From the smouldering ashes of the financial crisis, my interest in economics was born. From reading blogs and news articles to the birth of Bitcoin, my knowledge and understanding of our financial world grew. But how could I put my knowledge to use and be financially rewarded?
The decentralised, peer to peer, blockchain disruption is under way and the doors are open to anyone who has an internet connection. Cindicator is a decentralised, community driven platform that uses hybrid intelligence to provide financial market indicators. It now has over 95,000 individual analysts who send their predictions into the Cindicator ecosystem. These financial predictions are then enhanced using artificial intelligence to refine the data and make the forecasts more precise.
I came across the Cindicator project in late January 2018 whilst doing my weekly research of new and exciting start-ups that are based on blockchain technology. Reading about the project on Cindicator’s website really got me excited so I quickly registered to become an analyst and started making predictions. To my amazement, at the beginning of February I received an e-mail from Cindicator notifying me that I had finished in the top 20% for the month and I had been rewarded with Ethereum.
I’ve carried on making my predictions and have been fortunate enough to earn a reward each month so far. I think Cindicator is a unique system that provides powerful financial indicators. Many analysts providing unique insights in a decentralised manner produces more accurate market indicators than large groups of analysts working together.
You don’t need to be working in the City of London to be rewarded for your financial insights! Thanks to the very smart and easy to use Cindicator App you can now participate in making predictions in both traditional and crypto markets, any time and any where! New questions are frequently loaded into the app, answer as many as you wish.
The Cindicator App makes it easy to filter questions between past and future and between crypto and traditional markets. The questions themselves can be binary where there is a sliding percentage scale to indicate the probability of an event happening. For example, what is the probability of a particular cryptocurrency increasing by 10% over the next ten days.
Questions can also be price related; these require a more specific forecast by entering a price range for a commodity or cryptocurrency within a specific time span. For example, what will be the minimum and maximum price of Gold Futures during the following day. Conditional based questions are also offered.
Every month you have a good chance to be rewarded for your insights by receiving Ethereum directly into your Cindicator wallet. Withdrawals are permitted once you have reached a balance of just 0.01 ETH.
Making regular predictions in Cindicator has prompted me to research and learn about new and exciting projects in the crypto space. Indeed, during my time as a Cindicator analyst I have found that the more predictions I make, the more market knowledge and experience I gain.
Our wonderful internet has enabled us to access a wealth of information and entertainment. It’s an infinite resource of data. But how much choice and information do we need?
Do you sometimes feel a subtle excitement and eagerness just before you switch on your smart phone or power on your laptop? Who has e-mailed me? Who has said what on Twitter? What’s the latest bad news stories from around the world?
At first, feasting our mind on all of these nuggets of information is very satisfying and stimulating. However, after a while we get a bit restless and bored. What started off being a satisfying experience soon turns into an unsatisfying one.
Nearly every aspect of our lives has been transformed into an infinite digital universe.
Music
Before the internet, we were limited to how much music we could listen to by the size of our record collection. Everyone now has access to, at the touch of their fingertips, nearly every piece of music ever recorded in the history of the world. Where do you start?
Gambling
Thousands of online gambling websites exist and it’s oh so easy to get in. We are open 24 hours a day, 365 days a year, come on in and win some money! Twenty years ago we would have needed to travel to a casino or a bookmaker in order to gamble.
Pornography
This is the biggest fix on the internet and potentially the most toxic and damaging one. In comparison, a pornographic magazine has a beginning and an end.
News
We can read hundreds of articles on the same event or story. Whatever you are interested in, it’s there. Subjects you didn’t think you were interested in, well you are now! Each of us has a virtual library of a billion books!
Crypto Currencies
Many people have heard of Bitcoin but are stunned when they find out there are 1500 other digital currencies in existence. If one then becomes interested and involved in the crypto space, it soon becomes completely overwhelming and potentially addictive. I honestly didn’t intend to be a forex trader!
Charities and petitions
Many people are passionate about causes that matter to them. You start receiving e-mails from a couple of organisations but over the course of a few months you wonder how it is that you are now receiving five new petitions a day and updates from twenty organisations every week!
In contrast to being passive or reactive on the internet, we should also be proactive. Create something; music, photography, a story. When something authentic is created to the best of our ability, it is more rewarding and meaningful for us. If we receive positive feedback or even earn money from it, even better!
We must balance how much time we spend online with contrasting activities. I think switching off our phones for a few hours, an afternoon or even a whole day is extremely beneficial. Balance is key; we must strive for balance in our lives which ultimately derives from a balanced mind.
The infinite nature of the internet presents a huge challenge to our mental health. It has the potential to draw us into areas that fixate us. Many people are vulnerable to addictive tendencies and the internet acts as a catalyst for addictions to manifest.
Are the negative side effects that the infinite internet creates, one of the challenges humanity must overcome in order for us to be more consciously aware?
One thing is for certain, the internet is rewiring our brains.
Many of us have read the news reports about high levels of inequality in the world today and many have experienced the adverse effects of unfettered globalisation. Economic analysis clearly shows that since the financial crisis of 2008/09, the major fiat currencies of the world have been manipulated and devalued because of central bank interference.
When fiat currency is spent locally, much of it’s value disappears from the community and into the hands of multinational corporations.
In response to this centralised manipulation, a few paper based local currencies have been born. Whilst some of these have had a moderate uptake, their use is limited by a lack of community awareness, small scale business adoption and the fact that they remain outside of the digital domain.
Cryptocurrencies are, by their nature digital and decentralised (peer to peer). They are free from manipulation by centralised authorities. What if there was a platform that allowed decentralised trading of cryptocurrencies and smart tokens without having to rely on a counter party for liquidity? What if this platform also allowed communities to easily create their own digital currencies and smart tokens by simply using a chat bot?
Such a platform exists and it is called the Bancor Network. Once registered on the Bancor Network one has access to a unique decentralised trading environment. The growing range of smart tokens on the Bancor Network are fully liquid for each other due to the Bancor Network Token (BNT). What this means is that the availability of a smart token for trading is not dependent on other parties selling the same quantity of the smart token.
The number of potential use cases for community currencies that will be created on the Bancor Network is huge. Bancor can revolutionise the way money is created and how it is used and therefore change the world economy for the better.
It’s been one of biggest cryptocurrencies by market cap for a long time and many of us are familiar with Ripple and it’s cryptocurrency XRP. However, what use does it have for the individual investor? Is anyone actually buying anything with Ripple? Are there any businesses out there that accept XRP as a means of payment?
The Ripple network is basically a cryptographic layer over the traditional banking system. It facilitates faster and cheaper interbank payments and remittances. XRP provides the liquidity for these transactions.
Ripple frequently announce that they have signed agreements with major financial corporations which boosts sentiment and drives more investment in XRP. However, some of these large financial institutions will use the Ripple system to transfer fiat currencies and commodities without having a requirement to use XRP. Ripple looks like a great company with excellent technology but what can XRP really be worth if there is no requirement for their corporate clients to use it?
I think that many small investors are buying XRP as a speculative trade because they hear Ripple partnering with major financial institutions and therefore believe that the currency will rocket in value at some point in the future. That may well be true but I am becoming a bit sceptical.
Another important point to mention is that 100 Billion XRP were created but only 38 Billion have been released so far. Releasing billions more XRP in the future will no doubt have an impact on it's price. Just recently Ripple placed 55 Billion XRP into escrow to ensure certainty of total supply.
The price of XRP is less volatile than many other cryptos but after a recent climb to $0.25, it has started to drop back. Is it time to move out of Ripple and into some higher growth alt-coins?
There hasn’t been much coverage of Potcoin (POT) on the YouTube channels or the marijuana themed cryptos in general. I think commentators are missing out on some big news here and I would like to prompt a discussion on the developments in the marijuana industry and the various cryptocurrencies that have been developed to utilise a functioning and legalised hemp based economy.
Firstly, both Canada and numerous US states are starting to legalize recreational marijuana use in addition to medicinal use. The state of California and it’s huge economy is looking to legalise recreational use in 2018. This will mean massive business growth and many new jobs will be created as new customers flock to the dispensaries.
Marijuana based businesses based in the United States require banking facilities which are often difficult to obtain because federal law still considers cannabis an illegal drug. The use of Potcoin as a currency for trading is an obvious solution to this problem.
There have been many cannabis themed cryptocurrencies that have come into existence over the last few years. HempCoin (THC), DopeCoin (DOPE) and CannabisCoin (CANN) have all failed to establish themselves beyond small scale use.
Potcoin by comparison has by far the biggest market cap, trading volume and community of users. What is great about investing in Potcoin is that the consensus algorithm is proof-of-stake (POSV) meaning that you can gain interest of up to 5% a year by staking your wallet balance on the network. Payments on the Potcoin network are much faster compared to Bitcoin and the network fees are extremely low (0.01 POT). The current value of each Potcoin is $0.41.
The Potcoin blockchain is still only 3GB and the QT wallet is not very demanding on computer resources. As Potcoin does not use a proof-of-work (POW) consensus, the network therefore does not require much energy and so it is environmentally friendly.
If you look at Potcoin’s continued growth and the massive potential growth of the legalised marijuana industry, then investing in Potcoin would appear to be a win win decision.
When Bitcoin Cash (BCH) was created as a result of the hard fork on August 1 2017, many investors did not expect this new cryptocurrency to compete with Bitcoin (BTC). Despite an initial price rally in August, the value of BCash declined during September and October, eventually being worth just 0.052 BTC by October 21.
After the Bitcoin hard fork (SegWit2x) was called off on November 8, the price of BCash started to rally. There were many claims on social media that BCash was the new Bitcoin, that this was the start of the “flippening” and that many loyal Bitcoin holders were heading for the exit because Bitcoin would now not scale due to it’s high fees and slow transaction times.
Was there really a mass exodus out of Bitcoin for these reasons? Certainly the price of Bitcoin declined by approximately 20% over the next few days. However, the massive surge in the BCash trading volume and price could not be explained solely by investors moving out of Bitcoin. There was clearly new money piling into BCash, mostly through the South Korean exchanges.
I would argue that there were also some underhand tactics by the BCash team in order to attack the Bitcoin network. On November 9 the Bitcoin mempool started to increase in size dramatically, eventually reaching 160,000 unconfirmed transactions (the mempool stores Bitcoin transactions that are waiting to be confirmed). Was this huge increase in unconfirmed transactions due to investors desperately trying to get out of Bitcoin or had the network been a victim of an attack involving many tens of thousands of small spam transactions? Once the mempool was congested, BCash and it’s supporters were able to make substantiated claims that Bitcoin was now dysfunctional, useless and a sinking ship.
I realise that the BCash team are doing their utmost to promote their digital currency, but do they really need to obtain validity by launching network attacks on Bitcoin and then pointing to the damage caused in order to claim that Bitcoin is finished and is no longer a functioning system.
At present BCash does have much lower fees and faster payments due to it’s 8mb block size. However, many people have overlooked the fact that the Bitcoin improvement proposal (BIP148) user activated soft fork (UASF) took place on the Bitcoin network back in August and as a result the block size has increased slightly beyond the previous 1mb limit.
The weekend of November 11/12, 2017 was certainly an historical and pivotal moment in the Bitcoin story thus far. My guess is that there will be more battles between the current and future Bitcoin hard forks as we journey on through the ever expanding crypto universe.
…because you don’t really know what you are talking about!
After six years of endless predictions for when interest rates will start to rise, a lot of people are now gradually realising that many economists and central bankers don’t really know what is going on. Banks and investors have been pencilling in rate rises for years.
We have had Forward Guidance from the Bank of England which has proven fairly useless at giving anyone a clue when interest rates will begin to rise. There is always an excuse not to raise rates; inflation is too low, volatility in Chinese equities, a central banker wears a strange tie, etc. Will there ever be a right time?
In the six years that rates have been held at near zero in the UK, US and Europe there has been an additional $57,000,000,000,000 of debt added to the world economy. Debt which can never be repaid. We see bubbles around the world, from property to stocks.
By keeping interest rates so low for so long and injecting trillions of dollars of liquidity into the banking system, central banks have sown the seeds of the next financial meltdown. They seem so out of their depth that they spend their time reacting and adjusting to the rapidly changing developments in the markets and are incapable of making real assertions about the right policies for the future.
In the U.S. the reaction of the markets to positive employment data has been negative. Good news is bad news. This shows how dysfunctional things have become. Banks are addicted to cheap money and the highly leveraged want rates to stay low forever; they know that their debt is unaffordable if rates should return to the long term average.
Recently there has been two conflicting comments from the Bank of England’s Monetary Policy Committee. Kristin Forbes said that if you linger too long in the sun you could get burnt. She was concerned that if rates did not rise soon it could undermine economic growth. Meanwhile Andy Haldane has indicated that the next move for interest rates could be downwards! He is so concerned about another economic crash that he would consider making rates negative and even the abolition of cash to stop people hoarding. Good luck everyone!
With house price growth and house sales slowing down; I sometimes begin to wonder what other crazy plans the government could invent in order to prop up the housing market. If house prices still begin to fall after Help to Buy, Funding for Lending, bailing out the banks, printing £375,000,000,000 and holding interest rates at 0.5% for six years; what would they do? How bad would things have to get before we would see even more extreme market manipulation?
They could reduce interest rates even further so that they become negative. This would reduce the cost of servicing debt but I suspect that savers would have something to say about paying a bank to hold their money! There could well be a mass exodus of capital out of UK banks and possibly social unrest.
As the whole fiat monetary system is based on growing levels of debt, maybe the debt monster will soon consume all bank deposits. The following scenario may seem extreme but we now live with a western economy that already has unsustainable debt levels, increasing volatility and signs of currency wars.
Savers deposits are replaced by debt of equivalent value due to a collapse in economic growth and deflationary pressures. This helps keep mortgage rates low because an artificially engineered demand for the debt would have been created. Savers are paid a small amount of interest (yield) for holding the debt but would never be able to draw out any of their original capital as it would no longer exist! Virtually all money in existence represents debt and savers become mini bond traders. Capitalism without the capital.
On the 27th February 2014 the Royal Bank of Scotland announced losses of £8,200,000,000 for 2013. This brings total losses since 2008 to £46,000,000,000 which is more than the £45 billion that the bank received from the taxpayer when it was bailed out in 2008. Money well spent then!
The bank still has £38,000,000,000 of highly toxic loans on its books. There was talk of moving this debt out of the bank and into a so called ‘Bad Bank’ to be looked after by the state. Hold on a minute! RBS is already 82% owed by the taxpayer, what difference does it make?
The scary fact is that RBS has a £1,900,000,000,000 balance sheet that it is trying to unwind. This figure is nearly one and a half times the size of the whole UK economy! It has just recently been announced that RBS directors are sharing a £18,250,000 share deal! RBS is trying to compete in this insane financial world where banks are being kept alive by money printing, but RBS is broken and rotten to the core, it will probably take the whole country down with it.
Meanwhile Fred Goodwin at just the age of 55 is enjoying his £342,500 per annum pension that he has been claiming since 2009. Not a bad reward for steering one of the world’s largest banks into bankruptcy. He is currently working as a charted accountant; I really don’t think that this is a good idea and I fear for the company he is working for.
In my opinion, ‘Fred the Shred’ should have been fed through the shredder! Seriously, why isn’t this guy and his cohorts in prison? Actually, no that would be a further waste of tax payer’s money! I think working in a homeless shelter for a few years on the minimum wage would give Fred the reality check he needs.
If you think the statements below sound crazy, it’s because they are! Although these analogies are within a personal context, it’s quite scary to realise that many of these processes are going on in the financial centres of the western world.
Invest in some debt today before it’s too late!
Do the right thing and ask for a bail out. Your country will be proud of you!
A friend of mine owns a local bakery. To grow his income stream he is offering cheap debt coupons with every loaf of wholemeal bread.
I am investing in debt for the economic health of my country.
Yesterday I placed a bet that I will go bankrupt next month. I think this is going to be a nice little earner for me!
You owe it to yourself to max out your credit card. Don’t worry, you will be keeping many people in a job in the process.
Let’s go down to the debt superstore and pick up some junk bonds, they are great value at the moment.
I need to go out and get myself a loan to help me pay the interest on my debts.
I am buying up all the debts of my neighbours. They will spend the new cash on things they don’t need, but hey, it makes them feel better and keeps the system ticking along.
I evaluate myself to be worth £25,000. Based on this calculation I will re-mortgage myself and the newly created mortgage debt will be split into four pieces. These chunks of debt will then be used as Christmas presents to my friends and family.
I frequently travel on trains and I have been observing a peculiar action made by some of my fellow passengers. This action relates to pressing the train door release button when either boarding or disembarking a train at a station.
The train button illuminates and a loud bleeping sound is heard when the door release buttons become activated. It is only at this moment that the train doors will open.
I have noticed that many passengers press the door release button repeatedly before it becomes illuminated and before the loud bleeping starts. Some of these passengers may rarely travel by train and therefore not be aware of how the doors open. However, many are frequent commuters that I see often at the station.
Why would one keep repeatedly pressing the button if they had the knowledge that doing this would not result in the train doors opening any quicker? Maybe they are thinking about something else and are not aware of what they are doing. My reasoning would be that their mind is projecting into the future; they are standing on the station waiting for the door to open but this is not fulfilling so the mind wants to be in future (on the train or at their destination).
The human mind is often obsessed with the future, imagining it as better than or worse than the present moment. This reduces the present moment to an unsatisfactory experience and creates anxiety; you want to be at some future point in time but you are not. My observation with train doors is just one example of this process playing out. This mind dysfunction is causing problems and suffering all over the world in ways that are not so easy to observe.
The truth is that the present moment is all we ever have.
If I take out a loan of £10,000 from a bank, that money is created out of nothing. The money is deposited into my account and the bank has a signed agreement which says that I will pay the £10,000 back plus interest. It is an IOU.
Money represents debt not value. Virtually all the money in existence is based on debt. Without any debt there would be no money.
This system of money creation is known as Fractional Reserve Banking. This basically means that banks only keep a small fraction in reserve compared to the amount of debt they have on their balance sheets.
The European Central Bank (ECB) is just one of numerous central banks that have taken unprecedented steps to shore up the western banking system and thus prevent complete collapse.
In the last few years the markets have been reluctant to keep buying the debt (bonds) of Italy and Spain. The borrowing costs for these countries increased significantly.
As the result of this the ECB started to provide loans for these countries in exchange for some of the debt that the markets were unwilling to buy. These low interest loans are known as Long Term Refinancing Operations (LTROs).
During 2011 the ECB started to directly buy the debts of some weaker Eurozone countries. The decision to do this led to the resignation of the ECB’s chief economist.
As you can see from the chart below, the ECB’s balance sheet is expanding rapidly with the debts of Eurozone countries. What is the quality of this debt? Will it ever be repaid?
The giant US bank, JP Morgan, has just announced record profits of $6,500,000,000 for the first quarter of 2013. This is an astonishing amount of money considering that the US economy is struggling; the growth figure for the last quarter of 2012 was just 0.4%.
The main contributor to these profits was the investment banking division. Yes that’s right, the same area of banking that led to the financial collapse of five years ago. As a consequence of that crash, the US taxpayer bailed out JP Morgan the sum of $25,000,000,000 in 2008.
The other large US banks such as Citigroup and Goldman Sachs have also announced big increases in profits. It seems that the Federal Reserve’s stimulus package of buying $85,000,000,000 worth of ‘assets’ every month is having quite pleasant repercussions on Wall Street.
JP Morgan said that there are signs the US economy is “healthy and getting stronger”. Healthy and getting stronger for who? Elsewhere in the country we learn that there are 47,000,000 people living on food stamps. That’s nearly one in five US citizens and it’s an unprecedented number.
At the beginning of April, the Californian city of Stockton was granted permission to file for Chapter 9 bankruptcy protection. This is the largest US city so far to go bust. Detroit is a much larger city that could be heading the same way.
It seems that the actions of the Federal Reserve since 2008 has created two parallel economies or even realities. The rich are getting richer and the poor are getting poorer.
Since the onset of the financial crisis one could be forgiven for getting slightly confused about what is really going on in the economy. Bank bail-outs, house prices, inflation, quantitative easing and the Eurozone debt crisis; there has certainly been much to report.
The fact that there is no longer strong economic growth focuses the attention of different groups within society. These groups seek different outcomes and their perception of what has caused the economic downturn and what needs to be done to put it right, varies significantly. Many journalists ‘spin’ their stories to represent the views of one these groups within society. This is especially common in news reports about the housing market; there is a cognitive bias in order to support vested interests.
Looking at the economic pages of the BBC website recently I noticed conflicting reports on the same subject. On one page there were two articles about the Japanese economy. One headline read, “Signs of a pick-up in Japan’s economy” and the other said, “Japanese economy worse than forecast.” The predictions for growth in the economy over the last few years have been farcical. The IMF, OBR, CBI and others have all consistently downgraded their predictions. Do they not know what they are doing or is their reporting suffering from some kind of cognitive bias?
The truth is that we need to read many economic articles from different sources, some more trusted than others. Instead of our self-grasping mind attaching itself to an ideology, we can take a clearer and more balanced view by trusting our inner wisdom and integrity.
There are many people in the UK who have, over the last fifteen years, decided to borrow too much money. As the economy has turned sour The Bank of England has tried to help out these over stretched borrowers by keeping the base rate at the historic low of 0.5% for four years. Additionally it has pumped £375,000,000,000 into the ‘economy’ (QE) which has helped to sustain house prices. The UK government has also come to the rescue by providing up to £80,000,000,000 of ‘cheap’ money to banks (FLS) so that they can offer even cheaper mortgages.
Unfortunately the Funding for Lending Scheme has had a negative impact on savers because banks no longer have to rely on attracting depositors. Thanks to low interest rates and FLS the current rate of return being offered on savings products is appalling. Most savings accounts offer a rate which is far below inflation. Effectively savers are losing out on billions of pounds of interest whilst the cost of servicing mortgage debt has been reduced significantly.
As we are ‘all in this together’ I think savers should do even more to help out over-stretched borrowers. Perhaps a proportion of the interest paid on ISA’s could be redirected to mortgage accounts to reduce the cost of borrowing even further. After all it’s not the fault of highly indebted consumers that we are all in this economic mess. They were under pressure to take on more debt by the banks; it was very difficult to say no. The overwhelming desire to compete with the neighbours leads to a re-mortgage, a new car, house extension or exotic holiday. I’m sure many savers feel deep sympathy over borrower’s unfortunate circumstances.
Within days of posting my first blog, the London Evening Standard ran a front page headline which read “£100,000 deposit to buy first home”. This astonishing conclusion was the result of research carried out by Oxford Economics who predict that London property prices will just keep on rising and by the year 2020 the average price will be £489,214.
Even if it was possible to amass £100,000 for a deposit, one would still need to obtain a mortgage of nearly £400,000 to buy the ‘average’ house. Given that most lenders have now come to their senses; it is no longer possible to borrow much above four times annual earnings. This means a salary of around £100,000 a year would be required to qualify for the mortgage.
We talk of the human race progressing in many areas but when it comes to something as fundamental as housing we seem to be fast tracking back to the Victorian era; a wealthy property owning elite providing expensive, insecure short term rental accommodation for the rest of us.
The current influx of foreign money and the influence of ‘The City’ is keeping London’s property bubble inflated. All bubbles though, must eventually burst.
I was reading in utter amazement a front page article in the London Evening Standard which reported that three quarters of the first phase of a luxury housing development had been sold in just four days. The prices started at £350,000 for just a studio flat and rose to £6 million for a penthouse. Many of the buyers are from overseas, especially Asia.
How long can the London property bubble be sustained? This is difficult to answer but due to the fact that over half of all property bought in London is by overseas buyers, the current momentum is being driven by the wealth created in growing and emerging markets. The UK and US economies are being kept afloat by unprecedented central bank intervention which is sustaining the wealthy elite.
The gap between rich and poor has always been wide in London but it seems that it is now reaching huge proportions. With the prospect of many more cuts to social welfare, increasing energy bills and increasing food prices; the social unrest that we witnessed in 2011 could seem quite minor in comparison to future displays of discontent. I wonder if all of these overseas property 'investors' realise what they may be letting themselves in for.
