10th June 2022 > > US state regulation.

tl;dr

I take tax dollars over dogma every day of the week.

Market Snap (at time of writing)

Market Wrap

Stocks had a difficult afternoon yesterday though we haven’t seen a follow through to cryptos, at least not yet.

President of the ECB, convicted criminal Christine Lagarde, announced yesterday the end of quantitative easing (QE) on July 1st, with interest rate rises on July 21st and September 8th, with the objective of reducing inflation from the current 8.1% back to the 2% target over the medium term.

Central banks globally have got themselves in a terrible bind, an outcome that was entirely predictable based upon Japan’s experience of QE since before the turn of the millennium. I have no sympathy for them.

Occasional Series – Alok Sharma, Conservative MP, and his unholy alliance with the UN

On 7th August 2021, the CCC reported that Alok Sharma, Conservative MP and President of COP26 had visited THIRTY countries including SIX on the red list in the prior seven months during the period when most governments around the world were restricting our liberty and freedom with Covid related measures.

I might also add that Sharma entirely avoided any quarantine restrictions on any arrival in any country, especially not when returning to the UK.

Accompanied by a retinue of advisors and associated hangers-on (who also did not have to adhere to any of the restrictions placed on us plebs), it is not clear to me that chartering private jets for the purpose of convincing others about the need to reduce carbon emissions was ever going to be successful.

Unfazed by the failure of COP26 to achieve anything of any practical value to mankind, it is reported that the UN is soon to appoint globe-trotting climate destroying Alok Sharma to the role of Global Climate Chief.

I guess that any organisation that votes to have Qatar as a representative on its Human Rights Council will always believe it is beyond reproach.

The chutzpah of the political elite never fails to take one’s breath away.

Curious Cryptos’ Commentary – Some US states are hostile to cryptos

As previously reported, the recent mayoral elections for New York city were partly fought on a basis of which candidate was the most crypto friendly (see CCC 3rd September 2021).

Eric Adams, the recently elected Democrat Mayor of NYC, is a vocal crypto supporter to the extent that he took his first three pay checks in BTC. He publicly vowed to make New York City a mecca for the crypto industry:

“We need to use the technology of blockchain, Bitcoin, of all other forms of technology. I want New York City to be the center of that technology.”

Prior to his election, New York had gone out of its way to not only forego crypto business but had also implemented strict rules forbidding citizens from gaining access to centralised crypto exchanges (CEX). Eric promised a new dawn and had the full support of the CCC for doing so.

However, Governor Hochul now has a bill sitting on her desk for signing that will ban any new mining operation for cryptos that use the proof-of-work (POW) consensus mechanism and will refuse the renewal of licences to those already operating unless they can prove they use 100% renewable energy.

California is expected to follow suit.

There is an ongoing and somewhat fractious debate around the energy consumption of POW mining. There is a certain type of legislatory mindset whose knee-jerk reaction is to look at only the shoutiest of headlines and reach for the “ban” button.

Meanwhile, states such as Kentucky and Georgia are providing incentives to miners to base their business within their borders, mindful of the vast tax dollars that will accrue in future years.

Georgia already produces over a third of its energy from renewable sources. Electricity costs in Georgia are cheaper than most other places, and its carbon credit scheme is apparently one of the better designed versions.

Currently, New York state provides 10% of the total hashing power for the US, but that is likely to drop and drop significantly if the powers that be continue to demonstrate hostility to cryptos. Ancillary crypto businesses will often be based around mining centres - regulatory uncertainty will drive that business away too.

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Over in the state of Washington, there is a new energy tariff “Tarif 36” that adds 29% to the cost of electricity specifically aimed only at crypto miners.

Garry Arseneault, Commissioner for the Public Utility Districts Work for Chelan County in Washington state, called the new rate “innovative”.

That is one way of putting it.

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I fail to understand why dogma beats the practicalities of tax dollars in some peoples’ minds.