There's been plenty of discussion over whether services such as Apple's iTunes, Google Play, Facebook, Twitter and similar can ban users on a purely-discretionary basis.

The common argument is that because they are private companies they can create whatever policies they'd like so long as they do not violate existing civil rights law (e.g. you can't ban someone because they're black.)

But this isn't merely about services such as Facebook, Twitter and similar -- now the ability of content creators to monetize their work is at stake. As of the 21st of September  Infowars has been notified that Paypal is refusing to process payments for subscriptions as well as merchandise.

If you remember in 2017 the notorious neo-Nazi web site Daily Stormer was basically run off the Internet -- first by GoDaddy and then in rapid sequence multiple other firms, including Google.  They were denied the ability to buy DNS and hosting service as they were effectively black-balled by dozens of providers of these basic utility-class services more or less "all at once."

More recently Microsoft threatened Gab.ai with loss of their cloud computing provider, Microsoft's Azure, unless they made changes to their operations.  Microsoft was and remains unwilling to provide a specific list of changes they required or specifics of any alleged violations of their terms of service.

The premise that a private company can refuse service (or sales) to anyone is a fundamental part of Capitalism; the theory is that if one retailer does not wish to do business with you then another will.  But these campaigns of harassment are far more sinister and troubling because they now encompass the utility services that underlie the Internet's infrastructure.

This must not be allowed to stand.

Here's an example.  A hypothetical neo-Nazi wishes to buy a domain and purchase web services to air his views.   However repugnant the right to hold those views and express them is protected by the First Amendment.

Do businesses involved in selling Internet utility services have the right to refuse to sell to him?

To put your views on the Internet you need several different services, not just one.

1. A circuit or means of delivery and interchange with other users on the Internet.  Your cellphone or cable modem is an example of the "end connection" in this regard; in the publisher category this is either an ISP or some sort of a cloud provider.  This circuit is not just a line; in some way you have to connect to an interchange point, much like a phone on a physical wire is useless unless it connects to a switch so you can call other people.

2. A DNS or "nameserver" service.  This is what turns "vile-nazi.com" into an IP address in the format "1.2.3.4" or, in the IPv6 vernacular, "2501:......".  This is an essential service for the modern web because it is not only commonplace it is virtually always true on shared hosting or services of any sort that multiple names are bound to one IP address.  For example "vile-nazi.com" and "sweet-kitty.com" may both point to the same numerical IP address; the server determines which request goes where by the presentation of the domain name.

3. A computer (server), either a physical device or a virtual piece of a larger physical computer.  These days most small and moderate sites are run on virtualizations, not physical machines -- it's much less expensive and most small and moderate-sized sites simply don't need the entire power of a modern computer, so spreading it among other clients makes it less expensive for everyone.

4. The software that takes the message(s) you provide and formats and delivers them to others.  In the web world this is often Apache (a freely available piece of code) although not always by any means -- there are many other packages, some free and some commercial, that perform this function.  In addition there are services that perform this function in other ways (which are software packaged up with a "brand") such as Facebook and Twitter.

The question before us today is where is the line between a company able to refuse service to anyone and not?

I think we can agree that the neo-Nazi cannot be refused electrical service at his house.  Nor can he be refused water, sewer and trash pickup.  He also cannot be refused access to a toll road or bridge, even if privately run, so long as he pays the tolls like everyone else.

But he can be refused seating in a local restaurant.

What's the distinction?

Simple: The neo-Nazi's views are not implicitly endorsed by the establishment in the case of electrical, sewer and toll road service.

It is instantly obvious to an observer that the neo-Nazi's words on Facebook are in fact associated with the company Facebook.  Ditto for those on Twitter. But it isn't obvious to the public that the neo-Nazi bought his DNS or Web Service from GoDaddy or Amazon.  If one was curious you would have to dig for the information.  Even so these providers bear little risk of being co-branded with that neo-Nazi.

As such we should draw through regulation and law some simple bright-line tests.

Facebook can ban whoever it wants, for whatever reason.  So can Twitter.

GoDaddy, however, cannot ban a user from DNS registration no matter the purpose so long their site is legal.  Ditto for Amazon's AWS, Microsoft's Azure or any other cloud or hosting provider. Nor may providers refuse traffic interchange based on the viewpoints contained in their, or their customers, communications.

Twitter, in short, may ban anyone it wishes.  However, should they do so to any material degree there will be created an opportunity for a new Twitter, and anyone may start a competing service with essentially the same feature set.

What do we do with utility services that handle the flow of funds?

Traditional banks or fintech outfits such as PayPal  must not be allowed to discriminate against customers simply because they don't like their political views. Banking and monetary exchange is inherently a utility service and to deny same to any US Citizen as a consequence of their views is to attempt to "starve" a citizen for exercising their constitutionally-protected rights.

Thus the recent PayPal ban of Alex Jones must not stand, Master Card must not be able to ban Robert Spencer and neither can the decision of the bank that recently said "no" to a Florida candidate who supports the legalization of cannabis.  All of these are issue positions used to deny utility services.

We would not allow Florida Power and Light to cut off Nikki Fried's electricity because she supports the legalization of marijuana.  We must not also allow banks and modern utilities such as ISPs, domain providers and similar to effectively destroy people and political speech because they don't like the message, even though it's lawful.

Oh Bill Still!  Oh former Libertarian candidate for President who proclaimed this on stage:

"Crashes are caused by just one thing, and that's bubbles.  Bubbles are caused by just one thing and that's banks being in complete and total control of the quantity of the american monetary system in complete and total contradiction of the American Constitution."

But now, Mr. Still has found his #MAGA hat and his wife is worse, shilling his videos all over the Internet supporting outright monetary fraud and, in addition, shilling for herself with MLM "dietary supplements"!

Principles?  What are those?  Gee, did you forget what you actually said Mr. Still?

Well, let me remind you what the facts are from the US Treasury's own web site:

Now the GDP of the nation stands, as of last read, at $20,411,900,000,000.

Four quarters ago it stood at $19,588,100,000,000, a difference over the last year of $823,800,000,000.

In other words GDP is actually negative because the expansion of federal debt is greater than the expansion in GDP in dollars.

This is a matter of arithmetic -- not politics.

The problem is that in real terms you need to earn at least 6.23% to break even on a government (or any other) bond.  At any rate of return under 6.23% you are losing money in real terms if you buy such a security.  Of course right now Treasuries are all earning less than this (a lot less!) yet the above is a mathematical fact.

That is, in actual monetary terms the real inflation rate is 6.23%, not 2%.  The Fed can lie and the BLS and BEA can lie with their CPI tables but arithmetic does not lie and each dollar of monetary expansion by the federal government is a dollar of inflation -- period.

This sort of misdirection can be gotten away with for a while.  It was in the 2000s, and in the 1990s.  But it cannot be gotten away with forever because the damage in purchasing power done to everyone by this behavior is both real and immediate and it is this very behavior by governments and private banks that cause both bubbles and the resulting crashes.

Trump knows this and does not care.  He believes he will be out of office before it all blows up in his face.  Bush believed that too, and he was wrong.  Obama ran the same crap after the 2008 crash and got away with it for the eight years he was in office.

Trump will not get away with it.  We are running a 6.23% fiscal deficit during an expansion in the economy.  That's outrageously large and in fact belies the truth -- there is no expansion at all; the economy is in fact contracting and yet the false signals being sent to employers and others leads them to do uneconomic things like borrow money to buy back stock.

It is this very uneconomic behavior that in fact leads to crashes because it causes the valuation of assets to be falsely priced far above their actual value due to the perception that this insanity can and will go on forever, and thus whenever you wish to sell you will be able to at a higher price.

When reality comes calling prices do not "correct" they crash because there is utterly no underpinning for the valuation metric that you have been using and due to the effects of compounding actual valuations are half or less of where prices are trending!

It is stupid to continue to prance around and call this sort of economic distortion "good", but that's what I expect from our lying, fake-news media and serial liars and bubble blowers such as Larry Kudlow.

But the true test of whether someone is actually nothing more than 2-bit whore or believes what they say comes when someone who has made public speeches on the insanity of such behavior and in fact ran a campaign for the highest office in America on this very basis turns on a dime and supports the people doing it now.

Fuck you Mr. President and Congress both -- you're setting up the worst collapse and crash since the 1930s.  Double-fuck you, however, to those who have claimed in the past to be supporters of monetary and fiscal truth but have discarded same due to a putrid and fraudulent infestation in Washington DC that happens to be buttering one's bread via Youslob horsecrap and MLM schemes.

This is a bad number -- especially on the back of last month's report.

The unemployment rate declined to 3.7 percent in September, and total nonfarm payroll employment increased by 134,000, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, in health care, and in transportation and warehousing.

This is utterly nasty and the drop in the unemployment rate is entirely due to an increase in the NILF figure -- people who have left the workforce.

Let's look inside:

In a word: Meh.

The 12 month change is below 2m.  The rate has been over 2m for roughly the last year, but now it is solidly below.  That's bad news, because the increase in working-age population is approximately 2 million, so if you can't manage to put up that number on a 12 month rolling basis you are losing ground.

Heh, look at that "formal unemployment rate" -- it's a multi-generational low.  But does it mean anything?

Not really since there the employment:population ratio is nowhere near the 1969 figures.  Having an "unemployment rate" that is extremely low because people aren't looking for jobs but are either sucking off public assistance or otherwise out of the workforce isn't positive -- it's negative since only working people pay taxes.

Have you looked at the annualized "debt to the penny" figures lately?  No?  Well maybe you should.  I'll help you out with that in the next few days in my usual annual report on exactly how much bullshit Washington DC has emitted into the "economy" and thus the fraud embedded in the GDP "expansion" rate.

Once again having a Bachelors or better did not outperform; all of the educational categories gained, but both high school dropouts and degree-holders managed one tick of advancement.  "Some College" and High School graduates both gained more, however, meaning that once again we are making McJobs and not, as is often said, positions for the "highly educated."

There are also indications of slack in the part-time statistics but this month I ignore them because of Florence.  If they persist into next month, however, they are likely an early indication of a negative turn in the economy and employment situation.

We shall see.

Everyone is fawning over the deceased Senator from Arizona.

I will not be joining the party.

In fact, in my considered opinion he lived too long and the world is better for his passing.

Yeah, call me an asshole.  I don't care; I'm entitled to my opinion just as you are.

I don't base my view on his military service, nor on him being held in the Hanoi Hilton (or what he did while there.)  I've commented on that before during his Presidential run on these pages but it is neither the foundation of my extreme dislike of the man nor does it really modify anything, other than reinforce my basic opinion.

In my opinion John McCain was a self-serving bastard who didn't give a damn who got hurt or who he screwed as long as whatever he intended to do could advance what he wanted to obtain.

He ditched his first wife, who stayed faithfully married while he served and was imprisoned.  However, when she suffered a grievous accident through no fault of her own and was no longer pretty and thus not the sort of woman that a successful politician would want be seen with in public from a physical beauty perspective (as I judge to be his opinion, of course), and she never had been nor was at the time rich, he dumped her on his return to the United States for a women much younger, far prettier, uninjured, and a heiress who had a crap-ton of money to bankroll the start of his political aspirations.

If all that time apart had simply made for irreconcilable differences that might be able to be understood.  The raw power-seeking aspirational nature of who he hooked up with, however, never mind the timing and manner of his acts in that regard is quite another matter and belies both McCain's true intent and willingness to leave as much human wreckage behind as was necessary so long as he got what he wanted.

For that alone, in my opinion, John McCain deserves to burn in Hell.

Through his time in the House and Senate and indeed during his run for President he may have been known as a "maverick" but I think the better phrase to describe him is corrupt bastard.  May I remind you of Lincoln Savings and Loan, and the "Keating Five"?

In 1987 these men, McCain among them, got involved in a regulatory action against said bank on behalf of the Chairman and improperly intervened.  Two years later the bank collapsed, costing the federal government over $3 billion.  But far worse was the impact on bondholders and investors, many of whom were completely wiped out and left destitute.  Keating had made massive political contributions to all five.  While McCain escaped formal sanction by the Senate this was largely because he had taken office in the Senate after the salient events regarding those financial matters and thus the ethics committee claimed to lack jurisdiction.  The House Ethics committee ducked it as well, since he was now a Senator (despite having been in the House when the financial events happened.)  Fortuitous?  I suppose, but evading sanction by a bunch of limp-wristed worthless, corrupt cucks is not the same thing as not having done anything wrong.

Oh, and in the aftermath there were of course leaks intended to harm..... other politicians involved who happened to be Democrats. The GAO investigated and concluded McCain was responsible.  Of course nobody thinks that's a problem -- right?  Yet another example of "I don't give a damn who I burn or what sort of underhanded, backstabbing horsecrap I pull as long as I get what I want."  That's McCain for 'ya.

This pattern of leaks was to continue up until very recently -- from McCain.  It's funny how when you look at the Press though, or through Google, all you find in the search is leaks about McCain -- specifically, the leaked comment from the West Wing a few months ago that someone was glad he was dying.  Gee, where are all the other leaks that McCain himself committed along with improper influence and abuse of his office?  Buried down the memory hole, I see..... but the Keating incident, being infamous enough, is still findable if you know where to look.

Indeed it appears the only thing that stopped this pattern of outrageous conduct was McCain being rendered physically incapable of doing it anymore.  You know, by being on your deathbed and then (of course) dying!

Then there's the underhanded and arguably felonious urging of the IRS to use audits to destroy political opponents that came out of his Senatorial office -- including, specifically, Tea Party groups during Obama's Presidency.  His staff was caught doing it and proof is now out in the open in Judicial Watch's hands.  For that crap, in my view, he should be indicted, tried and hanged.  Of course you can't hang a dead person, so I guess this one goes to the guy in the Red Suit to adjudicate.

Of course it would be ridiculous to omit McCain's apparent involvement in the Steele Dossier.  While the book has not been closed on that as of this point it appears that taken as a whole the entire charade was a series of outrageously illegal acts intended to first subvert a federal election for President and then overthrow it's results -- and McCain's motive for being involved certainly looks like nothing more than pure, unbridled hatred.  I'm not sure I can actually count the number of likely felonies that will get tallied up when all is said and done on this and in any event that's another one for the guy in the Red Suit since you can't indict a dead man.

I should also point out McCain's trademark and decades-long condescending manner of speech.  In 2008, during the middle of the financial meltdown and an election season, he excused the banksters who ripped off the country and then voted for TARP.  When called on this the condescension came thick and fast, burying any criticism (including mine) under the old I'm smart, you're dumb, now shut the fuck up and get out of here tone of voice.

We'll top this off with McCain's long and sordid history of war-mongering but for those who are dead, too numerous to count as a consequence, it's certainly not last.  His advocacy and acts in this regard during his time in government have been incessant, outrageous, in many case based on lies and have gotten a lot of people killed.  I'm the first one to defend America but advocacy for wars and military actions that have no defined goals, no stated point at which they can be called at an end and at best a compromised justification (e.g. the Second Iraq incursion) are another matter.  We'll let the red suit guy adjudicate that one as well.

Rest in pieces, jackass -- let's see how the Ethics Committee of One passes judgement and unlike House and Senate committees he doesn't seem very amenable to mealy-mouthed excuses:

There's a rather nasty little secret in the "crypto" world -- a coin called Tether that is, as the name implies, allegedly "tethered" to the dollar.  In other words for each Tether there is an actual, hard reserve of one US dollar.

You would think with all the cryptocoins out there, from Bitcoin to the rest, that this one wouldn't matter much.  You'd be wrong, because an utterly enormous amount of transport, transaction volume and interchange takes place on "non-regulated" exchanges -- where there is no actual, documentary connection to the "mainstream" financial system.

As such there's no reference; you can't say a Bitcoin is worth $6,000 each unless you have an actual transaction made in dollars at that price.  Or can you?

Sure - provided you have a transaction in something else that has a hard reference to dollars, then it's fine.

Enter Tether.

Tether is the "glue" that binds all current crypto "valuations" to a real-world, government-issued reference -- the dollar, and by extension there (since dollars trade in the FX market against other government currencies) every other currency too, such as Euros and Yen.

But what if there are no actual dollars behind Tethers?

Then the entirety of the alleged pricing behind all of the other cryptos is at risk of being an immediate zero.

Note that Tether was allegedly supposed to produce a public audit (under GAAP) on a regular basis to ascertain that in fact its assertion of being 100% reserved with actual dollars has been met.  

In response, Tether Limited published a memo from an accounting firm affirming that it was fully backed. But the document fell suspiciously short of an official audit, and doubts only increased. On January 27, 2018, Tether parted ways with the auditor. Then, three days later, Bloomberg’s Matthew Leising reported that Tether Limited and its associated exchange had been subpoenaed by the Commodity Futures Trading Commission in another attempt to determine whether Tether is in fact backed by dollars. (To date, no charges have been filed.)

But wait -- they also issued $600 million worth of new Tethers on the same day they fired their auditor.

Where's the $600 million that had to be deposited and reserved, earning no interest, to back that?

It's not disclosed.

Where are the regular, public audits?  It sounds like the answer is "there aren't any."

The bigger problem is that there's no apparent justification for its business model in the first place.  There's no speculative interest in it since it is linked inextricably to the dollar, at least allegedly, it earns no rate of return and you can buy other crypto assets without going through it, so there is no reason to take the cost of the transaction either.

Unless.... the entire point was to at some point issue it unbacked, con people into thinking it is backed, and then convert it to dollars before anyone figures out you scammed them.

How did a "coin" that has no appreciation and is allegedly 100% backed, yet has no fundamental and necessary part of the crypto system go from $25 million in issued coins in early 2017 to more than $3 billion now without a single scintilla of appreciation?  Let me remind you that you cannot issue Tether, at least not legitimately, in exchange for anything other than actual dollars.

Where's the $3 billion on deposit and can you explain to me why instead of actual, regular audits under GAAP Tether issued instead a report from a law firm that had a caveat in it that it is not an accounting firm, did not conform to GAAP standards, and cannot attest to the sufficiency of the information the company supplied to it?

And finally, how did Tether's company intend to pay for said regular audits when the coin doesn't appreciate and it has a 100% reserve requirement?  If there is no discount rate on the coin who is paying the operating costs of the organization, including these alleged "audits" that have never happened, and how are they covering routine operating expenses since there appears to be no method to generate cash flow......

Further, if there really is nearly $3 billion sitting somewhere where did it come from and what motivation would the people who bought it have to have done so?  Remember that no transaction is ever without cost and it is not necessary to use this path; you can simply buy Bitcoin or whatever through Coinbase using dollars.

There is of course one very real possibility that comes to mind on fund sourcing, although that doesn't explain how the operating costs are being covered: The "investors" are all engaged in highly-illegal activity, such as pumping fentanyl and meth into the United States and elsewhere or running human trafficking (slavery, especially sexual slavery) organizations.

Is that the anchor of all cryptocurrencies today?

That's a pretty good question because if so it's all subject to seizure and "Tether" becomes, well, untethered.  Rapidly.

Then there's the other possibility -- there are no dollars and it's a scam.

Whatever it is, if the provenance of this thing doesn't prove up and confidence is lost, well, the entire crypto space will crash to its intrinsic value more-or-less all at once.

That would be zero, by the way.