politely call this procedure ‘Inflation‘.”

George Bernard Shaw

“The illusiveness of this concept of national income is to be seen in its dependence on changes in the purchasing power of the monetary unit.

The more inflation progresses, the higher rises the national income.”

Ludwig von Mises

“The gold standard did not collapse. Governments abolished it in order to pave the way for inflation. The whole grim apparatus of oppression and coercion, policemen, customs guards, penal courts, prisons, in some countries even executioners, had to be put into action in order to destroy the gold standard.”

Ludwig von Mises

“The idea that when people see prices falling they will stop buying those cheaper goods or cheaper food does not make much sense.

And aiming for 2 percent inflation every year means that after a decade prices are more than 25 percent higher and the price level doubles every generation.

That is not price stability, yet they call it price stability.

I just do not understand central banks wanting a little inflation.”

Paul Volcker

“Inflation is the fiscal complement of statism and arbitrary government.

It is a cog in the complex of policies and institutions which gradually lead toward totalitarianism.”

Ludwig von Mises

“To reverse the trend and reduce the role of government in our lives, and thus alleviate the government deficit and inflation pressures, is a giant educational task.

The social and economic ideas that gave birth to the transfer system must be discredited and replaced with old values of individual independence and self-reliance.

The social philosophy of individual freedom and unhampered private property must again be our guiding light.”

Hans F. Sennholz

“What I’m trying to say is that for the average investor, what I would encourage them to do is to understand there’s inflation and growth – it can go higher and lower – and to have four different portfolios essentially that make up your total portfolio that gets you balanced.”

Ray Dalio

“If government manages to establish paper tickets or bank credit as money, as equivalent to gold grams or ounces, then the government, as dominant money-supplier, becomes free to create money costlessly and at will.

As a result, this ‘inflation’ of the money supply destroys the value of the dollar or pound, drives up prices, cripples economic calculation, and hobbles and seriously damages the workings of the market economy.”

Murray Rothbard

“We are now speeding down the road of wasteful spending and debt, and unless we can escape we will be smashed in inflation.”

Herbert Hoover

“Inflation is probably the most important single factor in that vicious circle wherein one kind of government action makes more and more government control necessary.

For this reason all those who wish to stop the drift toward increasing government control should concentrate their effort on monetary policy.”

Friedrich August von Hayek

“Big business is not dangerous because it is big, but because its bigness is an unwholesome inflation created by privileges and exemptions which it ought not to enjoy.”

Woodrow Wilson

“Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth.

Gold stands in the way of this insidious process.

It stands as a protector of property rights.”

Alan Greenspan

“Higher education is the place where people who had big plans in high school get stuck in fierce rivalries with equally smart peers over conventional careers like management consulting and investment banking.

For the privilege of being turned into conformists, students (or their families) pay hundreds of thousands of dollars in skyrocketing tuition that continues to outpace inflation.

Why are we doing this to ourselves?”

Peter Thiel

Having examined the nature of fractional reserve and of central banking, and having seen how the questionable blessings of Central Banking were fastened upon America, it is time to see precisely how the Fed, as presently constituted, carries out its systemic inflation and its control of the American monetary system.

Murray Rothbard

“Inflation, being a fraudulent invasion of property, could not take place on the free market.”

Murray Rothbard

“No central banker would disagree with the proposition that inflation is primarily a monetary phenomenon.

Not one of them will disagree that every inflation has been accompanied by a rapid increase in the quantity of money and every deflation by a decline in the quantity of money.”

Milton Friedman

“The drum-fire of propaganda that the Fed is manning the ramparts against the menace of inflation brought about by others is nothing less than a deceptive shell game.

The culprit solely responsible for inflation, the Federal Reserve, is continually engaged in raising a hue-and-cry about ‘Inflation,’ for which virtually everyone else in society seems to be responsible.

What we are seeing is the old ploy by the robber who starts shouting ‘Stop, thief!’ and runs down the street pointing ahead at others.”

Murray Rothbard

“I think democracies are prone to inflation because politicians will naturally spend [excessively] – they have the power to print money and will use money to get votes.

If you look at inflation under the Roman Empire, with absolute rulers, they had much greater inflation, so we don’t set the record.

It happens over the long-term under any form of government.”

Charlie Munger

“Government policies try to prevent the emergence of serious unemployment by credit expansion, i.e., Inflation.

The outcome was rising prices, renewed demands for higher wages and reiterated credit expansion; in short, Protracted Inflation.”

Ludwig von Mises

“Inflation is essentially antidemocratic.”

Ludwig von Mises

“Inflation has always been an important resource of policies of war and revolution and why we also find it in the service of socialism.”

Ludwig von Mises

With 🧡

What is Bretton Woods ?!?

Mount Washington Hotel in Bretton Woods, New Hampshire, where the 1944 postwar U.N. Monetary and Financial Conference established an international commercial and financial system.

The Bretton Woods Conference, formally known as the United Nations Monetary and Financial Conference, was the gathering of 730 delegates from all 44 Allied nations at the Mount Washington Hotel, situated in Bretton Woods, New Hampshire, United States (July 1–22, 1944) to regulate the international monetary and financial order after the conclusion of World War II.

Bretton Woods Conference
July 1 to 22, 1944

The conference was attended by experts noncommittally representing 44 states or governments, including the Soviet Union.

It drew up a project for the International Bank for Reconstruction and Development (IBRD) to make long-term capital available to states urgently needing such foreign aid, and a project for the International Monetary Fund (IMF) to finance short-term imbalances in international payments in order to stabilize exchange rates.

Although the conference recognized that exchange control and discriminatory tariffs would probably be necessary for some time after the war, it prescribed that such measures should be ended as soon as possible.

After governmental ratifications the IBRD was constituted late in 1945 and the IMF in 1946, to become operative, respectively, in the two following years.

This led to what was called the Bretton Woods system for international commercial and financial relations.

The Bretton Woods System

The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement.

The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states.

The Bretton Woods system required countries to guarantee convertibility of their currencies into U.S. dollar, with the dollar convertible to gold bullion for foreign governments and central banks at US$35 per troy ounce of fine gold (or 0.88867 gram fine gold per dollar).

It also envisioned greater cooperation among countries in order to prevent future competitive devaluations, and thus established the International Monetary Fund (IMF) to monitor exchange rates and lend reserve currencies to nations with balance of payments deficits.

The Price of Gold, as denominated in dollars, was steady until the collapse of the Bretton Woods system in the mid-1970s.

The delegates deliberated from 1 to 22 July 1944, and signed the Bretton Woods agreement on its final day. Setting up a system of rules, institutions, and procedures to regulate the international monetary system, these accords established the IMF and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group.

The United States, which controlled two-thirds of the world’s gold, insisted that the Bretton Woods system rest on both gold and the US dollar.

Soviet representatives attended the conference but later declined to ratify the final agreements, charging that the institutions they had created were “branches of Wall Street”.

These organizations became operational in 1945 after a sufficient number of countries had ratified the agreement. According to Barry Eichengreen, the Bretton Woods system operated successfully due to three factors: “low international capital mobility, tight financial regulation, and the dominant economic and financial position of the United States and the dollar.”

On 15 August 1971, the United States terminated convertibility of the US dollar to gold, effectively bringing the Bretton Woods system to an end and rendering the dollar a Fiat currency.

Shortly thereafter, many fixed currencies (such as the pound sterling) also became free-floating, and the subsequent era has been characterized by floating exchange rates.

The end of Bretton Woods was formally ratified by the Jamaica Accords in 1976.

Sources:

https://www.britannica.com/
https://www.investopedia.com/
https://www.wikipedia.com/
With 🧡

Seven common mistakes crypto investors and traders make

Cryptocurrency markets are volatile enough without making simple, easily avoidable mistakes.

Investing in cryptocurrencies and digital assets is now easier than ever before. Online brokers, centralized exchanges and even decentralized exchanges give investors the flexibility to buy and sell tokens without going through a traditional financial institution and the hefty fees and commissions that come along with them.

Cryptocurrencies were designed to operate in a decentralized manner. This means that while they’re an innovative avenue for global peer-to-peer value transfers, there are no trusted authorities involved that can guarantee the security of your assets. Your losses are your responsibility once you take your digital assets into custody.

Here we’ll explore some of the more common mistakes that cryptocurrency investors and traders make and how you can protect yourself from unnecessary losses.

Losing your keys

Cryptocurrencies are built on blockchain technology, a form of distributed ledger technology that offers high levels of security for digital assets without the need for a centralized custodian. However, this puts the onus of protection on asset holders, and storing the cryptographic keys to your digital asset wallet safely is an integral part of this.

On the blockchain, digital transactions are created and signed using private keys, which act as a unique identifier to prevent unauthorized access to your cryptocurrency wallet. Unlike a password or a PIN, you cannot reset or recover your keys if you lose them. This makes it extremely important to keep your keys safe and secure, as losing them would mean losing access to all digital assets stored in that wallet.

Lost keys are among the most common mistakes that crypto investors make. According to a report from Chainalysis, of the 18.5 million Bitcoin (BTC) mined so far, over 20% has been lost to forgotten or misplaced keys.

Storing coins in online wallets

Centralized cryptocurrency exchanges are probably the easiest way for investors to get their hands on some cryptocurrencies. However, these exchanges do not give you access to the wallets holding the tokens, instead offering you a service similar to banks. While the user technically owns the coins stored on the platform, they are still held by the exchange, leaving them vulnerable to attacks on the platform and putting them at risk.

There have been many documented attacks on high-profile cryptocurrency exchanges that have led to millions of dollars worth of cryptocurrency stolen from these platforms. The most secure option to protect your assets against such risk is to store your cryptocurrencies offline, withdrawing assets to either a software or hardware wallet after purchase.

Not keeping a hard copy of your seed phrase

To generate a private key for your crypto wallet, you will be prompted to write down a seed phrase consisting of up to 24 randomly generated words in a specific order. If you ever lose access to your wallet, this seed phrase can be used to generate your private keys and access your cryptocurrencies.

Keeping a hard copy record, such as a printed document or a piece of paper with the seed phrase written on it, can help prevent needless losses from damaged hardware wallets, faulty digital storage systems, and more. Just like losing your private keys, traders have lost many a coin to crashed computers and corrupted hard drives.

Fat-finger error

A fat-finger error is when an investor accidentally enters a trade order that isn’t what they intended. One misplaced zero can lead to significant losses, and mistyping even a single decimal place can have considerable ramifications.

One instance of this fat-finger error was when the DeversiFi platform erroneously paid out a $24-million fee. Another unforgettable tale was when a highly sought-after Bored Ape nonfungible token was accidentally sold for $3,000 instead of $300,000.

Sending to the wrong address

Investors should take extreme care while sending digital assets to another person or wallet, as there is no way to retrieve them if they are sent to the wrong address. This mistake often happens when the sender isn’t paying attention while entering the wallet address. Transactions on the blockchain are irreversible, and unlike a bank, there are no customer support lines to help with the situation.

This kind of error can be fatal to an investment portfolio. Still, in a positive turn of events, Tether, the firm behind the world’s most popular stablecoin, recovered and returned $1 million worth of Tether (USDT) to a group of crypto traders who sent the funds to the wrong decentralized finance platform in 2020. However, this story is a drop in the ocean of examples where things don’t work out so well. Hodlers should be careful while dealing with digital asset transactions and take time to enter the details. Once you make a mistake, there’s no going back.

Over diversification

Diversification is crucial to building a resilient cryptocurrency portfolio, especially with the high volatility levels in the space. However, with the sheer number of options out there and the predominant thirst for outsized gains, cryptocurrency investors often end up over-diversifying their portfolios, which can have immense consequences.

Over-diversification can lead to an investor holding a large number of heavily underperforming assets, leading to significant losses. It’s vital to only diversify into cryptocurrencies where the fundamental value is clear and to have a strong understanding of the different types of assets and how they will likely perform in various market conditions.

Not setting up a stop-loss arrangement

A stop-loss is an order type that enables investors to sell a security only when the market reaches a specific price. Investors use this to prevent losing more money than they are willing to, ensuring they at least make back their initial investment.

In several cases, investors have experienced huge losses because of incorrectly setting up their stop losses before asset prices dropped. However, it’s also important to remember that stop-loss orders aren’t perfect and can sometimes fail to trigger a sale in the event of a large, sudden crash.

That being said, the importance of setting up stop losses to protect investments cannot be understated and can significantly help mitigate losses during a market downturn.

Crypto investing and trading is a risky business with no guarantees of success. Like any other form of trading, patience, caution and understanding can go a long way. Blockchain places the responsibility on the investor, so it’s crucial to take the time to figure out the various aspects of the market and learn from past mistakes before putting your money at risk.

Seven common mistakes crypto investors and traders make

Cryptocurrency markets are volatile enough without making simple, easily avoidable mistakes.

Investing in cryptocurrencies and digital assets is now easier than ever before. Online brokers, centralized exchanges and even decentralized exchanges give investors the flexibility to buy and sell tokens without going through a traditional financial institution and the hefty fees and commissions that come along with them.

Cryptocurrencies were designed to operate in a decentralized manner. This means that while they’re an innovative avenue for global peer-to-peer value transfers, there are no trusted authorities involved that can guarantee the security of your assets. Your losses are your responsibility once you take your digital assets into custody.

Here we’ll explore some of the more common mistakes that cryptocurrency investors and traders make and how you can protect yourself from unnecessary losses.

Losing your keys

Cryptocurrencies are built on blockchain technology, a form of distributed ledger technology that offers high levels of security for digital assets without the need for a centralized custodian. However, this puts the onus of protection on asset holders, and storing the cryptographic keys to your digital asset wallet safely is an integral part of this.

On the blockchain, digital transactions are created and signed using private keys, which act as a unique identifier to prevent unauthorized access to your cryptocurrency wallet. Unlike a password or a PIN, you cannot reset or recover your keys if you lose them. This makes it extremely important to keep your keys safe and secure, as losing them would mean losing access to all digital assets stored in that wallet.

Lost keys are among the most common mistakes that crypto investors make. According to a report from Chainalysis, of the 18.5 million Bitcoin (BTC) mined so far, over 20% has been lost to forgotten or misplaced keys.

Storing coins in online wallets

Centralized cryptocurrency exchanges are probably the easiest way for investors to get their hands on some cryptocurrencies. However, these exchanges do not give you access to the wallets holding the tokens, instead offering you a service similar to banks. While the user technically owns the coins stored on the platform, they are still held by the exchange, leaving them vulnerable to attacks on the platform and putting them at risk.

There have been many documented attacks on high-profile cryptocurrency exchanges that have led to millions of dollars worth of cryptocurrency stolen from these platforms. The most secure option to protect your assets against such risk is to store your cryptocurrencies offline, withdrawing assets to either a software or hardware wallet after purchase.

Not keeping a hard copy of your seed phrase

To generate a private key for your crypto wallet, you will be prompted to write down a seed phrase consisting of up to 24 randomly generated words in a specific order. If you ever lose access to your wallet, this seed phrase can be used to generate your private keys and access your cryptocurrencies.

Keeping a hard copy record, such as a printed document or a piece of paper with the seed phrase written on it, can help prevent needless losses from damaged hardware wallets, faulty digital storage systems, and more. Just like losing your private keys, traders have lost many a coin to crashed computers and corrupted hard drives.

Fat-finger error

A fat-finger error is when an investor accidentally enters a trade order that isn’t what they intended. One misplaced zero can lead to significant losses, and mistyping even a single decimal place can have considerable ramifications.

One instance of this fat-finger error was when the DeversiFi platform erroneously paid out a $24-million fee. Another unforgettable tale was when a highly sought-after Bored Ape nonfungible token was accidentally sold for $3,000 instead of $300,000.

Sending to the wrong address

Investors should take extreme care while sending digital assets to another person or wallet, as there is no way to retrieve them if they are sent to the wrong address. This mistake often happens when the sender isn’t paying attention while entering the wallet address. Transactions on the blockchain are irreversible, and unlike a bank, there are no customer support lines to help with the situation.

This kind of error can be fatal to an investment portfolio. Still, in a positive turn of events, Tether, the firm behind the world’s most popular stablecoin, recovered and returned $1 million worth of Tether (USDT) to a group of crypto traders who sent the funds to the wrong decentralized finance platform in 2020. However, this story is a drop in the ocean of examples where things don’t work out so well. Hodlers should be careful while dealing with digital asset transactions and take time to enter the details. Once you make a mistake, there’s no going back.

Over diversification

Diversification is crucial to building a resilient cryptocurrency portfolio, especially with the high volatility levels in the space. However, with the sheer number of options out there and the predominant thirst for outsized gains, cryptocurrency investors often end up over-diversifying their portfolios, which can have immense consequences.

Over-diversification can lead to an investor holding a large number of heavily underperforming assets, leading to significant losses. It’s vital to only diversify into cryptocurrencies where the fundamental value is clear and to have a strong understanding of the different types of assets and how they will likely perform in various market conditions.

Not setting up a stop-loss arrangement

A stop-loss is an order type that enables investors to sell a security only when the market reaches a specific price. Investors use this to prevent losing more money than they are willing to, ensuring they at least make back their initial investment.

In several cases, investors have experienced huge losses because of incorrectly setting up their stop losses before asset prices dropped. However, it’s also important to remember that stop-loss orders aren’t perfect and can sometimes fail to trigger a sale in the event of a large, sudden crash.

That being said, the importance of setting up stop losses to protect investments cannot be understated and can significantly help mitigate losses during a market downturn.

Crypto investing and trading is a risky business with no guarantees of success. Like any other form of trading, patience, caution and understanding can go a long way. Blockchain places the responsibility on the investor, so it’s crucial to take the time to figure out the various aspects of the market and learn from past mistakes before putting your money at risk.

Executive Order 6102

History Lessons,
never to be forgotten!¡

Executive Order 6102 is an executive order signed on April 5, 1933, by US President Franklin D. Roosevelt “forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States.”

The executive order was made under the authority of the Trading with the Enemy Act of 1917, as amended by the Emergency Banking Act in March 1933.

Summary

  • Forbade ownership of quantities of gold coin, bullion, and gold certificates worth in excess of $100 (about 5 troy ounces), with exemptions for specific uses and collections;
  • Required all persons to deliver excess quantities of the above on or before May 1, 1933 in exchange for $20.67 per troy ounce;
  • Enabled Federal funding of Exchange Stabilization Fund using profit realized from international transactions against new Federal reserves.

The limitation on gold ownership in the United States was repealed after President Gerald Ford signed a bill legalizing private ownership of gold coins, bars, and certificates by an Act of Congress, codified in Pub.L.93–373,which went into effect December 31, 1974.

The stated reason for the order was that hard times had caused “hoarding” of gold, stalling economic growth and worsening the depression as the US was then using the gold standard for its currency

On April 6, 1933, The New York Times wrote, under the headline Hoarding of Gold, “The Executive Order issued by the President yesterday amplifies and particularizes his earlier warnings against hoarding.

On March 6, taking advantage of a wartime statute that had not been repealed, he issued Presidential Proclamation 2039 that forbade the hoarding ‘of gold or silver coin or bullion or currency’, under penalty of $10,000 and/or up to five to ten years imprisonment.”

The main rationale behind the order was actually to remove the constraint on the Federal Reserve preventing it from increasing the money supply during the depression.

The Federal Reserve Act (1913) required 40% gold backing of Federal Reserve Notes that were issued. By the late 1920s, the Federal Reserve had almost reached the limit of allowable credit, in the form of Federal Reserve demand notes, which could be backed by the gold in its possession.

Source:
https://wikipedia.com/

The Laws are Unjust

As we’ve seen over the many years that this rag has been written (and beyond) companies who are able to fund whole teams dedicated to data security have been wholly ineffective at storing that data safely.

With the passage of this new law EU officials are actively putting citizens in harm’s way by irresponsibly trying to force bitcoin users to collect and store each other’s data. This is if you believe that is the actual intention behind this move.

In reality, this move likely serves as a pure intimidation tactic to coerce people to use trusted third parties when transacting with bitcoin.

A heavy handed shove into easily controlled vectors. If too many users are in control of their own private keys, run their own nodes, and are up to date on best privacy practices when transacting it is much harder to stop bitcoin.

And make no mistake, these people want to stop bitcoin at all costs.

They do not want you to be free.

They are quickly losing their grasp of control on the populace and they are moving as quickly as possible to clamp down in an attempt to retain control.

You are not meant to have privacy in their eyes. You are inherently a criminal in their eyes. These people think you are disgusting cattle who needs to be led at every turn.

It does not have to be this way. You do not have to succumb to the madness of these people. All it takes are a few decisions.

Speak up!

Act!

Disobey!

There is a silent majority out there who knows this type of attempted control is inherently wrong.

It is anti-human!

It is evil!

This silent majority needs to begin developing the courage to speak up.

Call out the abject insanity of allowing unelected institutions like the Financial Action Task Force write freedom restricting guidelines that get adopted by governments like the EU.

Learn how to run your own node, how to produce your own private/public key pairs, and how to destroy chain analysis heuristics with privacy best practices.

Make the tyrant’s job as hard as possible!

Disobey!

Stand up and defend freedom in the Digital Age by actively defying their unjust laws.

“If a law is unjust, a man is not only right to disobey it, he obligated to do so.”

It is your duty as an individual to disobey these incredibly invasive and tyrannical “laws”.

If you don’t disobey your progeny may not have the opportunity to. The time to counter punch is right now. Get on it.

Source: https://tftc.io/

Seven common mistakes crypto investors and traders make?

Cryptocurrency markets are volatile enough without making simple, easily avoidable mistakes.

Investing in cryptocurrencies and digital assets is now easier than ever before. Online brokers, centralized exchanges and even decentralized exchanges give investors the flexibility to buy and sell tokens without going through a traditional financial institution and the hefty fees and commissions that come along with them.

Cryptocurrencies were designed to operate in a decentralized manner. This means that while they’re an innovative avenue for global peer-to-peer value transfers, there are no trusted authorities involved that can guarantee the security of your assets. Your losses are your responsibility once you take your digital assets into custody.

Here we’ll explore some of the more common mistakes that cryptocurrency investors and traders make and how you can protect yourself from unnecessary losses.

Losing your keys

Cryptocurrencies are built on blockchain technology, a form of distributed ledger technology that offers high levels of security for digital assets without the need for a centralized custodian. However, this puts the onus of protection on asset holders, and storing the cryptographic keys to your digital asset wallet safely is an integral part of this.

On the blockchain, digital transactions are created and signed using private keys, which act as a unique identifier to prevent unauthorized access to your cryptocurrency wallet. Unlike a password or a PIN, you cannot reset or recover your keys if you lose them. This makes it extremely important to keep your keys safe and secure, as losing them would mean losing access to all digital assets stored in that wallet.

Lost keys are among the most common mistakes that crypto investors make. According to a report from Chainalysis, of the 18.5 million Bitcoin (BTC) mined so far, over 20% has been lost to forgotten or misplaced keys.

Storing coins in online wallets

Centralized cryptocurrency exchanges are probably the easiest way for investors to get their hands on some cryptocurrencies. However, these exchanges do not give you access to the wallets holding the tokens, instead offering you a service similar to banks. While the user technically owns the coins stored on the platform, they are still held by the exchange, leaving them vulnerable to attacks on the platform and putting them at risk.

There have been many documented attacks on high-profile cryptocurrency exchanges that have led to millions of dollars worth of cryptocurrency stolen from these platforms. The most secure option to protect your assets against such risk is to store your cryptocurrencies offline, withdrawing assets to either a software or hardware wallet after purchase.

Not keeping a hard copy of your seed phrase

To generate a private key for your crypto wallet, you will be prompted to write down a seed phrase consisting of up to 24 randomly generated words in a specific order. If you ever lose access to your wallet, this seed phrase can be used to generate your private keys and access your cryptocurrencies.

Keeping a hard copy record, such as a printed document or a piece of paper with the seed phrase written on it, can help prevent needless losses from damaged hardware wallets, faulty digital storage systems, and more. Just like losing your private keys, traders have lost many a coin to crashed computers and corrupted hard drives.

Fat-finger error

A fat-finger error is when an investor accidentally enters a trade order that isn’t what they intended. One misplaced zero can lead to significant losses, and mistyping even a single decimal place can have considerable ramifications.

One instance of this fat-finger error was when the DeversiFi platform erroneously paid out a $24-million fee. Another unforgettable tale was when a highly sought-after Bored Ape nonfungible token was accidentally sold for $3,000 instead of $300,000.

Sending to the wrong address

Investors should take extreme care while sending digital assets to another person or wallet, as there is no way to retrieve them if they are sent to the wrong address. This mistake often happens when the sender isn’t paying attention while entering the wallet address. Transactions on the blockchain are irreversible, and unlike a bank, there are no customer support lines to help with the situation.

This kind of error can be fatal to an investment portfolio. Still, in a positive turn of events, Tether, the firm behind the world’s most popular stablecoin, recovered and returned $1 million worth of Tether (USDT) to a group of crypto traders who sent the funds to the wrong decentralized finance platform in 2020. However, this story is a drop in the ocean of examples where things don’t work out so well. Hodlers should be careful while dealing with digital asset transactions and take time to enter the details. Once you make a mistake, there’s no going back.

Over diversification

Diversification is crucial to building a resilient cryptocurrency portfolio, especially with the high volatility levels in the space. However, with the sheer number of options out there and the predominant thirst for outsized gains, cryptocurrency investors often end up over-diversifying their portfolios, which can have immense consequences.

Over-diversification can lead to an investor holding a large number of heavily underperforming assets, leading to significant losses. It’s vital to only diversify into cryptocurrencies where the fundamental value is clear and to have a strong understanding of the different types of assets and how they will likely perform in various market conditions.

Not setting up a stop-loss arrangement

A stop-loss is an order type that enables investors to sell a security only when the market reaches a specific price. Investors use this to prevent losing more money than they are willing to, ensuring they at least make back their initial investment.

In several cases, investors have experienced huge losses because of incorrectly setting up their stop losses before asset prices dropped. However, it’s also important to remember that stop-loss orders aren’t perfect and can sometimes fail to trigger a sale in the event of a large, sudden crash.

That being said, the importance of setting up stop losses to protect investments cannot be understated and can significantly help mitigate losses during a market downturn.

Crypto investing and trading is a risky business with no guarantees of success. Like any other form of trading, patience, caution and understanding can go a long way. Blockchain places the responsibility on the investor, so it’s crucial to take the time to figure out the various aspects of the market and learn from past mistakes before putting your money at risk.

Source: https://bitcointalk.org/

Seven common mistakes crypto investors and traders make?

Cryptocurrency markets are volatile enough without making simple, easily avoidable mistakes.

Investing in cryptocurrencies and digital assets is now easier than ever before. Online brokers, centralized exchanges and even decentralized exchanges give investors the flexibility to buy and sell tokens without going through a traditional financial institution and the hefty fees and commissions that come along with them.

Cryptocurrencies were designed to operate in a decentralized manner. This means that while they’re an innovative avenue for global peer-to-peer value transfers, there are no trusted authorities involved that can guarantee the security of your assets. Your losses are your responsibility once you take your digital assets into custody.

Here we’ll explore some of the more common mistakes that cryptocurrency investors and traders make and how you can protect yourself from unnecessary losses.

Losing your keys

Cryptocurrencies are built on blockchain technology, a form of distributed ledger technology that offers high levels of security for digital assets without the need for a centralized custodian. However, this puts the onus of protection on asset holders, and storing the cryptographic keys to your digital asset wallet safely is an integral part of this.

On the blockchain, digital transactions are created and signed using private keys, which act as a unique identifier to prevent unauthorized access to your cryptocurrency wallet. Unlike a password or a PIN, you cannot reset or recover your keys if you lose them. This makes it extremely important to keep your keys safe and secure, as losing them would mean losing access to all digital assets stored in that wallet.

Lost keys are among the most common mistakes that crypto investors make. According to a report from Chainalysis, of the 18.5 million Bitcoin (BTC) mined so far, over 20% has been lost to forgotten or misplaced keys.

Storing coins in online wallets

Centralized cryptocurrency exchanges are probably the easiest way for investors to get their hands on some cryptocurrencies. However, these exchanges do not give you access to the wallets holding the tokens, instead offering you a service similar to banks. While the user technically owns the coins stored on the platform, they are still held by the exchange, leaving them vulnerable to attacks on the platform and putting them at risk.

There have been many documented attacks on high-profile cryptocurrency exchanges that have led to millions of dollars worth of cryptocurrency stolen from these platforms. The most secure option to protect your assets against such risk is to store your cryptocurrencies offline, withdrawing assets to either a software or hardware wallet after purchase.

Not keeping a hard copy of your seed phrase

To generate a private key for your crypto wallet, you will be prompted to write down a seed phrase consisting of up to 24 randomly generated words in a specific order. If you ever lose access to your wallet, this seed phrase can be used to generate your private keys and access your cryptocurrencies.

Keeping a hard copy record, such as a printed document or a piece of paper with the seed phrase written on it, can help prevent needless losses from damaged hardware wallets, faulty digital storage systems, and more. Just like losing your private keys, traders have lost many a coin to crashed computers and corrupted hard drives.

Fat-finger error

A fat-finger error is when an investor accidentally enters a trade order that isn’t what they intended. One misplaced zero can lead to significant losses, and mistyping even a single decimal place can have considerable ramifications.

One instance of this fat-finger error was when the DeversiFi platform erroneously paid out a $24-million fee. Another unforgettable tale was when a highly sought-after Bored Ape nonfungible token was accidentally sold for $3,000 instead of $300,000.

Sending to the wrong address

Investors should take extreme care while sending digital assets to another person or wallet, as there is no way to retrieve them if they are sent to the wrong address. This mistake often happens when the sender isn’t paying attention while entering the wallet address. Transactions on the blockchain are irreversible, and unlike a bank, there are no customer support lines to help with the situation.

This kind of error can be fatal to an investment portfolio. Still, in a positive turn of events, Tether, the firm behind the world’s most popular stablecoin, recovered and returned $1 million worth of Tether (USDT) to a group of crypto traders who sent the funds to the wrong decentralized finance platform in 2020. However, this story is a drop in the ocean of examples where things don’t work out so well. Hodlers should be careful while dealing with digital asset transactions and take time to enter the details. Once you make a mistake, there’s no going back.

Over diversification

Diversification is crucial to building a resilient cryptocurrency portfolio, especially with the high volatility levels in the space. However, with the sheer number of options out there and the predominant thirst for outsized gains, cryptocurrency investors often end up over-diversifying their portfolios, which can have immense consequences.

Over-diversification can lead to an investor holding a large number of heavily underperforming assets, leading to significant losses. It’s vital to only diversify into cryptocurrencies where the fundamental value is clear and to have a strong understanding of the different types of assets and how they will likely perform in various market conditions.

Not setting up a stop-loss arrangement

A stop-loss is an order type that enables investors to sell a security only when the market reaches a specific price. Investors use this to prevent losing more money than they are willing to, ensuring they at least make back their initial investment.

In several cases, investors have experienced huge losses because of incorrectly setting up their stop losses before asset prices dropped. However, it’s also important to remember that stop-loss orders aren’t perfect and can sometimes fail to trigger a sale in the event of a large, sudden crash.

That being said, the importance of setting up stop losses to protect investments cannot be understated and can significantly help mitigate losses during a market downturn.

Crypto investing and trading is a risky business with no guarantees of success. Like any other form of trading, patience, caution and understanding can go a long way. Blockchain places the responsibility on the investor, so it’s crucial to take the time to figure out the various aspects of the market and learn from past mistakes before putting your money at risk.

Source: https://bitcointalk.org/

The monetary properties of Bitcoin

bitcoin vs gold
bitcoin vs fiat

Bitcoin is a monetary good — a new form of money. As Bitcoin is a money, it must be compared to other monies to consider the comparative advantages of Bitcoin and from that consider further the probabilities of Bitcoin winning ground or not in the competition between monies.

Brief summarization of the monetary properties

Summarization of the monetary properties of Bitcoin compared to precious metals and fiat currencies

As the exhibit above showcases, Bitcoin offers many different distinct and compelling competitive advantages to the alternatives.

These include, but are not limited to:

1. Bitcoin is the first asset in the human history to provide any holder a very sure case of unseizability and censorship- and judgment-resistance for their funds.

◦ Unseizability: With precious metals and fiat currencies, the custodianship is mostly in the hands of trusted custodians that is subject to any intervention by a government or authority.

Bitcoin, with self-custody being orders of magnitude easier than with precious metals and fiat currencies, and access to the corresponding private key of funds being the sole way to access and move funds, no one can seize your bitcoins.

◦ Censorship- and judgment resistance: With precious metals and fiat currencies, the payment clearing for small value transactions can with not much hassle be somewhat censorship resistant if the involved parties are willing to transact in the physical units of precious metals and fiat currencies and to self-custody the funds going forward.

However, with non-small value transactions it is exceedingly inconvenient and costly for transactions of precious metals and fiat currencies to happen in the offline, with physical units and self-custody going forward, leaving the centralized intermediaries as the only option and these are subject to any intervention by a government or authority.

Bitcoin, with the payment clearing involving no centralized intermediaries but instead a decentralized and distributed setup requiring no AML/KYC, the result is that of a the payment clearing process being permissionless, allowing anyone with cryptographic access to funds to move them at their will.

2. Bitcoin provides an inherently apolitical global monetary unit. It is truly border-less, with no recognition of any jurisdictional rules and laws, allowing the jurisdiction of a counterpart in any transaction to be of no relevance.

◦ Fiat currencies are highly political and precious metals are less political than fiat currencies, but still much more political than Bitcoin.

◦ Bitcoin is truly border-less: any bitcoin funds can be accessed anywhere on the planet by having access to information that can even be stored inside a human brain and reliably retrieved at small effort — and, crucially, with no intermediary and no permission required the bitcoin funds can be moved to anywhere in the world with final settlement in the next block.

3. Bitcoin provides scarcity and salability through time characteristics vastly superior to any other monetary options, including fiat currencies and precious metals.

◦ The non-discretionary monetary policy of the bitcoin networking allowing for the asymptotic money supply* of 21 million BTC is built into the literal definition of the protocol. This is a drastic contrast to the arbitrary scarcity of fiat currencies governed by politics.

The scarcity of precious metals is much better than fiat currencies, but Bitcoin with the strictly fixed money supply outperforms any precious metal.

Bitcoin provides any holder a reassurance stronger than any other asset in the world that their ownership stake in the total quantity of Bitcoin on the market will never diluted.

One BTC of 21 million will always be one BTC of 21 million.

◦ Bitcoins are infinitely durable, impossible to counterfeit or dilute, can be stored at no cost and at no degradation.

* By inventing Bitcoin, Satoshi Nakamoto created the first example of a digital good (in this case, monetary good) that is impossible to reproduce ad infinitum, thereby creating the first instance of human history of digital scarcity.

Less talked about it, but perhaps more important, Satoshi Nakamoto with Bitcoin also created the first example of a good being absolute scarce.

Previously, any consideration of scarcity of a good was relative. Any physical good is never absolutely scarce, onlyrelatively scarce when compared to other goods — simply because any limit on a physical goods is a function of the time and human effort put towards producing the good.

Bitcoin, with the asymptotic monetary supply built into the protocol, is therefore the first example of absolute scarcity in a liquid commodity and good that cannot have its fixed quantity of supply increased.

People’s Money
Power to the People
The seed has been planted …
Make it Thrive !!!
Choose
Veritas non Auctoritas …
Choose Wisely

Secret IRS Files

ProPublica

Any more Questions ?¿

Warren Buffett
Jeff Bezos
Elon Musk

End of Lesson !
Class Dismissed !
🥺 🤫 😉 🙂

P.S - Before any 🧠less 🐑pss start 👏ing at any of these Wealthy "gentlemen" and their "charitable" acts for a country or the other... 

Take a deep breath...

And try to think...

If "one" that has a Wealth Growth of $13,900,000,000.00 Billions, has a Total Income Reported of $1,520,000,000.00 Billion and paid in Total Taxes 450,000,000.00 Millions, with a True Tax Rate of 3.27% sends Tech in countries that are of interest for so many reasons you would 🤢🤮🤢 ... 

Who's paying for the Tech ?!?

Me... You... My Momma... Your Momma !!!

End of story !!!

Use your 🧠 folks !!!

Use your 🧠 !!!

You already have it, it's almost FREE 😉 🤣 🙂
Source:

https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax

Trilemma of International Finance

Trilemma of International Finance

The relative value of any two curren-
cies—the exchange rate—is determined
through their sale and purchase on the global foreign exchange market. If government policy interferes with this market by changing the relative supply or demand of currencies, the exchange rate is managed.

The trilemma of international finance, is a restriction on government policy that follows immediately from the interaction of exchange rates, monetary policy and international capital flows.

Trilemma of International Finance

The trilemma states that any country can have only two of the following:

  • (1) Unrestricted international capital markets.
  • (2) A managed exchange rate.
  • (3) An independent monetary policy.

If the government wants a managed exchange rate but does not want to interfere
with international capital flows, it must use
monetary policy to accommodate changes
in the demand for its currency in order to
stabilize the exchange rate.

In the extreme, this would take the form of a currency board arrangement, where the domestic currency is fully backed by a foreign currency (as in the case of Hong Kong).

In such a situation, monetary policy can no longer be used for domestic purposes (it is no longer independent).

If a country wishes to maintain control over monetary policy to reduce domestic unemployment or inflation, for example, it must limit trades of its currency in the international capital market (it no longer has free international capital markets).

A country that chooses to have both unrestricted inter-national capital flows and an independent monetary policy can no longer influence its exchange rate and, therefore, cannot have a managed exchange rate.

Pieters and Vivanco (2016), government
attempts to regulate the globally accessible
bitcoin markets are generally unsuccessful,
and, as shown in Pieters (2016), bitcoin exchange rates tend to reflect the
market, not official exchange rates.

Should the flows allowed by bitcoin become big enough, all countries will have, by default, unrestricted international capital markets.

Thus, with bitcoin, (1) unrestricted
international capital markets is chosen by
default.

Therefore, the only remaining policy choice is between (2) managed exchange rates or (3) independent monetary policy.

If the country chooses (1) and (2), it must use reactive monetary policy to achieve the managed exchange rate.

If the country chooses (1) and (3), it must have a floating exchange rate because it has no remaining tools with which to maintain a managed exchange rate.

Ali et al. (2014), the European Central
Bank (2015) and the Bank for International
Settlements (2015) all concur that cryptocur-
rencies may eventually undermine monetary policy.

With 💚