What is getting clear for us now is that the rise of cryptocurrency stemmed from the failures of the government to do its job well.

California’s electrical grid can’t handle all the solar energy the state is producing

In California, solar power is booming: The state leads the nation in solar production, and for a brief period on March 11, California pulled nearly 40 percent of its electricity from the sun.

But the state’s solar boom isn’t all sunshine, as the Los Angeles Times energy reporter, Ivan Penn, laid out in a recent investigation. To avoid overloading its electrical grid, California has actually paid neighboring states like Arizona to take surplus renewable energy — dozens of times this year.

https://www.pri.org/stories/2017-07-20/california-s-electrical-grid-can-t-handle-all-solar-energy-state-producing

This is all by design.  The modern system is designed to take wealth automatically from savers, to push them into risky assets, so they help sustain all the asset bubbles that benefit the elites.

Bellator 184

Eduardo Dantas (c)   vs.   Darrion Caldwell            
Daniel Straus   vs.   Emmanuel Sanchez            
Pat Curran   vs.   John Teixeira            
Joe Taimanglo   vs.   Leandro Higo

What the Federal Reserve is actually whining about is not low inflation - it's that high inflation isn't pushing wages higher like it's supposed to.

It's not exactly a secret that real-world inflation is a lot higher than the official rates--the Consumer Price Index (CPI) and Personal Consumption Expenditures PCE). As many observers have pointed out, there are two primary flaws in the official measures of inflation:

1. Big-ticket expenses such as rent, healthcare and higher education--expenses that run into the thousands or tens of thousands of dollars annually--are severely underweighted or mis-reported. While rents are soared, the CPI uses an arcane (and misleading) measure of housing costs: owners equivalent rent. Why not just measure actual rents paid and actual mortgages/property taxes/home insurance premiums paid?



Healthcare is 18% of GDP but only 8.5% of CPI. To those exposed to actual costs of healthcare, 8.5% of the CPI is a joke.

The same can be said of higher education: households paying tuition and other college costs are exposed to horrendously high rates of inflation, as illustrated in this chart:



Revealing the Real Rate of Inflation Would Crash the System (August 3, 2016)

The Burrito Index: Consumer Prices Have Soared 160% Since 2001 (August 1, 2016)

Inflation Isn't Evenly Distributed: The Protected Are Fine, the Unprotected Are Impoverished Debt-Serfs (May 25, 2017)

Then there's the hedonic adjustments that are made to reflect improvements in quality, features, safety, etc. So the price of computers is discounted to reflect the increase in memory, etc. compared to previous models. This is a can of worms, as anyone shopping for a new car or truck can attest: yes, the vehicles have more safety features, but the sticker price is much higher. Do we knock off $10,000 the "price" because of these additional features? Why should we, when consumers have to pony up $10,000 more than they did a decade ago?

More honest and accurate estimates of real-world inflation that include the big-ticket categories of housing, healthcare and higher education reckon annual inflation is around 7% or even as high as 10% in high-cost metro areas, not 2%. This sets up a very peculiar cognitive dissonance in the financial media.

On the one hand, government agencies are bending over backward to under-report inflation. On the other, the Federal Reserve is whining that inflation is too low and their efforts to push it higher have failed. Heck, folks, the solution is obvious: just report real-world inflation without the hedonic adjustments and other shuck and jive, and when the rate of inflation comes in at a hot 7% instead of the official 2%, the Federal Reserve can declare victory.

Why does the Fed want higher inflation? The general explanation is higher inflation benefits bankers, borrowers and the expansion of credit that underpins our consumerist economy.

The idea is that as wages rise with inflation (assuming wages are rising, which they're not for the bottom 90%), households will have an easier time servicing existing debt and getting new loans.

The payments due on existing debt become easier to make as inflation expands everyone's paychecks. (Note that this expansion doesn't mean the purchasing power of the wage has increased; it's an illusory expansion that serves the credit industry.)

Banks benefit because they earn fees on originating new loans and rolling over existing debts into new loans.

But the supposed benefits of high inflation are undercut if wages don't rise as fast as prices. As many observers have noted, wages for the bottom 90% have not kept pace with higher costs. For the bottom 90%, rising rents, higher property taxes, higher health insurance premiums, higher healthcare co-pays and deductibles, soaring college tuition and so on, have squeezed household budgets while household income has stagnated.

No wonder the government wants to mask the real rate of inflation. If it was widely understood that inflation is reducing our purchasing power at an annual rate of 7% while wages are rising at 1% or 2% if at all, people might realize the Fed and other authorities have stripmined the many to enrich the few.



So what the Federal Reserve is actually whining about is not low inflation--it's that high inflation isn't pushing wages higher like it's supposed to. In the simplistic models of conventional economics, inflation is supposed to be a monetary function, i.e. a generalized secular dynamic that pushes everything higher--not just prices, but wages, too.

Alas, the world isn't as simple as the economists' models. So what we have instead is stagnating wages and soaring wealth-income inequality.



No wonder so many people reckon this was the real plan all along: it's worked brilliantly for the eight years of "recovery", greatly enriching the few at the expense of the many.

Homero Josh Garza’s now-defunct companies must also pay $10 million.

Homero Josh Garza, who founded two cryptocurrency startups, GAW Miners and ZenMiner, has been ordered to pay a final civil judgment of $9.1 million, plus $700,000 in interest.

The judgement, which was formally approved by a federal judge in Connecticut on Tuesday, comes months after Garza pled guilty to a single criminal wire fraud charge. In May 2017, as part of the same lawsuit, Garza’s companies were hit with a default judgment of more than $10 million. No representatives made any formal response to the lawsuit—Garza himself invoked his Fifth Amendment privilege.

According to the civil complaint, which was first brought by the Securities and Exchange Commission in December 2015, Garza and his companies sold more than 10,000 “investment contracts representing shares in the profits they claimed would be generated from using their purported computing power to ‘mine’ for virtual currency.”

The judgment against Garza comes just days after the SEC also sued a New York man and his two companies that were allegedly involved in fraudulent initial coin offerings despite the fact that “neither has any real operations.”

In his plea deal, Garza admitted that his businesses were, in fact, an illegal pyramid scheme. In early 2014, GAW Miners was first introduced to the Bitcoin public as a reseller of mining rigs. Later, the company shifted to cloud-based mining (Hashlets) and, in early 2015, introduced its own altcoin, dubbed “Paycoin.” GAW also tried its hand at its own cloud-based wallet service (Paybase) and its own online discussion board (HashTalk).

In January 2015, Garza told Ars that he “started the company because of scammers.” He claimed that he first heard of Bitcoin around a year ago, at which point he tried to buy a hardware mining rig and “spent $100,000 for a product I never got.” Garza declined to say from which company he purchased the rig.

“I’d never had any experience with that—realizing a couple weeks later that these guys didn’t care how much money I can afford to lose,” Garza said. “I got really frustrated and thought we should start a company to try to fix this.”

Garza told Ars that GAW (“Geniuses At Work”) made “over $1 million in sales our first month,” adding that, within a few months, “We leveled at $60 million to $80 million per year.”

The purported entrepreneur, who did not immediately respond to Ars’ request for comment, is due to be sentenced in the criminal case on January 5, 2018 at 10:00am in Hartford, Connecticut, before US District Judge Robert N. Chatigny.

Forensic investigative unit was forced to use equipment tagged for scrap.

Last month, the Securities and Exchange Commission revealed a 2016 breach of a test system that allowed an unknown party to get access to unpublished corporate information in the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. The breach potentially allowed the bad actors to profit from trades based on the information. SEC Chairman Jay Clayton revealed the extent of that breach in a policy statement on the importance of the commission's cyber-security mission. But just a few months before the SEC discovered the initial breach last year, as Reuters reports, members of the SEC's own internal digital forensics and security team wrote a letter bemoaning the lack of support they received from the agency's Office of Information Technology and SEC leadership.

In a memo sent to the SEC's inspector general, the head of the SEC's Digital Forensics and Investigations Unit complained that his team was woefully underfunded, undertrained, and forced to work with repurposed equipment and hard drives that had been designated by other branches of the SEC for disposal. The memo to SEC Inspector General Carl Hoecker, shared with Reuters by a congressional staffer, cited "serious deficiencies" in funding and support. The entire hardware budget for the unit was $100,000 for fiscal year 2017—half a million under the amount needed.

Normally, complaints to the inspector general of an agency get significant attention. However, in this case, the complaint was directed to Hoeker because he oversaw the unit. The Digital Forensics and Investigation Unit was created by Hoeker in 2015 not just for internal security investigations but so his office could play a role in the SEC's law enforcement role—providing forensic support to SEC criminal investigations. In a 2016 report to Congress, Hoeker described the role of the unit within the SEC Office of Investigations:

This new unit enhances the OIG’s investigative capability and assists in detecting, identifying, and protecting against threats to the SEC's sensitive information systems. Furthermore, the OIG has added auditors with information technology (IT) expertise. These staff will assist the OIG in continuing to perform its important oversight function as the SEC continues to make needed technological improvements to achieve its mission.

But that vision never clearly materialized—and for that part, neither did agency funding.

"Even though the [unit] has been in existence for over one year, there is no strategic vision and no clear objectives," the memo's author wrote. The memo also cited a lack of communications from the SEC's Office of Information Technology on internal IT security issues.

Two months after the August 2016 memo was written, the SEC detected a breach in EDGAR through an application in testing that provided access to live data. But it would take nearly a year for the SEC to determine the extent of the breach.

The buyer creates an escrow transaction, specifying the seller address, escrow address and amount of Ether. The smart contract locks the buyer's funds. When buyer receives the item, he can release the locked funds in the Dapp.

If a dispute happens, the escrow agent can step in to refund the buyer, or release funds to seller. At any point in time, the escrow agent NEVER has access to the funds, which eliminates one big security risk of transferring the entire transaction amount to the escrow.

In exchange for his service, escrow agent can charge a percentage fee set in the Dapp.

It is live at: http://escrowmyether.com/

Catalonia Referendum Pushes Bitcoin Prices Above $4,400

October 2nd, 2017

News that Catalonia has won "right to statehood" sent the price of Bitcoin at $4,400 on Sunday evening, close to 45% above the recent low.

It’s now official, 90% of Catalans who participated in Sunday’s referendum voted for independence.

That sounds like a clear victory for Catalonia’s independence movement.

The trouble is that only 42.3% of Catalonia’s participated in the referendum, which Spain’s constitutional court has declared illegal. And scores of people were injured in clashes with police.

While it is still unclear which way things will go next, one thing is clear, uncertainty is to spread over Spain, EU and the global economy.

That’s music in the ears of Bitcoin traders who pushed the digital currency up close to $150 dollars on Sunday evening, as clashes between pro-independence demonstrators and Spanish police broke off.

Bitcoin prices have stayed firmly above $4ooo recently, as traders have realized that the digital currency can survive and thrive without China. And government regulation is positive, not negative, for the future of Bitcoin and other major cryptocurrencies. It adds credibility to the market, while limiting the supply of new coin offerings.

Meanwhile, the digital currency has emerged as the new “gold,” a hedge against growing global uncertainty, as it was discussed in a previous piece here.

https://www.forbes.com/sites/panosmourdoukoutas/2017/10/01/catalonia-referendum-pushes-bitcoin-prices-above-4400/

News that Catalonia has won ‘right to statehood’ sent the price of Bitcoin at $4400 on Sunday evening, close to 45% above the recent low.

It’s now official, 90% of Catalans who participated in Sunday’s referendum voted for independence.

That sounds like a clear victory for Catalonia’s independence movement.

The trouble is that only 42.3% of Catalonia’s participated in the referendum, which Spain’s constitutional court has declared illegal. And scores of people were injured in clashes with police.

Source: Coinranking.com

While it is still unclear which way things will go next, one thing is clear, uncertainty is to spread over Spain, EU, and the global economy.

That’s music in the ears of Bitcoin traders who pushed the digital currency up close to $150 dollars on Sunday evening, as clashes between pro-independence demonstrators and Spanish police broke off.

Bitcoin prices have stayed firmly above $4ooo recently, as traders have realized that the digital currency can survive and thrive without China. And government regulation is positive, not negative, for the future of Bitcoin and other major cryptocurrencies. It adds credibility to the market, while limiting the supply of new coin offerings.

Meanwhile, the digital currency has emerged as the new “gold,” a hedge against growing global uncertainty, as it was discussed in a previous piece here.