How bitcoin fraud works Here’s how the fraud works, as described in this legal notice from the New York State Attorney General. A company called Bitfinex sponsors a cryptocurrency called Tether. This crypto is a so-called ‘stablecoin’. This means that the value of one tether is fixed at US$1.00. When you buy a tether for US$1.00, the money is supposedly held in safe liquid assets. When you cash in your tether, you should receive US$1.00 in return (less small transaction costs). The problem is that no one has been able to locate the liquid assets that supposedly back tether. There has been no full audit and there is no transparency about the whereabouts or composition of the liquid assets backing the coin. Tether claims that its dollar reserves are held in a Bahamian bank named Deltec Bank & Trust. But independent research revealed that the assets claimed by Tether exceed the total US dollar assets of the entire Bahamian banking system. Other research shows that those who buy tether use them overwhelmingly to buy bitcoin from unregulated crypto exchanges based in Africa and Asia. These exchanges offer leverage and often award ‘free’ tether coins for those who bring in new customers. These tethers have been used to bid up the price of bitcoin and create the bubble. Meanwhile, the dollars supposedly backing tether are unaccounted for. Not just a spectator sport for prudent investors If this process were to go in reverse, which it inevitably will, the bitcoin values would collapse quickly (because of leverage) and Tether would be unable to redeem retreating bitcoin investors (because of the unaccounted-for liquid assets). The Tether crooks would walk away with dollars. The prices of bitcoin and tether would collapse catastrophically. And the bitcoin ‘investors’ would walk away empty-handed. This is not just a spectator sport for prudent investors. The types of losses arising from a bitcoin collapse would easily spill over into brokerages and banks handling accounts of investors who were selling everything because they’re desperate to raise cash and avoid further losses. Because the shady bitcoin and Tether exchanges are unregulated, there is perhaps little that can be done to avoid this coming fiasco. Investors should at least be alert to the potential collapse by increasing their cash allocations to help weather the storm. Meanwhile, on a completely unrelated note… This may be the last US university where free speech still exists The censorship of conservative voices by progressive media has become a pandemic. President Trump was banned from Twitter and Facebook. The conservative investigative journalist James O’Keefe was likewise banned. A social media platform called Parler, which welcomed all points of view and was a favourite of many conservatives was shut down by Google, Facebook, and Twitter (which banned its content), and Amazon Web Services (which disabled Parler’s digital servers). The Silicon Valley neo-fascists have also banned any opinion on COVID-19 that contradicts official government propaganda. Empirical studies show that lockdowns don’t work to stop the virus, face masks are of dubious value, schools can reopen safely, and the so-called ‘vaccine’ is really an experimental gene therapy posing as a traditional vaccine. If you actually say any of these things on social media, you risk being shut down, or having a ‘misinformation’ label slapped on your content. That’s ironic because the biggest source of misinformation today is Silicon Valley and the government itself. Where are the defenders of free speech? Fortunately, there are still a few who uphold the free exchange of ideas. This article describes a new journal launched by students at the University of Chicago. The journal, called the Chicago Thinker, has a mission statement that says: ‘We demand not to be coddled. Embracing the experience of unfettered inquiry and free expression is precisely the point of these years of intense study: to rigorously confront and challenge our most deeply-held beliefs—and to emerge from the experience as more thoughtful, informed human beings.’ Let’s hope the University of Chicago is not the only institution willing to stand up for free speech and robust debate. The right to free speech is too often taken for granted. It’s the first freedom attacked by the radical left. They understand that once free speech is gone, it’s impossible to get back. From then on, the left controls the debate, which means they control the culture. We all need to do what we can to defend free speech. We’re not only defending the right of others to say what they want. We’re defending our own ability to do the same. Regards, Jim Rickards,
Strategist, The Daily Reckoning Australia PS: This content was originally published by Jim Rickards’ Strategic Intelligence Australia, a financial advisory newsletter designed to help you protect your wealth and potentially profit from unseen world events. Learn more here. | 