Bitcoin Price Crashes After Exchange Admits Security Breach, Over $60 Million Stolen

I was initially enthused by Bitcoin as an anti-dollar crypto-currency, but after researching its cyber-security issues, I became suspicious of Bitcoin's creation.  My suspicion was Satoshi Nakamoto, the alleged mythical creator of Bitcoin (whether one person or a group of hackers), could be a sub-unit of the US Treasury.

The holes in the security of Bitcoin, and the non-anonymity of the block chain header--which tracks all transactions, hinted towards a backdoor created by financial authorities to track nefarious Bitcoin holders.

Is this conspiratorial?  Yes, but who benefits by providing an alternative to the USDollar, yet still maintaining confidence in the dollar?  If gold is an undesirable alternative to the dollar, Bitcoin could be a welcome supplement to dollar hegemony for the financial status quo.

Due to the obvious risks of holding Bitcoin (it's electronic, it can be lost, it can be stolen, and competitive crypto-currencies exist--undermining its stated goal of scarcity), I subsequently couldn't endorse Bitcoin or any other crypto-currencies.

The fall of Mt. Gox raised my suspicion.  This latest theft of Bitcoin confirms my skepticism.  The fallout of this latest electronic theft is yet to be determined.  Who is legally liable?  Will insurers guarantee the losses?

At the end of the day, Bitcoin is an electronic entry, much like a bank account.  The difference is banks don't have the reserves to back up their deposits due to fractional reserve banking, which is hugely problematic despite reassurances by the financial authorities.

Ownership is 100% possession, so the ultimate safe haven currencies are still physical gold and silver.  This has been true for over 6000 years, and will continue to hold true.

http://www.zerohedge.com/news/2016-08-02/bitcoin-crashes-after-exchange-admits-security-breach

US Offers Immunity To Junior FX Manipulators In Exchange For Ratting Out Their Seniors

The US has angered Germany with delays of German gold repatriation, and alleged spying of Germany's leaders, including Prime Minister Angela Merkel.  The US has also angered France by  targeting PNB Paribas for banker misdeeds.  And they continue to prosecute London banks, deservedly so.

Meanwhile, sovereign trading partners are ignoring US and NATO-led trade sanctions against Russia and China.  Apparently, Europe values their energy sources more than any outdated traditional alliances with US exceptionalism

In this current cycle of punishing miscreant bankers, US regulators curiously are not indicting US bankers for manipulation of markets.  This will only add to the antagonism US allies have toward America.  The emperor not only has no clothes, but it is running out of friends.

http://www.zerohedge.com/news/2014-07-13/us-offers-immunity-junior-fx-manipulators-exchange-ratting-out-their-seniors

Putin Laughs At Saudi Offer To Betray Syria In Exchange For "Huge" Arms Deal

http://www.zerohedge.com/news/2013-08-08/putin-laughs-saudi-offer-betray-syria-exchange-huge-arms-deal

Three's company: silver margin change

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/11/9_Jim_Rickards_-_Threes_Company,_Silver_Margin_Change.html

This is a pointed reminder to the readers and listeners of King World News and something we have discussed before. Most markets consist of two parties, the buyer and the seller. But in futures markets there's a third party in every trade which is the exchange and more specifically the rule making bodies and margin setting panels on each exchange. They act not in the best interests of buyers or sellers but in the best interests of the exchange itself and its statutory duty to maintain orderly markets.

Invariably the parties disadvantaged by these moves complain that the exchange is "changing the rules in the middle of the game". That's a naive and pointless perspective. The fact is that the ability to change the rule is itself a rule. The exchange is not changing the rules, they are just utilizing an alternate set of rules that are already in place. Traders should stop complaining and read the rule book. It's all there.

What is more intriguing is what motivates the exchange officials to use these rules? Is it truly a disorderly market (the usual reason) or is it part of a larger coordinated effort involving Federal regulators and policymakers to do whatever it takes to push up prices of risky assets such as housing, stocks and junk bonds and push down prices of safe-harbor assets such as gold and silver?

The point is, when buyers and sellers transact in futures markets, they're never alone. Exchange monitors are always looking over your shoulder. Never ignore the power of the exchanges and regulators and always remember they will use this power when it suits them, not you.

China opens up domestic gold market

http://www.thedailycrux.com/content/5410/China/eml

China will let more banks import and export gold and open trading further to foreign companies as near-record prices and falling stock markets spur demand in the world's second-largest buyer of the metal. Gold prices gained.

Gold demand in China, the world's largest producer, gained in the first half as government measures to cool the property market and falling equities spurred investment, the Shanghai Gold Exchange said July 7. Spot gold gained to a record in June as investors sought to protect their wealth amid concerns about the global economic recovery.