Kashkari: Federal Reserve Doesn’t Need to Protect Investors

Another Federal Reserve president has spoken out on interest rates. Neel Kashkari says there is no need for interest rate hikes right now but that the US Federal Reserve does not exist to protect investors.

Though the stock markets are exhibiting “nervousness,” says Kashkari, investors have to figure out what to do next.

We are not here to protect investors from losses. This is a capitalistic economy we live in and if investors take risks, they should bear the consequences of those risks.

But, says the Minneapolis Federal Reserve chief:

We pay attention to the stock market.

No Reason to Apply Economic Brakes

Kashkari, echoing Atlanta Federal Reserve President Raphael Bostic’s recent comments, believes it’s time to stop interest rate hikes:

I don’t see any reason that we need to tap the brakes pre-emptively on the economy, let’s let the job market continue to strengthen and wages and inflation pick up and we can always raise rates then.

Bostic said last week that, amidst uncertainty:

The appropriate response is to be patient in adjusting the stance of policy and to wait for greater clarity about the direction of the economy and the risks to the outlook.

After a slew of interest rate hikes in 2017 and 2018 and a declining equities markets at the end of 2018, the US Federal Reserve took the pressure off the markets early this January. Federal Reserve Chair Jerome Powell said:

We will be patient as we watch to see how the economy evolves.

The markets responded, with five days of consecutive gains.

S&P 500 (Blue) Dow Jones Industrial Average (Red) and Nasdaq (Yellow) Performance Over the Last Year | Source: Trading View

Federal Reserve United and Independent

Federal Reserve Vice Chairman Richard Clarida has since said the Federal Reserve could be “very patient.”

Kashkari’s comments on investors come in defense of US President Donald Trump’s attacks on the central bank. He says the Federal Reserve is “united” in its independence and focus on data.

Federal Reserve Chair Powell knocked back Trump’s criticisms as the market struggled in late 2018, saying he would not resign. The Federal Reserve is an independent body, and despite Trump’s comments, he cannot fire Powell or force him to quit.

With further interest rate hikes in the near future now very unlikely, investors appear more confident despite other concerns. The Dow Jones Industrial Average ended the day up 141 points or 0.59%.


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Author: Melanie Kramer  
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Paxos Standard giving trouble to users trying to redeem stablecoins for dollars

With stablecoins becoming a ubiquitous part of the crypto landscape, many traders wonder about which one is the safest or most efficient for their purposes. The latest reports concerning Paxos Standard are not very welcoming towards those who are doing their own research about the stablecoin.

According to a report published today by ccn.com, Paxos Standard has been over questioning users who try to redeem their PAX for dollars. Crypto Twitter is already reacting on the news:


Paxos, a NYSDFS regulated company, promises a stable, supported, no fees and fast (operating outside of banking hours, they claim) one-to-one redemption of PAX for USD.

However, the report assures that a group of 5 traders who trade several million dollars a week, saw their funds withheld for a week or more, with one of them not having been able to fulfill the redemption at publishing time.

The common issue shared by the group of traders was an excess of questions coming from the Paxos Standard team, which seemed to be weary of the origin of the funds, the use of several Binance addresses or the identity of the possible counter parties of the traders.

Further questions from Paxos Standard team include enquiries about the user´s trading strategy, their name, location, position and salary, or anticipated monthly activity for purchases and redemptions, among many other sensitive details.

The company replied to these allegations without giving specific information about the cases mentioned in the report, but stating the following:

Yes, we have closed a few accounts, only for very good reasons. It’s all for the sake of AML/KYC compliance. While we don’t comment on the status of individual account activity, we can tell you about the patterns we’ve seen lately.


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Author: ALBERTO ARNALDO
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Bittrex Exchange Will Let Investors Swap Their Dollars For Cryptocurrency

  • A U.S.-based crypto exchange lets investors buy coins using U.S. dollars.
  • In the past, the majority of alt coins could only be purchased by first converting dollars into bitcoin.
  • Working with U.S. agencies to help solve the “regulatory puzzle” of cryptocurrencies will help unlock capital, says Bittrex Founder and CEO Bill Shihara.

Join in the fun and play on the world’s First Hybrid on-line Casino with BTC and Fiat currency payments. Check on-line for latest promotions.

Investors now have a new way to purchase cryptocurrencies using U.S. dollars.

Bittrex, a Seattle-based cryptocurrency exchange, has struck an agreement that allows investors to buy digital coins with American dollars. In the past, only coins traded on Coinbase, a digital currency exchange in California, could be bought with dollars. That is a fraction of the approximately 1500 digital coins floating around the universe of cryptocurrenices.

To buy any of the other coins, investors had to convert their money to bitcoin first. Now they have Bittrex.

Founder and CEO Bill Shihara told CNBC that the goal is to “expand out to as many markets as possible on Bittrex,” he said on “Fast Money” Friday.

“As well as expand it so that every customer on Bittrex will be able to have access to U.S. dollar trading,” he said.

The exchange might even help move the market. Since so many alt coins could only be purchased by way of bitcoin, the value of bitcoin and many other digital currencies were closely correlated. The value of those crypto units may now begin to decouple from bitcoin, Shihara said, as more investors transact in dollars.

Currently, nearly 200 different digital coins can be traded on Bittrex. The CEO said that a “small, select number of launch partners” are working with the exchange to pay in dollars.

“In this phase, we’re stress-testing our system,” he said. “We’re working with the banks very closely to ensure that they can process the FIAT deposits and withdrawals. Also, the engine itself that we use to trade, is going to be able to properly handle the load.”

Cryptocurrency is still largely unregulated in the United States, which has led many financial institutions and investors to be cautious of the coins, amid a landscape of widespread fraud and fake ICOs. Other traders have sought out foreign markets to invest in digital assets like bitcoin.

But Shihara said working with U.S. regulatory agencies on better ways to use cryptocurrency will add value to the space.

“We think that solving the regulatory puzzle in the United States really unlocks a lot of capital that really can’t trade on a foreign exchange that doesn’t have proper [anti-money laundering] controls or proper compliance,” Shihara said.


Here at Dollar Destruction, we endeavor to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Kellie Ell
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Bitcoin is no different to a ‘regular currency’ says Federal Reserve Bank strategist

A strategist from the St Louis Federal Reserve Bank has stated that Bitcoin is more like a regular currency than you may expect.

Christine Smith, a strategist, recently gave a string of reasons why Bitcoin is no different from a regular currency. She made the statement with the added insight that Bitcoin may appear less exotic from a banker’s perspective.

The statement was delivered in a post titled “Three ways Bitcoin is like regular currency”. The federal reserve bank recently published articles that criticised Bitcoin and pointed out the ongoing issue of money laundering with digital currencies.

Smith refuted the claim that Bitcoin has no intrinsic value by pointed out that currencies like the US dollar have no intrinsic value either. She reasoned that the US dollar is printed on a form of paper money that is cheap to make.

Another feature of Bitcoin is its scarcity of supply as there is only 21 million BTC in total. Smith pointed out that a big part of the federal reserve is in maintaining scarcity of a regular currency so that the value is not undervalued.


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Smith also pointed out that contrary to popular opinion the federal reserve does not print money but just increases/decreases the monetary base. There is currently around $1.63 trillion in the US currency today.

The similarity in scarcity between Bitcoin and US dollars is not without limits because a central bank has the ability to boost supply if there appears to be a need to do so. Bitcoin on the other hand is less able to tweak its supply as a regular currency can.

The role of scarcity according to Smith is extremely important because an unlimited supply of currency would devalue its monetary value. Smith reasons that the value of currency is in relation to how much of that currency is available at the time.

Both Bitcoin and the US dollar seem to operate under similar assumptions about monetary value and have more in common than one may think.



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A rising dollar is among the ‘biggest threats’ to the global economy, strategist says

A trade showdown between the U.S. and China is widely expected to be detrimental to global economic growth, while elevated tensions over the standoff between the world’s biggest economies has also dulled the dollar’s appeal.

There was a trade war … It took place last year and America won it because it effectively imposed 10 percent tariffs on China and 12 percent on the rest of the world and 15 percent on Europe by depreciating the dollar,” Paul Gambles, managing partner at Thailand-based advisory firm MBMG Group, told CNBC’s “Squawk Box Europe” on Thursday.

The dollar Index, the greenback versus a basket of currencies, is up over 1 percent since the end of January with most of its slide happening before that date.

Global economic growth could soon be derailed by a bounce in the U.S. dollar, a strategist told CNBC Thursday.

A trade showdown between the U.S. and China is widely expected to be detrimental to global economic growth, while elevated tensions over the standoff between the world’s biggest economies has also dulled the dollar’s appeal. The U.S. currency has recorded five consecutive quarters of losses, which includes the last quarter ending March 31.

President Donald Trump’s top economic advisor Larry Kudlow has since sought to ease concerns by saying the U.S. administration is in “negotiation” with China — and not engaged in a trade war. This helped stir a dramatic comeback in U.S. equities and prompted the dollar to rebound.

“There was a trade war … It took place last year and America won it because it effectively imposed 10 percent tariffs on China and 12 percent on the rest of the world and 15 percent on Europe by depreciating the dollar,” Paul Gambles, managing partner at Thailand-based advisory firm MBMG Group, told CNBC’s “Squawk Box Europe” on Thursday.

However, he argued the dollar has since showed signs of “forming a bottom.” The dollar Index, the greenback versus a basket of currencies, is up over 1 percent since the end of January with most of its slide happening before that date.

“I think the key point is the American economy and actually the global economy was predicated on the dollar continuing to fall … So actually even a 1 or 2 percent appreciation is quite dangerous,” he said, before adding that continued dollar strength is “probably one of the biggest threats” to worldwide economic growth.

Sound and stable

Last month, Kudlow said he believed a good economy policy included a “sound (and) stable dollar.” His comments were largely in keeping with previous U.S. administrations, who have traditionally been proponents of a strong greenback.

Nonetheless, at the start of the year, Treasury Secretary Steven Munchin had suggested dollar weakness was “not a concern of mine” only to backtrack a day later and reiterate that a strong “long-term dollar” is in the country’s best interest. Trump hinted before his inauguration that he preferred a weaker dollar.

Trade showdown

Meanwhile, an ongoing trade dispute between Washington and Beijing has fueled market fears of a full-blown trade war. This, in turn, could threaten to derail global economic growth.

Trump had unveiled a list of Chinese imports he aimed to target on Tuesday, as part of a crackdown on the Asian giant’s trade practice. Beijing responded with additional charges on 106 U.S. products less than 24 hours later, stoking concerns of a tit-for-tat trade war.
The White House has since sought to push back on the notion a trade war could soon breakout, aiding dramatic recovery for U.S. stocks in the previous session.


 

Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author Sam Meredith

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