Tags: regulators | bitcoin | warnings | investor | cryptocurrency

Casual Investor, Cryptocurrency Fanatics Won't Heed Bitcoin Warnings

Casual Investor, Cryptocurrency Fanatics Won't Heed Bitcoin Warnings
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Tuesday, 12 December 2017 08:16 AM Current | Bio | Archive

The two top U.S. financial regulators, Jay Clayton, chairman of the Securities and Exchange Commission (SEC) and J. Christopher Giancarlo, head of the Commodity Futures Trading Commission (CFTC), weighed in on the frenzy surrounding trading in cryptocurrencies.

They warned investors about the risks connected with volatile digital assets and that, and this is very important for investors to take note of, the CFTC could not protect investors in many cryptocurrency trading venues.

From its side, the U.S. Securities and Exchange Commission released a Public Statement on Cryptocurrencies and Initial Coin Offerings.

More alarmingly, there are also media reports of leveraged retail investors becoming involved in the bubble. That is a concern because leverage increase has the potency on the economic effects of the bubble.

The retail investor involvement is also a concern, but generally spoken this is an inevitable part of the later stages of an asset bubble.

Will the regulatory comments stop this? I don’t think so.

Financial regulator comments are important to people who are sophisticated financial investors reading the financial media.

The casual retail investor, the cryptocurrency fanatic and the digital anarchist are unlikely to know or are unlikely to care what the financial regulators think.

Besides that, today we get a couple of interesting inflation data out of the U.S. and the UK.

The United States releases producer price inflation (PPI). Producer price inflation (PPI) is a far better measure of corporate pricing power than is consumer price inflation (CPI) because non-market calculated, and administered prices are influential in the consumer price measures.

The trend of producer price inflation (PPI) has been rising and there are indications that pricing power has improved for corporates over the course of the last year, albeit the evidence rests on the somewhat weaker foundation of survey-based data and anecdote.

Over in Europe, the UK producer price inflation (PPI) was up a slightly smaller than expected 0.3 percent on the month in November. Even so, this was still enough to raise the annual inflation rate a couple of ticks to 3.0 percent, its first increase since August but still 0.3 percentage points short of its September print.

Consumer price inflation (CPI) rose a slightly larger than expected 0.3 percent on the month in November. This put the annual inflation rate at 3.1 percent, up just a tick from September/October.

The UK unusually is an economy where inflation risks are for lower rather than higher inflation in the coming year (2018). This is a function of base effects arising from sterling’s earlier decline, which raised inflation, but less than might be supposed this year, but which is assumed to not having significant further impact next year.

Germany has released its ZEW current economic conditions survey for December that showed practically no change in analysts' assessment of the German economy. The current conditions index rose a further 0.5 points to 89.3, its fourth increase in the last five months and its highest reading since July 2011. By contrast, expectations slipped by 0.7 points to 17.4.

The ZEW survey suggests that analysts remain very upbeat about the German economy this quarter and see further solid progress at the start of next year.

Etienne "Hans" Parisis is a bank economist who has advised investors on financial markets and international investments.

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The casual retail investor, the cryptocurrency fanatic and the digital anarchist are unlikely to know or are unlikely to care what the financial regulators think.
regulators, bitcoin, warnings, investor, cryptocurrency
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2017-16-12
Tuesday, 12 December 2017 08:16 AM
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