I'm not a fan of mandatory investor education classes. The issue was brought up recently by former chair of FDIC, Sheila Bair, who sees early financial education as ways to stop future FTX-style disasters. The model of finance I've been using for many years is the fairly dismal dark forest model. The financial industry is a shadowy forest full of sly foxes waiting to prey on retail investors. The list of sly foxes is long: all sorts of Samuel Bankman-Frieds, IRS scammers, internet ponzi schemers, stock con-artists, bankers hocking high-fee products, fly-by-night gold mine promoters, an ..read more

Last month American provocateur Tucker Carlson visited a Russian grocery store. Because it was filled to the brim with food, Carlson claims that western sanctions placed on Russia aren't having an effect. "We've been told sanctions on Russia have had a devastating effect on its economy," writes Carlson. "We visited a grocery store in Moscow and found a very different situation." Tucker Carlson We've been told sanctions on Russia have had a devastating effect on its economy. We visited a grocery store in Moscow and found a very different situation. pic.twitter.com/oPF1WUE6Ec — 1776 (@TheWakeni ..read more

There's a new financial loophole in town: stablecoins. Stablecoins are dollar, yen, or pound-based payments platforms that are built using crypto database technology. Financial institutions are always looking for loopholes to game the system. Typically this has meant avoiding capital requirements or liquidity ratios in one jurisdiction in favor of a looser standards elsewhere. The new stablecoin loophole allows for a different set of financial standards to be avoided, society's anti-money laundering regulations. I'll explain this new loophole using PayPal as my example. PayPal now offers ..read more

I very much enjoy economist Robin Brooks's tweets, especially his charts showing how sanctions imposed on Russia have affected regional trade patterns. While direct trade between Europe and Russia has collapsed thanks to Russia's invasion of Ukraine and subsequent sanctions, the chart below shows a suspicious-looking countervailing boom in European trade with Kyrgyzstan. A big chunk of these European goods are presumably being on-shipped from Kyrgyzstan to Russia. New all-time highs for Italian (lhs) and Austrian (rhs) exports to Kyrgyzstan in Nov '23. This goes on from every single EU ..read more

Call me a pedant, but I'm not a fan of the word "crypto". It may have been a serviceable category back in 2011 when there was only one type of crypto thingy – bitcoin. But it's ceased to be a meaningful term and, if anything, it causes a regression in understanding. Source: Fidelity Case in point is the above diagram from Fidelity, which suggests that clients should conservatively invest 40% of their wealth in "equity," 59% in "fixed income", and the other 1% in "crypto." These categories are nonsensical because in many cases, crypto *is* equity. (And in other cases, crypto *is ..read more

What do I like about Byzantine coinage? Most people probably admire the Byzantine solidus, a gold coin that maintained its weight and purity for over 600 years, which is quite remarkable for a coin. The solidus was exported all over the world, including to Europe, which lacked gold coinage at the time, making it the U.S. dollar of its day. That's neat, but it's not the solidus that impresses me. It's Byzantium's small change that I like. The availability of small change is vital to day-to-day commercial life. Alas, the minting of low-value coins has often been neglected by the state. Small c ..read more

Turkish banks halted transactions with Russian banks last month and are only slowly reintroducing payments for a narrow range of products that are on a so-called "green list," reports Ragip Soylu. This broad debanking of Russia by Turkey is part of the fallout from President Biden's first round of secondary sanctions, announced on December 22.  Ukraine/sanctions watchers around the world are breathing a sigh of relief. At last the cavalry has arrived! While the Russian sanctions program has often been described by the press as the "world's strictest", in actuality it has been (till now) a ..read more

Some folks are suggesting that a bitcoin ETF is absurd because it doesn't fit with Bitcoin's original ethos. On the contrary, I think it's a nice snug fit. It would be a misunderstanding of bitcoin's history to assume that it was the idealism of cypherpunk-ism that gave birth to the Bitcoin movement. Bitcoin would never have got off the ground without a massive amount of old fashioned greed, too. In bitcoin-speak, this greed usually goes by the term number-go-up, and it was crucial from the start. The new bitcoin ETFs are certainly not cypherpunk, but they are very much in the founding spir ..read more

I'll start with the conclusion. I don't think flatcoins are a good idea. The idea for flatcoins has been around for a while, but it got a wider airing when it popped up in a Coinbase marketing piece from earlier this year. Now, arch-crypto hater Nouriel Roubini has undergone a Damascene conversion and is about to introduce a crypto flatcoin, suggesting that these novel instruments are "the way forward."   What is a flatcoin? If you own one dollar's worth of stablecoins or one dollar's worth of Wells Fargo deposits, both stay locked at $1 dollar indefinitely. A flatcoin, by contrast ..read more

Coinbase, the U.S.'s largest crypto exchange, is openly processing Ethereum transactions involving Tornado Cash, a piece of blockchain infrastructure that was sanctioned by the U.S. government last year for providing mixing services to North Korea.  Over the last two weeks Coinbase has validated 686 Tornado-linked transactions, according to Tornado Warnings. I've screenshotted the table below: This table shows how many blocks each validator has proposed that includes a transaction that has interacted (either depositing or withdrawing) with Tornado Cash contracts in all denomination ..read more