Why Are Big Banks Interested in Bitcoin?

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I was reading a Reuters piece on Bitcoin (which for the record I think is a combination of sci-fi fueled fantasy and scam ponzi scheme) when I saw this interesting revelation:

Workers at Morgan Stanley (MS.N) and Goldman Sachs (GS.N) in London and New York have been visiting online Bitcoin exchanges as often as 30 times a day, according to documents seen by Reuters. Neither bank wanted to comment.

Employees at almost all the major international banks and numerous trading and investment firms have shown interest.

Bitcoin has become the Wild West of finance, with a proliferation of websites offering loosely regulated replicas of the services familiar to those in the financial industry.

There is a Bitcoin stock exchange, where companies can make initial public offerings and pay dividends in Bitcoin.

One website offering Bitcoin options trading was ‘listed’ this month for an implied valuation of half a million dollars.

Perhaps the most notorious is Bitcoinica, a platform offering margin trading, short selling and stop orders run by 17-year-old Chinese high school student Zhou Tong.

Users can leverage their bets up to a ratio of 10:1 on Bitcoinica, meaning they can lose more than their initial investment.

Zhou Tong, who is professionally advised by a forex trader and the head of a Singapore-based algorithmic trading firm, now lends his name to international slang.

To be “Zhou Tonged” is to be wiped out financially.

The chorus of a YouTube rap laments a Bitcoin day trader rash enough to hold a position with no stop loss protection: “It’s so silly, how come you just lost funds? You got Zhou Tonged!”

Sounds like Bitcoin is seen as yet another way banks can keep themselves afloat using
“exotic financial instruments” to separate suckers from hard earned cash. I guarantee you people who got “Zhou Tonged” have to cover their losses in non-bitcoin.

Let’s be honest, Bitcoins are just another attempt by people to create “creds” they can trade on the “Matrix” ala 90s cult phenomenon Shadowrun. That franchise, (now devolved into an Earth First! inspired morality tale) still influences transhumanism, neo-primativism and the remnants of the cyberpunk culture today and with Bitcoin and other online currency movements you can see the influence just as clearly. It’s interesting to note that Bitcoins are often used on sites to make illegal purchases – like drugs and illegal firearms. This is a fad based on late 90s cyberpunk pretensions not a sound investment.

Which makes Morgan Stanly and Goldman Sachs looking into this troubling. Either they see the potential to rob more people in an effort to prop up institutions that should have been bankrupt long ago or they are even less astute with money than we assume. Either way if you deal with them or Bitcoin you should be worried.

Fed Buying 61% of U.S. Treasuries

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This is the cheap gimmickry the left is using to avoid facing the obvious – we’re broke. This will only make the inevitable collapse more painful than it has to be:

The Federal Reserve is propping up the entire U.S. economy by buying 61 percent of the government debt issued by the Treasury Department, a trend that cannot last, Lawrence Goodman, a former Treasury official and current president of the Center for Financial Stability, writes in a Wall Street Journal opinion article published Wednesday.

“Last year the Fed purchased a stunning 61 percent of the total net Treasury issuance, up from negligible amounts prior to the 2008 financial crisis,” Goodman writes.

Goodman also warns that U.S. economy and markets are “at risk for a sharp correction” if conditions aren’t “normalized.”

“This not only creates the false appearance of limitless demand for U.S. debt but also blunts any sense of urgency to reduce supersized budget deficits.”

What’s the point of this? As MoneyNews explains it’s all about the illusion of stability:

Fed intervention in the government debt market makes demand for Treasury bonds appear higher than it really is, as foreign creditors and other investors have fled U.S. government debt instruments and are looking elsewhere until the government makes serious attempts to curb spending and narrow its gaping deficits.

Goodman notes that foreign investors like Japan and China that once scooped up U.S. debt are shunning it. In 2009, such foreign purchases of U.S. debt amounted to 6 percent of GDP and has since falled by over eighty percent to a paltry 0.9 percent.

Without foreign buyers and a shrinking base of U.S. corporate and bank buyers, the Treasury has had to resort to the Federal Reserve itself to make the purchases. The Fed purchasing not only makes up the shortfall, but can keep long term interest rates artificially low.

“The Fed is in effect subsidizing U.S. government spending and borrowing via expansion of its balance sheet and massive purchases of Treasury bonds. This keeps Treasury interest rates abnormally low, camouflaging the true size of the budget deficit,” Goodman writes.

“Similarly, the Fed is providing preferential credit to the U.S. government and covering a rapidly widening gap between Treasury’s need to borrow and a more limited willingness among market participants to supply Treasury with credit.”

 

As stated this trend cannot last. At some point the government will not have money to pay its bills and will be forced to take austerity measures like Europe has. You can see how well that turned out.

Get prepared.

Obama Administration Funding Middle East Christian Extermination

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Hillery Clinton, representing the U.S. State Department, was at a “Friends of the Syrian People” summit held in the increasingly Islamist Turkey. At that conference the “Syrian Resistance” was promised money, logistical support and was implicitly promised weapons to overthrow the Baathist regime. Russia, who has sided with the Syrian government, has condemned the move saying it would lead to years of bloodshed.

But there is another problem with people claiming to be friends to the Syrian people arming Muslim Brotherhood and Al-Qaeda backed mercenaries in yet another Arab state. The atrocities these animals are committing against minorities, specifically Christians.

Here’s a report on the ongoing violence in Homs by AINA:

Syrian President Basher Assad isn’t the only target of Syrian rebels as Syria’s Orthodox Christian Church reports “ongoing ethnic cleansing of Christians” by al-Qaeda-linked Islamist militant groups in the embattled Syrian city of Homs.

The report from the Vatican news agency Fides says Brigade Faruq, which has links with elements of al-Qaeda in Iraq and Islamist mercenaries from Libya, has expelled 90 percent of Christians living in Homs, nearly 50,000 people.

Reportedly, the armed Islamists went door to door in the Christian neighborhoods of Hamidiya and Bustan al-Diwan informing the homeowners that if they did not leave immediately they would be shot. Then pictures of their corpses would be taken and sent to al-Jazeera, along with the message that the Syrian government had killed them.

As such, the men, women and children — denied by the Islamists from taking any of their belongings — were forced to flee to mountain villages 30 miles outside of Homs, their homes occupied by the militants who claimed the owners’ possessions as “war-booty from the Christians.”

According to reports by Barnabas Aid, a relief agency assisting Syrian Christians, the forced Christian exodus from Homs has been ongoing since the beginning of February when armed Islamists murdered more than 200 Christians, “including entire families with young children.”

At that time a representative of Barnabas Aid pleaded, “Christians are being forced to flee the city to the safety of government-controlled areas. Muslim rebel fighters and their families are taking over their homes.”

Unfortunately, Islamist attacks against Syria’s Christian community, including kidnappings and murder, have occurred almost from the onset of the popular uprising against the regime of Syrian President Bashar Assad which began in March 2011.

In other words we’re funding a Jihad which is being fought like a Jihad, with the rapes, theft and looting Muslim commanders use as rewards for their soldiers being commonplace. You’ll also notice that Al-Jazerra and other media are complicit in the Jihad, allowing themselves to be used by these scum in extortion schemes.

The Christian Post has more, including pointing out that Assad is of a Shiite off-shoot (the Alewites) who themselves are often persecuted by Sunni Muslims, so the autocratic government of Syria did protect religious minorities. In fact much of Assad’s brutality has been aimed at keeping Sunni Muslims from taking over the country and massacring the minorities within.

Our government is helping the Sunni Muslims overthrow the government and has no plans to protect the minorities within. We are in fact providing promises of weapons to Al-Qaeda linked paramilitaries. Coincidentally the Muslim Brotherhood is meeting with Obama now. In the White House. After running pogroms in Egypt and a Black genocide in Libya.

Understand what is going on here. The Obama administration is funding and arming Wahhabi mercenaries to explicitly topple secular governments and persecute religious minorities. The Clinton administration did thee same in Bosnia. What exactly is the payoff for a Muslim Brotherhood take over of the Middle East besides a second Holocaust and the extermination of Christian, Druze, and other religious minorities? Egypt will become a Sharia state and no doubt the nucleus of a new Caliphate. That Caliphate will make war on the world.

So why are we supporting this? What promises is Obama making even now to the Muslim Brotherhood? Why are we abandoning centuries old American principles of religious freedom to support militant theocracy? Maybe because Leftists and Islamists will stand together to overthrow the old world order to install a new one? Maybe when OWS needs support to overthrow our cities these same mercenaries will be imported here?

If I were a Christian I would be reading Revelations now.