There is one catch however. To get your £5 bonus, you first need to send someone £5. But there is a way around this. Read on for the instructions!

These are the instructions a friend sent me. Feel free to share them on to your friends (with your own referral code, of course):

“1. Get the app (https://cash.app/app/PZCC24Z) and if it hasn’t already done it automatically (it isn’t doing so for some people), type my referral code in using the option to do so in the main menu (PZCC24Z). This will get me my referral reward (cheers!).

2. The app will send you £5 for your first spend within 14 days. A quick way to get your fiver ASAP though and get your “spend” back instantly is to send one of your friends on the app a fiver (the app will send YOU a fiver for spending that) and then they send it straight back to you!

You will now have £10 in your account (your fiver they sent back to you, plus the fiver the app sent you). Withdraw to your account, done, you’ve made a fiver!

Then you can do what I’ve instructed above with friends using your own referral code to make fivers and make them fivers!”

Bitcoin’s transactions are resistant to being stopped (censored) but they are open for all to see.

This is a problem for everyone, not just those doing illegal transactions. Companies don’t want their financial dealings made public, campaigners in oppressive regimes don’t want their transactions tracked by the state and average members of the public don’t want their savings open for all to see.

Furthermore, even if you don’t mind people seeing what you are spending, what if someone that once held your coins did something that your government doesn’t like? If a coin can be traced back to all its previous users, companies could be forced to refuse coins based on their previous owners’ actions.

Privacy Coins

The solution is privacy coins. These coins obfuscate the true source of transactions. They aim to offer the privacy that people thought Bitcoin offered.

Two prominent examples of these are Monero (XMR) and Zcash (ZEC).

Monero uses a technology called Cryptonote. This uses what are known as ring signatures which basically moves the coin in such a way that it is hard to work out where the transaction originated.

Although Monero offers a high level of privacy, because the mixed transactions are still visible publicly there remains a risk that transactions could be decoded at some later stage.

ZCash has a better privacy technology known as zk-SNARKs. This allows transactions to be sent that do not reveal most of the data about the amounts or parties involved. However, Zcash does not require all transactions to be done via its privacy technology. This means that only a small number of users do so. Because the number of private users is small, this means the potential for privacy to be broken is increased.

Pirate Chain

PIRATE (ARRR) uses the same technology as Zcash but requires its use on all transactions (other than the first transaction when it is initially created i.e. mined). This gives it the highest degree of privacy available.

The project’s website explains it like this:

Written in the code of Pirate Chain is a vast treasure chest (pun intended) of cryptocurrency firsts, along with a secure way to prevent hostile attacks on the chain and keep user’s transaction data private. Pirate Chain does not leak any transaction meta data, allowing every transaction to stay private. Proof of this is given on the block explorer (the place where you can see the transactions that occur. All cryptocurrencies have one). When you view the block explorer, you will notice that transactions occur, but the addresses they are sent from are not there, the addresses they are sent to are not there, and the amount transacted is not shown, only the transaction fee. This is one of many proofs that show users that their data is safe and private.

Mining Pirate Chain works very similarly to how Bitcoin mining works (which was talked about in Part II of this series). The key difference between them is that Pirate Chain mining is private, not allowing anyone to see how much was mined per address on the block explorer. This allows users to feel confident that whether they are transacting with others, mining or purchasing things, no data is compromised. Nobody is able to see how much you have in your wallet or trace anything back to you. Simply put, it works exactly how privacy should work, what’s your is yours and not visible to anyone but you.

Pirate Chain – The Ultimate Privacy Coin

Pirate Chain is currently a small project ranking 299 on Coin Market Cap. But the fundamentals of this project make it one to watch! It seems likely to me that we will see this project doing rather well and many early investors could make a healthy return. On the other hand this project may not do well despite the fundamentals, as is the case with many crypto projects.

What you do with this information is entirely up to you. This is not financial advice.

What Else Poku Banks Admits

Alongside admitting that his claim about Samuel Leeds being a ‘fake guru’ was for “views” and “clickbait”, Poku Banks makes a number of refreshingly honest revelations, perhaps due to his youth and inexperience.

In the debate Poku Banks admits to lying, says he isn’t arguing against the claim that Samuel runs a legitimate business that teaches and helps people, says Samuel’s Crash Course is “good value” and “great”, says he thinks the BBC had an agenda against Samuel, admits that the person he collaborated with for his property course is a mentee of Samuel’s student and that this person is more successful in property than him.

It is almost unbelievable that he openly admits all this after implying Mr Leeds is a ‘fake guru’. However, you can view all evidence for this in the summary I posted as a YouTube comment here.

Did Poku Banks Prove Samaul Leeds Is A ‘Fake Guru’?

Poku gave his definition of a ‘fake guru’ at the beginning of the debate saying it could be someone that presents themselves as something they are not. Samuel added to this that it is a fake teacher or expert. Poku agreed. At no point in the debate did Poku provide evidence which would fit this definition.

Later in the debate, Poku tried to change this definition claiming Samuel is a fake guru because Poku thinks Samuel markets the rent-to-rent strategy to “vulnerable people”. As the basis for this claim falls outside of the agreed definition of ‘fake guru’, in my opinion, Poku loses the debate at this point.

A Wider Problem?

Poku Banks is a young guy who ultimately, when pushed, came clean about what he was doing and why. He will no doubt learn from his mistakes and go on to do better things. But Poku’s unintentional transparency shines a light into what may be driving some of the experienced critics and professional ‘exposers’ that litter the internet.

In a previous article, I suggested that another critic of Mr Leeds may have been doing something very similar to what Poku Banks openly admitted to. Of course, unlike Poku an experienced businessman is highly unlikely to come out and say it directly.

This is not to say anyone that posts criticism of Samuel Leeds or anyone else is unjustified or simply seeking views. However, there is clearly a portion of people that appear to fit this description.

An Appeal To Honest Critics

If you are an honest critic of Samuel Leeds, it is as important for you to root these people out as it is for those that support him. If you have genuine criticisms to make they will be lost and discredited in the minds of the public if they become mixed in with the claims of fame-seeking influencers who are happy to take whichever side gets them views and clicks.

Poku Banks eventually owned up and admitted what he was doing. It is time some of the more experienced, older people playing the same game do so too. If you are an honest critic it is time to root out the charlatans in your ranks.

What is going on and what is likely to be the Bank of England’s next move?

Recession Re-Confirmed!

The Office for National Statistics today published revised estimates showing we are indeed in a recession, although Quarter 2’s retraction is likely to be smaller than first thought at 19.8% compared to the initial estimate of a 20.4% drop. This confirmation is not particularly surprising given the lockdown’s impact on trade.

As some lockdown measures have been reintroduced this trend is likely to continue into Quarter 3’s figures.

Property Boom!

A report by NAEA Propertymark, a trade body for estate agents states that 13% of properties sold for more than the original asking price in August. This is the highest number since November 2015.

According to Mark Hayward, Chief Executive of NAEA Propertymark:

…Last month, we witnessed a boom in the number of prospective buyers following the government’s announcement of a Stamp Duty holiday, and it seems this is increasing the level of competition in the property market. With the increase in the number of prospective buyers since this announcement, many buyers are clearly willing to pay over the asking price in order to secure their dream home.

Housing Report, August 2020

Currency Printing And The Bank Of England’s Next Move!

Why are house prices going up? In part it is due to factors such as the lockdown and Government support for business e.g. backing for loans, but it is also down to Bank of England currency printing. As the currency supply is increased, the value of the currency goes down and therefore it makes sense to move capital into assets with a limited supply such as property.

The Bank of England is likely to continue to print more currency in future waves of QE. However, it also looks set to use another economic tool if things continue to get worse, negative interest rates!

Negative interest rates are where the central bank charge banks to store currency rather than pay them interest. The aim of doing this is to encourage banks to lend.

The Bank of England has played down the idea of using negative interest rates but announced in September that “it would take a detailed look at how negative interest rates might work in practice during the last three months of the year” according to the BBC.

As the central banks continue to back themselves into a corner with accelerated currency printing, negative rates seem to be inevitable. The Bank of England seems to be preparing for them while attempting not to spook the markets.

If this happens, it is likely that property will receive a further pump in price.

“UK house prices rose by 2.0% in August, after taking account of seasonal effects, following a 1.8% rise in July. This is the highest monthly rise since February 2004 (2.7%). As a result, annual house price growth accelerated to 3.7%, from 1.5% last month. House prices have now reversed the losses recorded in May and June and are at a new all-time high.“

House prices recover from recent dip to reach new all-time high in August

This rise in the price of houses is likely to have been boosted by Quantitative Easing from the Bank of England and cash injections from the Government including furlough schemes and self-employment grants. It is also the result of pent-up demand from the lockdown (when it was hard or impossible for people to move). This leads to the question of what will happen once this additional help dries up? Will we see a crash?

A Coming Crash

The most likely outcome (and that which is backed by the historical data) is that we a going to head towards an overall property crash. This doesn’t mean that all areas of the country will be effected, but when the market seems irrationally buoyant, people are about to lose the additional government support they have been given due to the lockdown and we have been in a property bull market for as long as we have, we should be heading for a crash.

Property trainer and investor Samuel Leeds explains this and predicts a crash in 2021 in this video:

The Inflation Hypothesis

A less likely but possible scenario is that the Bank of England leads us into higher inflation, thereby increasing property prices even as property values drop.

Since the last recession the Bank of England has been engaging in Quantitative Easing (QE) which is the process of creating additional new currency to purchase bonds when there is any economic dip. This is new. QE was not used in previous recessions in the UK. Theoretically, pushing new currency into the economy every time there is a dip should push prices up indefinitely. The problem with doing this is eventually this will lead to extremely high or even hyperinflation.

In the US the Federal Reserve has announced that it’s inflation target is now “flexible” (meaning that inflation can be expected to go above it’s target for some time). If the Bank of England follows their lead, this would mean that the likelihood they will continue to pump the market even if it pushes up inflation faster significantly increases.

The Bank of England could also use negative interest rates, which is when banks are charged for holding funds at the Central Bank. This is intended to make banks lend out their capital. While the Bank of England rejected the idea in August, they are keeping this under review. In their Monetary Policy Report they state:

The MPC [Monetary Policy Committee] will continue to review the appropriateness of a negative policy rate as a policy tool alongside its broader toolkit. The MPC has other instruments available — for example, asset purchases and forward guidance. The MPC will continue to assess the appropriate monetary policy stance and will keep the appropriate tools for achieving its remit — including negative policy rates — under review

Monetary Policy Report, August 2020

There is also a possibility that the Bank of England will move from purchasing government bonds with QE to purchasing other assets such as shares or mortgage-backed securities. If this happens this will create an even stronger artificial boost to prices.

If these means of creating artificial increases in the currency supply and the flow (velocity) of money are used, it may well mean that property prices rise in currency terms, while falling in real terms. If, for example, house prices rise by 3% but the price of groceries rises 5% and the price of money with a limited supply e.g. gold, silver, Bitcoin, etc rises by 20% then house prices will be falling in real terms while seeming to increase due to inflation.

Conclusion

The likelihood of a crash is inarguable, historical data and the evidence seem to be on the side of this outcome. But there is also the possibility of high inflation or even hyperinflation instead. With the seeming irrationality of central banks since the last financial crisis I am somewhat drawn to this hypothesis. But the experts and investors are most likely to be right and we will see a significant crash first. Only time will tell.

In a statement posted on the UK Governments portal, Housing Secretary Robert Jenrick issued the bad news for landlords.

The statement highlighted the following key points:

– Ban on evictions continues for 4 weeks taking the total ban to 6 months

– New 6 month notice periods to be in place until at least 31 March 2021

– Once eviction hearings restart, the judiciary will carefully prioritise the most serious cases including those involving anti-social behaviour and domestic abuse

Jenrick extends ban on evictions and notice periods

Impact On Landlords

While the Government claim that 87% of tenants have continued to pay their full rent since the start of the COVID pandemic, this move will undoubtedly have negative consequences for those landlords who have tenants who are unable or unwilling to pay.

Even when courts re-open to eviction cases in September the Government has made it clear that cases involving anti-social behaviour and domestic abuse will be the priority. This will mean that landlords that are simply seeking what they are owed will go to the back of the line.

Alex Cook, director of litigation firm Helix Law, speaking to iNews said: “The fear is these claims won’t be heard for many months or possibly even years because the courts will be at maximum capacity.” He said that many of his clients haven’t been paid any rent in over a year!

Opinion: Unbalanced Response

The supposedly pro-business Conservative government seems to be taking a rather unbalanced approach to this issue. It is right and proper that renters are being protected from homelessness caused by no fault of their own. But there must also be protections put in place for landlords, many of whom are not wealthy themselves.

If the Government is going to force private individuals to house people perhaps they could also cover any unpaid rent (and recover this from the tenant at a later stage)? Perhaps evictions could be allowed to go ahead in cases where the tenant hasn’t shown willingness to negotiate or shown that their income has been affected by the lockdown? Whatever the solution is, simply putting the burden on landlords isn’t the answer.

A recession is when there is two consecutive quarters where the GDP of the nation drops i.e. there is a drop in the total expenditure of the economy. Quarter 1, January to March, saw a drop of 2.2% and Quarter 2, April to June, saw a massive 20.4% drop according to the Office for National Statistics.

No Surprise!

Lockdown started on 23 March 2020, and worries about coronavirus started even before this, so of course there was a drop in the total spending in the economy! With cafes, bars and other business closed this should come as a surprise to no one. So the announcement that we are in a recession is a formality rather than actual news.

The extent of the drop may be argued to have been a surprise. However, the Governor of the Bank of England said in July that the UK could have a “23 to 25 per cent” contraction in the second quarter. The UK has a large hospitality sector so a lockdown was inevitably going to have this type of effect.

Short Term Recovery

We are already seeing signs of a recovery with the Office for National Statistics stating there has been a rise in GDP of 8.7% during June. With the lockdown over, this is likely to continue and we should see this trend continuing in the next quarter.

The Bank of England printed £100 billion in new currency in June in its latest round of quantitative easing.

What is quantitative easing?, BoE

Continual currency printing means that the value of existing currency will go down overtime. However, the circulation of this currency means that the total spend in the economy will go up, leading to an increase in GDP.

This currency printing, combined with the various measures used by the Government such as Bounce Back loans, self-employment grants and Eat Out To Help Out discounts, are likely to see the economy appear to recover significantly.

In the short term, it is possible that we will soon come out of this recession and see economic growth again.

Long Term Problems

Longer-term is a different story. As government programmes stop and the build up of currency in the economy either forces the Bank of England to contract the currency supply by rising interest rates or do nothing and see higher levels of inflation, the real problems will start.

If the Bank of England decides to continue with further rounds of quantitative easing, things could get even worse. The continued printing of currency will cause prices to rise. Holding your savings in currency will not be a good idea at this point as its purchasing power will be decreasing fast. Assets with a limited supply will do well in my opinion such as gold/silver, Bitcoin and property.

In my view, this recession is more of a warning than a reality. It is giving us time to prepare. The ONS announcement told us what we already knew and the media headlines were typically alarmist.

In a previous post called Explaining Fiat Currency With A £150,000 Pokemon Card! we looked at how the creation of fiat currency (pounds, dollars, euros, etc) causes the purchasing power of that currency to go down. If you are unfamiliar with this topic, I would recommend reading that post before this one.

What Is Quantitative Easing?

Quantitative easing (QE) is the creation of additional money by the central bank of a nation to buy bonds or other financial assets as a means of stimulating the economy. When new currency is created, it reduces the value of existing currency. This new currency therefore pushes prices up.

In this short video, the Bank of England explains that they don’t even print up this money, instead simply adding a few extra zeros to their online accounts:

Following the recession of 2008 there has been a number of rounds of quantitative easing.

In June 2020, the Bank of England undertook a £100bn round of QE. This is a chart that shows their cumulative government bond purchase via QE:

When this new currency is created the market does not immediately react and adjust prices to compensate for the new currency in the system. This means the large funds, banks and companies that receive this money first in the form of bond purchases are at an advantage. They can, at first, purchase assets at prices that, by and large, reflect the value of currency before the round of QE.

As the additional demand created by the new currency is noticed by the market the prices of the assets they buy begin to rise. Eventually this will cause price rises across the economy in the form of inflation.

How QE Pumps UK Property Prices

The new currency created by quantitative easing increases the UK property prices in two major ways. Firstly, the new currency, over time, reduces the spending power of each individual pound. This means even if a property remains static in value, it’s price in currency will go up. Furthermore, because this new currency goes to funds and banks first that invest that money, this additional currency will impact the price of assets (including property), before it impacts the cost of consumer goods.

The second impact of QE on property prices is the realisation among high net worth individuals and investment funds that the value of their currency position will continue to go down. This forces them to move their money into assets with a limited supply. At the time of writing, Bitcoin, gold, silver and property are all up and I think this is no coincidence.

As Governments continue to print currency driving down its value, more and more value will be driven into the property market. If and when these continual rounds of QE result in massive inflation, even if property values go down, prices will go up!

As a side note: This blog has been listed on Feedspot’s Top UK Property Blogs & Top 10 UK Cryptocurrency Blogs lists. Thank you to them for listing us!

The rules will apply from 23 August 2020 until 28 March 2021.

We will go over some of the main changes that will impact you as a private landlord if you are seeking to evict tenants.

If You Have An Ongoing Eviction Case

If you have an ongoing case that has been stayed due to the temporary ban on evictions, you are likely to need to issue a “reactivation notice” to the court and the defendant. If you do not do this, the case will remain dormant.

This may not apply if the case was “brought on or after 3 August 2020 or in which a final order for possession has been made”.

Coronavirus Impact Statement

Where you are evicting someone for not paying their rent, you will now need to include a statement setting out any knowledge you have about “the impact of the coronavirus pandemic on the Defendant and their dependants”.

Updated Rent Account

The “reactivation notice” must contain an “updated rent account for the previous two years”. This means you will need to provide the rent history beforehand, rather than at court.

The Courts Don’t Have To Hear Your Case Within 8 Weeks

Normally the date from the issue of the claim form until a hearing should not be more than 8 weeks. However, this requirement has been lifted due to the expected backlog of cases.

High Court Eviction Notice Period

High Court bailiffs will now have to give notice to the tenant of an eviction in the same manner as County Court bailiffs already have to do. This comes in separately from the other provisions and is not a temporary measure.

Priority Cases

The purpose of the new rules is to limit the number of eviction cases coming before the courts. According to Compliance Officer for The Guild of Property Professionals, Paul Offley:

…the Government is eager to only have cases that are a priority go through the courts if possible. Priority cases have been defined as those that include anti-social behaviour, extreme rent arrears, domestic abuse, cases involving squatters, fraud or unlawful subletting….If a case does not fall into the category of being a priority, the Government is encouraging parties to use an independent third-party mediator to assist them in reaching a mutually acceptable agreement to resolve their dispute, rather than going to court.

New rules for possession proceedings

Further Reading

You can find full details about the changes on the Judiciary website: Civil Procedure (Amendment No. 4) (Coronavirus) Rules 2020 & the 123rd Practice Direction Update and Civil Procedure (Amendment No. 3) Rules 2020 & the 122^nd Practice Direction Update.

Conclusion

It is likely to be more difficult to evict tenants even after the ban is lifted in August. The new rules coupled with extremely busy courts means bad news for landlords with tenant troubles. The courts are going to prioritise the worst cases and expect landlords to try to resolve issues with renters wherever possible.

If you are impacted by the new rules in anyway, you should speak to a legal professional immediately.