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7th August 2022 > > US regulation.


tl;dr

US regulation takes two steps forward, and one step back.


Market Snap








Market Wrap

Risk assets generally trading in a narrow range, in the face of uncertainty as to what the next round of market manipulation by central banks is going to look like, after the disaster of quantitative easing (QE).


Occasional Series – Quantitative Easing (QE)

If I listed here simply the dates that the CCC explained in sometimes excruciating detail the perils of QE, that would make for my longest post ever.


All the recent Governors of the Bank of England (most embarrassingly of whom is Carney) have totally failed their one collective task of maintaining monetary stability.


This collective failure was embedded by Carney and his advocates in the Conservative party in their unbridled enthusiasm for QE, a policy designed to make the rich richer, and the poor poorer.


You may recall that prior to Covid, QE had signally failed to unleash inflation, as was expected by most commentators. I made the observation that all previous examples of rampant inflation due to money printing (the Weimar Republic, Zimbabwe, Venezuela to name just three) had occurred in closed economies. Economic theory, and experience, did not extend to money-printing in open economies.


Then along came Covid, and the collective governmental over-reaction plunged all countries back into being closed economies, with a consequentially dramatic increase in the policy of QE. Hey presto, we now have rampant inflation, the cause of which lies directly with governments and central banks. Do not fall for the lie that the war in Ukraine is a major contributory factor.


We are all now suffering this injustice.


Curious Cryptos’ Commentary – US Regulation

Regular readers are all too familiar with the Responsible Financial Innovation Act (see CCC 8th and 28th June 2022 amongst others), a fine piece of bi-partisan legislation that is aimed at giving regulatory clarity as to whether digital assets are viewed as commodities or securities, a topic very close to the heart of all holders of Ripple (XRP).


Hard on its heels comes another piece of bi-partisan legislation, the Digital Commodities Consumer Protection Act.


This bill:


“… provides the Commodity Futures Trading Commission (CFTC) with the authority to regulate the trading of digital commodities—mandating consistent, rigorous rules for all market participants.”


In effect, this bill will require that all digital commodity platforms – centralised exchanges, brokers, dealers, and custodians – register with the CFTC. In theory that goes for decentralised exchanges too, which poses an interesting quandary to those who believe in a fully decentralised ethos.


Once again, this new bill is a recipient of the CCC’s seal of approval.


Transparency and disclosure will go a long way to normalising the external view of cryptos, particularly as they relate to the retail market.


It is amazing what can be achieved with cross-party support.


Meanwhile, on the ugly side of the ledger, Senator Elizabeth Warren continues with her one-woman crusade of fear and doubt about the crypto industry.


As a member of the Senate Banking Committee, Warren is running a campaign to get committee members and senators to sign a letter to the Office of the Comptroller of the Currency (OCC) asking that banks cease activities in the crypto space.


The OCC’s acting controller, Michael Hsu, has himself expressed fears and caution about the crypto industry, so if this letter gains traction, it is likely to be received with enthusiastic sympathy.


It is inconceivable in the long-term that banks will not be involved in cryptos, but initiatives like this introduce yet more regulatory uncertainty just at the time when significant progress was being made on that front.


It is amazing how insular and wrong someone can become without talking to the other side.

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