Authored by Connor Freeman via AntiWar.com,

European Union Commission President Ursula von der Leyen announced that the bloc would give Kiev 18 billion euros next year while it continues fighting Russia, Reuters reported on Friday.

The latest  pledge was made during the second day of the EU leaders’ summit in Brussels, where further support for Ukraine is being discussed. According to von der Leyen, Kiev estimates that, to run the country, it requires 3-4 billion euros every month “for the basics.”

So far, this year the bloc has provided Kiev with 19 billion euros. Looking ahead to 2023, the EU is committing to give Kiev 1.5 billion euros per month. The remaining monthly welfare for Ukraine’s government is expected to come out of the American taxpayers’ pockets and international institutions, according to von der Leyen.

As Americans and Europeans alike struggle amid skyrocketing inflation and soaring energy prices, their governments appear dead set on continuing to pour tens of billions of dollars into Ukraine to fund its corrupt government and keep NATO’s proxy war going. “It is very important for Ukraine to have a predictable and stable flow of income,” von der Leyen declared.

Ukrainian President Volodymyr Zelensky addressed the EU leaders at the summit and made several demands. He wants “new powerful” sanctions levied against Russia and Iran. Zelensky blames Tehran for Moscow’s drone attacks, but there is no definitive evidence that the Iranians have sold Moscow these weapons. Despite repeated denials from Russia and Iran, the EU as well as the UK imposed fresh sanctions on Iran this week over the allegations of Russia bombing Ukraine with Iranian drones.

Moreover, Zelensky asked the EU for more air and missile defense systems. In recent weeks, Berlin sent the first of four IRIS-T air defense systems and Paris pledged more anti-aircraft systems. Zelensky also warned that Moscow’s increased air attacks on civilian infrastructure in Ukraine, which is being provoked by repeated Ukrainian terror attacks and shelling inside Russia, will lead to a refugee crisis in Europe.

“Russian terror against our energy facilities is aimed at creating as many problems as possible with electricity and heat for Ukraine this fall and winter so that as many Ukrainians as possible move to your countries,” Zelensky told the summit. The EU is now looking at ways to assist Ukraine to restore power, electricity, and water supplies, von der Leyen said.

Concurrently, the German parliament approved a massive 200 billion euro ($195 billion) rescue package to help households and companies as they endure the energy crisis caused by the Washington-led sanctions blitz on Russia. Before the war began, Russia provided roughly a third of Europe’s gas and Germany depended on Moscow for more than half of its gas supplies. After the Nord Stream pipelines were sabotaged, Russian President Vladimir Putin offered to ship gas to Europe via an undamaged line in Nord Stream 2. This offer was quickly rejected by Berlin.

There are current rumblings that GOP House members are getting frustrated with a “blank check” mentality toward Ukraine…

Tucker Carlson on Zelensky calling for more funding from the US: “Some uppity foreigner in a t-shirt demanding money for his ‘critical economic needs’? We have critical economic needs too, buddy. Who are you troll? Go away.” pic.twitter.com/pJvtjoqDl4

— The Post Millennial (@TPostMillennial) October 14, 2022

Secretary of State Antony Blinken celebrated the explosions in the Baltic Sea, which caused possibly the largest ever leak of methane gas, describing the attack as a “tremendous strategic opportunity for the years to come.”

Before incumbents are replaced after the midterms in January, members of both parties in the U.S. Congress reportedly plan to pass another gargantuan Ukraine aid package. The number being floated is $50 billion. This is supposed to keep Kiev’s war going for another year, but that number will likely increase. Washington has already funded Ukraine’s war with more than $67 billion this year, in mostly military aid, this would raise that figure to more than $115 billion.

Authored by Wesley Thysse via DecentralizedLegalSystem.com,

The War on Crypto Privacy Intensifies. Automatic Reporting of All Trades and Transactions Soon Mandatory.

Massive overreach of international regulators to force all service providers in the industry to:

• Record ALL crypto trades on exchanges, DEFI and DEXs;

• Record (large) purchases from private wallets;

• Record all transfers to cold storage and make lists with private wallet addresses;

• Send all this info annually to the (tax) authorities;

• And finally, force governments to pass these rules into domestic law.

The war on privacy continues. The aim: to tackle anonymous spending and exchanging of crypto.

As you’ll discover, these new regulations force upon us a system of complete surveillance and control.

This report explains exactly what to expect from the latest developments launched in October 2022…

What is Going On?

​Last year, the crypto world was shaken to its core when the Financial Action Task Force (FATF), acting in behalf of the G20, released their guidance on virtual assets.1)

This document laid out a set of rules regarding stablecoins, distinctions between private and hosted wallets, extensive KYC requirements, the tackling of privacy tools, and more.2) FATF has also provided a final definition of the type of service provider tasked with reporting on crypto: the Virtual Asset Service Provider.

Fast forward to today, and these rules are quickly being implemented across the world.3) But as usual, it didn’t stop there. Another international regulator, the OECD, is already building on this framework in an attempt to massively increase the grip of authorities on crypo.

What is the OECD?

The Organisation for Economic Co-operation and Development (OECD) is a Paris-based international organisation that works to “build better policies for better lives.” Its goal is to shape policies that foster prosperity, equality, opportunity and well-being for all.4)

Together with governments, policy makers and citizens, the OECD works on finding solutions to a range of social, economic and environmental challenges. From improving economic performance and creating jobs, to fostering strong education and fighting international tax evasion. The organisation provides a unique forum and knowledge hub within which to discuss and develop public policies and international standard setting.5)

This “international standard” setting is what we will look at next.

Automated Exchange of Financial Information with Authorities Since 2014

In 2014, the OECD published the Standard for Automatic Exchange of Financial Account Information in Tax Matters.6) This publication created a “Common Reporting Standard” (CRS), which forces financial institutions to automatically exchange account information with the authorities of the country of residence of their account holders. The goal: to prevent persons from holding financial accounts in offshore jurisdictions and not reporting them back home.

This is why all financial service providers request utility bills: they prove where you live, and hence where they have to report to.

All financial institutions that are subjected to these regulations are forced to automatically report to the authorities the name, address, Tax Identification Number(s), date and place of birth, the account number, and the account value as of the end of the relevant calendar year (or other appropriate reporting period).7)

Now, there is no more hiding of accounts held with a foreign financial institutions. The authorities enlisted all financial institutions as involuntary (but powerful) assistants in collecting facts and evidence needed for tax compliance.

The Panama Papers; Just in Time to Boost Worldwide Implementation of Automated Reporting…

After publishing their standards in 2014, the OECD needed to get countries and their financial institutions in line. By August 2015, the OECD had released the first version of a CRS Implementation Handbook.8) It provided practical guidance to assist government officials and financial institutions in implementing CRS.

But while the standards set by the OECD came into force in 2016 in early-adopting states, by March of that year these standards were still far from being fully integrated into the global financial system.9) This was especially true in the offshore jurisdictions that were the main target. What was needed was a shift in conscience…

On April 3rd, 2016, the International Consortium of Investigative Journalists published a giant leak of offshore financial records, better known as the Panama Papers.10) These revelations caused public outrage.

The G5, the five largest Western European countries, were quick to jump on the bandwagon and call for more international cooperation to tackle “tax dodging and illicit finance.”11) The message did not fall on deaf ears; the next day, on April 15th, G20 Finance Ministers and Central Bank Governors met in Washington and issued the following Communiqué:

“…we call on all relevant countries including all financial centers and jurisdictions, which have not committed to implement the standard on automatic exchange of information by 2017 or 2018 to do so without delay and to sign the Multilateral Convention. We expect that by the 2017 G20 Summit all countries and jurisdictions will upgrade their Global Forum rating to a satisfactory level. We mandate the OECD working with G20 countries to establish objective criteria by our July meeting to identify non-cooperative jurisdictions with respect to tax transparency. Defensive measures will be considered by G20 members against non-cooperative jurisdictions if progress as assessed by the Global Forum is not made.”12)

Thus, within 12 days of the publication of the Panama Papers, the world’s 20 most powerful governments had collectively agreed to start pushing CRS reporting requirements aggressively, and to punish non-cooperative (offshore) jurisdictions—regardless of their local laws.

This is how offshore finance was brought into the fold, and financial privacy died.

Why Can the OECD Regulate Financial Institutions Around the World? Isn’t this a Task of Democracy?

The OECD isn’t a government agency of any individual country. As such, it cannot create law. It issues what is known as “soft laws,” or “recommendations” and “guidance.” Only when this guidance is transposed into the laws of individual countries does it becomes “hard” law, with real world power.

In theory, this process is subjected to the formal (democratic) law-making processes of the implementing countries. However, countries that don’t participate face restricted access to the financial system and ostracism from the international community. For this reason, almost all nations are compelled to implement these recommendations.

It must also be said that national governments, especially in the Western world, highly value this kind of international cooperation, and the control it gives them without the need to deal with the “inconveniences” of democracy. They simply hide behind the fact that these are “international standards” which they have to follow because “everybody” does.

Neither does it help that few of our representatives, journalists and fellow citizens seem to understand the impact of these treaties. Those in the legal industry who do understand the implications just look at it as “business as usual” and a new way to generate income. As such, most standards are passed into domestic law with little opposition or delay.

International Standards Aim to Supersede National Law

Once these treaties are accepted, they become part of a body of law called “international law,” which in many cases supersedes national laws. Unknown to the general public, international law is increasingly being used as a backdoor for passing invasive regulations such as those we are discussing here, and establishing a global bureaucracy with real power over our (financial) lives.

It is also worth noting that the people working for this Paris-based institution have not been elected, their procedures and budget are not subjected to democratic oversight, and they are almost impossible to remove from power.

Like most international organizations, their operations fall under the Vienna Conference on Diplomatic Intercourse and Immunities.13) As such, they enjoy immunity for their actions taken whilst in office, are exempt from administrative burdens (such as taxes and fines), and enjoy less stringent (COVID) travel restrictions.

AUTOMATIC Exchange of Transaction Info For Crypto

Last October 10th, the OECD published the “Crypto-Asset Reporting Framework and Amendments to the Common Reporting Standard.”14) This applies the tax reporting guidance of the existing CRS to crypto―and makes it FAR more invasive…

The OECD first published a public consultation version of the document on 22nd March 2022.15) The deadline for feedback from the public was 29th April 2022. This gave the public just over a month to analyze a 101-page document, figure out what it meant for them and their clients in multiple jurisdictions, and formulate a public statement on company letterhead.

This is not a sign that the OECD takes public input seriously. When comparing the two documents, there is no material difference between the public consultation and the final version in the section that matters most, the actual rules…16)

Public consultations give these recommendations the appearance of being widely supported by “stakeholders.” It creates the illusion that the public has a say in the matter. It doesn’t. When you read the questions carefully, they only seek feedback on details, such as which intermediaries are to be included or excluded, which type of NFTs are to be in scope, what reporting thresholds there should be, and how much time should be reserved for implementation.17)

Furthermore, if you read the commentaries submitted, which can be downloaded here, most respondents just talk their own book, trying to elicit amendments that perhaps exempt them from a specific reporting requirement, or trying to get a longer time-frame for implementation. In all fairness, there were also a number of industry insiders who highlighted the double standards created for the crypto industry, and how much of a burden the regulations would represent. In the end, none of this mattered. The regulations have been published and are now the new worldwide standard.

What Are The New Guidelines for Crypto?

​ As was the case with earlier regulations, Bitcoin will not be banned. Instead, the OECD builds on the approach set by FATF: to regulate the service providers who facilitate transactions.

In this instance, the OECD developed a new global tax transparency framework which provides for the automatic exchange of tax info on transactions in a standardised manner. This is the “Crypto-Asset Reporting Framework” or “CARF.”18)

As previously mentioned, automatic exchange of information used to contain only the details of the individual and the account value. New reporting obligations, however, apply to all transactions in an account. This is a major extension of the reporting obligations that currently exist for non-crypto financial services.

Reporting of Transactions (and their Nature) by VASPS

The OECD proposes that those providing crypto transaction services, for or on behalf of customers, are to report under the CARF. We are talking here about the reporting entities that are defined by FATF, i.e. “Virtual Asset Service Providers,” or “VASPs.”19)

Before we look at the details of the information that is going to be exchanged, let us remind ourselves of what a VASP is:

“VASP: Virtual asset service provider means any natural or legal person who is not covered elsewhere under the Recommendations, and as a business conducts one or more of the following activities or operations for or on behalf of another natural or legal person:

i. exchange between virtual assets and fiat currencies;
ii. exchange between one or more forms of virtual assets;
iii. transfer of virtual assets;
iv. safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets; and
v. participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.”20)

As you can see, the definition of VASP is so wide that it covers many of projects currently operating in the crypto space. According to the OECD, reporting obligations also apply to companies facilitating Decentralized Finance and Decentralized Exchanges.21)

What Type of Transactions are to be Reported?

What needs to be reported? In particular, the following three types of transactions:

• Exchanges between Crypto Assets and Fiat Currencies;

• Exchanges between one or more form(s) of Crypto Assets;

• Transfers of Crypto Assets (including Reportable Retail Payment Transactions).22)

Transactions will be reported by type of Crypto Asset, and will distinguish between outward and inward transactions. In order to enhance the usability of the data for tax administrations, the reporting is to be split out between Crypto-to-Crypto and Crypto Asset-to-fiat transactions. Reporting service providers will also be forced to label transfers (e.g. airdrops, income derived from staking or a loan), in instances where they have such knowledge.23)

In short, the CARF mandates that information an all trades, including the type of coin, the amount of coins, the market value, and what was paid, be submitted. This info is then aggregated and automatically exchanged.24) The goal is to inform the tax authorities of how much you own and what kind of income you generated from your holdings.

And if that is not enough, the OECD allows lawmakers the option to request lists of private wallet addresses of users.25)

Reporting of Retail Transactions from Private Wallets

On a final note, the OECD has come up with a trick to limit the opportunity for crypto users to spend their coins anonymously. The CARF also applies to merchant providers facilitating crypto payment for goods or services. In such instances, the merchant provider is required to treat the customer of their customer as its own customer, and report the value of the transaction to the tax authorities of the buyer.26)

For now, this only applies to “large” purchases of over USD 50,000.27)

What About US Citizens and Green-Card Holders?

The CRS has been implemented worldwide. All developed nations and all international financial centers have been included in the list, leaving few of the world’s financial highways untouched.28)

Surprisingly, the United States is not on that list. The reason is that the US came up with their own automatic reporting framework even before the OECD did. It is called the Foreign Account Tax Compliance Act, or FATCA, and requires that foreign financial Institutions and certain other non-financial foreign entities report on the foreign assets held by their U.S. account holders.29)

Up until now, FATCA did not directly apply to crypto. But the new 2023 budget proposal seeks to amend section 6038D(b) of the Internal Revenue Code to require reporting for a new third category, namely any account that holds digital assets maintained by a foreign digital asset exchange or other foreign digital asset service provider (a “foreign digital asset account”).30)

There is also another US-specific reporting obligation, the Report of Foreign Bank and Financial Accounts. Regarding FBAR, FinCEN has issued Notice 2020-2, stating that it also intends to make reporting foreign virtual currency accounts mandatory.31) Moreover, US tax payers are already required to report their crypto transactions on their tax returns.32)

The question is, will the United States also implement a CARF like system, as in the automatic reporting of all transactions? This question remains unanswered for now. But President Biden’s Executive Order from earlier this year clearly stated that the current administration is committed to these international standards, including those commissioned by the G20 and FATF, and that the US has a leading role in developing and adopting these international standards on digital assets.33)

Despite all this, it is still unclear what the regulatory landscape in the US will look like. Regardless, US-based companies with clients in other countries (i.e. most of them) will have to implement these policies. It is hard to imagine the US government not wanting to have this information for itself, especially since the legal framework is largely in place. But we will have to wait and see.

What Will Be the Outcome of These Regulations?

​The outcome of these new international standards will be full transparency towards tax authorities. The aim of these standards is to get automatic insight into all your trades, even laying the foundation to prevent you from spending coins anonymously with retailers that use a third party payment provider.

This means in practice that although you can hold coins in your private wallet, you cannot easily spend or exchange them anonymously. In short: no more privacy when you use third party services.

One might say this will be the death of third party services, because accepting online payments is as simple as installing a piece of code on your website and taking the payments yourself. But most companies do not have the capacity to run their own payment system, and are likely going to require payments through a regulated merchant.

As long as there isn’t a Bitcoin standard, meaning accounting and payments regularly done in Bitcoin, there will be a need for fiat on- and off ramps. As such, even when you do business in crypto, your suppliers or clients are likely to make use of a service provider with reporting obligations.

As a result, expect far more scrutiny on transactions; from exchanges, but also from the people and businesses you are dealing with in everyday crypto activity. Even if you do not need to report on certain transactions, they might be forced to do so.

You might be okay with accepting direct peer-to-peer transactions, but could run into issues later when you are obliged to prove where the payments came from.

Regulators Are Out of Control

The reality is that these regulators are out of our control. Without (direct) democratic mandates or oversight they are flooding the world with regulation. Just like totalitarian regimes, they effectively force private parties to police each other.

The service providers, forced into unpaid financial surveillance, carry the rising compliance costs. Obliged to make hard decisions as to whom they can take on as customers, they are likely to cut services to those they consider not worth the compliance costs, such as small or “high risk” businesses, and people in developing nations.

The cost of compliance might become so great that at least some of them might want to facilitate transactions only with fully-vetted wallets tied to a digital ID, such as the EU is implementing.34)

New Precedent: Centralized Surveillance of Individual Transactions

This is a good example of regulations being built on top of one another, and raising the bar with each step. It should not come as a surprise if at some point regular financial service providers are forced into similar obligations to get in line with these new “international standards.” This step might be taken with the introduction of Central Bank Digital Currencies, currently being developed all around the world.35)

Door Open to Further Monitoring and Restricting of Payments

It is not hard to imagine that once all transactions are transparent, more actions can be taken as to which type of payments and type of persons are allowed or not. We can see this financial “cancel culture” already happening around the world.36)

As a result of all this surveillance, it is not only privacy that is at risk right now; this starts to touch the very idea of maintaining a payment system where you can freely transact and engage in economic activity.

Only a massive and radical decentralization movement away from third party service providers can prevent this dystopia. Stay tuned for a next report and a roadmap for just that…

Update(1645ET): A major new and sensational charge of a Ukrainian false flag plot in the making issued by Russia’s defense chief has set off a string of tit-for-tat accusations and statements Sunday.

Russian Defense Minister Sergei Shoigu claimed in rare phone calls that included his counterparts from the United States, Britain, France, and Turkey that Ukrainian forces are preparing a “provocation” with a radioactive device. A Kremlin statement cited that he conveyed a warning over “possible Ukrainian provocations involving a ‘dirty bomb'”.

Shoigu’s office said in follow-up that he conveyed the warning to all the above-named countries’ defense chiefs. As for his conversation with Secretary of Defense Lloyd Austin, it was the second phone call in merely three days. The Pentagon in the hours after said Austin told Shoigu he “rejected any pretext for Russian escalation” – which strongly suggests the US perceives that Moscow is about to heighten attacks on Ukrainian cities further:

Russian authorities repeatedly have made allegations that Ukraine could detonate a dirty bomb in a false flag attack and blame it on Moscow. Ukrainian authorities, in turn, have accused the Kremlin of hatching such a plan.

The Kremlin is further charging that this low-intensity nuclear provocation is being prepared with the help of Great Britain; however, the Western allies have said no evidence whatsoever was presented in the phone calls alongside the accusations.

The UK defense ministry said in its statement following Shoigu’s phone call with Secretary Ben Wallace that the Russian side “alleged that Ukraine was planning actions facilitated by Western countries, including the UK, to escalate the conflict in Ukraine.”

“The Defense Secretary refuted these claims and cautioned that such allegations should not be used as a pretext for greater escalation,” the ministry said.

Russia is saying that such a ‘dirty bomb’ detonation, which would spread radioactive waste and potentially contaminate large urban areas, would then be blamed on Moscow in order to justify greater Western intervention.

Ukraine, for its part, blasted what the presidency’s office called an “absolute and quite predictable absurdity” and blatant “lie”. France too agreed with Ukraine’s assessment, and a statement from the French Foreign Ministry has ominously warned that the crisis is “trending towards uncontrollable escalation.” But Macron on Sunday admitted that “peace is possible” – yet it depends on when the Ukrainians “decide it”.

Who exactly endowed this person with the authority to decide when the US must launch World War III on his behalf https://t.co/GYc98QnH89

— Michael Tracey (@mtracey) October 23, 2022

Meanwhile, Zelensky’s own rhetoric urging Western military intervention has escalated as well, all of which strongly suggests the war will soon grow hotter.

* * *

earlier

Now much of Western Ukraine, which lies far away from the front lines of fighting with Russia in the east, is without power due to fresh weekend airstrikes across the country. 

Ukrainian President Volodymyr Zelensky in a Saturday night address said new “massive” strikes targeted Dnipropetrovsk, Khmelnytsky, Kirovohrad, Mykolaiv, Odessa, Rivne, Volyn and Zaporizhia regions.

“We continue eliminating the aftermath of today’s terrorist attacks on our infrastructure,” Zelensky said. “The geography of this new massive strike is very wide.”

The past days have already seen power outages in Kyiv, with energy grid authorities warning of rolling blackouts, and urging residents to take power-saving measures such as the avoidance of running large appliances. 

On Saturday the national power utility operator Ukrenergo said that damage from the latest round of Russian strikes set a new record. The Saturday air offensive by Russia was bigger than an initial major wave of strikes from earlier this month:

Over 1.4 million Ukrainian households have lost electricity after a morning of repeated Russian air raids, Ukraine President Volodymyr Zelenskyy’s office says.

The Ukrainian General Staff reported that 40 cruise missiles and 16 allegedly Iranian-made drones hit Ukraine throughout the day.

Oleksandr Kharchenko, a Ukrainian energy official, said in an interview with US media that national infrastructure vital for the people is facing “really huge trouble”.

“When you don’t have electricity in a city, it means you have no water, you have no supply of gas, you have nothing,” Kharchenko said. Days prior to the stepped-up Saturday assault the government said one-third of all power stations had been hit or damaged in Russian strikes. 

The right bank of Kyiv covered in darkness this evening as the Ukrainian authorities began to implement planned power outages to save energy, due to continued Russian strikes targeting Ukraine’s energy infrastructure. pic.twitter.com/QeR6AEvYwG

— Status-6 (@Archer83Able) October 20, 2022

Most new damage to energy has been recorded in the country’s west, south and center, with some hospitals since reporting they are running on backup generators. Reserves of oxygen and fresh water are also being tapped by hospitals. 

Ukrenegro has on Sunday introduced phased blackouts to “avoid accidents”, per The Guardian: 

The blackouts began at 11.13am local time (09.30am BST), with households in Kyiv divided into three groups that will be “disconnected for a certain period of time”, DTEK said.

It added that the blackouts should last “no more than four hours” but may be longer “due to the scale of damage to the power supply system”.

According to the latest estimate of the damage reported in Reuters, “Russia has hit at least half of Ukraine’s thermal generation capacity and caused billions of dollars of damage in attacks since Oct. 10, but not all stricken power units have stopped working completely, Ukraine’s energy minister said on Friday.”

⚠️ Confirmed: Live network data show internet outages in south #Ukraine corresponding to new Russian missile attacks this morning targeting critical infrastructure; the bombardment of civilian energy utilities has intensified since 10 Oct.

📰 Background: https://t.co/S0qJQ7CJD3 pic.twitter.com/M832lukdy5

— NetBlocks (@netblocks) October 22, 2022

Further, “Herman Halushchenko told Reuters in an interview that 30-40% of overall national power infrastructure had been hit in attacks that he depicted as intended to destroy Ukraine’s energy system — a goal that he said had not been achieved.”

After a near-apocalyptic 6 months for bitcoin and the broader digital token segment, which led to the now traditional spike in crypto obituaries, some are wondering if the crypto winter is starting to thaw and is sentiment is about to reverse.

One such tentative ray of hope comes from Bank of America’s latest Global Cryptocurrencies note, in which author Alkesh Shah paints a gloomy picture for most assets, yet one where cryptos may soon start diverging, to wit:

Higher rates, driven by inflation and budget deficits, continue to pressure risk assets including the digital assets sector. Our macro colleagues note early signs of capitulation given max bearishness (see this Oct 20 report) for the 5th consecutive week as hedge funds position less bearishly on equity and an S&P YE price forecast indicating 2% downside from current levels as client flows signal expectations of a potential market bottom. But, rate risks remain.

We expect blockchain and application development to drive token price divergence with blockchains exhibiting a growing application ecosystem and Web3 applications providing real-world functionality and capturing traditional company market share to outperform

Of course, we all know what they say about opinions… but what about other tangible indicators?

Let’s start with fund flows.

As Shah writes, BTC exchange outflows last week were the largest since mid-June, tight supply (tokens last moved over 1 yr ago remain near all-time highs) and whale accumulation indicate investor HODLing and limited near-term sell pressure (bullish). ETH saw its 3rd consecutive week of muted activity following large exchange inflows pre/post-Merge and as price headwinds continue (-23% since early Aug), signaling limited near-term buy pressure (bearish). Top 4 stablecoin exchange outflow over the last 2 weeks were 80% and 88% below the average weekly inflow/outflow over the prior 6 weeks, respectively, indicating that investors are moving to the sidelines (neutral).

But what was far more notable than flows, is the recent spike in bitcoin-gold correlation. Here again is BofA:

BTC exchange outflows over the last 4 weeks ($2.6bn) were 3.6x larger than exchange inflows over the prior 4 weeks. Exchange outflows for 3 of the prior 4 weeks (BTC +2% last 4 weeks) indicate that investors continue to HODL instead of selling into strength. A decelerating positive correlation with SPX/QQQ and a rapidly rising correlation with XAU indicate that investors may view bitcoin as a relative safe haven as macro uncertainty continues and a market bottom remains to be seen.

And some more observations:

The correlation between bitcoin and the S&P 500 (SPX) reached all-time highs on Sept 13 of this year and the correlation between bitcoin and the Nasdaq 100 (QQQ) reached all-time highs on Sept 13 as well.

The correlation between bitcoin and gold (XAU), which is commonly viewed as an inflation hedge/store of value, remained close to zero from Jun’21 through Feb’22 and turned negative on Mar 2, but the inverse correlation decreased from Apr’22 through Aug’22 before the correlation turned positive on Sept 5 and continued to increase. The inverse correlation between bitcoin and the dollar (DXY) has increased since Jul 14.”

Of course, such divergence in correlation between risk assets and bitcoin, and convergence between gold and bitcoin, is precisely what should be happening for an asset that was designed to be diversifying, and to hedge inflation, not to be an highly-levered beta on tech names. That said, it is still too soon to tell if bitcoin can move sharply higher as stocks continue to slide and the dollar surges. Incidentally, such a reversal in crypto, where it trade not as a high-beta tech stock, but as an actual alternative to the dollar would be the best news long-suffering crypto bulls will have gotten in a long time.

Housing bubbles are a tricky phenomenon. As a market gathers steam and prices increase, it remains a matter of debate whether that market is overvalued and flooded with speculation, or it’s simply experiencing robust demand.

Of course, once a bubble bursts, it’s all obvious in hindsight.

One common red flag is when prices decouple from local incomes and rents. As well, imbalances in the real economy, such as excessive construction activity and lending can signal a bubble in the making.

Visual Capitalist’s Nick Routley created the map below, based on data from the Real Estate Bubble Index by UBS, to examine 25 global cities, scoring them based on their bubble risk.

Overinflated Markets

In the 2022 edition of the Real Estate Bubble Index, nine of the cities covered were classified as having extreme bubble risk (1.5 or higher score).

Canada’s largest city finds itself at the top of a ranking no city wants to end up on. Toronto’s home prices have been rising steadily for years now, and many, including UBS, believe that the city is now firmly in bubble territory.

Vancouver also finds itself in a similar position. Both Canadian cities have a high quality of life and have thriving tech industries.

Notably, none of the U.S. cities analyzed find themselves in the most extreme bubble risk category. The closest scoring U.S. city was Miami, which sits firmly in overvalued territory (0.5-1.5 range) with a score of 1.39.

Examining the Trends

In recent years, low interest rates helped push home prices and incomes further apart.

For cities in the bubble risk zone, prices have climbed by an average of 60% in inflation-adjusted terms over the past decade, while rents and real incomes increased by just 12%. And, while COVID-19 briefly put a dent in urban demand, rents in the cities analyzed rose at around the same pace as pre-pandemic times.

As a result, all but three of the cities saw positive price growth over the past year from a nominal price perspective:

U.S. cities occupy a number of spots at the top of this chart. Miami, in particular, is seeing strong internal migration patterns, as well as renewed interest from foreign investors.

Hong Kong experienced the biggest one-year nominal drop of all the cities analyzed. The report notes that since around 2019 Hong Kong “has broadly stagnated as the lack of affordability, economic woes, and pandemic restrictions all took a major toll on demand.”

Prices can’t rise forever. According to UBS, most cities with high valuations, price corrections have already begun, or could be right around the corner.

By Remix News

It may already have seemed that inflation in the West is slowly approaching its peak, but that is not the case. Considering the numbers coming from Germany, inflation may be far from peaking.

Producer prices in Germany increased by a record 45.8 percent year-over-year in September, the same as in August. Energy prices, which rose by 132.2 percent year-over-year, had the most impact on this. The only positive thing about this is that the month-over-month growth slowed a little due to the drop in commodity prices. However, for consumers, it follows that consumer inflation, which lags behind the so-called production inflation, must still climb. We cannot lie about this.

For Germans, however, the following sentence, which German statisticians added as a comment to the numbers, sounds the most frightening: “Compared to the same period last year, August and September recorded the highest increase in producer prices since the start of the survey in 1949.”

Germany is extremely sensitive to mentions of inflation or public debt. To understand why, we have to go back in history. The pre-war hyperinflation in Germany was caused by the fact that Germany could not finance the reparations from World War I. It began to pay its reparations with debt and started to monetize this debt, printing uncovered inflationary money and using it to pay off the debt. The result was hyperinflation and total economic disruption. Many historians believe it was this economic undergrowth that brought Hitler to power and marked World War II.

After the war, Germany, therefore, made a literal 180-degree turn. While before the war it showed enormous fiscal indiscipline, went into debt, printed money, and faced hyperinflation, after the war, on the contrary, it became Europe’s top-of-the-class in fiscal policy. It began scrupulously taking care to keep its public finances under control, not excessively inflating its debt, and not even remotely playing with anything resembling monetization. Jens Wiedmann, former governor of the German central bank, has been the most vocal central banker in Europe when it comes to criticizing the monetization of southern European debt and the policy of negative interest rates that the European Central Bank has begun to commit to in recent years. And it was the German Constitutional Court, through which some of the ECB’s plans of monetizing public debt did not pass.

So we have to understand that for Germany, the current inflation and debt monetization are much more sensitive topics than for any other European country. So far, consumer inflation in Germany is “only” 10 percent, a drop above the average inflation rate in the entire Eurozone, which reached 9.9 percent. Inflation, however, continues to rise.

Economics is not mathematics; economics is mainly about psychology. And here, we begin to encounter very sensitive limits of psychological tolerance. At this moment, inflation has several dimensions. In the first place, the Germans are becoming alarmed and irritated, although they are not yet venting such emtions via mass riots.

Secondly, it is politically very tricky to call a spade a spade. Given the German sensitivities on the mentioned topics, it is simply not politically appropriate to say that inflation is caused by the monetization of European sovereign debt. Rather, they talk about expensive energy, which in turn is linked to the war in Ukraine. They do not directly name the causes. But if we do not identify the causes, we cannot eliminate them, so we cannot solve the problem. The fact that the presidents and prime ministers of the countries of the European Union are trying to find the solution to expensive energy, and talk in particular about the regulation of gas prices, is a testament to this blind stumbling. This is what’s happening instead of admitting the simple facts that, on the one hand, there is more money than goods in circulation and, on the other hand, energy demand is greater than the supply after we voluntarily switched off energy as part of the Green Deal.

And thirdly, people are increasingly fleeing inflation by going into real assets. They can no longer run to mortgages due to the rapidly rising interest rates. Although gold is in great demand in Europe, having a choice between gold and gold is not enough for somebody. And so the demand for such things as historical weapons, aged alcohol, or Swiss watches is growing. Exports of Swiss watches rose by 19 percent in September and could be a record this year. A time is coming when people will increasingly use cash instead of bank accounts and pour cash into cashable durables.

Authored b y Jeffrey Tucker via The Epoch Times,

This is the age of censorship, pushed by government and interests and enacted by wholly captured Big Tech firms.

If you doubt it, look through the hundred or so pages of emails dug up in court discovery between government agencies and social media firms during the COVID crisis. The relationship is warm and wholly normalized.

If, for three years, you had a sense that you were being fed a canned line through all major media platforms, that the science was being filtered, that the talking heads were merely telling you what they were told to tell you, that dissent was being crushed, you aren’t wrong. This is exactly what was happening.

COVID was a major test case, but the model has been rolled out to cover a whole range of other topics, including election fraud, vaccine safety, and climate change. If an issue is important to a powerful interest and prevailing government priorities, the censors are tasked to get to work. The platform you have today could be gone tomorrow, no matter how much of a personal investment you have in it. In fact, large accounts seem more likely to be attacked than small ones.

We now know about a series of emails between former FDA commissioner and Pfizer board member Scott Gottlieb (now at the American Enterprise Institute) and tech firms concerning the writings of Alex Berenson. Berenson was an early critic of COVID policies and among the first to sound the alarm about vaccine efficacy and safety. Gottlieb targeted Berenson by name and told Twitter and others precisely what needed to happen as soon as possible. Berenson had to be silenced.

It’s true that Gottlieb wasn’t a government employee at the time, but these things can get murky. We know from many reports inside the White House that Jared Kushner consulted him directly in the days when they were twisting Trump’s arm to approve a lockdown of society. Gottlieb’s connections in and out of government regulatory agencies are vast.

It’s one case of hundreds, thousands, and countless other cases. People write to me daily to report that LinkedIn has taken down a message without warning, that Facebook has slapped a warning on a post, that Twitter has taken down their account, or that Google’s YouTube has dinged or deleted their account.

More intense forms are happening in web hosting (Amazon can throw you off) and even finance. PayPal has cut many individuals and institutions from access and even dared floating a fee for “misinformation”—a word we now understand to mean opinions not approved by ruling class censors. If this practice is rolled out further—and there’s no question that many intend to do so—we could find ourselves surrounded in a Chinese-like social credit system.

This raises serious legal issues which are now being litigated across the country. Governments can’t simply privatize their censorious ambitions to the private sector and pretend that is entirely consistent with the First Amendment. The freedom of speech is a general principle that prohibits government from muscling speech platforms to comply with their edicts. And this is true even with private entities who sign up willingly for the job like earnest members of the Red Guard.

There’s another reason why censorship is more pervasive than at any time in our lifetime. It’s because we have never had such access to so many varied information portals. Imagine if the whole lockdown scenario had taken place in the early 1970s. There were three television networks. Each offered 30 minutes of news each day; 10 minutes or so were devoted to national and international affairs and the rest to sports and weather. The news anchors all said essentially the same thing, which led most people to believe that this was all they needed to know.

Why did we have a sense that there was no arbitrary censorship? Probably because there didn’t need to be. The information cartel was fully intact. The ruling class was perfectly positioned to script the prevailing narrative. Not even newspapers were distributed outside their region of influence. The New York Times was for New York, The Washington Post for Washington, and so on.

There were no websites, podcasts, Substacks, discussion forums, group messages, and not even emails. There was no way to send documents except by government mail because not even the fax machine had yet been invented.

Yes, there were alternative newsletters and things, but they were often expensive, and you had to know about them to get them. Other than that, the whole population was largely in the dark. Looking back, it’s amazing that there ever were protests for civil rights or against the Vietnam War at all. This is why arts and music were so hugely important to both movements: They were a way to get the message out that the news cartel couldn’t control.

Maybe many people like that world. It seemed orderly. There was a “national culture” mostly informed by prevailing news control. No one knew a better system. But then came technology. Even by the late 1980s, things were opening up. Ronald Reagan himself credited new information flows for provoking the unrest in Eastern Europe and the Soviet Union that led to so many revolutions.

By 1995, the end of the orderly and controlled information cartel had been shattered by the web browser and the explosive growth of the internet beyond a few to everyone. It seemed to many at the time to be the beginning of a great and new renaissance. Information is the light, and with the light comes emancipation from old forms and new opportunities for everyone. It seemed like “the end of history,” and those years spawned a kind of wild optimism that humanity would forever escape the despots.

At the same time, this created a major problem for ruling class elites who once enjoyed complete hegemony over the public mind. Their control was collapsing before their eyes. We loved it.

The fix has been a quarter century in the making, one step at a time, toward somehow rebuilding what they lost. This is precisely why this is all happening now. In other words, it’s the age of censorship precisely because it’s the age of information. One follows the other.

Why is information so dangerous to some people? Because information is about ideas, and history is shaped by the ideas we hold. They’re more powerful than armies because ideas are mentally and emotionally powerful, and infinitely reproducible and malleable, and they inspire action. Once an idea takes hold in a population, nothing can stop its forward advance and eventual victory.

In other words, there’s a strange way in which censorship itself should give us hope simply because elites find it’s so desperately needed right now. Censorship is the tribute that lies pay to truth. If truth were not so powerful, no censorship would be necessary. Also, if the system of information distribution were as highly controlled and narrow as it was in the 1970s and earlier, there would be no real need to silence anyone.

Authored by J.A.Frascino via AmericanThinker.com,

Woke progressivism seeks to strengthen the weak by weakening the strong…

We are told that the MAGA cult, Trump voters, and Republicans in general are a threat to democracy, who, if not neutralized, will lead the nation into fascism.  In theory, a politically divided nation such as ours could evolve into fascism or socialism, should a political faction gain autocratic control.  In reality, however, we are confronted with the threat of evolving into a much more unique political structure – a Mediocracy.

A Mediocracy is a social structure in which mediocrity prevails.  Those who would change America pursue mediocrity under the banner of our moral obligation to elevate the status of the underachievers, marginalized, and minorities in our society.  The basic ploy is to lump such individuals into groups and to define them as victims of oppression.  They suffer solely from the oppressive social structure of patriarchal white supremacy, which must be dismantled.  

To entertain other reasons for the obstacles they might face is hateful, immoral, and racist.  White underachievers are dispensed with as irredeemable deplorables and deserve no further attention.  Our society, based in racism and xenophobia, is deemed illegitimate.  The fact that it has grown to become the most honored and respected on earth does not redeem it.  We must throw out the baby with the bath water and restructure society.

This message is delivered to the masses via mediacracy, the utilization of the media to control, mislead, and manipulate public thought through ambiguous and deceptive language, analogous to Orwellian newspeak.  Those not adhering to the mediocracy are debased as deniers, haters, or purveyors of disinformation, and need to be silenced.  

(Cancel culture is a natural extension of political correctness; from “you shouldn’t say that” to “you can’t say that”.)

To elevate the status of those defined as oppressed, we must embark upon a program of diversity, equity, and inclusivity.  “Diversity is our strength!”  Is it?  The strength of our society lies in its ability to achieve its constitutional purpose, requiring it to align its forces with sufficient magnitude and direction so as to achieve its goals.  In physics, this thrust is referred to as a primary vector.  Diverse forces flying off in all directions only serve to weaken the vector forces.  

Strength lies in overcoming the diverse forces and aligning them with the primary vector.  In society this is achieved through assimilation.  Woke progressivism thwarts assimilation by dividing social elements into adversarial factions – the oppressors v. the oppressed – via identity politics.  Facilitating diversity, per se, in such a confrontational manner already divides and weakens our nation.

Equity is the quest of equal outcomes.  A seemingly noble quest, eclipsing that for equal opportunity.  It equates meritocracy with white privilege and mandates that advancement be based instead on race or gender – “checking the boxes”.  Checking the boxes produces a Vice President of the caliber of Kamala Harris.  When universally applied, a major step down the pathway to mediocrity.

Inclusivity relates to a union of the oppressed and their woke advocates.  Oppressors need not apply, since they are largely incapable of overcoming their white privilege, unconscious bias, and white fragility.  The left, once advocating for assimilation of the disadvantaged into the mainstream, now seeks to demonize and eliminate the mainstream.  They say that we must also legalize drugs, ignore homelessness, family breakdown, depression, suicide, crime, and an influx of unskilled labor – hardly strengthening measures.

Woke progressivism, under the banner of racism, preaches that our society, solely a product of white supremacy, is irredeemably immoral and unsustainable.  All the products of such a society, its greatness included, must be sacrificed.  The ensuing Mediocracy then will be ripe for control by the ruling elite.