Tag Archives: police asset forfeiture

Mar 20 2017

Are Cycles Universal or Regional?


Armstrong Economics Blog/Real Estate

Re-Posted Mar 20, 2017 by Martin Armstrong

PopulationOfRome

QUESTION:  I have a question regarding cycles. You provide some very detailed, historic references showing why certain events are occurring now (again). Is there a disposition for something that occurred in the past to be destined re-occur for a particular region/country (i.e. Greeks abandoning property due to excessive taxation) because it happened once and now the propensity to repeat that causal action again is “in their DNA”. Is that something we as Americans do not yet possess because we have not been around long enough to experience a “fall of Rome” type event?

SM

ANSWER: Cycles are based upon two element – (1) nature and (2) human nature. Some regions will be prone to natural disasters while others are not. Ironically, many of the best ports where cities grew such as Tokyo and San Francisco just as examples, were great harbors because of earthquakes. The landscape in California is strikingly beautiful compared ot the flat plain in Oklahoma, again because of earthquakes. The rocks that appear in Central Park in New York City are there because an earthquake fault runs through New York City making the harbor what it was. Hence, there are cycles that impact only on a regional basis due to nature.

With regard to Greeks walking away from inheritance because they cannot pay the tax, this is inherent to all societies when government goes too far. They imposed harsh laws in Vancouver against foreign real estate buyers and the market crashed. Because it was a local law, they moved to Victoria and Toronto. In Australia, they are seizing properties own by foreigners and selling them off. All of these types of interventions are reactions to events set in motion externally.

realestate

That said, this is the US cycle for real estate as a national whole. I just bought a house in Florida at about 50% of its 2007 high value. Trophy spots for the high end where people are just parking money we warned would make new highs going into 2015.75 – but that is not the bulk of the market. Why is the US market (minus trophies) down hard when that is not the case in other countries? The difference is the regional issue. In the USA, many people have 30 year mortgages. In Canada, the best you can get is a 10-year fixed mortgage. In Germany, you can get up to a 15-year fixed mortgage.

We must understand that property values are LEVERAGED, so if the money for fixed rate loans dries up because of interest rate hikes and political uncertainty, then real estate prices MUST fall. This is all because of the leverage that was deliberately injected into the real estate market during the Great Depression for property fell  in value so far, only cash buyers could buy anything. Farm land fell in value to below what it was sold for by the government more than 80 years before.

Real estate is different from stocks and gold. Yes it is a place to park money. However, be careful because without mortgages available, it falls further than other tangible assets because it has been LEVERAGED! Moreover, it is a fixed asset meaning you cannot leave with it. Therefore, people are forced to simply walk away when (1) the tax burden is too high and (2) there is war and the region is being invaded.

Mar 20 2017

NY Times First Reported Trump was Wiretapped Back in January


Armstrong Economics Blog/Corruption

Re-Posted Mar 20, 2017 by Martin Armstrong

NYT Jan 20 2017 Trump Wiretap

The New York Times print story on the front page of January 20th, 2017 read: “Wiretapped Data Used in Inquiry of Trump Aides”. Of course now, the New York Times is trying to downplay that story simply because Trump said Obama had wiretapped his campaign. Since “wiretapped data” was being used to investigate President Trump’s associates and they are going over those conversations, it seems self-evident that someone has the recorded conversations. INFOWARS is reporting that have evidence now of the wiretapping from a law enforcement source. How is it possible to go over conversations to investigate if any of Trump’s people spoke to Russians without recording those conversations?

McCain IncidentThe two Republicans who are trying to dethrone Trump I have stated are two men I would not shake hands with. John McCain, when a Lieutenant Commander in the U.S. Navy as a Navy pilot, played a hog-dog maneuver on July 29, 1967 that killed 134 sailors. McCain while on the deck of the carrier U.S.S. Forrestal, pulled a trick by doing a “wet start” up of his jet to show off. This created a large startling flame and sudden shocking noise from the rear of a jet engine. He also seems to have apparently armed a weapon that resulted in launching a powerful Zuni rocket across the carrier’s deck hitting other parked planes. The subsequent massive explosions, fire and destruction went several decks below and nearly sunk this U.S. aircraft carrier. This stunt resulted in the deaths of 134 sailors and seriously injure another 161 sailors blinding some.

McCain JohnAny other Navy pilot causing this type of death and destruction would have been grounded and charged. Not McCain. For you see, his grandfather was a famous FOUR STAR Navy admiral and his father was at the time a Navy FOUR STAR admiral. McCain was simply transferred and everything was covered-up. What is alleged thereafter is on a mission is that he was disliked by other pilots and they deliberately left him out to get shot down.

Wikipedia, not a reliable source to say the least, says: “During the Vietnam War, he was almost killed in the 1967 USS Forrestal fire. In October 1967, while on a bombing mission over Hanoi, he was shot down, seriously injured, and captured by the North Vietnamese. He was a prisoner of war until 1973. McCain experienced episodes of torture, and refused an out-of-sequence early repatriation offer. His war wounds have left him with lifelong physical limitations.”

This paragraph is added by Centinel2012, I have heard the McCain’s stay in the Hanoi Hilton was not as bad as claimed and that while there his nickname was “songbird” I’ll leave it to the reader what that means. I have also heard from a sailor that was on the Forrestal that the above incident is true, although there is a minor deviation which Doesn’t change the story but what happened afterwards.

John McCain is no conservative, which has been his complaint against Trump. McCain voted to tax the internet. He wrote in correspondence: “On May 7, 2013, I voted to support the Marketplace Fairness Act because this bill will ensure that sales tax is collected on all purchases, regardless of whether in a brick and mortar retailer or through internet transactions.”

The other Republican trying to stop Trump is none other than Lyndsey Graham who sponsored the  Act that allows the government to arbitrarily imprison you without a trial or a lawyer. All they need do is claim you were associated with “terrorism”. However, the definition of “terrorism” has expanded to anyone who resists government domestically as well. Members of the protest in Oregon protesting against the government has had the Washington Post asking – Why aren’t we calling the Oregon occupiers ‘terrorists’? Lyndsey Graham has unleashed the very tool that has wiped out the Constitution with changing the definition of a single word.

Humpty DumptyThese are the two Republicans trying to say Trump was not “wiretapped” but implying that there was no surveillance at all in any form. Yet Acting Attorney General Sally Yates, James Clapper and John Brennan, warned Trump that Michael Flynn did speak to Russian about the sanctions. They had access to those recorded conversations. What is stunning is how now everyone has amnesia about Flynn or how is it possible to investigate conversations if they do not have them?

It just appears that government is just so corrupt, there is nothing much we can do but just watch. Sooner or later, Humpty Dumpty will fall and nobody can put him back together again. This is part of the critical key to a Phase Transition. Such moves take place when people lose all trust and confidence in government. We are getting there.

Mar 19 2017

Senator Diane Feinstein Hints That Trump May Resign: “I Think He Is Going To Get Himself Out”


Tyler Durden's picture
by Tyler Durden
Re-Posted from ZERO HEDGE Mar 19, 2017 9:15 PM

Authored by Mac Slavo via SHTFplan.com,

It’s no secret that there is a concerted effort underway to do everything possible to remove President Donald Trump from office.

From Russian ties to business conflicts of interests, both Democrats and Republicans are actively working to find chinks in the President’s armor.

But for those with hope of change in their hearts, Democrat Senator Diane Feinstein says there is a possibility that Trump will eventually remove himself from office by filing his own resignation.

Speaking to a crowd during a town hall-style Questions and Answers session, Feinstein was asked how Congress is going to deal with Trump’s alleged illegal activities:

Journalist: We don’t know what’s happening but we know that he is breaking laws every day, he’s making money at Mar-a-lago, he’s getting copyrights in China, he has obvious dealings with Russia, the Dakota pipeline… there’s some many things that he’s doing that are unconstitutional… how are we going to get him out?

Feinstein: We have a lot of people looking at this… Technical people… I think he’s going to get himself out… I think sending sons to another country to make a financial deal for his company and then have that covered with government expenses… I think those government expenses should not be allowed.. we are working on a bill that will deal with conflict of interest… it’s difficult…

There are Videos of Feinstein speaking to what appears to be a local press pool of reporters and protesters where Feinstein discuss Trump’s conflicts of interests, and also who Feinstein husband’s firm directly benefited from bills she voted into law, proving once again that the hypocrisy of socialist Congressional representatives from California has no bounds…

Mar 19 2017

Judge Allows Class Action Lawsuit Against City of San Jose by Attacked Trump Supporters…


Source: Judge Allows Class Action Lawsuit Against City of San Jose by Attacked Trump Supporters…

Mar 19 2017

John McCain – The Rise And Fall Of An American ‘Hero’


Tyler Durden's picture
by Tyler Durden
Re-Posted from ZERO HEDGE Mar 19, 2017 8:05 PM

Authored by ‘Vaniam’ via The Burning Platform blog,

This is an Arizona patriot’s unique view on John Sydney McCain

As of late, we the people of Arizona are very shocked to see what he has become. He is a caricature of a man who, around here, is about as popular as the ping-pong president. How could the people of Arizona, the state that brought you the O.K. Corral, the Grand Canyon, constitutional carry, and sunshine 360 days a year re-elect such a steaming lumpen pile?

The truth is that Arizona like many other states is really two states, Arizona the free and Arizona the slave. The free side is much how you would imagine a free and prosperous state. Resplendent and sublime examples of the master artist’s work are everywhere. The people out here are old school salt of the earth. Cowboys get along with Indians, bikers get along with hippies, liberals with conservatives. Its a place, as my venerated 77 year old neighbor once said to me, “everybody knows everybody’s business but minds their own.” People are kind and polite, willing to help a stranger.

The down side of Arizona is Maricopa county, or as we call it out here, “the late great state of Maricopa,” which is Phoenix and the metro areas surrounding the capitol. The geographic area is roughly ten percent of the land mass but over sixty percent of the human population. This creeping concrete jungle is dependent on the good grace of the rest of the state for its water and power.

As of late it seems this mini metropolis has been infected with the Soros self destructing ideals of wholly owned politicians, defective voting machines, and a spike in immigrants from places where we can’t even say their names. There is a mountain of circumstantial evidence that Maricopa county is compromised as far as elections go. Do you really believe that Sheriff Arpio lost the election to a cop who has always been pro illegal immigration? Or that local reported irregularities, in mainly democrat controlled precincts, somehow did not favor the Soros-Obama machine. I know, fake news right?

I have some pretty vivid memories of growing up in Arizona. We were still part of the wild west, all our roads and days seemed to stretch before us beyond the vast horizon. America still seemed on the ascendancy even though looking back we had probably reached our peak years before my birth. Even after watching in horror as we bugged out of Saigon and dumped our helicopters into the bottom of the ocean we still believed in hero’s.

In the early 1980’s the people of Arizona were sold on the heroism of John Sydney McCain. McCain moved to Arizona and was sold as a hero. The powers that be needed him to replace a genuine hero, Sen Barry Goldwater. Had we the people known at that time about his multiple affairs, divorcing his disabled wife, and marrying a beer heiress for her fortune and political connections, he would have never won his first race. The people of Maricopa county at that time were not soft shoe, plaid pants, neo cucks like the majority are today.

I will never forget McCain speaking to my high school during his first campaign. After his little speech it was opened up for questions. Most were along the lines of ‘do you like Coke or Pepsi best?’or some other inanities. When my turn came I stood up and asked “Will you give us your word as an officer and a gentleman that you are not now or will never be a member of the trilateral commission or any other organization which gives away American sovereignty?”(I was a political junkie even as a kid.) After being somewhat stunned at the question his answer was along the line of ‘Of course I would never do anything that goes against the constitution’ yada, yada, yada.

If McCain was ever a maverick looking out for the peoples’ interests this illusion came to an end once he went to the senate. He immediately started to hang out with some of the earliest known swamp creatures. Receiving over one million dollars from land swindlers who cost taxpayers over three billion dollars (in 1980’s dollars) in what many experts claim led the southwest United States into a major recession. It also cost thousands of retires their life savings which they thought were safe in real estate backed bonds. This was the beginning of the long swath of destruction that the not so honorable gentleman from Virginia continues to leave in his wake, without a clue (or a care) for the people of this world he harms.

Doddering old fool or criminally insane madman?

Insanity or madness can be described as becoming a danger to oneself or others. We can certainly prove beyond a shadow of a doubt that McCain is a danger to others. Just ask the relatives of the tens of thousands dead from the endless wars, or the relatives of the 6000 plus American KIAs in the last fifteen years. As far as being a danger to himself we may never know unless and until some brave hacker shows us how John spends his spare time. McCain has done America dirty in so many ways over the decades. We need an encyclopedia to document it all. So we will just go over some of the more egregious recent examples.

During the last government shut down Obama closed memorials and parks that belong to we the people. This was done as a mean spirited, vindictive maneuver that especially hurt WW2 vets coming to DC to see the new memorial dedicated to them. These men, who are almost all gone, were denied what to them what would have been a great honor. Some lowly park rangers put up puny little show gates for the media, that denied access to the veterans. Despite his office being hammered with calls telling him to fix this, McCain refused to do the honorable thing. He did nothing. He couldn’t be bothered. Had he shown up and demanded the veterans be allowed in he would have done a thing of a truly non partisan nature, and in some ways been heroic. Now the stain of this incident will follow him the rest of his days.

The Phoenix VA is the worst in the country. As the senior Senator on the Armed Services Committee, McCain bears full responsibility for this. Again if he had acted as an honorable man, made sure more people were fired not just given their golden government parachutes we might be going in the right direction to fix this deplorable situation. It has been 6 to 12 years (depending on your perspective) since the problems with the VA began to come to light. The waiting lists still exist. Men and women who picked up the phone when Uncle Sam called them up are still second fiddle to a self feeding, self promoting parasitic bureaucracy.

It is well documented that McCain and his little buddy have armed and funded ISIS. Many pictures of them exist yucking it up with those who would do us harm. As if we didn’t have enough enemies already it seems we need more. All in the name of full spectrum dominance by our deep state uni-party.

Presently McCain is trying to force us into an unnecessary confrontation with the Russian federation. McCain also wants war with China, North Korea, Syria, Iran, and Ukraine. McCain seems to have no concern, compassion or remorse for the tens of thousands of deaths he has been responsible for. This madness has gotten out of hand. It has created an endless loop of more death, destruction, collateral damage, and rapefuges. Throw in some reconstruction projects for his cronies a little global insecurity and a dash of ignominy on our once highly esteemed fighting forces and it becomes clear why the whole world hates us.

In light of McCain’s 35 years of “service,” after 16 years and over 6,000 military deaths from these endless wars, it might just be time to rethink our strategy. If the New York Don can keep landing blows against the fake media, as he wins a few more hearts and minds, at some point the governor of the universe may once again see America as worthy of the eternal blessings of liberty, then divine providence will enable us to smite this vile depravity known as the deep state uni-party.

McCain needs to go to all 152 homes in Arizona who have lost loved ones in the endless wars. Starting at my friends house, his 22 year old son was killed by an IED near Taji Iraq in 2006.McCain should kneel and grovel in each darkened doorway with his face down buns up, begging forgiveness from the families of his victims.

Seriously dude 35 years is a long time. Any “good work’ you might have done at one time has long since been nullified by the endless war years. If you haven’t achieved whatever it was you originally set out to do, at 80 years old you never will.. If you haven’t amassed all the filthy lucre your family will need after your gone I am afraid you are out of luck.

From Centinel2012, A lot of Nam vets don’t think McCain is a hero — he has been very good at covering his questionable past; E.G why is his nick name “songbird?”

Mar 19 2017

Deutsche Bank: “The Probability Of A Negative Shock Is High”


Tyler Durden's picture
by Tyler Durden
Re-Posted From ZERO HEDGE Mar 19, 2017 8:47 PM

For the second week in a row, Deutsche Bank’s strategist Parag Thatte has a somewhat conflicted message for the bank’s clients: on one hand, he writes that positive economic surprises continue “but are getting less so”, and although the divergence between har data surprises and sentiment is diminishing the bank is somewhat confident that a “pullback in the very near term is unlikely” (here DB disagrees with Goldman Sachs). However, Thatte is increasingly hedging, and notes that because a “rally without a 3-5% sell-off that is typical every 2-3 months is now running over 4 months and is in the top 10% of such rallies by duration”, he cautions that “the probability of seeing a negative shock is high” especially since Q1 buyback blackout period has begun.

Here are the key observations from the Deutsche Bank strategist:

  • The equity market rally has been going uninterrupted for a long time, driven by the unusual resurgence of positive data surprises. Strong data surprises drove equity inflows and fund positioning, adding to the steady support from buybacks. An expectation that positive data surprises were likely to persist underpinned DB’s call 2 weeks ago that a pullback was unlikely in the very near term. The bank takes stock of the current situation below:
  • Duration of rally now in top 10%. The rally without a 3-5% sell-off that is typical every 2-3 months is now running over 4 months and is in the top 10% of such rallies by duration.

  • Data surprises positive but getting less so. While incoming data in the last week has continued to surprise to the upside relative to consensus, it has done so at a more modest rate and DB’s data surprises index, the MAPI, is now declining off its highs.

  • Divergence between sentiment and hard data surprises diminishing. Attention has focused on the divergence between sentiment data which has run up strongly and hard data which has so far lagged. In terms of surprises, i.e., relative to what’s priced into consensus forecasts, hard data surprises have fallen back to neutral over the last two weeks, while sentiment surprises have declined this week but remain elevated. The surge in sentiment data is getting built into consensus forecasts and sentiment surprises also moving down to neutral over the next 3-4 weeks.

  • Fund positioning already trimmed in line with neutral hard data surprises. US funds have already been trimming equity exposure for the last three weeks in line with the decline in hard data surprises suggesting funds may already be anticipating a modest slowdown in overall data. Real money equity mutual funds are already close to neutral but asset allocation funds and long-short equity hedge funds are still overweight. Macro hedge funds are exposed to short rates positions in our view, not long equities.

  • Inflows accelerate. The pace of US equity fund inflows has accelerated over the last 4 weeks ($36bn). However flows have been closely tied to overall data surprises and could start to moderate in turn.

  • Buyback blackout period has begun. Heading into the Q1 earnings season, the pace of buybacks will slow as an increasing number of companies enter earnings blackout periods starting this week.

* * *

DB’s summary take on near-term equity moves:

Continued muddle through most likely in the near term. The fundamental drivers as well as demand-supply considerations for equities point to a continued muddle through in the near term. However history suggests that with the duration of the rally already in the top 10% by duration, the probability of seeing a negative shock is high. But the medium term outlook remains robust with the unfolding growth rebound having plenty of legs while from a demand-supply point of view flow under-allocations to US equities and robust buybacks remain very supportive.

* * *

Away from equities, the picture in rates, commodities and currencies based on trader flows is as follows:

  • Oil falls but still expensive and long positioning still elevated. Following the November OPEC supply-cut announcement oil prices became very expensive on our medium term valuation framework for oil and commodities based on the trade-weighted dollar and global growth (Trading The Commodity Underperformance Cycle, Apr 2013). The decline in oil prices over the last two weeks has trimmed the extent of overvaluation but leaves oil prices slightly above the upper-end of the historical 30% overvaluation band which has marked extremes (currently $48). Net long positions are off of recent record highs but remain quite elevated.
  • Extreme short positions remain an overhang for rates moving up. Bond yields fell sharply after the rate hike this week much like they did after the December one. While real money bond funds remained close to neutral going into the FOMC this week, leveraged funds shorts in bond futures remained near extreme highs. Outside of HY funds which saw a large outflow as oil prices fell this week, bond funds have continued to receive robust inflows. Indeed duration sensitive funds have this year completely recouped all of the outflows seen in the aftermath of the elections.
  • Gold valuations stretched again. Gold prices have rallied on the back of a return of inflows into gold funds this year reversing the modest outflows in Q4. Massive cumulative inflows since early 2016 ($40bn) remain an overhang. Gold longs had been declining heading into the FOMC meeting. Gold prices have again disconnected sharply to the upside from the historical drivers of the dollar and the 10y yield as well as global growth. Copper long positions continued to slide for a 6th straight week.

  • Shorts in the Mexican peso, the best performing currency this year, have collapsed to neutral. Mexican peso shorts fell sharply last week to the lowest levels in over 15 months as gross shorts fell sharply while longs also rose. Aggregate long dollar positions had been rising going into the FOMC meeting reflecting rising shorts in the yen and sterling even as euro shorts were pared.
Mar 19 2017

After Creating Chaos For Brand Starbucks CEO Howard Schultz Steps Down – Preparing For 2020 White House Bid?…


Source: After Creating Chaos For Brand Starbucks CEO Howard Schultz Steps Down – Preparing For 2020 White House Bid?…

Mar 19 2017

EXCLUSIVE! New NSA Whistblower Goes Public About Trump Surveillance


Published on Mar 19, 2017

This video gives you everything you need to know about how Donald Trump was surveilled by Barack Obama.

Mar 19 2017

Philly Cinco De Mayo Celebrations Canceled Over Trump Immigration Crackdown


Tyler Durden's picture
by Tyler Durden
Re-Posted From ZERO HEDGE Mar 19, 2017 5:45 PM

Following the Trump administration’s recent federal illegal immigration crackdowns, organizers have canceled El Carnaval de Puebla, a major Cinco De Mayo celebration in Philadelphia.

This week, ICE announced that 248 people in Pennsylvania, Delaware and West Virginia are now in federal custody awaiting deportation after a two-week sweep.

 

And now, NBC reports that the annual parade through South Philadelphia has taken place in late April or early May for the last decade and is the city’s largest Cinco de Mayo celebration. Organizer Edgar Ramirez said as many as 15,000 gather from as far as New England and Chicago.

“The group of six organizers decided to cancel unanimously,” Ramirez said. “Everyone is offended by the actions of ICE. They did not feel comfortable holding the event.”

The decision to cancel El Carnaval, Ramirez said in an interview Friday, was “sad but responsible” in light of the immigration crackdown by federal authorities.

“We have people who travel all the way from Chicago, Connecticut and New York. We don’t want anything to happen to them,” he said.

ICE Officer Khaalid Walls of the agency’s Philadelphia office said in an email that “ICE’s enforcement actions are targeted and lead driven. ICE does not conduct sweeps or raids that target aliens indiscriminately.”

As for a return of Carnaval, organizers will decide sometime in the future if the parade once again dances its way through the heavily Latino Pennsport neighborhood, Ramirez said. “Let’s see how things are next year,” he said.

Mar 19 2017

Bitcoin’s ‘Fork’ In The Road


Tyler Durden's picture
by Tyler Durden
Re-Posted from ZERO HEDGE Mar 19, 2017 6:55 PM

Authored by Vinny Lingham,

I’ve been very surprised with the amount of vocal support for a Bitcoin Hard Fork – especially from many Bitcoin supporters who believe it is either inevitable or “not a bad thing”. I get it, but you’re wrong. I know everyone is tired of the scaling debate. I’m not going to go into the technical details around this debate for this post, but instead, I’m going to focus this post on debunking the non-technical arguments for a Hard Fork and highlighting the ensuing confusion and market impact that a contentious Bitcoin Hard Fork will have, if we indeed have a split between Bitcoin Core and Bitcoin Unlimited.

Exchanges today have just confirmed they will be listing BTU as an altcoin if there is a Hard Fork?—?this scares me because although the industry person knows what an altcoin is?—?the average person outside the industry doesn’t. This was the catalyst for my post today.

I have predicted that Bitcoin should hit $3,000 by end of this year?—?but not if there is a contentious Hard Fork.

Keep in mind that the hope of this post is that it changes the mindset around support for a contentious Hard Fork, which creates another Bitcoin, because I believe this needs to be avoided at all costs. In fact, if any of the scenarios below begin to play out, we’re already in trouble… If you agree with the logic below, translate this post into Mandarin and any other language and let’s convince miners and the community to not consider even doing a Bitcoin Unlimited Hard Fork.

Also, even after the big bug in Bitcoin Unlimited yesterday, more nodes are back up and running signalling it. I know many people don’t believe it will happen and they may be right, but we cannot ignore a persistent and growing threat to the ecosystem and so I’m speaking out about it now.

For more background on the Bitcoin Unlimited vs Segwit debate, check the bottom of this post for links, including a number of technical reasons why a Hard Fork is a risky proposition for Bitcoin. I’m also not delving into the technical debate as that has been done ad nauseam elsewhere.

Bitcoin’s greatest asset is its brand awareness!

It’s inarguable that Bitcoin is the single strongest brand in the crypto space. I believe it probably received $2–5bn in free media exposure over the years. A Hard Fork would create 2 brands of Bitcoin?—?essentially handing over some brand value to Bitcoin Unlimited. I wrote a post about Bitcoin’s power and network effect over 2 years ago?—?it’s worth reading if you haven’t.

The moment there is a hard fork, we are going to allow brand confusion to step in. This is a HORRIBLE idea.

The security of the Bitcoin network comes from the computational hash power that the miners bring. This is driven by the price of Bitcoin?—?higher the price, more hashing power. High prices are in turn driven by market demand. Market demand is driven by PR & media and the long term narrative that Bitcoin is the first and only true cryptocurrency which is a long term store of value. If we mess with this, I believe we can expect negative consequences…

When the media declared Bitcoin was dead in 2014, it took us a long time to recover, price wise.

Bitcoin Unlimited will just become an altcoin if it doesn’t have majority support?—?why does it matter?

In the event that 35–50% of miners broke away and created an altcoin, in this case?—?Bitcoin Unlimited, we would essentially then have 2 coins. Bitcoin (BTC) & Bitcoin Unlimited (BTU). One could argue that BTU is not Bitcoin, but it may still be called Bitcoin by the man on the street. For instance, if he buys what he thinks is Bitcoin, to buy some gift cards at Gyft, only to discover that he bought the wrong Bitcoin?—?can you imagine the issues that merchants are going to have now in dealing with the customer support fallout. In all or many cases, they may even remove Bitcoin as a payment method, unless the business is Bitcoin only, in order to avoid customer confusion or the risk of the individual coins fluctuating in price between purchase and usage.

As much as the crypto world is smart enough to understand the differences, the average person barely understands Bitcoin today and forcing them to tell the difference between BTU & BTC is going to be a big challenge.

Let’s not forget some other important points: Roger Ver (the force behind Bitcoin Unlimited aka Bitcoin Jesus) also owns Bitcoin.com (and a number of other strong domain names) and he also owns a couple of hundred thousand Bitcoins (apparently around 300k BTC).

When Bitcoin forks, everyone who is holding BTC, would receive an equal amount of BTU?—?so Roger would have presumably 600k coins (300BTC +300 BTU) according to industry rumours.

The moment Bitcoin splits, he is able to legitimize Bitcoin Unlimited using Bitcoin.com?—?which for the uninitiated would actually be a legitimate source of information, and is highly ranked on search engines like Google. Bitcoin Unlimited would effectively become Bitcoin.com. My first company was in search engine marketing?—?I know this world all too well.

If there was a fork and Roger wanted to pump Bitcoin Unlimited, he could literally dump all his Bitcoin (BTC) holdings into the market. I don’t want to even guess what 300,000+ coins being moved in a short space of time would do to prices, especially after a contentious hard fork where new money investors would already be on the sidelines. This happened to Ether Classic after the Ether Fork?—?the Ether Foundation sold off 90% of their coins and depressed the price. Just the threat of this alone will cause the market to tank for BTC, just for starters. If Roger wants to kill Bitcoin’s price and legitimacy, there is no reason to not fear this and the market will start pricing in this risk.

Roger would not be the only person to sell down BTC. Other BTU loyalists who have two sets of coins would do the same, initially in order to drive down BTC. Conversely, all the long term BTC holders would now receive equal amounts of BTU. Even the most hard core BTC Hodlers would probably sell down BTU with all their BTU coins in order to try and crush it. Given the importance of BTC as a reserve asset in altcoins, many traders could use weakness in price to short BTC and drive their altcoin prices up.

Long story short?—?none of these scenarios (or any others I can think of) play out well for Bitcoin, either in the markets or the media and this fundamental divide means that you’re going to have increased volatility from both sides, as more coins will pour into the market?—?crushing any demand side driven rally.

The whole point about Bitcoin being a long term store of value is that there are only 21m coins, ever. Stability, security and scarcity are the differentiation properties of Bitcoin, a contentious Hard Fork attacks these properties and will be strongly reflected in the price. After a Hard Fork, we will be sitting with 33m “Bitcoins”, on track for 42m and we’ll be having arguments about which one is the legitimate Bitcoin for years to come. You can expect legal cases to arise around the use of the brand, as the Ethereum Classic Investment Trust has shown.

Imagine someone says: I want to buy Bitcoin. Next question is: Which one?! After that, the very next question will be :

“What if one of these coins fork again?—?then we will have 63m coins, and so on and so forth.”

But, aren’t two coins are better than one! The market will adjust!

Let’s say the price of Bitcoin today is $1,000?—?if doing a 75%/25% split would now mean that you have have 2 coins, this should mean they are worth $1,000 ($750+$250). So, I did a simplified calc based on Metcalfe’s law, and it estimated the new coins combined could be worth more than 33% less almost immediately after a Hard Fork due to reduced network effects, and that’s assuming everything went well… With the ensuing FUD and negative press/media?—?you can expect this to drop even further! Bitcoin’s enemies can’t wait for an opportunity like this.

Creating two networks destroys network effects (payment providers, merchants, etc) and the Bitcoin price is non-linear to size of network, so the two coins combined will not equal the same price. You can compare this to the Ether split, as Bitcoin is at scale ($20bn) and Ether wasn’t at the time and it definitely set them back.

Bitcoin has died many times, it can survive a Hard Fork! Even Ethereum did.

Let’s start over. Ethereum is a B2B facing platform?—?consumers & media don’t know or really care about it. Bitcoin is a $20bn asset class. And yes, after the media declared Bitcoin dead after the last “bubble”, it took us 2+ years to rebuild the price by generating demand organically. The media attention this time during the recovery and cross the price of gold does not even come close to last time when it was taking off like a rocket. If a split is portrayed badly in the media and creates confusion, we will possibly go into another 2 years of sideways and down. Do we have that much time again with other competitors on the heels? And let’s be frank, a Hard Fork is not Bitcoin dying. It’s Bitcoin duplicating. Now we have two Bitcoins, both won’t die, maybe one will. Which one is the real Bitcoin? Do not underestimate how many enemies Bitcoin has?—?a fork will just give them all the ammunition they need to confuse the market.

Who cares if 30% of the miners fork off?

Bitcoin’s price is a function of faith and network security, given the large amount of computing power that goes into it. Metcalfe’s law dictates that the value of the network is the square of the network. By splitting the network even 70/30, it’s inarguable that it’s less secure. Yes, it could rebuild but, depending on the price of each coin after the split, hash power may move from one coin to the other. These are highly specialized machines and one coin surges in price, you can expect hash power to follow suit.

Remember that one of the biggest mining companies, Bitmain, is now signaling support for Bitcoin Unlimited. It’s very clear that the current difficulty of Bitcoin makes it harder and harder to compete in this market, but after a Hard Fork, there would need to be a difficulty adjustment on both new forks, given the reduced hash power?—?this opens up the opportunity for Bitcoin mining companies to sell more hardware to miners on both sides of each coin.

The sales of mining equipment are a huge economic disincentive to maintain the status quo without a block size increase, unless the Bitcoin price surges which I don’t believe will happen unless Segwit is adopted and then this debate is over. I called 1300 as a key resistance level and it’s proving to be.

Bitcoin was largely built on the premise that economic forces and self interest would help govern the security of the network. We talk a lot about decentralization but the reality is that the hardware that powers Bitcoin is produced by a handful of companies who also control mining pools which can be used against the network.

Bitcoin has a product & people problem, not a technical problem. A fork will resolve it because both sides get what they want.

The real issue, I believe is two-fold. The community wants Bitcoin to be all things to all people?—?Roger wants cheap coffee transactions, Core wants to ensure its sufficiently decentralized and secure, Vinny wants a store of value, etc.

We have a governance problem in Bitcoin and we have no way to resolve conflict except to fight about it, publicly and given that it’s quasi-democratic, unless we all agree on something, nothing gets done. This has burned a lot of people and I can see why we have so many altcoins out there trying to replace Bitcoin.

Bitcoin cannot be all things to all people, at least, not a for a long time. Right now, it needs to be stable, secure and unchallenged. We can continue to argue amongst ourselves as a community, but for now I am against any contentious Hard Fork that would see us creating two separate code bases with two different brands of Bitcoin.

Companies like Coinbase, BitPay, Gyft, BitPesa, Bitgo and many others have invested years to build consumer adoption and understanding of Bitcoin and create outlets for people to use it. A fork now would undermine all these efforts, investments and limit adoption of Bitcoin in general. Unlike in the Ethereum Hard Fork, 100s of companies use Bitcoin and this would lead to a lot of counterproductivity. Companies should be focused on advancing adoption of their products, not in protocol fights. This debate has already been a strain on the community.

I understand and appreciate many of the different perspectives?—?some which I have not had the time to mention in this post, but given a balance of risks to the Bitcoin ecosystem, I believe that the adoption of Segwit right now is imperative in order for us to get to the next stage in the evolution of Bitcoin and remove the risks of a contentious Hard Fork. The Core Dev team has had a lot of criticism leveled at them and clearly they are not good at community relations, managing perceived conflicts of interests (like Blockstream’s involvement), which has resulted in emotions flaring up against them which is causing an uprising of sorts as we are now seeing. Technically, however, it’s inarguable that they are the best technical team in Bitcoin today.

If we all just breathe out, and put aside our differences and emotions (even just for a while), let’s accept that doing a Hard Fork right now is NOT in the best interest of Bitcoin and let’s please just adopt Segwit.

This post is not trying to be an endorsement or critique of either BU or Core. This post is asking the community to put aside their differences and come together to prevent an irreparable splinter.

I’ll keep posting more links below, but here one for starters: