Tell it like I see it…my weekly news collection

Weekly news collection of April 24, 2020

Blockchain and Security Tokens

  • Vertalo is tokenizing a large real estate portfolio on Tezos blockchain. This is done directly between asset owners and their existing investors. It is therefore a secondary market tokenization aiming at reducing costs and making the transaction frictionless between the participants. A very sensible technological improvement but not yet a step towards “market liquidity” for any such tokens and their tradability, which is yet far from coming.

Crypto, Money and Central Bank Digital Currencies

  • I mentioned in previous newsletters how helicopter-money is coming and how this could be the catalyst for CBDC adoption. But as the articles below shows there is much more to it in this black-swan induced debt crisis. The current monetary system is at stake. What will come afterwards is hard to say. Gold is doing its job, stablecoins use is on the increase and this should be also reflected, sooner or later, on the price of BTC.
  • The Dutch Central Bank takes officially a favourable position towards the issuance of a Euro CBDC and candidates itself for the leading role. Interestingly a CBDC — issued directly into citizens wallets — might open the door to an interesting “default” store of value proposition for citizens which nowadays does not exist. Say you have stress in the banking system and are worried about the balance on your account, you can quickly move the balance into a safer CBDC wallet. From there you can invest into other assets as you like. All frictionless, efficiently, rapidly and cost effectively.
  • All this while China starts testing on retail shops the use of its CBDC, the digital Yuan.

Bitcoin

  • I wrote before about bitcoin properties which makes it a digital gold and a good store of value. Yet in this crisis it is not acting as I would have expected, at least for now it has been fairly correlated with risk assets in the downtrend. I certainly did not change my views although I am trying to figure out what are the problems that currently affect bitcoin. Among those potential causes the first article below points out the excessive leverage (100x) of crypto exchanges which exacerbate BTC´s volatility.
  • The second article below points out the lack of mass adoption in retail commerce. This is certainly true but even if BTC denomination — as suggested in the article — can be one of the causes for the lack of adoption, there is more to it. Chiefly, I think is the lack of a really user friendly app for the average potential user. My mom can not use a hardware wallet but she knows how to use Telegram on her mobile phone.

Economics

  • The US economy adds another 4,4 million jobless bringing the total to 26,5 million in just over 1 month.
  • Europe´s PMI index fell an astonishing 74%. The biggest fall in history since the index was first recorded.
  • In an historical event on April 20, the May 2020 WTI crude oil futures contract plunged to a record negative of -$40.32 a barrel and settled at -$37.63. The anomaly was caused by lack of storage at Cushing Oklahoma where delivery of the futures contract is done. The technical reasons are explained below.

https://www.barchart.com/story/futures/quotes/CLK20/overview/4732084/may-wti-crude-plummets-to-negative-prices-ahead-of-expiration-and-delivery

https://twitter.com/RogerDiwan/status/1252324705291374592

European Union or better…disunion

  • When even those traditionally pro-EU/€uro are dissatisfied, then we are close to clinical death. Do not underestimate however the trillions at stake of the “special interest groups” in Brussels. What people think is irrelevant. Even if the patient is clinically death, no one seems to be willing to pay for the funeral…yet!
  • So, while Merkel may have won this latest battle in the end she may lose the war for the EU. And, in the ultimate irony, the people of Europe may have her to thank for their deliverance from its dysfunction.”
  • The moment of truth has come, as Evans-Pritchard calls it — and nothing has happened as I have suspected. They kicked the can down the road again by issuing the usual press releases of a successful package worth €500 billion put together (but still all the terms must be agreed and maybe something will happen in June…maybe). Nothing new, just more debt, more interest to pay, no common bonds, no monetization of national bonds by the ECB. As far as Italy is concerned, the only way — again and again — is to leave the €uro, not tomorrow, not after tomorrow, NOW. Unfortunately Italy lacks brave and competent politicians, leaders with a vision. It is rather governed by a corrupted gang of EU appointed vassals.

Covid-19 conspiracy theories and reality — connect the dots

Covid-19 Liabilities and Law suits against China

  • Holding China liable for tort in spreading the virus will be very difficult. The first obstacle is the Foreign Sovereign Immunities Act of 1976 which extends blanket immunity to countries from most lawsuits in the United States. The exceptions are rather narrow and rarely accepted by American courts. Even if valid exceptions can be found — such as in case of commercial activities as some plaintiff argue the Wuhan lab was — proving the cause-effect nexus will be very hard. However, since it seems that the west is concertedly moving against China to blame it for the virus spreading, sanctions might be the geopolitical tool chosen in the end. Otherwise a full military escalation is clearly in the plans, see here John Pilgers great film documentary for the English TV (the part relating to the US nuclear experiments in the Marshall Islands — of which I was not aware (forgive my ignorance for that sad part of human history post WWII) — is quite disturbing and comparable with what done by the Nazis in the extermination camps.

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