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Can Turkey’s Lira Survive?

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The Turkish central bank is employing short-term borrowing to bolster the lira. Investors and currency traders are uneasy with the actions. Laura Pitel and Adam Samson report for the FT: Turkey’s central bank has bolstered its foreign currency reserves with billions of dollars of short-term borrowed money, raising fears among analysts and investors that the country is overstating its ability to defend itself in a fresh lira crisis. Reported net foreign reserves held by the central bank stood at $28.1bn in early April — a sum that investors already believed was inadequate because of … [Read more...]

Can IBM Revolutionize Foreign Exchange with Blockchain?

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IBM has rolled out a new service called IBM Blockchain World Wire that hopes to optimize and accelerate foreign currency exchange. Rachel Wolfson reports on the new service at Forbes, writing: IBM is paving the way for banks and other regulated financial institutions to join the blockchain revolution. Rather than going through a series of intermediaries when sending money across borders, IBM has created a real-time, global payments network to support cross-border transactions and foreign exchange in more than 50 countries using digital assets, also known as cryptocurrencies or “stable … [Read more...]

Cryptocosm and Life After Google: Is Tether No Longer Credible?

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What happens when the core promises of a crypto-currency no longer hold true? Frances Coppola, a Senior Contributor at Forbes explains that Tether, a so-called "stablecoin," that is supposedly pegged to the U.S. dollar may not be as linked to the fiat currency as has been advertised. She writes: USDT is the foremost stablecoin in the crypto world. Pegged one for one to the U.S. dollar, it is widely used as a vehicle for getting dollars in and out of crypto exchanges. Crypto enthusiasts will tell you that holding USDT (“Tethers”) is the same as holding dollars. But now, Tether, the issuer of … [Read more...]

Inflation is Destroying Venezuela’s Economy: Shield Your Portfolio Against It

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Socialist president Nicolas Maduro has run out of other people's money, and so his government is using inflation of its currency to pay its bills. The country's inflation has gotten out of hand, and hyperinflation has ensued. Now, the dropping value of the country's bolivars has decimated its manufacturing industry. The Wall Street Journal reports: Manufacturing’s fall reflects broader economic devastation. Venezuela’s economy has halved during President Nicolás Maduro’s six years in office, and is expected to decline another 30% this year as new U.S. sanctions on oil hit. The country’s GDP, … [Read more...]

Canadian Crypto-currency Debacle

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“A Canadian cryptocurrency exchange says about $140 million worth of customers’ holdings are stuck in an electronic vault because the company’s founder, and sole employee, died without sharing the password,” reports Paul Vigna at the WSJ. On Jan. 15, the company announced on its website that Mr. Cotten had died on Dec. 9 from complications related to Crohn’s disease while building an orphanage in India. He was 30 years old. Two weeks later, the exchange filed for bankruptcy protection in a Nova Scotia court. Quadriga said its customers have accounts with a total balance of about C$250 … [Read more...]

Did Crypto-currency or Bad Governance Beat These Investors?

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Buyers using the QuadrigaCX exchange to invest in crypto-currencies are waking up to the possibility that their money may be gone forever. What happened, you ask? The system, like all crypto-currency systems presumably, was encrypted, but in the case of QuadrigaCX, only one man knew the password, and he's dead. Gerry Cotten, founder of QuadrigaCX took the password used to access customers' $145 million in digital assets with him to the grave. Without the password, it appears there is little the company can do to access customers' assets. Coin Telegraph reports: The exchange only has … [Read more...]

The Silver Lining to Your Cash

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I like having a little silver in my pocket especially when times are desperate. And I also like some in my portfolio. We may not see a rally in silver this year, but it’s coming off it’s best December in almost two years, up 9.1 percent, making me happy I own some. For me, silver is a counterbalance to my cash. And if the Fed’s going to sit tight on rates and silver is at its smallest output since 2013, it might be time to pay attention. Marvin Perez reports at Bloomberg: Think of it as a potential silver lining for investors. A deepening shortage is promising to help boost prices as … [Read more...]

Central Banks Are on a Gold Buying Spree

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Central banks of countries trying to move away from dollar reserves are buying up gold in amazing numbers. Russia, Turkey and Kazakhstan were leaders in increased gold buying last, reports Henry Sanderson in the Financial Times. He goes on to write: Central banks bought a net $27bn worth of gold, driven by Russia, whose net purchases were the highest on record, according to the World Gold Council, an industry-backed body. Volumes came to 651.5 tonnes, an increase of 74 per cent on the previous year. The buying reflects continued efforts by emerging market central banks to diversify their … [Read more...]

Gold Begins to Shine

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  Market volatility and a weaker dollar has pushed the demand for gold higher. Investors are driving up the price for the safe haven precious metal. Neil Hume reports at the Financial Times: For much of 2018 gold was out of favour, hit by the strength of the dollar and interest rate rises in the US, which dented the appeal of assets such as the precious metal that offer no yield. That saw gold trade as low as $1,174 in August in spite of rising geopolitical tensions and the fallout from US-China trade war. Sentiment towards gold began to improve towards the end of the year as … [Read more...]

Are Stablecoins the Best of Both Worlds?

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By tying blockchain technology to fiat currencies, stablecoins are trying to be the solution to cryptocurrency volatility. Hannah Murphy reports for the Financial Times: While stablecoins are less enticing investments for risk-hungry speculators than other cryptocurrencies, proponents argue users get the best of both worlds: the low volatility of fiat currencies together with the advantages of digital currencies, such as fast international payments, availability to anyone with an internet connection and no need to go through the banking system. And many believe their potential goes beyond … [Read more...]