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To: carranza2 who wrote (138859)	2/2/2018 2:04:10 PM
From: TobagoJack	1 Recommendation Recommended By dsv Respond to of 218913

ft.com Forget bitcoin, give me old-fashioned gold as an inflation hedgeIt’s pretty, it’s useful and you don’t need a password to access it Vesperas yesterday © BloombergOver the past year or so, there has been no overall cut to Japanese domestic productive capacity — except in some thoroughly outdated sectors and a few in which Japan has no hope of ever regaining a competitive advantage, such as coal or textiles. You will think this one of the most boring sentences ever offered to you by this column. But bear with me. It is actually one of the best clues you will find as to what might happen next in the global economy. For years now, the world has suffered from an overcapacity and disinflationary problem. Too many factories produce too much stuff, pushing down prices for that stuff too far as a result. You see the consequences of this all around you in low wage growth and endless quantitative easing. There is a general assumption that this hasn’t changed and is not changing, so there is no risk of inflation rising from its clearly cooling ashes, regardless of how loose monetary policy is and for how long. This assumption might be completely wrong. Look at how the world ended up with too much capacity in the first place. It was (as is almost everything) all about China. The accession of this huge economy into the World Trade Organization in 2001, the priorities of its leaders over the past couple of decades ( growth, growth, growth) and the particularly huge dose of stimulus chucked into the economy in 2009 added massive, cheap capacity into the global system and changed everything for everyone else. Who wants expensive stuff made in Michigan or Aichi Prefecture when you can have cheap stuff made in China instead? Quite. But China’s changing. For years, party officials have been incentivised to force growth out of their regions, regardless of the effects on prices, global macroeconomics or, for that matter, pollution. But in the party conference in October, Xi Jinping shifted emphasis. Instead of focusing on growth, China’s leader talked of “three tough battles”: against preventing major risks (mainly financial — the new target is to be “further deleveraging”); poverty (Xi fancies a “moderately prosperous society” in all respects); and pollution (he wants to see the sky blue again). The result has been pretty instant. Almost as the delegates headed home, say the analysts at Gavekal, prices of natural gas (a “clean fuel”) doubled; steel output stalled; and cement sector output actually fell even as demand for it and hence prices rose. China doesn’t seem to be adding new capacity to the global economy in the way that it was and that should mean it isn’t exporting deflation to the rest of the world any more either. That is a dynamic that is arguably beginning to show up everywhere else. The slack is disappearing. There is no spare capacity left in Japan (or you would see new cuts to it). Industrial production in the US hit a record high in December, despite the US being too busy with buybacks and financial engineering over the past decade to build new capacity. Manufacturing output in the UK is at its highest in 10 years. This could all lead us to several interesting conclusions. The first, highlighted by Gavekal, is that it is an explanation for the way stock markets in countries that have been hampered with too much productive space in the past are suddenly breaking out. See China, Japan and Korea — markets you might want to stick with for a bit. The second is that, guess what, the boom in the US might not be entirely down to Donald Trump’s policies. The factories could be humming because global capacity constraints are being hit rather than because he’s the best economic manager ever. And the third is that the real inflation our great leaders (the central banks) think is impossible however much they might print, isn’t impossible at all. It is early days to be too sure about this. There could be more capacity than is immediately obvious and the global economy remains relatively fragile. However, the insanely tight labour market in Japan and the historically low unemployment rates in the US and the UK do rather back up the idea that excess capacity is yesterday’s story. And it’s hard to pretend that a little inflation isn’t creeping back into the numbers almost everywhere: the UK’s Retail Prices Index is now sitting at 4.1 per cent (which presumably is why Mark Carney is very keen indeed that we are aware that it has “known errors” in its calculation). None of this is a certainty — far from it. But if inflation might be coming back or even if there is just enough data out there to provide markets with a whopping inflation scare, you will need to be ready. The central banks probably won’t be. So how can you hedge yourself? My usual answer to that is gold. But there’s a group of people who tell me they have a better answer for me. Let’s call them bitbugs. Bitcoin, they say, can’t lose its purchasing power as a result of inflation (thanks to its apparently limited supply). It doesn’t rely on governments for its value. It’s transferable, liquid and private — the perfect defence against the inflationary bias endlessly created by dim-witted central bankers (though their nerves will be jangling at the end of this week as cryptocurrency values plunge). It is, as one bitbug told me on Twitter last week, way better than gold as a hedge against governments and inflation: “Gold is old.” If I can dig out the tweet, I will be referring my sneerer to Mr Carney. While he doesn’t like inflation measures that tell him what he doesn’t want to hear, he really, really doesn’t like the anonymous nature of bitcoin. “One doesn’t have anonymity for bank account transactions,” he says, “why would you for cryptocurrency transactions?” Gold has a few things going for it that cryptocurrencies don’t. The G20 doesn’t waste much time these days talking about how to regulate people’s gold holdings Why indeed? I mention this to make the point that cryptocurrencies are only transferable, liquid and private for as long as regulators allow them to be. You could say the same of gold, of course. Owning all but a small amount of gold coin was temporarily made illegal in the US in 1933. But gold has a few things going for it that cryptocurrencies don’t. The G20 doesn’t waste much time these days talking about how to regulate people’s gold holdings (Mr Carney says regulating cryptos is top of the list). It is universally accepted as a global and long-term store of value and one that doesn’t demand a password when you want to dig it out from under your bed. It’s pretty; it’s useful; it’s really hard to fake; it’s easy to change into a fractional currency; and, crucially, it has history. An ounce of gold has, give or take, hung on to its purchasing power for thousands of years. I’d be surprised if anyone was saying that about bitcoin in 4018. I hold gold as a hedge against shocks and in particular against inflation, precisely because gold is old. Merryn Somerset Webb is editor-in-chief of MoneyWeek. The views expressed are personal. merryn@ft.com. Twitter: @MerrynSW

To: carranza2 who wrote (138859)	2/2/2018 3:04:36 PM
From: TobagoJack	Read Replies (1) \| Respond to of 218913

besides this below, coming should be an allocated physical gold-backed crypto endorsed by asian central bank should make gold more utilitarian zerohedge.com Gold-Backed Cryptocurrencies: Icing On An Already Tasty Cake? Authored by John Rubino via DollarCollapse.com, The blockchain has discovered gold (or gold has discovered the blockchain). Either way, this means several things. First, the decades-long dream of a gold-backed cybercurrency may finally be realized. Second, gold and probably silver are looking at a big new source of physical demand. Third, the huge number of gold-related initial coin offerings (ICOs) in this largely unregulated pipeline will require buyers to learn how to tell the legitimate offerings from the scams. Two probably-legitimate examples: UK’s Royal Mint Launches Gold-Backed Cryptocurrency(Cointelegraph) – The UK’s Royal Mint, the institution responsible for producing all the physical money the country has for circulation, has announced the launch of its own gold-backed cryptocurrency.The Blockchain-based coin, called Royal Mint Gold (RMG), is a digital representation of gold stored in The Royal Mint vault. The Royal Mint Bullion, the Royal Mint company that sells physical gold, is the first company to allow customers to hold gold-backed assets on Blockchain, Tom Coghill, RMG’s Commercial Lead, stated in an interview with Express.co.uk. Coghill also mentioned that one RMG coin is equal to one gram of gold, adding that “it’s real gold you’re holding when you’re holding our RMG.” A recent report published by the World Gold Council (WGC) compared Bitcoin and gold, declaring that though Bitcoin saw a higher growth in value in 2017, gold would remain an important store-of-value investment. Coghill claimed that Bitcoin investments are more uncertain than investments in gold: “Gold has probably had an argument that it’s been a store of value for 6,000 years, bitcoin’s a bit younger and the future of bitcoin is uncertain.” ——————– Cryptocurrency backed by gold being developed by Perth Mint to entice investors back to precious metals(ABC) – Australia’s biggest gold refiner, the Perth Mint, is developing its own cryptocurrency backed by physical precious metals.The ambitious plan, which is subject to a confidentiality agreement, will make it easier for consumers to buy gold. The mint also plans to make use of blockchain technology, first used as the core component of the digital currency Bitcoin, where it works as a public ledger for transactions. In the 10 years since its inception, blockchain has been used to track transactions in industries from agriculture to land registration and the music recording industry. For the Perth Mint, the need to bring investors back to precious metals after a boom in alternative investments such as cryptocurrencies posed an opportunity, according to chief executive Richard Hayes. “I think as the world moves through times of increasing uncertainty, you’re seeing people look for alternate offerings,” he said. “And you’re seeing this massive flow of funds into the likes of Bitcoin at the moment because people are looking for something outside of the traditional investments.” But Mr Hayes said the volatility of some of the current cryptocurrencies meant they did not suit all investors. And that is where a gold-backed offering may fit. “With a crypto-gold or a crypto-precious metals offering, what you will see is that gold is actually backing it,” Mr Hayes said. “So it will have all the benefits of something that is on a distributed ledger that settles very, very quickly, that is easy to trade, but is actually backed by precious metals, so there is actually something behind it, something backing it.” Some thoughts on gold-backed cryptocurrencies (or tokens or whatever the correct term ends up being): 24 hour trading Most financial markets have trading hours that are limited to the business day. Which means that most US investors can buy and sell, say, Amazon stock or silver coins only when domestic markets are open. Owners of a blockchain asset, in contrast, can wake up in the middle of the night, see an accurate quote, and act on it instantly. Whether this is a good or bad thing depends on the temperament and self-control of the individual. It’s possible that we’re creating a financial time-suck comparable to social addictions like Facebook and Instagram. And maybe a new danger for sleepwalkers…sleep trading? On the positive hand, when things spin out of control in Asia or Europe, American owners of crypto-gold won’t have to wait until morning (which may be too late) to move their assets out of harm’s way. Is it allocated? Lots of different kinds of gold and silver accounts are already available, with the biggest differentiator being the ownership of the bullion sitting in custodial vaults. With allocated accounts buyers own specific metal bars, while with unallocated accounts buyers are in effect creditors of the company running the fund. The former is vastly safer and should be the only way that anyone ever owns remotely stored precious metals, including cryptos. Good for gold/silver price? Precious metal cryptos might engage some of the animal spirits that have been driving the bitcoin bull market — especially now that existing cryptos are correcting hard, thus reinforcing the lesson that these currencies aren’t backed by anything real. It’s possible that the contrast between bitcoin and crypto-gold will become a major topic of conversation in 2018, with the latter looking good by comparison and attracting serious speculative cash. Existing tokens It turns out that there are already a number of gold-backed cryptocurrencies out there. Here’s a list compiled by GoldScape: Gold-Backed Cryptocurrency Directory This is a current list of gold-backed cryptocurrency. This is a directory and not an editorial endorsement, so research all of the alternatives before investing. Some of the cryptocurrencies listed here don’t detail how they store and account for gold either, so proceed with caution. Any questions regarding each coin should be referred to their social media channel or forum listing. Since this post was first published there have been new coins added to the list and some are now ready to buy. The list is now sorted in order of availability. Flashmoni (OZT) Location: UK Website: flashmoni.io Flashmoni is a blockchain-powered fintech company that offers a physical gold-pegged cryptocurrency, innovative payment solutions and a smart contract-based advertising solution. In addition to using gold to back their tokens, they also plan to raise funds to directly operate mines to “improve miner’s working conditions, their lives and of the communities where they live.” There are two gold-backed tokens: OZG which is a private token pegged with 24 K gold stored in Dubai’s DMCC Free Zone and in Singapore. 1 OZG = 1 grain of gold (1 grain is approx 0.065 gram). OZT is the public token tradable on crypto exchanges and OZTs core value is 1/20th of the OZG. GoldCrypto (AUX) Location: Belize Website: goldcrypto.io AuX tokens by GoldCrypto are a cryptocurrency backed by physical gold. Currently, each 750 AuX Tokens will be backed by one ounce of gold (approximately US$1.70 per AuX Token). This gold backing per AuX Token then progressively increases. Gold Bits Coin (GBeez) Location: Australia Website: goldbitscoin.com Gold Bits Coin is a gold-backed crypto but the site and White Paper is light on details. It says that each coin is “backed by real gold”, but it doesn’t say how much gold is in each coin, or how it is stored. Gold Bits Coin Pre-ICO is on until 31 January 2018. XGold Coin (XGC) Location: Panama Website: xgold.lu XGold Coin (XGC) is a gold backed digital crypto-currency option. The price of one XGC Coin at initial pricing is based on a single gram of Gold. PRE-ICO First Round is on until 10 February 2018 and is offering a Pre-ICO 35% bonus. AurusGold (AWG) Location: Netherlands Website: aurus.io AurusGold is fully-allocated, gold-backed cryptocurrency. The Aurus asset tokenising protocol is used by top European gold traders to tokenise 99.99% LBMA approved, fully audited gold under the AurusGold (AWG) currency. PureGold (PGT and PGG) Location: Singapore Website: puregold.io Puregold is a payment gateway using Gold backed cryptocurrency. They offer two digital tokens called PGT for transactions; and PGG which is a cryptoasset backed by physical gold. The company uses physical gold (of 999.9 quality) as its security. Puregold’s gold reserves equal or exceed its circulated amounts of PGG gold-backed tokens. The physical gold is stored by a third party in a decentralized storage unit that Puregold stores investment grade gold, gold jewellery, small ingots (up to 100 grams) and coins. Puregold is part of Puregold.sg, which is a private mint in Singapore with its own in-house factory producing gold and bars. The ICO for Puregold runs from 15 January 2018 to 14 March 2018 Reales (RLS) Location: Estonia Website: realescoin.io Reales coin is a token that combines a basket of precious metal and cryptocurrencies. The breakdown of each token is 10% physical gold, 35% physical silver, 20% Bitcoin, and 20% for ICO’s and alt-coins (total 85%). The remaining 10% is for company’s budget and 5% for operational costs. Reales ICO ends 8 March, 2018. Icing on the cakeThe forces driving precious metals higher (out-of-control credit creation pretty much everywhere, geopolitical chaos in much of the world, bond and stock bubbles that should, if history still matters, burst shortly, and the looming mass devaluation of fiat currencies) are already nothing short of spectacular. So gold and silver don’t need the blockchain to be big winners in the next few years. Still, the number of gold-related blockchain products is apparently going to soar in 2018 as the big gold players stake their claims. The result? A potentially significant jump in demand for physical gold as all these promoters acquire metal to back their offerings. *So while gold is likely to soar in any event, the blockchain connection might be a big help. Think of it as icing on an already tasty cake.*