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So I was thinking how the existing monetary system and financial norms could increasingly come under threat from crypto.
You know, just a standard morning.
See, at some point I think investors will get fed up with constant interventions from regulators, political obstacles, and geopolitical tensions.
All of these restrictions on business and investment (which have always happened to varying degrees), are now taking place in a yield scarce world.
As an investor, why would you keep putting money into an increasingly hostile environment and only getting low/negative yields in return?
Especially if there's a rapidly developing alternative...
The recent OnlyFans debacle was a great example of 'regulations' leading to sub optimal outcomes for a business.
Basically, the firm was held to ransom by payment providers.
Remove the porn, or no payments for you.
When porn is literally the OnlyUSP of OnlyFans, that's a big problem.
Whatever your stance on adult content, surely everyone can agree that payment providers should be sticking to providing payments, not decreeing what a business can and cannot do because of some obscure Venture Cap contracts or ESG interpretation.
Finance should not be weaponised so readily...
Obviously, if they don't wish to provide the payments for 'that type' of business, that is their absolute right, but ask yourself if they would take the same stance if a competing payments system existed?
by the way, OF have suspended the policy change for now because people have 'made their voices heard'...
Back to the main point, I asked Twitter about crypto becoming a new/parallel monetary system and got some excellent replies.
Have a read and let me know what you think 👇
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The $3.5 trillion mess continues as the 'House adopts the budget blueprint'
It's a proper s**tstorm in US politics right now, and a few people got confused over the 'congress passes infrastructure bill' headlines.
It has passed... From congress into the senate.
Democrats have got the tiniest majority in the senate, so there needs to be full consensus for any vote to pass. There are significant differences of opinions to resolve before any budgets or infrastructure plans can become law.
The TL;DR version via Reuters:
Pelosi had hoped to quickly approve the $3.5 trillion budget outline, which would enable lawmakers to begin filling in the details on the sweeping package that would boost spending on child care, education and other social programs and raise taxes on the wealthy and corporations.
But centrist Democrats, led by Representative Josh Gottheimer, had refused to go along, saying the House must first pass the infrastructure bill, which has already won approval by Republicans and Democrats in the Senate.
Liberals, including Representative Alexandria Ocasio-Cortez, have said they will not support the smaller package without the larger one, fearing they will lose leverage.
As Politico noted:
With the infrastructure bill vote now slated for Sept. 27, Democratic leaders are teeing up a potential doomsday scenario with deadlines for government funding, surface transportation programs, key pandemic-relief programs and the debt limit all coming due at once.
It also appears that the September 27th deadline isn't binding...
So, don't get excited about this being over... Neither the bipartisan bill or the $3.5 trillion are in the bag yet.
It's just getting started.
Further reading here:
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Xi's mission to tame the private sector... Is 'common prosperity' the true end goal?
The massive shakeup in China has left many questioning what the true motives are...
Is it merely a move to tame some more out-of-control sectors of the economy?
Or a power move to consolidate control over private enterprise in line with social party goals?
It could also be anything in between...
Chinese economists were sounding very capitalist in this Bloomberg article 👇👇👇
Former UBS chief economist George Magnus suggests that it too early to know for sure 'but everything about Xi’s China suggests a craving for control and Leninist discipline that are not compatible with good economic outcomes'
Have to agree with him there...
We should certainly not make light of Xi Jinping’s determination to go after the rich and the capitalist class where he might well see the accumulation of wealth as a threat to the power and status of the party and himself. Financial and fiscal penalties, and tough regulations are pretty much a shoo-in.
Whether he will be as determined to ensure that incentives are preserved or created, and regulatory, competition, and other public institutions reformed to allow the quest for creativity and productivity to sit comfortably alongside equity is a moot point, or more likely, rhetorical.
For this to occur, we have to ask what’s left of reform and opening up, if anything, how China’s structural economic headwinds are gathering in the harshest external environment it has known in a half a century, and whether in fact the crackdown on private firms and entrepreneurs is a compulsive political campaign leading China down an economic path it would not otherwise choose.
Full article is definitely recommended reading. 👇
Nomura also suggested that the property market curbs may be China's 'Volcker moment' 👇👇👇
Whatever happens in China, it will have huuuuge ramifications for the global economy...
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