Higher taxes anyone…anyone?

Thursday, 4 January 2018
Melbourne, Australia
By Bernd Struben

  • Ripple is on a tear
  • Cryptocurrency trading platforms
  • Margaret River beckons

We kick off today’s Port Phillip Insider with a question.

One which has nothing to do with cryptocurrencies, commodities, or the stock markets. Though it could have an impact on your wallet.

And the question is…

When was the last time you were in a bar or at the bottle shop and thought, ‘Wow, these drinks are cheap’?

If you’re like me, your answer may be ‘never’.

Or perhaps the thought crossed your mind the last time you were overseas. Where the free market is more likely to determine the price of your pint of beer or glass of chardonnay, rather than punitive government sin taxes.

I ‘enjoyed’ my first $10 pint when I moved to Melbourne from South Australia in 2013. Today that same pint in the same bar costs $12.

No surprise then that Deutsche Bank ranks Melbourne as the eighth most expensive city in the world to buy a beer. (Oslo, Norway tops the list.)

But that’s not nearly expensive enough for the Foundation for Alcohol Research and Education.

They’re lobbying to increase the excise tax on all alcohol by 10%. Draught beer would be particularly hard hit. According to The Age, their proposal would see the tax on tap beer increase by 50% to match the tax on packaged beer. Ouch!

Don’t worry though. It’s all for your own good.

The Foundation’s pre-budget report estimates the higher taxes will squeeze $2.9 billion in extra revenue from Aussie drinkers. And reduce alcohol consumption by 9.4%.

Michael Thorn, the Foundation’s CEO, decries alcohol for its ‘disruption to families, the impact on employers, [and] reductions in productivity’.

The thing is, the vast majority of Australians drink responsibly. And they’re already paying far too much tax for their bevvies.

What Michael and his ilk fail to grasp is that ever-higher taxes will do little to nothing to reduce consumption among the real problem drinkers. These folks will cut back on other expenses — like new clothes for the kiddies — long before cutting back on alcohol.

And if the booze tax goes too high, as we’re seeing with tobacco, you can expect illicit home brewers and black-market sales to take off.

It’s another ill-informed, big stick approach to a matter that requires finesse. And the issue of problem drinkers is one the Foundation for Alcohol Research and Education needs to accept won’t ever be solved entirely.

In the meantime, if you’re looking for a bargain pint, you might want to consider Prague. At AU$1.66 a glass, Deutsche Bank ranks the city as the world’s cheapest for a cold one.

Now to the markets…

Markets

Overnight, the Dow Jones Industrial Average closed up 98.67 points, or 0.40%.

The S&P 500 gained 17.25 points, or 0.64%.

In Europe, the Euro Stoxx 50 index finished up 19.69 points, or 0.56%. Meanwhile, the FTSE 100 gained 0.30%, and Germany’s DAX climbed 106.82 points, or 0.83%.

In Asian markets, Japan’s Nikkei 225 opened strongly on its first day of trading in 2018. At time of writing it’s up 567.27 points, or 2.49%. China’s CSI 300 is up 0.46%.

In Australia, the S&P/ASX 200 is up 2.42 points, or 0.04%.

On the commodities markets, West Texas Intermediate crude oil is US$61.85 per barrel. Brent crude is US$67.84 per barrel. At prices like this I expect to see US shale producers ramping up production. The increased supply should put a cap on the WTI price, and likely see it fall back below US$60 by February.

Gold is trading for US$1,311.43 (AU$1,675.74) per troy ounce. Silver is US$17.11 (AU$21.86) per troy ounce.

One bitcoin is worth US$15,026.72.

The Aussie dollar is worth 78.26 US cents.

Ripple is on a tear

OK. You knew we couldn’t avoid cryptocurrencies for long.

Today we’ll throw the spotlight onto altcoins. Meaning most anything but bitcoin.

Take ripple, for example. This altcoin has been around since August 2013. Though I’ll wager you never heard of it back then. I certainly hadn’t.

It pretty much went nowhere until April this year.

One year ago, on 4 January 2017, you could have bought yourself a ripple for 0.6 US cents. By 23 April that same digital token was worth 3 US cents. At time of writing it’s trading for US$3.50.

That represents a 58,233% gain year-on-year. Meaning a $2,000 investment last January would have you holding $1.17 million today.

Ripple’s blistering gains have seen its market cap take the number two spot away from ether. At time of writing, ripple’s market cap stands at US$135 billion. That’s closing fast on bitcoin’s US$256 billion.

And it’s not just ripple. As Bloomberg reported this morning:

Bitcoin alternatives are closing the gap with the market leader after names like stellar and cardano became red hot as 2017 was closing.

The biggest cryptocurrency’s share of market value has fallen to a record 36 percent from 56 percent a month ago…

Ethereum, the second-largest by market value, has roughly tripled in the last two months. Cardano is up more than 40-fold in the period. That compares with an approximate doubling for bitcoin, which went more mainstream in December by sporting its first U.S. futures contracts. Bitcoin rose 2 percent Wednesday.’

Our in-house crypto experts, Sam Volkering and Ryan Dinse, are all over the rise of altcoins.

They recommended their readers buy into ripple on 5 July 2017 — the very day they launched Secret Crypto Network. Readers who bought in on the day of recommendation are now sitting on gains of 936%.

And this is from their introductory service.

Sam Volkering’s premium service, Crypto Tech Investor, is currently closed to new subscribers. But Sam and publisher Kris Sayce plan to open the doors for a limited time next week. Watch this space.

In the meantime, here’s what Sam wrote about altcoins to his readers in Secret Crypto Network yesterday:

2018 is going to be the year of the altcoin. All the other cryptocurrency projects that are building platforms, products or services with real-world use may see values skyrocket even faster.

We’re going to focus on bringing you more opportunities that are actively tradeable now so you can get in early. We believe January 2018 will be like January 2017 but for altcoins. You may get a lot of crypto recommendations in the coming weeks — so be prepared.

This doesn’t mean we don’t think our other “established” cryptos like bitcoin or ethereum won’t continue to rise; we think they will — and then some.

But the real big winners are more likely to come from altcoins this year. And that is incredibly exciting!

How exciting?

See for yourself right here.

Cryptocurrency trading platforms

Most cryptocurrency trading platforms cover the big ones, like bitcoin and ether. But trying to find a platform that offers many of the up-and-coming altcoins can be frustratingly tricky.

Reader Chris wrote in with the following, very succinct, email yesterday:

Please recommend crypto currency trading platforms.’

Thanks Chris for getting right to the point. I’m far from an expert here myself. So I passed this on to Sam and Ryan this morning.

Ryan fired back the following email:

I’m loath to “recommend” any as they all have problems and growing pains due to the sheer velocity of demand.

But….

I personally use Poloniex, Bittrex and Binance and have found all pretty good once you get used to them. Though if you have a problem support can take ages.

There’s also some cool things coming out in the future like Ox and Cryptobridge, decentralised exchanges, though I have not looked into them too hard yet.

For buying bitcoin and ethereum in Australia I use CoinJar, Independent Reserve and ACX.io.

Cheers,

Ryan D.’

Sam got back to me a few minutes later, despite it being late night in the UK. (I’m not sure the man sleeps!)

He wrote:

I’m finding Binance the easiest, fastest and most reliable at the moment, although that can change. Bittrex…I’ve personally had problems with their customer service for over a month now. Prior to that they were good.

They’ve all got CS issues because of the crazy demand. I’ve used 0x. It works but isn’t for noobs. Etherdelta was also good but it’s now a security risk.

I second Dinse’s position in not recommending any one exchange. Use a few. I buy from fiat through Coinbase and Bittylicious here in the UK and buy through Coinbase in Oz.

Well, there you have it.

Have a play with various exchanges until you find a few that work best for you. And when you’re starting out, only use a small amount of money! Better to have $50 disappear into thin air than thousands.

If you do plan to invest in altcoins, don’t go it alone. Get the support you need here.

And let’s not forget your daily dose of politically incorrect news…

In today’s Australian Tribune: ‘Labor Reduced to Desperate Hyperbole on Welfare Reform

Intergenerational dependence on welfare is something all first world nations contend with.

When money is handed out too easily, with too few checks in place, people come to depend on their taxpayer funded cheques. And all too often, their children follow in their footsteps…

Australia’s welfare system is long overdue for an overhaul…’

The Australian Tribune is Port Phillip Publishing’s political newsletter and website.

If you’re fed up with reading sanitised, politically correct dogma cut and pasted from one mainstream source to another then The Australian Tribune is for you.

And it’s absolutely free.

Sign up here to get The Australian Tribune delivered free to your inbox five days per week.

You can visit our website at https://www.theaustraliantribune.com.au/ to read the complete article above now.

Margaret River beckons

And finally, a quick housekeeping note.

I’m off to Western Australia on holiday for two weeks. But don’t panic. You’ll still receive your daily dose of Port Phillip Insider…just not from me.

I’ll be back behind the keyboard on 23 January.

Until then, happy investing.

Cheers,
Bernd