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February 07 2014

07:19

Max Keiser Radio - The Truth About Markets - 01 February 2014

Max Keiser and Stacy Herbert of MaxKeiser.com with their Resonance 104.4 FM show!

February 04 2014

08:41

‘Emerging Markets’ Take A Hit

“Emerging markets” around the world — Turkey, Argentina, South Africa, more – were supposed to be the next big wave of economic energy. Now, they’re in trouble. We’ll ask why.

The going rate of U.S. dollars and euros is displayed outside a foreign exchange business in Buenos Aires, Argentina, Monday, Jan. 27, 2014. The Argentine government announced Friday Jan. 24, it was relaxing restrictions on the purchase of U.S. dollars. The measure would start taking effect Monday, allowing Argentines to buy dollars for personal savings, reversing a 2012 restriction. (AP)

The going rate of U.S. dollars and euros is displayed outside a foreign exchange business in Buenos Aires, Argentina, Monday, Jan. 27, 2014. The Argentine government announced Friday Jan. 24, it was relaxing restrictions on the purchase of U.S. dollars. The measure would start taking effect Monday, allowing Argentines to buy dollars for personal savings, reversing a 2012 restriction. (AP)

Guests

Mike Regan, editor-at-large for Bloomberg News. (@Reganonymous)

Scheherazade Rehman, professor of international business, finance and international affairs at George Washington University. (@Prof_Rehman)

Ian Bremmer, president and founder of Eurasia Group. Author of “Every Nation for Itself: Winners and Losers In a G-Zero World.” (@ianbremmer)

From Tom’s Reading List

The Economist: China loses its allure –”For the past three decades, multinationals have poured in. After the financial crisis, many companies looked to China for salvation. Now it looks as though the gold rush may be over.”

Wall Street Journal: Gobal Companies Address Latin American Risk — “Drooping currencies in Brazil, Argentina and Venezuela have reduced the value of sales there in dollar terms, while inflation has made it hard for many consumers to afford much beyond necessities. Argentina’s heavy government spending and a loose money policy have fueled inflation estimated at more than 25% a year. In Venezuela, inflation is running at more than 50%, and price controls are creating shortages.”

Reuters: Weak U.S. data sends dollar, equities lower — “Emerging market stocks extended a two-week selloff as weak Chinese manufacturing and services data weighed, while the Turkish lira and South African rand weakened after policymakers poured cold water on expectations of higher local interest rates.”

November 20 2013

22:34

Bit By Bit By Bitcoin

During our Nov. 20 hour on the buzzy, big world of bitcoin, we fielded a great number of calls from listeners wondering just what, exactly, the digital currency really is.

We tackled some of the finer points in the early part of the hour, but our guest, Stanford University Graduate School of Business Economics Professor Susan Athey, provided a helpful crib sheet on the finer points of bitcoin regulation.

So far we’ve been discussing the use of bitcoin for illegal activities, and this week a lot of discussion of bitcoin as a speculative investment or a store of value.   But some argue that bitcoin has a lot of legitimate uses that have gotten less airtime.  What is your take on bitcoin?  When I look at math-based currencies, I see a revolutionary technology that allows one individual to send money to another individual instantly, securely, and without a middle man.  Current methods for sending money are archaic—if I want to send money from my Bank of America account to my Fidelity account, BOA will charge me $3 for 3-day delivery, $10 for next day, and $25 for a wire.  I still have to wait for my funds to be available on the other end.  It costs $45 to wire internationally, and there are also delays.  I’m a premium customer.  Really?  In the year 2013?  Math-based currencies offer an alternative payment rail that is instant, secure, and cheap.

You might ask, if all math-based currencies are is a payment method, why do you need new currencies at all?  The answer is that the currency is an integral part of the technology.  I can’t literally beam a physical dollar to you.  The currency is the way you keep track of who has what, and who sent how much to whom, all on a public, secure ledger.  You can call it a chit, a coin, a mark in a book—some thing has to move from me to you in the ledger, and that thing is called a bitcoin or a unit of a math-based currency.  Some next-generation math-based currencies, such as that built by a company called Ripple Labs (disclosure: I’m an advisor there), completely abstract from the underlying currency in the user experience.  A U.S. user with a dollar balance in a U.S. bank sends yen to the Japanese bank account of a Japanese customer.  The virtual currency operates behind the scenes.

What are the use cases for virtual currency?  One that I’m very interested is the developing world, where most citizens don’t have bank accounts.  You might think it is strange to consider something so technologically advanced for the world’s poor, but you have to remember that cell phone coverage is better in many African countries than in Palo Alto, CA.  In addition, countries like Kenya are actually on the cutting edge of using technology for payments.  A full one third of commerce in Kenya takes place using cell phone credits as a medium of exchange.  It works great, as anyone with a cell phone can store money there, and people send credits from phone to phone.  The problem is that the fees are large: cashing out can cost as much as 20-25%.  That’s not so great for people in poverty.

Another big use case is remittances.  Remittances are estimated to be $4-500 billion dollars a year, and are a double-digit share of GDP for a range of poor countries—Ghana, Nigeria, Nicaragua, and so on.  Yet fees are large—published estimates vary, but put fees in the 7-9% range.  Math-based currencies can be used by remitting agents and receiving banks to provide an instantaneous and low-cost way to move money across borders.  If we get to a point where retail establishments offer to change local currency to virtual in remitting and receiving cities, individual consumers could send their remittances directly to their families via mobile phone, with the only remaining fees being those charged by the local exchanges.  Since money is sometimes needed urgently at home, this can provide great benefits.

Math-based currencies also enable more electronic commerce.  Today, there’s no cost-effective way to buy hand-crafted items from most developing countries the way I can on eBay or etsy in the U.S.  And firms in Kenya with things to sell have no way to, say, buy advertising from Google in Kenyan Shillings.  So you can look at the internet from all over the world, but you can’t transact.  Math-based currencies let you send funds as easily as email.

Are there uses within a firm?  Rather than accumulate potential trades throughout the day and clear at the end to save fees, a multinational firm can send money to itself many times a day over the low-cost math-based currency rails, reducing the need to hold large balances within each country and increasing efficiency.

Hasn’t Paypal already solved this problem?  You can look to what Paypal has enabled—people can send money to each other easily within the U.S., allowing for easier fundraising and allowing e-commerce to work for individuals or small businesses who can’t afford credit card services.  But, Paypal is an institution, a middle man, that charges a fee.  Math-based currencies take that to the next level, allowing one individual to send to another using a protocol that is architected to operate without a toll collector in the middle.  The on-ramps and off-ramps for getting local currency in and out of the system do charge fees, however.

What do you think about the bitcoin price increases recently?  Well, if you expect the volume of transactions to grow a lot, then the exchange rate from dollars to bitcoins has to grow too, because each bitcoin can only be used so many times per day.  The market value of all bitcoins has to be enough to support transaction volume.  You could interpret the price increases as reflecting increased optimism about the future volume of transactions, driven by China implicitly signaling that it will allow bitcoins to be used for commerce there.

What about the extreme volatility?  Volatility is bad because it increases frictions—if I just want to send you $100, the exchange rate might change between when I buy the bitcoins and send them to you, and when you receive and cash them out.  That creates risk and frictions. But the level of the exchange rate is irrelevant for the efficiency of the payment rail—if I knew it would be $1000/bitcoin all day long, or $100/bitcoin, either way I can buy bitcoins, send them to you, and you can sell them, while avoiding paying exorbitant bank fees.  You still incur some fees when getting money in and out, but those are relatively low and should fall over time with competition.

It’s also worth checking out The Guardian’s simple, easy to read explainer on the ins-and-outs of the crypto-currency.

The apparent boom in bitcoin’s actual, bitcoin-to-dollar conversion ratio is also readily apparent in the chart below, tracing the currency’s quiet start at around $2 a share to the dizzying heights of $900 per share during this Monday’s Senate hearing on the future of digital currency.

What do you make of the bitcoin buzz? Is it a bubble? A criminal currency? Or the future of monetary exchange? Leave your thoughts below, or on Facebook, Tumblr and @OnPointRadio.

11:39

Digital Currency, Bitcoin And The Dark Web

Bitcoin and virtual currencies in the spotlight on Capitol Hill. We’ll look at the new world of digital money and the issues that come with it.

Guests

Andy Greenberg technology, privacy, and information security reporter at Forbes Magazine. Author of “This Machine Kills Secrets: How WikiLeakers, Cypherpunks, and Hacktivists Aim to Free the World’s Information.” (@A_Greenberg)

Robin Sidel, senior special writer at The Wall Street Journal.

Susan Athey, professor of economics at Stanford University’s Graduate School of Business. Senior Fellow at the Stanford Institute for Economics Policy Research.

Sen. Tom Carper, U.S. Senator. (D-Delware). (@SenatorCarper)

From Tom’s Reading List

Wall Street Journal: U.S. Officials Set to Address Bitcoin at Senate Hearing — “Officials from the U.S. Secret Service, which investigates counterfeit currencies, and the Treasury Department’s Financial Crimes Enforcement Network made similar remarks, detailing successful criminal investigations into virtual currencies and the need to ensure that companies that deal in bitcoin comply with money-laundering rules where appropriate. Fed Chairman Ben Bernanke, who isn’t testifying Monday, said in a letter to the Senate committee that while virtual currencies ‘may pose risks related to law enforcement and supervisory matters, there are also areas in which they may hold long-term promise, particularly if the innovations promote a faster, more secure, and more efficient payment system.’”

Forbes: Meet The ‘Assassination Market’ Creator Who’s Crowdfunding Murder With Bitcoins –”Like other so-called ‘dark web’ sites, Assassination Market runs on the anonymity network Tor, which is designed to prevent anyone from identifying the site’s users or Sanjuro himself. Sanjuro’s decision to accept only Bitcoins is also intended to protect users, Sanjuro, and any potential assassins from being identified through their financial transactions. Bitcoins, after all, can be sent and received without necessarily tying them to any real-world identity. In the site’s instructions to users, Sanjuro suggests they run their funds through a “laundry” service to make sure the coins are anonymized before contributing them to anyone’s murder fund.”

The New Yorker: Dark Wallet: A Radical Way To Bitcoin — “Wilson and Taaki’s project, tentatively known as Dark Wallet, is a simple wallet designed to be easier to use for people who aren’t tech-savvy; they hope that in turn accelerates the currency’s rate of adoption around the world. The wallet will be open-source and free to use. Eventually, Wilson and Taaki hope to create a vast stable of Bitcoin-related tools. The goal, for Wilson, is similar to what he tried to do with the Liberator: use technology to remove government intervention from his life, and from the lives of like-minded people.”

November 18 2013

23:44

Podcasting currency how your podcast pays you

A list of all the ways your podcast pays you both monetarily and in non-tangible rewards. http://thepodcastersstudio.com/055/

July 14 2011

13:35

Bitcoin : Planet Money : NPR

On today's Planet Money, we look at a new kind of currency that's not backed by any government. http://www.npr.org/blogs/money/2011/07/13/137795648/the-tuesday-podcast-bitcoin

June 15 2011

13:01

CRE182 Elektronisches Geld - Chaosradio Podcast Network

13:00

Die Wahrheit 005 – Bitcoins | monoxyd

February 16 2011

08:49

The Friday Podcast: How Four Drinking Buddies Saved Brazil

http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil This is a story about how an economist and his buddies tricked the people of Brazil into saving the country from rampant inflation. They had a crazy, unlikely plan, and it worked.

October 18 2010

08:51

September 21 2010

00:05

U.S.-China Economic Tensions

U.S.-China tensions over currency and trade are reaching a high pitch. We look at whether or not a showdown with China would boost, or bust, the American economy.
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