Financial Markets Meltdown

[fishtank]

The cheap money is ending soon ....
https://ca.finance.yahoo.com/news/ba...l?guccounter=1

[Buckhead]

So, we can look forward to higher interest rates and the yield curve steepening substantially. That is my take away from that.

[pikergolf]

I figured it was only a matter of time.
https://nationalpost.com/news/canada...ra-court-rules

[Jigger]

You knew the Government was going to force coinsquare to give its customer information over to them? What gave you that inkling?

[pikergolf]

Originally Posted by Jigger

You knew the Government was going to force coinsquare to give its customer information over to them? What gave you that inkling?

When they went after people making to much money in their tax free accounts.

[fishtank]

anonymously....lol remember all those secret swiss account, that the swiss bank cough up after the us demanded .


also coinbase and binance the worlds largest cryto are going to be listing in the stock exchange, if they want to do business in the US, better be willing to follow the rules .

wiki
In November 2017, Coinbase was ordered by the US Internal Revenue Service to report any users who had at least $20,000 in transactions in a year

On February 23, 2018, Coinbase told approximately 13,000 affected customers that the company would be providing their taxpayer ID, name, birth date, address, and historical transaction records from 2013 to 2015 to the IRS within 21 days.

[ehrgeiz]

^
It's a fair play I think if you are unloading crypto to fiat and trying to avoid capital gains tax, CRA should go after those individuals. Particularly if the volume justifies the chase. Although I've never encountered a more incompetent organization filled with ineffectual boobs in my life so my guess is they spend more chasing than they get back. With that, the Government does not provide the same tax shelter investment vehicles that they do for traditional finance within the crypto world (TFSA, RRSP). Nor do they provide any security or regulatory oversight so maybe from an ideological perspective tax evasion is fair play too. Also, as more and more people are content keeping their wealth in crypto while using the sans KYC decentralized exchanges/ dapps such UniSwap as Tornado Cash it will be increasingly impossible to pair transactions with identity. Except for maybe the real whales by virtue of sheer volume.

I definitely take issue with CRA or any nations tax-man chasing capital gains on deemed dispositions within the greater blockchain ecosystem though. I also say good luck going down that labyrinth!

[fishtank]

Originally Posted by ehrgeiz

^
It's a fair play I think if you are unloading crypto to fiat and trying to avoid capital gains tax, CRA should go after those individuals. Particularly if the volume justifies the chase. Although I've never encountered a more incompetent organization filled with ineffectual boobs in my life so my guess is they spend more chasing than they get back. With that, the Government does not provide the same tax shelter investment vehicles that they do for traditional finance within the crypto world (TFSA, RRSP). Nor do they provide any security or regulatory oversight so maybe from an ideological perspective tax evasion is fair play too. Also, as more and more people are content keeping their wealth in crypto while using the sans KYC decentralized exchanges/ dapps such UniSwap as Tornado Cash it will be increasingly impossible to pair transactions with identity. Except for maybe the real whales by virtue of sheer volume.

I definitely take issue with CRA or any nations tax-man chasing capital gains on deemed dispositions within the greater blockchain ecosystem though. I also say good luck going down that labyrinth!

would they only be tax if they covert to fiat? or say they spend it for a transaction, goldsilverbull accepts bitcoin for payment .

[bdub]

Originally Posted by fishtank

would they only be tax if they covert to fiat? or say they spend it for a transaction, goldsilverbull accepts bitcoin for payment .

Would it not get taxed whenever you exchange it for another asset? One crypto to another, crypto to gold, crypto to cash etc. Once they have the records of transactions tied to identities they will be coming to collect their share of any capital gains.

[Buckhead]

Unless they ban Crypto Currencies all together like India is proposing to do.
Governments are not going to give up control easily, especially if they intend to issue their own crypto currency.

[ehrgeiz]

^
Granted I only play an accountant on the internet, but I understand that concept to be captured under deemed dispositions or barter, both of which can be taxable.

Let's get more complicated and evasive, I'll collateralize some Bitcoin and take out a loan into a USD pegged stable-coin like DAI or better yet a blockchain organic stable-coin like RAI. If I must, you can currently do this with USD or CAD, but you then need a trusted/centralized lender. Tesla recently announced they will accept Bitcoin, it shouldn't be long until they consider stable-coins as well. In fact, Elon Musk has been hinting at it if you read between the lines of his relatively recent tweets. I use this loan to purchase my new Tesla. Do I need to pay taxes aside from GST? My understanding suggests nay, but I am subject to a call should the value of my collateral diminish which is always possible in the crypto world. Ideally though, I have a healthy loan to value ratio and pay back the loan over time at 4-6% using whatever fruit my labor produces. In that case, I have now avoided capital gains, acquired a physical asset and preserved any gains on my collateral (or loses ).

Now imagine removing the trusted/centralized lender and replacing it with a Decentralized Anonymous Organization that creates an open source decentralized smart contract which is settled on the Ethereum blockchain. The contract UI finds, connects and binds the lender and the borrower into the transaction using a stable-coin. The bank or any centralized, trusted 3rd party is now obsolete and the entire benefit of the transaction rests with the lender and the borrower.

As I said in an earlier post, I see the wave forming that is likely to disrupt and eat the oligopolistic banking industry's lunch. Can't say for sure, I don't know when, but it can't happen soon enough. Banking institutions do not create or add value, only facilitate. Their wealth is derived from a toll on the fruits of individual creativity and labor. They were a necessary evil, but technology is in the process of superseding them.

[fishtank]

Originally Posted by bdub

Would it not get taxed whenever you exchange it for another asset? One crypto to another, crypto to gold, crypto to cash etc. Once they have the records of transactions tied to identities they will be coming to collect their share of any capital gains.

that what i thought, as they want record of all transaction dating back to 2013 . . with big institutions jumping in with billions, tax revenue is getting big enough for the governments attention .

[bdub]

Originally Posted by Buckhead

Unless they ban Crypto Currencies all together like India is proposing to do.
Governments are not going to give up control easily, especially if they intend to issue their own crypto currency.

Yeah, India among others is starting to take action against cryptos. The EU warned recently that investors could loose all their investments in crypto, a veiled threat that the west is moving towards banning of mining, trading or holding cryptos? Large amounts of the transactions in cryptos are used by China, Iran and Russia to avoid sanctions, money laundering, etc. I think regulatory risk is huge.

[ehrgeiz]

I actually think the regulatory risk is diminishing. If it wasn't the institutional money wouldn't be moving in as it currently is.

The sharpest Countries with growth supportive crypto policies including taxation will reap the benefits of being a real-world hub for this economy.

But I could be wrong. As always time will tell.

[MooseRiverTrapper]

Canadian oil and gas boys!! Killing it.

[pikergolf]

Have any of you looked at or are invested in Psychedelics?

[ghfalls]

The shroom boom is coming. I’m invested in a few penny stocks but nothing too serious.

[foremost1]

Invested in mmed at .65 also invested in a couple others. I have done very well and think there is room for growth.

[Sundancefisher]

Strange.

Lots of chatter about a huge market drop coming and starting this week.

https://financialpost.com/pmn/busine...ding-this-week

https://ca.finance.yahoo.com/news/tr...165129468.html

Should be an interesting week.

How about speculating China maybe trying to cash out of North American markets in the face of some serious political battles with US and to a much lesser extent China.

Not to mention billions leaving Hong Kong may mean China has to liquidate to prop up that market trading hub.

[fishnguy]

^ A hedge fund got margin called (that is, went into nonexistence) and it’s positions were liquidated. Here is an explanation of what kind of happened: https://mobile.twitter.com/bauhiniac...65326298718212

Interestingly, the Chinese companies it had strong positions in could very well be “fake”, lol.

[Dean2]

What u are seeing is the inevitable implosion of companies that are heavily manipulated or completely bogus. Anyone that invested in Chinese companies is an idiot. There is zero regulatory over sight of Chinese companies and stocks. I have never owned one for just that reason. The G7 countries are tough enough to invest in.

[fishtank]

There are probably a few more margin call coming , but they have good friends on Wall Street ,they are all cannibals remember 2008

$16 billion x5margin..... wow that’s going to cause a ripple

[fishnguy]

^ Read about the character who ran the hedge fund, Bill Hwang. Not his first rodeo. It will be interesting what this week reveals what happened. A lot of speculations at this time. Some go as far as to suggest that the guy is cashing in on short positions he had against his own fund, lol.

[Buckhead]

Originally Posted by ehrgeiz

I actually think the regulatory risk is diminishing. If it wasn't the institutional money wouldn't be moving in as it currently is.

The sharpest Countries with growth supportive crypto policies including taxation will reap the benefits of being a real-world hub for this economy.

But I could be wrong. As always time will tell.

Banks are aware of what is happening and want their own piece of the Crypto pie. Several large banks already have divisions specializing in blockchain and smart contracting technology - JP Morgan Chase, Goldman Sachs, Bank of America.
This has been trending for several years.

[fishnguy]

Globe and Mail: Nomura and Credit Suisse warn of big losses after Archegos share dump

Quite fascinating how much exposure there is to the shady funds and it all goes unnoticed until it pops.

[fishnguy]

One more article about the fund that went broke and lack of transparency/regulations.

Forbes: The Firm Behind The $30 Billion Firesale Shaking Financial Markets Disclosed Almost Nothing

How many more like that are out there, I wonder.

[Dean2]

I have said parts of this on a couple of other threads but thought I would post this here. PAY VERY CLOSE ATTENTION to what is happening right now. Gas is up 80% from a year ago, food 40%, Lumber 400%, copper 200%, housing is going up 30% a month in some places, even Edmonton and Calgary are seeing prices rising and short supply. There are severe shortages of everything from electronic chips to fresh produce. Despite what we see every day, the Fed tells us inflation is under 2%. Bank of Canada has changed its tone on interest rates, signalling possible rate hikes much sooner, and the liberal government has started knee jerk reactions to increase revenue and cool the Eastern Canadian and B.C. housing markets. If interest rates get to 5% it will take nearly all of the taxes raised from income tax just to cover the interest payments on our current National Debt. Income tax is still double what is raised on GST so increases to GST is not out of the question post the next election if the Liberals get in.

Between rampant inflation, higher taxes, and higher interest rates the financial health of many is going to take a real beating over the next 5 years. The advice I am giving the people I consult for, make sure your money is in assets that will increase with inflation and that you get as much debt paid down as possible, even debt where the interest is tax deductible. Assets that earn income are a far better choice than straight cash in a savings account. Best of luck all.

[Jim Blake]

Originally Posted by Dean2

I have said parts of this on a couple of other threads but thought I would post this here. PAY VERY CLOSE ATTENTION to what is happening right now. Gas is up 80% from a year ago, food 40%, Lumber 400%, copper 200%, housing is going up 30% a month in some places, even Edmonton and Calgary are seeing prices rising and short supply. There are severe shortages of everything from electronic chips to fresh produce. Despite what we see every day, the Fed tells us inflation is under 2%. Bank of Canada has changed its tone on interest rates, signalling possible rate hikes much sooner, and the liberal government has started knee jerk reactions to increase revenue and cool the Eastern Canadian and B.C. housing markets. If interest rates get to 5% it will take nearly all of the taxes raised from income tax just to cover the interest payments on our current National Debt. Income tax is still double what is raised on GST so increases to GST is not out of the question post the next election if the Liberals get in.

Between rampant inflation, higher taxes, and higher interest rates the financial health of many is going to take a real beating over the next 5 years. The advice I am giving the people I consult for, make sure your money is in assets that will increase with inflation and that you get as much debt paid down as possible, even debt where the interest is tax deductible. Assets that earn income are a far better choice than straight cash in a savings account. Best of luck all.

Nailed it!! I wonder how long the Government will be able to mask what is really going on before SHTF? Trudeau is obviously in a hurry to get an election called and over with before this happens.

Like I said before....early eighties here we come again!

[Twisted Canuck]

I think it's going to be worse then the 80s.

Thanks for sharing your wisdom Dean.

[HVA7mm]

Originally Posted by Dean2

I have said parts of this on a couple of other threads but thought I would post this here. PAY VERY CLOSE ATTENTION to what is happening right now. Gas is up 80% from a year ago, food 40%, Lumber 400%, copper 200%, housing is going up 30% a month in some places, even Edmonton and Calgary are seeing prices rising and short supply. There are severe shortages of everything from electronic chips to fresh produce. Despite what we see every day, the Fed tells us inflation is under 2%. Bank of Canada has changed its tone on interest rates, signalling possible rate hikes much sooner, and the liberal government has started knee jerk reactions to increase revenue and cool the Eastern Canadian and B.C. housing markets. If interest rates get to 5% it will take nearly all of the taxes raised from income tax just to cover the interest payments on our current National Debt. Income tax is still double what is raised on GST so increases to GST is not out of the question post the next election if the Liberals get in.

Between rampant inflation, higher taxes, and higher interest rates the financial health of many is going to take a real beating over the next 5 years. The advice I am giving the people I consult for, make sure your money is in assets that will increase with inflation and that you get as much debt paid down as possible, even debt where the interest is tax deductible. Assets that earn income are a far better choice than straight cash in a savings account. Best of luck all.

Definitely sound advice. We are currently carrying very little debt and even though the interest is currently pretty inconsequential and I'm paying things down at a pretty reasonable pace, I'm old enough to remember what happened to interest rates in the 80's. I have some assets within my TFSA that I may sell to pay off the debt if the earnings are outpaced by a rise in interest rates.

With plans for early retirement in 5 to 10 years, I'd prefer riding things out in a debt free fashion, the cost of living will be enough of a pain.