A clearer image of the above chart can be found here (tradingview: https://www.tradingview.com/x/FouWe2J9/)

Core CPI, CPI m/m and CPI y/y data all coming in under expectations via (https://www.forexfactory.com/calendar)

Reach out to us at Stormrake for further market insight and allow us to help you navigate the sea of mania and laser-eye memes, so that you can realise your goals in the market!

Welcome to another jam packed Rake Review as July delivered on news and controversy again. From Central Banks, to Regional Banks, to BRICS, to China, to new listings that claim to be the answer "Worldcoin", we go around the world as Bitcoin quietly counts down to the next halving in April.

We've talked a lot about the dangers of manipulated money markets and how the outcomes of that manipulation lead to poor economic outcomes. This month we saw no less than the Australian Central Bank's (RBA) governor be replaced with him being out of a job by September this year. 

Earlier Phillip Lowe (RBA Chief) told Australians that near zero interest rates would not rise for until at least 2024. Since then we saw the steepest rise in rates in Australia's history. Mortgage payers are understandably upset and the anger was felt at the recent parliamentary enquiry. The result - Swapping Phillip Lowe for his deputy. A change aimed at appeasing the angry populace that is struggling under the weight of enormous interest repayments but a change that will have zero impact as long as the RBA mandate remains the same. Another change is that the RBA will move from monthly meetings to 1 & a half  monthly. You are expected to believe that 8 interest rises a year will be better than 12. That's for people that don't know that it doesn't matter how many slices a pizza has - its the total size. It's like walking into a restaurant and asking it to be cut into 8 instead of 12 because you aren't very hungry.

The US has only 8 meetings a year for the Fed but that hasn't stopped them from having the steepest climb of interest rates in their history. Yesterday, true to his word the Fed chair Jerome Powell announced yet another rise of 0.25%. He is currently at no risk of being replaced like his Australian cousin. In fact, while recession fears abound in parts of the economy, this month actually makes it look like a soft landing is possible. Data suggests that inflation is moderating (in both Australia & the US), and parts of the economy are surprisingly resilient. For example, jobs data is still very strong. Could the US achieve a soft landing? Could we see inflation being lowered at the same time as the economy doesn't get destroyed? Our base case would be that as soon as the Fed lowers rates we see inflation kick up again.

While news filters through of China's foreign minister Qin Gang being purged from the records, China's growth seems to have stagnated. China was very slow to leave the COVID lockdown madness. They only abandoned target zero once there was mass unrest in the provinces to the point where the Communist party's authority was in doubt. Once opening up China has struggled to regain their growth rate with high youth unemployment and significant problems in the property sector. Having said all that, official growth is still over 6% annualised which in the western world would be fantastic growth. As a result, it seems likely China will cut interest rates and take other measures to free up credit which outs pressure on the US to do the same.

After the Banking crisis (spate of Bank failures and bailouts) in the US we had in March, we saw another Bank go down in July. PacWest (another regional bank) had lost 2/3 of its value after clients started to seek to move their deposits to safer (guaranteed) banks. The Banc of California has agreed to buy the whole of PacWest.

However, the big question remains which is: Will this latest failure trigger a new waive of Bank failures. No one knows exactly how much losses banks are carrying from over investment in government Bonds that have crashed since the Fed started its tightening cycle. By some accounts a significant number of Banks in the US and around the world are technically insolvent.

We wrote about this in detail in our Thunder Trading update so I won't go into great detail here. However, given that this is key news, what you need to know is that on the whole the SEC suffered a defeat and Ripple is clear of charges that it sold unregistered securities (to retail clients at least). It's a huge win for the crypto industry and a reason to be bullish going into the halving and a period of time where crypto prices are a rubber band ready to fly. XRP, XLM, SOL and many others are up significantly since the ruling was announced.

As a slight warning, it is still possible that the SEC could appeal. Lyn Alden has recently said that she thinks there is a high likelihood of an appeal given the SEC's comments on the decision.

Blackrock has filed for a Bitcoin exchange traded fund (ETF) at the SEC and others have either followed or changed their filing to be in line with that of Blackrock. The reason for that is simple, Blackrock, the worlds largest fund manager has an impeccable track record of succeeding in its filings. No one has yet succeeded to get an ETF up in the US but with Blackrock's filing the odds of success seem to have increased. 

More than that, Blackrock seems to have already invested in BTC with Larry Fink once a detractor now publicly spruiking Bitcoin as a truly global investment. Again this is incredibly positive news for the industry as the amount of funds under the control of Blackrosk and the other fund managers is astronomic compared to Bitcoins tiny 570BN USD Market Cap. If they invest, Bitcoins price could rocket. We have saved the Video of the Month below for Larry.

Oh, by the way, Blackrock now suggesting 84.9% Bitcoin allocation is the way to go. That's pretty crazy even by our standards.

The biggest launch of July was Worldcoin (WLD). Founded by Sam Altman, the man behind Open AI, Worldcoin is a controversial ID technology delivered through the global power of crypto. If you think that sounds amazing, think again as many think this could usher in a dystopian future. Ben Simpson of Collective Shift says "The big issue becomes who we want to create and gate-keep our digital identities."

Do you actually want your eyes biometrically scanned for your digital wallet and digital ID?  Strangely, thousands of people are lining up.  Also, unsurprisingly, the tokenomics here are designed to make huge money for the founders. Only a small % of the total supply is released and market makers have been called in to set the price where founders want it. Beware.

Finally, the Bitcoin Halving is under 3/4 of a year away. In April, the amount of BTC released every block will halve lowering supply to hit the market. In the past this has helped put a supply shock into the market and we have seen what can happen to price. Don't get caught short.

• More rumblings around the BRICS nations (Brazil, Russia, India and China +) introducing a new gold backed currency to replace the USD
  
• DOGE coin rallied on the back of news that that Twitter's rebrand will introduce a DOGE payment option as Musk makes waives again.
  
• CZ and Binance fighting back against CFTC in new filing
  
• After halting rates last meeting the Fed increases 0.25%. Larry Fink expects another 1% worth of rises over the next year.

For something completely different and a bit more fun we wrote an article about schooling and education. Take a break from finance, crypto and economics and have a leisurely read here: https://www.stormrake.com/blogs/post/the-world-is-run-by-c-students

Where do you sit on this: Do C students Run the World? Do A students Rule? Can someone without a high school diploma succeed in business? 

Is Schooling actually serving our children in 2023?

If you enjoyed this Rake Review, feel free to open an account and gain access to more proprietary research and work with your very own dedicated crypto broker.

There are 2 weeks to go until the end of the Financial year in Australia. Are you ready with your tax strategy? We will discuss this later but first we have so much news in such a short period of time. The SEC is going to war with the largest crypto exchanges in the world while declaring more and more currencies as "unregistered securities". What does this mean for the industry, your investments and the next bull run?

Binance had previously already been flagged as the "bad guy" when the CFTC released a detailed dosier alleging that Binance targeted US customers without a licence, traded against their own clients with hidden accounts as well as a raft of other impropriety so it was no surprise when the SEC officially went after them. The biggest exchange in the world is now in damage control with the founder CZ desperately trying to maintain the status quo. CZ has recently been accused of selling BTC to buy BNB (The Binance token) in order to defend the price of it from free falling. If you recall what happened with Sam (SBF)  and FTX this all seems like a perfect mirror image. Needless to say if you have funds on Binance or hold the BNB token please speak to us urgently and work out a plan of action. 

The following day after suing Binance the SEC officially went after Coinbase. This was more of a surprise because Coinbase was seen as a good actor trying to walk the path of full transparency and legitimacy. Under SEC's watch Coinbase listed on the US stock exchange and became the largest custodian of funds including for Greyscale and Blackrock. Brian Armstrong the CEO has been vocal in trying to work with regulators to make sure they could operate by the book. Coinbase had reached an impasse with the SEC recently and threatened to go completely offshore by leaving the US. So, the legal action makes it clear the SEC sees the whole crypto industry as a threat and the announcements took a swipe at several prominent cryptocurrencies. For a full list see here.

The implications are significant for the web3 and crypto industry. Effectively, the current environment makes it impossible for a new coin to be available for sale in the US. Now, given the global nature of cryptocurrencies the US regulators see global issues as US issues. Every founder of a cryptocurrency that has been named as a security may soon find themselves in trouble with the law. Now do you see why Satoshi disappeared? 

As an investor you have to ask yourself: Should I still be holding Cardano or Matic or BNB? What does the future hold? The answer is important. Many of our clients have chosen to consolidate their altcoins into Bitcoin (BTC).

Bitcoin is now at almost 50% dominance again. This means that Bitcoins value is half of all the other (top100) cryptocurrencies put together. The other currencies come and go. They have their time in the sun and then fade into insignificance. The greater fool theory has it that you can make money if the guy you sell to is a greater fool than you are. As the price rises everyone wins until the last guy gets stuck holding a bag of worthless tokens.

Bitcoin is different. It is not a security according to the SEC. It also doesn't have a founder or headquarters that you can send a subpoena to. It can't be sued. It can't be stopped and it can't be controlled by the government or the regulators.  

The Largest Home Loan Bank in Australia CBA has updated its fraud system and set a limit of 10,000 per calendar month for deposits to crypto exchanges as well as a compulsory 24 hr block. It's the kind of overreach we haven't seen yet from banks in Australia. Is there more to come? Either way, as we always say, deposits to Stormrake should never say "crypto" or "BTC". Please only use your customer ID as the reference and no description. We have never had a problem and we'd like to avoid any issues in the future. For now we have full complete access to all our Banks and can fully service all AUD needs. If anyone has a banking issue please let us know.

Meanwhile the Australian Bitcoin Industry Body has officially replied to the CBA:

As Financial Year 2023 draws to a close, we remind all clients to have a think about their positions. Note that we do not provide financial advice and we are not tax experts or accountants. However, there is only 2 weeks left in the financial year for any trades to count towards FY23. Speak to your accountants as to what is best for your tax position and let us know if you need to transact.

As the year draws to a close Stormrake will charge the accrued custody fees for all accounts holding crypto. Look out for that in your next statement which will detail any charges.

• SEC files lawsuits against Binance and Coinbase on consecutive days. These are the 2 largest centralised exchanges in the world. Coinbase especially was trying to be a fully regulated exchange and listed in the US under the watch of the SEC. The SEC also declared a new list of cryptocurrencies as securities. Full list here: Contact your broker if you have these tokens.
  
• Commonwealth Bank announces all withdrawals to crypto exchanges will be held for 24hrs to protect their clients from fraud.
  
• BlackRock files for a Bitcoin only Spot ETF (Technically a trust) in a complete 180 after calling Bitcoin an "Index of Money Laundering" in 2013. BlackRock is the worlds biggest fund manager.
  
• The RBA raises rates again by 0.25% but the Fed decides to halt for the first time since the record tightening began.
  

During the week we wrote an education piece on the way that SEC looks at what is and isn't a security. The Howie Test is used to decide and if a cryptocurrency is a security it needs to fully comply with securities law in the US. Bitcoin is not a security and never was. The article here looks at this in more detail.

Many people think confiscation is impossible in the western world but studying history allows us to see that confiscations have happened before and there is a chance of confiscations in the future. The article here looks at what happened in more detail.

If you enjoyed this Rake Review, feel free to open an account and gain access to more proprietary research and work with your very own dedicated crypto broker.

May 2023 proved to be a rollercoaster month in the world of economics and cryptocurrency. The (All Powerful & Mighty) United States, teetered on the brink of debt default. The debt ceiling was maxed and the Democrats and Republicans tussled for an agreement over raising the level of borrowing that the US was allowed. We wrote a full explainer yesterday here. Today the details of a deal finally emerged with the debt ceiling being suspended altogether. I wonder (sarcastically) if this move will stop the exponential growth of US debt?

Back in the day when dollars were backed by gold (real money), currency notes were quite literally gold certificates, exchangeable for gold. Check out the image below to see how it looked. Quite different from what Americans use as currency today, isn't it? Today, the basis of currency is trust. For instance, the note in the first image says, "In God We Trust". This begs the question - should we have to trust anyone when dealing with money?

The current fiat money system in the US isn't backed by any physical assets. It operates solely on the "Full Faith and Credit" of the U.S. government. This may have been a workable system back in the 70s, but in the face of an exponentially growing debt to GDP ratio of 130% and rising inflation, one can't help but question the solidity of this faith.

Perhaps, the answer to this conundrum lies in a predictable, non-debaseable form of currency – Bitcoin. The appeal of Bitcoin lies in its finite supply, making it immune to printing or manipulation.

As the piece linked here talks about Bitcoin may just be "The Ultimate Asset of the 21st Century" 

But we could be way off the mark. Maybe you should trust this guy:

As we highlighted on socials, Binance has had significant regulatory setbacks this month. Following regulatory enforcement action by the SEC, FTCA as well as being sued privately in the US, Binance left Canada entirely and has now lost its AFSL (Australian Financial Services Licence) and banking access in Australia. This is significant because Binance is the worlds largest exchange and has grown in market share since the FTX exit. This development had a stunning effect. Aussie investors were able to withdraw but not deposit which caused a decoupling to happen between the AUD denominated markets on Binance and the world price. For example BTC price denominated in AUD on Binance was at times 40% lower than what you could get at Stormrake.

So, anyone that sold crypto into AUD on Binance was getting a 40% haircut. Anyone that withdrew AUD missed out on a 40% arb where they could have bought BTC, sent to Stormrake and sold into AUD for a 40% higher price and withdrawn to their bank account. Of course they could also have just kept the cheap BTC in Stormrake custody. 

Allow us to toot our own horn for just one paragraph. As a Stormrake client you benefit from being able to get the best price of 20 exchanges all over the world and benefit from multi pronged banking networks. That means that when Binance or any other exchange has issues you will still be able to maximise your buy and sell prices. Stormrake currently tracks 6,000+ Markets around the world and over 1,000 tokens (But you may only need 1). 

• Binance pulls the pin on AUD pairs (Markets) following its loss of its AFSL and its banking relationship with Westpac. As a result Binance records significantly lower prices for crypto in AUD.
• De-dollarisation escalates.  Iran pushes ahead with de-dollarisation meeting with 11 significant countries. This (moving away from USD denominated trade) is "Not a Voluntary Choice" according to  Iran's First Vice President. Weaponisation of the Dollar by the US is leading to global trade looking for an alternative.
  
• Fees remain stubbornly high on ETH and BTC. Pepe craze and BRC-20 transactions force high fees despite not hitting a bull-market yet.
  
• Pepe creates Millionaires as the Meme coin rises and falls. 
  

Bitcoin, the trailblazer of the cryptocurrency world, has become a household name in the past decade. Yet, many people still struggle to understand this digital asset and its significance in the current financial landscape. This piece aims to demystify Bitcoin for beginners and shed light on its fundamental principles.

Introduced in 2009 by an anonymous entity known as Satoshi Nakamoto, Bitcoin is a decentralized digital currency operating without a central bank. The foundation of Bitcoin lies in the combination of economic incentives & blockchain technology, a public ledger containing all transaction data from anyone using Bitcoin.

Unlike traditional currencies, Bitcoin has a limited supply. Only 21 million bitcoins can ever be mined, contributing to its scarcity and value. This characteristic sets Bitcoin apart from traditional money and positions it as "digital gold."

If you enjoyed this Rake Review, feel free to open an account and gain access to more proprietary research and work with your very own dedicated crypto broker.

In the labyrinthine world of economic policy, one term that has frequently made headlines is the U.S. debt ceiling. The recent crisis underlines the contentious nature of this mechanism and brings to the forefront questions about our modern central banking system. In contrast, Bitcoin’s predetermined supply mechanism offers a striking alternative.

The information contained here is for general information only. It should not be taken as constituting financial advice. Stormrake is not a financial adviser. You should consider seeking independent financial advice prior to making any personal investments.

The recent 2023 crisis has once again shone a spotlight on this peculiar mechanism. As the U.S. government spent more than its tax revenue, the debt ceiling had to be raised to avoid default. This scenario has become a recurring theme over the years. The ongoing cycle of borrowing, spending, hitting the debt limit, and then raising it, raises valid questions about the viability of this system. 

* Significant crises happened prior to this, most recently in 2013, 2011 & 1995. 

Critics argue that the debt ceiling is an outdated concept that does more harm than good. It disrupts the financial market, undermines the economy, and adds unnecessary stress to an already complex governmental budgeting process. Moreover, it highlights the infinite loop of the central banking system, where money creation becomes a necessity to keep the economy afloat.

The central banking system, with its ability to adjust monetary supply, has been seen as an integral part of our economy. However, the frequent need to raise the debt ceiling paints a clear picture: the system requires consistent borrowing and money printing to function. This reality is not sustainable and opens up questions about alternative economic structures.

In an era marked by monetary uncertainty, Bitcoin provides an innovative alternative to traditional banking systems. It offers a decentralized, transparent, and fair monetary system, proving to be the antithesis of the current central banking structure. While debates around the U.S. debt ceiling continue, Bitcoin's supply mechanism stands as a testament to the power of a fixed supply and open transparency. In the end, it could prove to be the way forward in our evolving financial landscape.

If you enjoyed this Thunder Trading, feel free to open an account and gain access to more proprietary research and work with your very own dedicated crypto broker.