When a reality tele star makes it (almost) to the White House, the rupee under your mattress is worthless in a weekend and your Venezuelan wallet can’t hold your cash, it feels like a global Moneygate. Just ask the Italians. Yet there’s more bad news, right here in the sunshine state – but we’ll get to that.
If Trump overcomes his obvious technological ignorance (he said he’ll call Bill Gates to close down parts of the internet supporting terrorist activity) and is able to navigate the pending child rape case in time for the White House; what kind of US Government will he create? Planning to repeal the Dodd-Frank Act introduced post GFC to regulate Wall Street, the financial future seems shaky. No wonder world markets rattled post-election announcement whilst Bitcoin rose 3%.
Yet according to Eisman, the man famous for predicting (and profiting) from the GFC depicted in last year’s Oscar winning, The Big Short, the next global economic crash is inevitable – irrespective of who’s in the White House. Eisman says European banks are sated with “non-performing loans” (NPLs); mortgages in which companies and households have fallen behind in repayments or failing to make repayments at all. Billions are still on the books, written down as worth about 45% to 50% of their original value. “Europe is screwed. You guys are still screwed,” says Eisman. “In the Italian system, the banks say they are worth 45-50 cents in the dollar. But the bid price is 20 cents. If they were to mark them down, they would be insolvent.” Italy’s “No” vote in the Referendum has already rocked the Euro – trading at 20-month lows against the dollar in the immediate aftermath. Bitcoin is set to rise again.
Over in Venezuela, after it’s oil-based economy crashed, the government’s solution was to keep printing more cash. With currency value heading to hell and prices soaring heavenward inflation is now over 700%. A packet of cigarettes that cost 250 Boliver yesterday, now costs 200,000 – and the final slap? All that cash is worth $1 on the black market. Venezuelans no longer count currency; they weigh piles of cash. Boliver to Bitcoin conversions have reached all-time highs.
As the Indian government demonetised high-value currency notes not only did citizens find their stash of cash worthless, they were hit with the crushing realisation that the rupee’s remaining may not be worth much either. In a rush to buy Bitcoin, they were hit with a 25-28% surcharge, paying heavily for the risk Bitcoin exchanges factored into accepting an unstable currency.
But the Moneygate suckerpunch happened at home. The Queensland government just passed legislation helping itself to the Superannuation held for public servants – to the tune of $4 billion. Yet the most offensive part of the Revenue and Other Legislation Bill 2016 was the justification: “Community consultation was not undertaken in relation to the revenue legislation amendments in the Bill. Consultation was not considered necessary or appropriate as these amendments are necessary to protect the State’s revenue”
Isn’t Australia a Democracy?
Nathan van den Bosch, founder and CEO of Bitcoin Trader says the decision is having a significant impact on the way citizens invest their Super. “Historically people diversify their portfolio with a 5-10% Bitcoin investment. We are now fielding panicked calls for individuals who want to convert their entire savings into Bitcoin.”
The Queensland Government’s decision is rippling beyond local borders. Van den Bosch says the legislation sets a dangerous precedent across the entire country, “With a stroke of a pen, any Government can take your Super savings – Bitcoin is the only asset class immune to third party repatriation.”
Perhaps an amendment is also needed to the Queensland catchphrase, “Beautiful one day, Bitcoin the next.”