The BIGGEST Ponzi Scheme of Them All!

Your hard-earned money is going into perpetuating a Ponzi scheme. This scheme has been running for a long time, but, with every passing day, it’s getting closer to collapse. Decades of your future are at stake as a result. 

The Ponzi in question is the state pension scheme you’re paying into - whether you want to or not. Most of us who live in countries that run state pension schemes for our retirement make our monthly contributions in the belief that, when the time comes, the state will duly look after us. That cosy assumption is now increasingly in doubt.

It’s a common misconception that the money we contribute to our state pensions is held or invested on our behalf for when we retire. It isn’t. It is in fact paid straight out to the current cohort of pensioners who made their contributions in the same good faith over the course of their working lives. This wouldn’t be an issue if the numbers of working-age people were greater than or equal to the number of retirees. They aren’t. 

In fact, populations in a frightening number of countries are getting rapidly older. As people drop out of the workforce, not enough babies are being born to replace and support them. You’ll probably have heard about this demographic time bomb before and your state pension is in its blast zone.

In today’s video, we explore the great pension Ponzi scheme and its causes, effects and implications for all of us. If you subscribe to the nation that forewarned is forearmed, then this is not one to be missed. 

You can watch that video here.

📈 Crypto Market Forecast 📈

The macro doesn’t matter… until it does. For the last couple of weeks, crypto has been riding its own wave - that of the spot Bitcoin ETF. This has caused crypto to completely decouple from stocks, which have been crashing. However, correlations could return this week, and that’s because there are lots of big macro factors coming up. 

For starters, the Bank of Japan’s meeting is tomorrow. Depending on when you read this, it could already be in progress. Why does this matter? Well, it’s believed that the BoJ could start signalling the end to its yield curve control (buying up Japanese government debt to keep interest rates low). This is relevant to crypto, because less YCC means less money printing.

However, it’s also relevant to macro. That’s because Japan holds lots of foreign assets, namely US bonds. The yen recently fell below a critical level against the USD. This increases the likelihood that the BoJ will increase its defence of the currency. This means selling US bonds for USD to buy yen. The selling of US bonds will cause long-term yields in the US to rise. 

As some of you may have seen, the interest rate on 10-year treasuries recently hit 5%. It looks like it could be on the brink of breaking out. Some believe that the situation in the Middle East will cause a flight to safety that causes investors to buy treasuries, bringing yields down. But, what if the situation in the Middle East doesn’t escalate? What if the status quo continues? 

Believe it or not, but this would be the bearish scenario, and it could be the real reason why stocks are crashing. With US GDP figures still coming in above expectations and the Fed expected to pause its rate hikes later this week, it appears that the US economy is much more resilient than expected, even with higher interest rates. This means no stimulus anytime soon. 

In other words, it looks like the markets are finally starting to believe that the Fed will stay higher for longer, as Jerome Powell has been saying all along. Funnily enough, at the Fed’s last press conference, Jerome seemed seriously concerned about a recession. That’s why we’ll be watching him closely when he delivers the next press conference this Wednesday (1st November).  

You should also be watching what’s going on in Congress now that a new speaker of the House has been elected. What’s hilarious is that nobody seems to know anything about Mike Johnson. All the mainstream media can say about him is that he’s a Trump ally. That’s not necessarily good news for crypto - Trump was actually the first president to bash Bitcoin publicly (in 2019). 

That said, it’s quite clear that Republican politicians are overwhelmingly pro-crypto. Republicans also seem to be against the excessive fiscal spending that’s been supporting the economy so far. But, Republicans appear to be just as keen to spend money when it comes to military affairs. This ties into a more crypto-specific factor we’ve been mentioning for a while now. 

There’s a pending defence bill that’s waiting to be passed by the House - it’s the last step before it gets signed by president Joe Biden and becomes law. This defence bill contains a problematic provision that could require US-based stablecoin issuers like Circle to conduct KYC on all wallets holding their tokens. It wouldn’t surprise me if this bill gets rushed through this week. 

At the same time, US politicians are putting pressure on the Department of Justice to investigate Binance and Tether’s alleged involvement in illicit financial activity. What’s insane is that these calls are coming from otherwise pro-crypto politicians - Cynthia Lummis and French Hill. The fact that they’re on the same side of Elizabeth Warren on this issue tells you how serious it is. More on that in a moment. 

Meanwhile, the UAE has been trying to get off the FATF’s grey list. As we’ve seen with countries like Kuwait and Pakistan, the FATF will likely use this as leverage to force the UAE to restrict the crypto industry. Now that US politicians are openly calling for Binance to be investigated, it’s possible that its UAE operations will be one of the bargaining chips on the table. 

It’s going to be a very interesting week… 

💯 Deal This Week 💯

Recent market conditions have prompted many people to wonder whether they should be topping up their portfolios.  

Well, to do that, you’ll need a fast and easy to use on-ramp to convert some of that fiat currency into crypto. But which one to choose?

The crazy crypto scientists at Coin Bureau have tested many different options. However, the one we find the easiest to use has got to be the Swissborg app!

There you get access to dozens of altcoins and it has got to be one of the most seamless experiences we have found to get into crypto the easy way! Also, if you deposit  €50+ you’ll get up to €100 FREE!

👉 Top up your portfolio the easy way & try Swissborg!

🤦‍♂️  Misinformation Campaign 🤦‍♂️

If you’ve followed the news recently, you’re likely aware that over 100 US Senators, led by Sen. Elizabeth Warren (D-MS), wrote a letter to the Biden administration on 17th Oct, expressing concern about how Hamas and the Palestinian Islamic Jihad (PIJ) had raised millions of dollars through cryptocurrency.

Specifically, the letter stated that the two groups collectively raised over $130 million in crypto between August 2021 and June 2023, and demanded to know what the Treasury Department and others were doing to prevent the use of crypto in financing terrorism.

The letter seems to have had some effect because, less than 24 hours later, the US Treasury Department announced that it had sanctioned several individuals and entities who were reportedly supporting Hamas’s operations.

While cracking down on terrorism and its funding is certainly a priority, there was one problem with this series of events – it was triggered by inflating crypto’s role in funding Hamas.

Here is what really happened.

The terrorism-financing data cited in Sen. Warren’s letter was completely based on a Wall Street Journal (WSJ) news report that was published on 10th Oct.

Interestingly, this WSJ report itself claimed to quote findings by blockchain forensics firm Elliptic and Tel Aviv software company BitOK.

Specifically, the WSJ report claimed, citing a July 2023 report by Elliptic, that the PIJ had received $93.7 million in crypto between August 2021 and June 2023 and added, citing a (hard to find) BitOK research report, that Hamas received about $41 million over the same timeframe.

For context, Matthew Levitt, a former senior Treasury official, estimates Hamas’ annual operating budget to be around $300 million to $450 million. A significant portion (approximately $100 million annually) of this has been known to be provided by Iran. This means that the figure quoted by the WSJ report effectively labels crypto as accounting for around 10% to 20% of Hamas’ annual funding.

Safe to say, that’s no small number. However, given the public nature of blockchains and the current state of blockchain analytics, some in the industry were sceptical of the WSJ’s figures. It was likely that most of the crypto donations sent to Hamas were traceable and therefore either instantly sanctioned or frozen. This makes the blockchain a bad route by which to source funding. In fact, even Hamas told its supporters in April 2023 that it was no longer accepting crypto donations.

As a result, blockchain analytics firm Chainalysis did some digging and published an 18th October report that debunked the data quoted by WSJ. Chainalysis’ report clarified that the real figure was, in fact, only around $450K, not $82 million. A week later, Elliptic (the organisation whose report WSJ relied on) also published a clarification stating that the WSJ team had misconstrued the data in its July report.

The WSJ had actually attributed all the funds held in the wallets of the service providers Hamas had used to be funds raised by Hamas, when in fact only a small portion of those funds belonged to the group.

Given that the report has led to a false narrative being spread by US politicians, many in the crypto space had asked WSJ to retract or publish a clarification on its earlier report. While WSJ did end up posting a clarification on its Oct 10 report, it had initially refused to admit fault.

In fact, Ian Talley – one of the authors of the WSJ report, even wrote an X thread attempting to portray Elliptic’s newly released clarification as a contradiction of its earlier July report.

Thankfully, he got fact-checked by X’s community notes feature, which allowed users to expose how Talley was misrepresenting the original report by only selecting text which supported his narrative. Specifically, users pointed out that the original report states “wallets & funds are related to but not owned by groups mentioned, and include funds in broker wallets.”

Talk about instant karma.

However, even though a clarification has been made, it’s highly unlikely that it will encourage crypto doomers such as Sen. Warren to stop their crusade against the industry. It’s easier to peddle lies when they serve your purpose after all.

📊 Guy’s Personal Portfolio 📊

BTC 41.76% | ETH 28.79% | USDC 16.47% | USDT 6.59% | USD 3.33% | ATOM 2.11% | DOT 0.94%

🔮 Video Pipeline 🔮

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📖 Quote of the Week 📖

Time in the market beats timing the market. The more emphasis you put on buying Bitcoin at the “right” price, the more opportunities you lose to accumulate. We cannot stress enough the importance of Dollar Cost Averaging (DCA) into Bitcoin. Over a long enough time frame, the returns will justify it. 

“Great results can be achieved with small forces” - Sun Tzu

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.

Guy Turner

Guy is one of the founding members and face of the Coin Bureau. Like many of us, he is just an average joe who became “crypto curious” back in 2013. After recognising the potential of blockchain technology, Guy set off on a mission to create crypto educational content, working with others to start the Coin Bureau website and released our first video on YouTube in 2019. You can learn more about him in his Who is Guy? blogpost.

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