Category: Campfire

It was no ‘Thrilla in Manila’, as Muhammad Ali dubbed his fight against “Smokin'” Joe Frazier in 1975. Wednesday’s much-hyped two-hour ‘contest’ between American billionaire Michael Saylor and wealthy Canadian businessman Frank Giustra on Youtube was promoted as a “Great Debate” over Bitcoin versus gold.

I felt as I watched the six ’rounds’ that while Saylor (in Bitcoin’s corner) did some great ducking and weaving, Giustra (in gold’s corner) failed to deliver a knock-out punch. By the end, it felt a bit of a damp squib.

Coming a week after Coinbase, the cryptocurrency exchange, listed on Nasdaq at a heady $80 billion valuation, coinciding with the UK Chancellor Rishi Sunak’s announcement of a Treasury/Bank of England taskforce to consider the potential for a central bank digital currency, I expected more sparks to fly than actually happened. Coinbase is now trading around five times its price of six months ago. It’s an unusual IPO – a tech company that has come to market and is showing profitability, which most never manage.

The comments that stacked up on Youtube from spectators of the Saylor/Giustra dance as it happened said it all – the world seems bitterly divided between pro and anti-Bitcoin and gold cult followers. According to them you are either destined for poverty or riches from gold or Bitcoin – neither of which is true – and missed the point about both cryptocurrencies and gold. In fact both Saylor and Giustra missed the point.

Cryptocurrencies were developed and have flooded the popular imagination for a very good reason – people have lost or are losing faith in fiat or government-issued currency. I get that; that’s why I set up Glint. Who knows what the future will bring? Cryptocurrencies may well survive – but they are infants scarcely out of diapers compared to gold. In any case there’s room for both.

Saylor for his part ducked away from Giustra’s sensible punches about risk, throwing some feints along the way, such as his extravagant claim that “Bitcoin’s the most popular investment asset in the history of the world”.

But the contest got bogged down and Giustra failed to land what could have been the most devastating punch – which is that while gold has indeed been used throughout most of recorded history as money, it has once more re-gained that status, thanks to Glint. For with Glint’s App and Mastercard® you can load gold onto it, and then take that shopping and spend gold as money. That’s not easy with cryptocurrencies, which are transactionally slow and cumbersome.

Note to self: contact Giustra and remind him that his pro-gold notes need updating to take account of Glint.

Until next week!

Jason

Like most of you, I presume, I strongly feel that how I use my money is my own business. I don’t see why anyone should be able track or control my use of money to gather data about me or my personal tastes, or to extend in any way their surveillance over me.

Not that I have anything to hide – it’s just that how I choose to use my money seems a deeply private affair. Which is one reason for using gold as money – gold is the most universal and private store of value there is, as it owes its creation to no human. Anything made by humans can be corrupted and abused.

So I am watching with some trepidation the onward march of Central Bank Digital Currencies (CBDCs). Pretty soon governments everywhere will try to foist these cash-substitutes onto their citizens.

Ironically, cryptocurrencies were created to escape the relentless devaluation of fiat currency (cash); yet governments are now going to use the technology underpinning cryptocurrencies – blockchain – to re-assert their power over how we use the money they create, by developing CBDCs.

The world’s central bankers are accelerating their efforts to coordinate and roll-out CBDCs; they are alarmed that China’s own CBDC will leave them standing.

China is often thought of leading the charge on CBDCs but actually the National Bank of Cambodia (NBC) last October launched a payment system called Bakong, co-developed with Soramitsu, a Japanese blockchain start-up. The NBC hopes that the Bakong will stem the decline in use of the national currency, the Riel. Most transactions in Cambodia are in US dollars and the Riel is losing its status as money.

More than a dozen countries are in the process of developing their own CBDC. The deputy governor of China’s central bank, the People’s Bank of China (PBoC), recently wrote in Yicai Global that China’s CBDC should be used on a “controllably anonymous” basis and that “complete third-party anonymity… may encourage criminal activities”. “Controllably anonymous” sounds like a contradiction in terms. India said earlier this year that it is considering criminalising private cryptocurrencies while building a framework for its own official digital Rupee.

China’s CBDC has already been steadily introduced via the state giving away millions of its currency, the Renminbi (which means “the people’s currency” in Mandarin) in a series of state-run lotteries in various cities. Users have to download an app to receive the currency.

In reality, China’s CBDC will be a “stablecoin”, i.e. pegged to the Renminbi. This, hopes Beijing, will prevent speculators from driving it higher or lower. It will also, hopes the Communist Party, knock privately-generated cryptocurrencies – trading of which is banned in China, even though an estimated 65% of global Bitcoin mining happens in China – for six.

Stablecoins have other advantages for governments, too. They are programmable; in early testing for instance the Renminbi version had an expiry date, encouraging holders to spend it more quickly. It was also trackable, allowing closer monitoring of Chinese citizens.

With such state control all kinds of things become possible – such as the immediate issuing and collecting of fines.

This kind of stuff gives me the creeps. So when I read (as I did this week) that a senior member of the Bank of Japan says that seven central banks – including the US Federal Reserve and the European Central Bank – are now jointly looking into setting a common framework for CBDCs, I sniffed Big Brother around the corner.

Money is power. But money and power are in a confusing flux right now. Privately-generated cryptocurrencies (which are extremely difficult to use as money) are facing a steady but relentless challenge by government stablecoins. And as governments everywhere try to push their digital cash on their citizens, the scope for government control over how, when, and where they can use that money will expand willy-nilly.

To avoid even the risk of that kind of supervision and interference I will be using my Glint card, and its gold, even more in the future.

Until next week!

Jason Cozens

Like most of you, I presume, I strongly feel that how I use my money is my own business. I don’t see why anyone should be able track or control my use of money to gather data about me or my personal tastes, or to extend in any way their surveillance over me.

Not that I have anything to hide – it’s just that how I choose to use my money seems a deeply private affair. Which is one reason for using gold as money – gold is the most universal and private store of value there is, as it owes its creation to no human. Anything made by humans can be corrupted and abused.

So I am watching with some trepidation the onward march of Central Bank Digital Currencies (CBDCs). Pretty soon governments everywhere will try to foist these cash-substitutes onto their citizens.

Ironically, cryptocurrencies were created to escape the relentless devaluation of fiat currency (cash); yet governments are now going to use the technology underpinning cryptocurrencies – blockchain – to re-assert their power over how we use the money they create, by developing CBDCs.

The world’s central bankers are accelerating their efforts to coordinate and roll-out CBDCs; they are alarmed that China’s own CBDC will leave them standing.

China is often thought of leading the charge on CBDCs but actually the National Bank of Cambodia (NBC) last October launched a payment system called Bakong, co-developed with Soramitsu, a Japanese blockchain start-up. The NBC hopes that the Bakong will stem the decline in use of the national currency, the Riel. Most transactions in Cambodia are in US dollars and the Riel is losing its status as money.

More than a dozen countries are in the process of developing their own CBDC. The deputy governor of China’s central bank, the People’s Bank of China (PBoC), recently wrote in Yicai Global that China’s CBDC should be used on a “controllably anonymous” basis and that “complete third-party anonymity… may encourage criminal activities”. “Controllably anonymous” sounds like a contradiction in terms. India said earlier this year that it is considering criminalising private cryptocurrencies while building a framework for its own official digital Rupee.

China’s CBDC has already been steadily introduced via the state giving away millions of its currency, the Renminbi (which means “the people’s currency” in Mandarin) in a series of state-run lotteries in various cities. Users have to download an app to receive the currency.

In reality, China’s CBDC will be a “stablecoin”, i.e. pegged to the Renminbi. This, hopes Beijing, will prevent speculators from driving it higher or lower. It will also, hopes the Communist Party, knock privately-generated cryptocurrencies – trading of which is banned in China, even though an estimated 65% of global Bitcoin mining happens in China – for six.

Stablecoins have other advantages for governments, too. They are programmable; in early testing for instance the Renminbi version had an expiry date, encouraging holders to spend it more quickly. It was also trackable, allowing closer monitoring of Chinese citizens.

With such state control all kinds of things become possible – such as the immediate issuing and collecting of fines.

This kind of stuff gives me the creeps. So when I read (as I did this week) that a senior member of the Bank of Japan says that seven central banks – including the US Federal Reserve and the European Central Bank – are now jointly looking into setting a common framework for CBDCs, I sniffed Big Brother around the corner.

Money is power. But money and power are in a confusing flux right now. Privately-generated cryptocurrencies (which are extremely difficult to use as money) are facing a steady but relentless challenge by government stablecoins. And as governments everywhere try to push their digital cash on their citizens, the scope for government control over how, when, and where they can use that money will expand willy-nilly.

To avoid even the risk of that kind of supervision and interference I will be using my Glint card, and its gold, even more in the future.

Until next week!

Jason.

As  I stir the ashes of this week’s campfire I find myself in a state of slight confusion – will I need a vaccine ‘passport’ to able to go the pub for a drink and a much-needed ‘in person’ meet-up with my Glint team? Or to travel abroad? Or to sit down for a meal in a restaurant?

According to the UK Prime Minister Boris Johnson, when non-essential shops and pub gardens in England re-open on 12 April “there is absolutely no question of people being asked to produce a certification or a Covid status report when they go to the shops or to the pub garden or to the hairdressers or whatever…”

For good measure, he added “we’re not planning that for step three, either”. Step 3 (which will be no earlier than 17 May) will see the re-opening of theatres, cinemas, galleries “subject to specific conditions: that they comply with COVID-Secure guidance including taking reasonable steps to limit the risk of transmission, complete a related risk assessment; and ensure that those attending do not mix beyond what is permitted by the social contact limits”. Those social contact limits ban groups of more than six people or two households indoors. How will that work in a cinema or pool hall for example?

Not even by 21 June is it guaranteed that the abnormal conditions of life which have been imposed by the government (and heartily supported by the general public, if most opinion polls are to be believed) during Covid-19 might be removed. “This is subject to the outcome of the Events Research Programme, and a review of social distancing measures”, says the government’s website. Restrictions on what we can do, how we can mingle, where we can go, are being lifted; at a snail’s pace.

But the introduction of vaccine certificates or passports – which would include vaccination status, test results or evidence of someone having contracted and recovered from Covid-19 – “could potentially play a role” in the future, says the government.

Boris Johnson said during a debate on national identity cards, when a previous (Labour) government introduced plans for them in 2003: “I will in no circumstances carry one and even were I compelled to do so, I would take it out and destroy it on the spot were I ever asked to produce it. It is a plastic poll tax that will do nothing to assist the struggle against terrorists and will hugely expand the powers of the state over the individual”.

The last time the UK legally imposed compulsory identity cards was during the Second World War – everyone had to carry the card at all times and failure to do so was a criminal offence. That lasted until 1952 – seven years after the war ended.

The sheer bureaucracy of administering all these ‘steps’ (the ‘tier’ system has been quietly dropped in England at least) and ensuring compliance is mind-boggling. Whole new businesses have grown up around Covid testing, like moss on an ill-tended garden path.

There is already opposition building among MPs and others outside Parliament to any idea of compelling the introduction of ‘Covid passports’ – but the private sector may start imposing them anyway. The risk is not just Covid-19 but widespread confusion as to what is or is not permitted, and on what basis.

Until next week!

Jason.

Spring is here and finally, we have some sunshine! In the UK, the mood is lifting, nicely coinciding with the easing of the government’s restrictions on social interaction. As of Monday, this week the rules allow six people (or two households) to be free to meet outdoors, and outdoor sports and open-air swimming pools are again open.

In the past 12 months – the UK went into its first ‘lockdown’ 23 March 2020 – we have acquired lots of new vocabulary; ‘social-distancing’, ‘flattening the curve’, ‘lateral flow tests’, ‘immunocompromised’, ‘intubation’, ‘personal protective equipment’, ‘proning’ … the list goes on. Will we still be using them a year from now or will they just be distant bad memories. We are told that Covid-19 (or some variants) will still be with us but that we will have to live with that. They can’t lock us away forever though. Economic need is starting to trump health anxieties. Policymakers are starting to realise (I hope) that they need to get the economy restarted.

From 12 April, gyms, hairdressers and other venues can re-open in England but not until 21 June (on current plans) will all legally-imposed limits on social contact be removed. Nightclubs from that date can throw their doors again.

Brits can, in other words, look forward to going back to ‘normal’. But after a year of more or less enforced social distancing, we have no idea what that might be. I presume that at most social gatherings there will be one main topic of conversation – ‘how was life for you under lockdown?’

But at least it will soon be legal to rub shoulders with strangers, shake hands with friends, and hug one another again – crowding will be back and I can’t wait.

For the Glint team, crowds are starting to re-appear. As we have been advertising in recent editions of The Treasury, we are offering Glint clients the chance to pre-register their interest in investing in Glint, and to join our gold-as-money movement. Very soon now, we are throwing the invitation open to the wider public – crowds are back!

Have a great week!

Jason.

I have just filled in my census form. It’s a job that comes round every 10 years, although Scotland is pushing back its census until 2022, “due to the impact of the Covid-19 pandemic” which, oddly enough, has not delayed that of England, Wales or Northern Ireland. The US also runs a census every 10 years – their next one is due in 2030.

What do I think of these great data-gathering exercises? A nosey-parker intrusion by the state into the private lives of 68 million people? Or a useful exercise which enables the government to make better policy decisions? On the basis of many past government errors, I’m not very hopeful about the latter.

But unless I want a criminal record, I have no choice – failure to complete the census risks a £1,000 ($1,383) fine. Refusing to complete the US census risks a fine of up to $5,000 (£3,600). Four UK ‘refuseniks’ were fined a £1,000 after the 2011 UK census; 270 more were fined an average of £218.

Censuses have expanded their probing over time. As with the first (1790) US census, there were just six questions in the first (1801) UK census – no names or addresses. From 1871 to 1911, the UK one even asked if anyone was blind, deaf, dumb, an imbecile or lunatic.

For 2021’s model the (now) 50 questions range from “what is your name and date of birth” to “how well can you speak English?” and (voluntary) ones about religion and gender.

Personal data is big business these days. The UK’s Office for National Statistics promises “your information is safe with us” and will remain confidential for 100 years. But how strong can that promise be? The US moved its census on-line to an outsourced company from 2016; but it was hacked from IP addresses in Russia during 2018 testing.

There were ‘thousands’ of data breaches in UK government departments between 2019 and 2020. The UK government awarded a £65 million contract for administering this year’s on-line census to a US-based company called Leidos, which the Stockholm International Peace Research Institute (SIPRI), listed as the 19th biggest arms and military services company in the world in 2019. The 2011 census was run by the US-based arms company Lockheed Martin.

Gathering and using information on individuals is probably the biggest growth industry of the early 21st century. China does it very effectively and, with its Central Bank Digital Currency – and CBDCs will soon be everywhere – is tightening its grip over its citizens. Your fiat money is not really yours; your personal data is not really yours.

At Glint, we take your data security very seriously. So, I urge you to be vigilant and protect your personal data.

Until next week, stay safe.

Jason.

This is the time of year when UK (excluding Northern Ireland) property owners get their annual council tax demand for the next year. If ever there was a confirmation that inflation is back, it’s this – my council tax for April 2021-April 2022 is up by 4.8% compared to the previous year. One item – for the local police and crime commissioner’s services – has gone up by a whopping 7.4%!

Meanwhile, the government says the Consumer Prices Index (CPI) rose by 0.7% in the 12 months to January this year. The CPIH (which includes owner-occupiers’ housing costs, including council tax) rose by 0.9% in the 12 months to January this year, according to government figures. My council tax went up by 4.99% in 2019-20 and 3.99% in 2020-21. So over three years, this tax has risen by an average 4.59% a year. Across the country council tax this year will go up by an average 6.6%. Yet the government figure for the annual CPIH nationwide in 2019 was 1.4% and 0.8% in December 2020. There seems to be a discrepancy somewhere…

This creeping inflation and stealth tax hits us all; the poorest households hardest. Many have racked up debts during the Covid-19 lockdowns. Total UK household debt in the third quarter of 2020 was almost £1.9 trillion, 2.4% higher year-on-year. It’s difficult to accurately assess how many and what types of people are struggling in the UK – there are so many ways of calculating this. But the increase in foodbank use – up by 88% rise in demand during February-October 2020 compared to the same period in 2019 say independent food bank operators – gives a clue.

Yet at the same time, many UK households have managed to save during the Covid-19 lockdowns. Since March 2020 UK households have accumulated an estimated £125 billion in savings, according to the Bank of England (BoE).

Where will all this unusual savings go? It may well be just as quickly spent once the Covid-19 lockdown ends, although maybe it needs to be saved for rainy days ahead.

For the UK’s Chancellor, Rishi Sunak, has in mind a series of stealth taxes, by de-indexing the tax system. From 2022 through 2026 there will be no adjustments of income, inheritance or capital gains tax brackets, of pension lifetime allowances or of value-added tax (VAT) for small-business thresholds. This de-indexing will see him gather an additional £25 billion in taxes over four years and push 1.3 million new taxpayers onto the tax rolls by 2026 – with the majority at the bottom end.

Like a frog dropped into a saucepan of cool water that is actually being boiled up, a percentage here and a percentage there feels rather painless at the time. All of us facing an inflationary council tax bill will have to grit our teeth and bear it.

Is gold a good hedge against inflation? This debate rages. And opinion is deeply divided about where inflation is headed.

In any case at Glint, we promote gold not purely as a hedge against inflation, but as money, to be bought, spent and used as an alternative to paper money; since 1933 the US dollar has lost more than 90% of its purchasing power. And the amount of dollars in circulation is now 60 times greater than in 1933. Some of you may have more cash around as a result of policy decisions by your government; but holding it as cash or putting it into a bank account may not be the best use of it in these volatile times.

All the best,

Jason

Anyone who watched all four seasons of the Netflix drama The Crown will have seen a dysfunctional family in full spate. Very few would willingly join such a family, or ‘the firm’ as the Royals call it.

Poor Harry was born into dysfunctionality, but Meghan volunteered for it. Love is blind, they say. Since the Harry + Meghan show relocated to California mutual accusations have criss-crossed the Atlantic – hints of Meghan’s bullying of her staff by the Palace, suggestions by her of racism at the heart of ‘the firm’…this could run and run. The Crown’s scriptwriters are probably rubbing their hands with glee.

Meanwhile, Prince Philip has been hospitalised with heart problems. The Queen is in her 94th year. It’s all starting to feel like another annus horribilis, which is how the Queen described 1992 after that year’s sequence of unpleasant events for ‘the firm’.

Will this internal struggle, playing out on a TV near you, damage the monarchy’s standing? Last December a YouGov poll found that while 67% of Brits (and 84% of over-65s) want to keep the monarchy, just 21% would prefer an elected head of state. But many would like to see Prince William leapfrog Prince Charles and become the next monarch.

Tantrums in a teacup, you say. There are much bigger issues – the return of kids to school this week, and the paradoxical possibility of there being an upsurge in influenza cases (which kills around 11,000 people in England every year) later this year because there have been almost no infections thanks to the Covid-19 lockdowns. Like Meghan, we might be asking ourselves, ‘will we ever be free again?’ Britain has had the tightest lockdown in the developed world in this ‘second wave’; each additional week of lockdown costs taxpayers £6 billion according to the Adam Smith Institute.

That’s almost enough to fund Boris Johnson’s latest wizard scheme, a White House –style ‘situation centre’ in the basement of the Cabinet Office costing £9 billion (minus overrun costs). The ‘SitCen’ is due to open this summer. It will be the government’s ‘command bunker’ for emergencies such as terrorist attacks or pandemics.

It used to be said of Labour governments that they were ‘tax and spend’ machines. It’s starting to look like Conservative governments are no different. As we face a £2 trillion national debt, tax rises are already starting to happen. Inflation is cooked into the cake. The Harry + Meghan episode signals a further erosion of stability – what we have known and lived with for decades past is fast changing.

In this increasingly uncertain world, where both money and monarchy are besieged, gold-as-money, thanks to Glint, may well help you provide a shelter from the storm.

Until next week.

Jason