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Re: Mounting a legal challenge against the central bank

drew959

on 25/08/2017, 23:27:37 UTC

Thanks for the replies. Ill try to address them as best I can.

Im not attempting to gain personally from this in any monetary way. Mounting a legal challenge would not require much capital a few thousand at the most I guess which I can fund myself. What would potentially require funds is obtaining expert testimony but I would really hope that interested free market economists would contribute their time pro bono or a reimbursement to cover their out of pocket expenses.

There would be no direct monetary benefit that I can see for those contributing. This would be a project community funded by likeminded individuals similar to kickstarter. Ive reached out to the bitcoin community as I believe a large number of users/followers have similar views to mine. If the challenge is successful it would have potentially far reaching consequences like for Australia for instance. The Reserve Bank of Australia (RBA) is similar to the RBNZ in that it has very autocratic views, distrust of free markets, does not believe in freedom and believes people need to be "protected" from themselves.

Not that it really matters but the LVR rules are extremely unpopular and have effectively shut out low income first home buyers from the entire housing market. The fundamental problem is that that RBNZ does not believe there are not enough houses; they think there are too many people and therefore instead of policies to support capital flow to the housing market they prefer to try to suppress demand by trying to increase prices of homes and price people out of the market.

My guess is that no one supports the LVR rules especially including first home buyers and investors who have been priced out of the market and sellers who have less buyers competing.

The more important point is that the RBNZ has entirely misdiagnosed the problem and come up with a remedy that has made things worse. Nowadays you would be very hard pressed to find any economists who think price controls work. Unless you spoke to those at the RBNZ. The broader issue or protecting the financial system itself is also very wrong imo. The only thing that can protect the system is competition not complex rules and regulations.

My preference is that the entire macro prudential rules are repealed entirely and the RBNZ goes back to simply being responsible for stable prices. This policy has worked very well for decades and insulated NZ to a great extent from the GFC. However that is not going to happen so the next best thing would be to challenge their basis on intervening in the market in the first place.

This is a very serious problem in this country. For those not aware we have the highest rate of homelessness in the developed world. For a country with a landmass similar to Japan and the UK but with a population of only 4m no less. Auckland is the world's fourth least affordable city in the world, now tailing only Hong Kong, Sydney and Vancouver as the least accessible housing market.

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Mounting a legal challenge against the central bank

drew959

on 23/08/2017, 22:44:40 UTC

I want to mount a legal challenge against the Reserve Bank of New Zealand against their "loan to value"(LVR) rules. At a very cursory level the LVR rules require bank lenders to loan no more than 80% of the value of home mortgage for owner occupiers i.e. borrowers need a 20% to obtain mortgage funding. For "property investors" a 40% deposit is required.

Why do i want to do this?
- NZ is experiencing a severe shortage of homes across the country but particularly in Auckland the largest city
- The shortage is driven primarily by excessively restrictive land use rules by local councils and govt regulation. It is exacerbated by monopoly suppliers supported by local councils and nonsensical house building standards
- There is no shortage of land in NZ, demand is intense, we have record low interest rates, strong migration and consumer confidence. Imo it is a disgrace and scandal that we are in this situation
- The RBNZ has piled on top of council and govt and has restricted the flow of capital to the housing market and indirectly trying to suppress prices i.e. imo the LVR rules are a form of price controls although not as a blunt instrument as a price ceiling
- NZ led the world down a monetarist approach to monetary policy in the early '80s by having a sole function of price stability and nothing else. This has now changed for the worse.
- The LVR rules have been implemented under the so called "macro prudential policies" which came into effect during the GFC. Many other countries would have experienced the same policies implemented if they were not already.
- Macro prudential policies imo is the wrong path to take. Rather than stabilising the financial system they merely make too big to fail financial giants even bigger and more entrenched. These policies intensify rather than mitigate risks to the system. Macro prudential policies are the modern day keynesian approach of attempting to fine tune and economy. Central banks should stick to their knitting which is monetary policy.

Why bitcoin?
- Bitcoin is near perfection of monetary policy - no capital controls, no fixed rate of exchange and most importantly a predictable certain monetary policy that cannot change.
- Bitcoin has bypassed the central banks and imo time will prove it to be an inherently more stable reliable currency/medium of exchange
- Many of those involved in bitcoin will have similar views and background to me; in a nutshell i'm a libertarian monetarist who dislikes and excessive regulation that has very bad consequences and has an interest in social justice.

What do i need?
- Initially a modest amount of funding to obtain legal council
- Expert testimony from economists to support the legal challenge

Im in two minds whether this is the right place to start this. If anyone has any interest or suggestions please do post your ideas or message me. Obviously there are a lot of details to the above which will be explained pending interest.

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Board Economics

Re: Causes of hyperinflation

drew959

on 11/04/2014, 12:16:06 UTC

You can buy trillion dollar notes from zimbabwe on ebay for a few dollars. That should give you an indication of what causes hyperinflation.

It is caused by excessive money printing and nothing else.

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Board Legal

Re: Is the IRS ruling final? Where is the legal / technical analysis?

drew959

on 08/04/2014, 10:37:54 UTC

Quote from: numismatics on April 08, 2014, 03:42:56 AM

reusing an earlier post from a different thread:

The issue is one of administrative law, and I'm not sure how to reconcile the different treatment by two executive branch agencies. Both the IRS and FinCEN's definitions were promulgated in the form of a guidance document, which has no binding legal effect. Guidance documents are neither rules (which would require the agencies to comport with the rule-making requirements enumerated in the Administrative Procedures Act, 5 U.S.C. §§ 551-559), nor are they adjudications the substance of which can be appealed and reviewed by federal courts.

I see two ways forward, one short term and one long term:

Short term way forward: The IRS guidance document requests "comments from the public regarding other types or aspects of virtual currency transactions that should be addressed in future guidance." You can mail your comments to:

Internal Revenue Service
Attn: CC:PA:LPD:PR (Notice 2014-21)
Room 5203
P.O. Box 7604
Ben Franklin Station
Washington, D.C. 20044

I think taxing virtual currencies as property ignores the fact that they are indeed designed to be used as a medium of exchange. The IRS's definition treats BTC as property (and taxing according to capital gains), which means they perceive BTC as something that is purchased to appreciate in value. This perception is probably driven in part by how much BTC can fluctuate relative to fiat and the fact that some people are purchasing and selling for purely speculative purposes: the IRS wants to tax realized gains as income. The most significant problem with this guidance is that it discourages the use of BTC as a medium of exchange by imposing a substantial record keeping burden. It would be helpful if future guidance distinguished between the manner in which BTC was used, and in particular differentiating between using BTC to buy and sell goods and services (BTC as a medium of exchange) from purchasing and selling BTC for the purpose of making money from speculation (BTC as a traded commodity).

Long term way forward: Petition various agencies to initiate the rule-making process for actual rules regarding the treatment of virtual currencies (http://www.reginfo.gov/public/reginfo/Regmap/regmap.pdf). The most obvious candidates are the Department of Treasury, the IRS and/or FinCEN, but it would probably not be effective to simply ask these agencies for a rule. Rather, before petitioning for rule-making to be initiated, some groundwork is required: (1) what person or association of persons will petition for the rule; (2) clear statement of purpose of the proposed rule-making; (3) clear language of the proposed rule; (4) clear explanation of why the proposed rule would be in the public interest; (5) relevant information assembled in easily digestible form; and (6) a clear and compelling explanation of why the rule is necessary.

A decentralized way to move forward would be to announce that we need this information, and call upon the BTC community to start submitting it to a designated repository. A committee of curators of that repository could cull the best and most relevant information and assemble a draft proposal of the petition for rule-making. The proposal would be announced for additional comment period before the community approves the petition in its final form. The committee of curators would then submit the petition to the agency or agencies.

Thoughts?

Thank you for this post I agree and its a good way to move forward.

If you are right and the IRS are taking into account how people are behaving in respect of virtual currencies instead of solely focusing on what the currencies in fact represent then that is wrong. Its quite possible given the conclusion that they could be considered "property".

In my view, where they cannot be considered as "currency", being a medium of exchange, then virtual currencies should be viewed as "services" rather than "goods" or "property".

I will look into drafting a legal opinion and posting it here for comment.

Here in New Zealand we have quite established laws around what are goods or services. We have a GST (goods and services tax) which is the same as VAT.

I can leverage off established rules and case law here. There is in fact quite detailed views issued by the authorities here around software and intangible property and what should properly be considered goods/property and services.

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Board Legal

Re: Bitcoin, the IRS, and the laws of the land.....

drew959

on 05/04/2014, 00:55:19 UTC

I am wondering has the IRS "ruled" Bitcoin is property or is this their view?

I would think this is a legal question not a decision to be made by the IRS

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Topic OP

Is the IRS ruling final? Where is the legal / technical analysis?

drew959

on 05/04/2014, 00:41:37 UTC

Hi everyone

A few questions regarding the IRS ruling.

1. Is is final? i.e., when they ask for comments/questions does that mean they are seeking feedback on their initial view?

2. Where is the technical analysis to support the position that it is property and not a currency? The paper itself is cursory and contains almost no legal analysis to support the conclusion.

3. Can US taxpayers take a position it is currency and fight it out in the courts? i.e., I would think the IRS is not the arbiter of whether virtual currencies are property or not. It is a legal question rather than a decision to be made by the IRS?

I am a tax professional (outside the US) and would be very willing to assist in making submissions regarding this. The ruling is obviously not a good outcome and without seeing any legal analysis seems contrived to argue this is "property".

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Board Beginners & Help

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Hello newbie here

drew959

on 02/01/2014, 00:21:17 UTC

This is my first post and introduction.

I first read about Bitcoin in 2009 and thought what a fantastic idea. It appealed to the libertarian and economic views i hold (Minarchist to be specific). It never actually occurred to me that it could be an investment!

Anyway, im glad to be here and want to do a few things. Invest in bitcoin. Looking for a $500 entry point to hold for long term. Look into mining alt-coins. Contribute to discussions.

Thank you