One of the problems with “crypto” is just that – no one seems to know exactly what it is.
Or at least, no seems able to explain what it is.
Somehow, a digitized online representation of a “coin” has immense value, though what gives it any value is difficult to understand. It is not backed by precious metals. It is not issued by a bank.
It’s just there, on the screen.
The willingness of a sufficiency of people to accept that it has value is apparently the source of its value. Dirt could work on this principle. To be fair, crypto is not dirt – but it isn’t much different from U.S. dollars, which have value chiefly because people accept them as having it. 
The pieces of paper themselves, have no more intrinsic value than the digitized representation of a “coin” online.
And that of course is the primary danger of both. They have value only because someone (speaking figuratively here) assigned it to them and because others agree to accept that estimation of value, which isn’t moored to anything of actual value – at least insofar as can be objectively pointed to as being such, like a piece of silver or gold.
We all pretend the “dollars” – or “coins” – themselves are things of tangible value. That works just as long as it does.
Which probably won’t be for very long.
Now, the pieces of paper issued by the private cartel of banks that control their supply are “backed” by the “full faith and credit of the United States,” for whatever that’s worth. And it is probably worth something. Not much, given the value of a “federal” dollar has declined by more than 90 percent since the “federal” reserve began issuing these pieces of paper more than 100 years ago.
Meanwhile, the value of “crypto” has generally tracked in the opposite direction, a phenomenon that has made it very attractive to people trying to figure out a way to staunch the seemingly unstoppable bleeding out of the value of their money. It’s tempting to transfer “dollars” into “coins” when “coins” seem to hold rather than hemorrhage value. 
The housing market seemed to offer such back in the late ’90s and early 2000s. Could the spectacular increase in “crypto’s” value be of a piece?
That’s an important question.
Another one pertains to aspect of value that the piece of paper in our wallets have over digital-electronic shave-fractions of “coins” online.
They have physicality.
They may just be pieces of paper. But those pieces of paper are tangible and so under our physical control. The buying power of a piece of paper can be diminished by the printing of more pieces of paper but it is not possible for some remote entity to simply poof them out of functional existence – summarily disabling your ability to exchange them for things of tangible value.
They are also anonymous.
When you hand the man at the gas station $40 in paper currency as payment for the gasoline you just pumped into your vehicle, no one else is aware of the transaction. There is no record of the transaction, except perhaps a receipt – which has no identifying particulars and isn’t electronic.
The scariest thing about “coins” to this writer is that they are entirely electronic. This necessarily means every transaction involving a “coin” leaves a digital footprint.
It would be extremely easy for whomever has access to the data – and we have no idea exactly who that is – to put together a complete dossier of your financial life, which is your life. Down to the last can of Coke you bought by waving your phone at the purchase kiosk.
They – whomever has these records – knows everything about your buying and selling at the moment of transaction.
Including disparities in your buying and selling.
This is precisely why the Biden Thing is pushing the banks to report every single transaction over $600 to the Eye That Never Rests. So as to compare what you have been buying with what you’ve been earning . . . and reporting.
Any disparity results in a you-know-what.
Eliminate those piece of paper altogether and this automatic cross-referencing becomes infinitely easier. Down to the last fraction of a cent easier. It also makes it hard (if not impossible) to operate outside of their system. That cash-only side hustle no one knows about is known to the finest detail.
Taxes could be dunned automatically – “pay as you go.”
But as oppressive as that would be, far more so would be the use of electronic money to coerce compliance. There were lots of loose ends evident during the attempt to assert total control over the world’s population during the “pandemic.” Those who seek to use “health” to enslave could use threats to close down stores but if the store owner chose, he could defy – to various degrees – such decrees. He might choose to sell you food – even if you weren’t “masked.” Individuals could form underground networks of commerce, buy and sell among themselves and no one else the wiser.
As long as you had cash, you could buy.
But when cash transforms into a digital icon on your smartphone, your economic existence becomes entirely at the pleasure of whomever – whatever – controls the functionality of that app. Given what we already know about the benevolence of the entities who have electronicized our world – the Apples and Googles – there is cause to feel extremely uneasy about putting our finances into an electronic “wallet” that can be lifted at ay time, without our being aware it was just done.
Money shouldn’t be this difficult to understand.
Nor – at least potentially – to take away.
. . .
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Seems like this is one of the big problems with digital bits.
I was reading an article by Robert Blumen about inflation, ‘Weimar and Wall Street’ when I came across this take:
“… rapid changes in the purchasing power of money make comparisons between present and future goods impossible.”
He was talking about the loss of purchasing power of fiat money due to inflation & hyper-inflation, which reminded me of Eric’s article, what with the wild gyrations in the value of Bit Coins/digital dollars, that creates the same problem.
I just knew there was something else wrong with Bit Cons in addition to all the other reasons, I just couldn’t put my finger on it until I read that. Thought maybe some others might find that viewpoint valuable?
Amen, Helot –
Maybe I’m just stuck in my thinking but I am very leery of any form of “money” that has no physicality or intrinsic value. A “bitcoin” is (as I understand it) nothing more than a digitized variant of the federal reserve “note.” You can use both to buy things – without any physical money ever changing hands. Just digital accounts sending/receiving. So many obvious (to me) dangers inherent in such. The two primary ones being each can be created out of thin air, as much as those who control the making want to. What prevents whoever controls Bitcoin from making more of them – beyond assurances they won’t? Who controls Bitcoin, when it has no physicality?
I like precious metals because of their physicality and because they have intrinsic value (and so will never have no value) and because it is very hard to “inflate” the value of them because it is very hard to just create more gold and silver out of thin air.
Eric-
Bitcoin solves the byzantine generals problem: if there are traitors within, how does the general make sure that the troops receive the correct order? For transactions that translates into how do we know we have the true ledger and not a spoof from someone trying to steal. The answer is a consensus algorithm! For the General, if the troops compare orders with each other and determine which orders most of them received then the troops know what the general’s true orders were and which orders were from traitors. That is what the infrastructure of Bitcoin allows- trustless transactions!
Next Two Countries To Buy Bitcoin Are Friends of China
https://www.zerohedge.com/news/2022-01-28/two-countries-likely-announce-bitcoin-buys-2022
I find it interesting how words can be used to create fictions. Like why are these mathematical puzzles called “coins” as in Bitcoin, and why solving those puzzles using electricity and fiber optic wires called “mining.” Calling solutions to mathematical puzzles “coins” does not make them so. These solutions are merely ideas or recipes whose owners are recorded in a blockchain, which is just another idea. But of course, they will have exchange value as long as people, on the margin, are willing to acquire ownership of these recipes by giving up paper money, trinkets, pet rocks, gold, silver or anything else for them.
But in the end, these mental ideas have no other use unlike all of the other things exchanged for them. Even paper money is tangible paper and can be used as toilet paper, insulation, or can be burned to create warmth. Even pet rocks are rocks and can be used as weapons or to build a house with. In prisons, tangible things like cigarettes and packets of instant coffee often have value as money, but in the end, they can always be smoked or eaten.
It will be interesting to see what happens with these mental recipes called Bitcoins. I have no bias for or against. If for some strange psychological reason, humans continue to be willing to give up paper, rocks, and metals to acquire them, they will have “value.” But the second that the human psychology changes, they will be exchangeable for nothing.
= totally clueless about bitcoin…
ATTENTION: Bitcoin is a mainstream investment now, the institutions (like pension funds), buy it now, (it is not a back alley scam, that is insanity, stupidity, loser talk, intellectual laziness)
these investment professionals investing in bitcoin know 1000 times more about investing then you…
I saw an interview of someone setting up the infrastructure so institutions could get very large positions in bitcoin anytime they wanted to, (it was predicted the price would really take off because of this), this started around march 2020, after the infrastructure was set up they could buy $50 million and up positions in bitcoin, after that the price took off.
Cryptocurrency is information. Nothing more. While some applications can be more elaborate than others, it is, in essence, just a method by which transactions are recorded. Some of these methods may be more anonymous and secure than others, but most aim to exclude centralized control. This makes the idea of cryptocurrency desirable, as manipulation by centralized powers can be more difficult, as is the targeting of any individuals assets or transactions.
That said, such manipulations aren’t impossible, and crypto has its limitations. With paper cash, anonymity of both transactions and transactors is much more secure, but the currency itself if controlled by centralized powers. Though these powers have considerable difficulty stopping cash transactions, they can and have been diluting the pool, and systematically destroying the value of that currency.
Keeping the baddies away is always going to be the problem with any currency, paper or crypto-electronic.
Unfortunately the baddies are not just simple on the street robbers, but control freak government and corporate types. Sure, you may be able to keep them from stealing it from you, however all they have to do is block you from being able to access it either. Unless you have a phone or computer that doesn’t have an Apple, Microsoft or Google OS on them they simply have to turn that off and you’re back in the stone ages basically.
If we had a free market there would be probably 15-20 pretty major OS’s and probably triple of that of more minor or speciality OS’s. Kind of like when personal computers became a thing back in the 80’s, and there were a bunch more choices until Microsoft killed that.
That would make crypto better if there were more choices in OS’s so you could avoid the control freaks, which are basically impossible today. I know Linux exists, but in 30 years it’s made no progress towards being a consumer grade system.
I agree that there should be a much greater variety of operating systems, especially when it comes to phones. Linux, however, has made great strides towards being user friendly. It also comes in an astounding variety of distributions geared for every type of application imaginable, and from the highly esoteric to the beginner or Windows/Mac convert.
There, of course, needs to be heavier development of other OSs, but they are out there as well, such as Haiku and KolibriOS, which are completely independent.
Okay, somebody out there give me “the help me see” speech. Our all-around favorite guy, Jay, has put his foot down “”With inflation well above 2 percent and a strong labor market, the committee expects it will soon be appropriate to raise the target range for the federal funds rate.”
Soon? Such a magical word, soon. It could mean tomorrow, next month, or maybe three years from now. Jay’s “soon” has steered the Dow to a difference of 500 points today. At 3:30 PM it is down 249 points. Obviously, having the largest jump in inflation since 1982, a supply chain breakdown, and a job force that doesn’t want to work isn’t enough concern to get the ball rolling. If I was one of those crazy conspiracy theorists, I would actually start contemplating that Jay really wants the US Economy to crash and burn. Nothing else makes sense.
https://www.foxbusiness.com/economy/federal-reserve-signals-interest-rate-hike-january-2022
vix the winner this year up 47%
dow, nasdaq, (gold, silver as of today), bitcoin all down this year
jan 28th vixy 18.50 calls up 50% today
feb 9th spy 445 puts up 33% today
for the last 2 years you just bought spy (s&p 500) call options and made money,
maybe in 2022 you just buy spy put options?
Hi Eric, et al,
There seems to be a lot of confusion and misunderstanding about crypto currency in general and Bitcoin specifically. The original whitepaper by Satoshi Nakamura can be found at https://www.bitcoin.com/satoshi-archive/whitepaper/. Another interesting EweBoob podcast in which Jordan Peterson has a conversation with four Bitcoin aficionados can be found at https://www.youtube.com/watch?v=iVym9wtopqs and it is well worth the time spent to watch IMO. These guys have read Von Mises and Rothbard and though some of their statements are debatable, their positions and principles are mostly sound. Mises that the only purpose of money was as a medium of exchange. Most people nowadays believe money is a store of value and that’s a mistake from Mises PoV. That addresses the “intrinsic value” mistake many people make. Bitcoin in particular can be an excellent version of money from the Mises perspective. The big reason for this is that the supply is limited to 21 million bitcoins. Not all crypto currencies have limits and that’s a good reason to discuss the pros and cons of individual cryptocurrencies. The technical aspects of crypto are interesting to nerds like me. The libertarian principles inherent in crypto are fascinating to me. In any case, the concepts in the original white paper are pretty neat and the potential for overcoming the power in central banking systems fuel a lot of the bashing of cryptos….money is whatever parties in a transaction agree to use in a truly free market….
Hi Giuseppe,
But how is the supply limited to 21 million bitcoins? What is to prevent whoever is conjuring these “coins” into existence from conjuring as many into existence as they decide to?
I am not an economist and so may be out of my depth on the subject of money but my gut as well as my head tell me that real money must have intrinsic value else it it just a kind of confidence game. Silver and gold are worth something in their own right. Independently of their value as a medium of exchange but also relevant to their value as a medium of exchange because they’re worth more than just .00007888 fractions of a digital icon (“coin”) or the face value of an otherwise worthless piece of paper.
I don’t question that money – in a purely functional sense – is whatever parties in a transaction agree to use in a truly free market. I question the soundness of “money” without value in and of itself.
The Byzantine nature of “crypto” also sets off alarm bells for me. If something as simple as a medium of exchange can’t be easily understood by any reasonably bright person, it triggers my Spider Sense that a con is afoot.
I could go on in a lot of detail a bit later. Gold and silver are commodities that work well as money for a number of reasons described by Von Mises in his Theory of Money and Credit ( a fascinating read if you are inclined ). Perhaps a longer post later but I have chain sawing to do. The video I linked to above really addresses a lot of these issues and Jordan Peterson is a very perceptive integrator of facts and concepts….more later.
P.S. – the limit of 21 million Bitcoins is built into the architecture of the Bitcoin blockchain. Of course, hard forks from the Bitcoin blockchain have occurred and will occur but there can be only 21 million Bitcoins.
There will never be 21 million bitcoins. Many bitcoins are already irretrievably lost to failed equipment, forgotten passwords, and people who died taking their passwords with them.
At some point the rate of losing bitcoins permanently will exceed the mining rate. The mining rate will reach zero. The number of bitcoins available will approach zero. At some critical point there will be too few for the system to function. It’s built to fail.
Cryptocurrency is something of value because people seek it. They desire it cause computers tell you that its valuable. Each coin is exponentially more complex to mine, and bitcoin is mathematically limited. Just as gold miners developed machinery to crush rocks and sort through sand, computer companies design ever more complex CPUs, GPUs and computer networks to obtain these “coins”. The price of bitcoin drives demand for mining equipment which is purchased with zero interest loans. So in essence, bitcoin which exists to increase computer production and capabilities.
All of the bullshit about libertarian concepts is just bait. Bitcoin is deepstate sorcery.
How can you live in the 21st century and be clueless about crypto?
There is a very small number of people who know a lot about crypto, then there is a lot of people that are clueless. This is intellectual laziness. (very similar to the covid hoax awareness level).
People with knowledge about crypto are sometimes in the high tech sector or the financial markets.
They could be people that hate the central bank printing press. There is another group that thinks like this, the gold bugs, they are usually against crypto.
I used to trade and watch the financial markets all the time and I like gold/silver. I found out about crypto through watching max kaiser.
I did a lot of research into crypto because I wanted to invest in it.
I have a professor friend who likes investing, he knew nothing about crypto so I spent hours talking to him about crypto, mostly bitcoin.
I told him I should teach a class on crypto at his college, never did but there is an opportunity there, so it is worth learning about crypto. .
max kaiser
https://www.rt.com/shows/keiser-report/
decentralized and escaping central bank banksters running the printing press, you would think independent, freedom loving, anti big government, libertarian people would love it…..but no, almost total negativity, strangely from conservatives. leftist/communists hate it…….
my son said he wanted to invest in crypto….now I know why, he listens to peterson, not me, I told him a lot about crypto a long time ago, he wasn’t interested……
Jordan Peterson has a conversation with four Bitcoin aficionados can be found at https://www.youtube.com/watch?v=iVym9wtopqs
The Immaculate Conception: Bitcoin vs Fiat Standard
https://www.youtube.com/watch?v=FXvQcuIb5rU
Songbird It was chilling, remarkable, stunning, revealing, and terrifying in strange ways. It features a dystopian society that is fully consumed by disease panic and controlled by a police state that claims to be fixing the problem.
https://brownstone.org/articles/songbird-the-dystopian-film-that-became-real/
The whole point of crypto was young people setting up a new financial system because they couldn’t participate in the old one. The boomers made money in real estate and the stock market, the young people were left out, so they are building a new financial system.
Hi anonymous1,
If the boomers made money in RE and stocks, why can’t the millennials? Actually, I have many millennials who are quite successful at both based on what I see on their 1099s with Robin Hood, ETrade, Charles Schwab, etc. I also have successful that own several rental properties throughout the country in such places as FL, GA, and AZ.
Millennials and Gen Zer’s like the newness of Bitcoin. They grew up with a computer in front of them and enjoy the convenience of such a system. To each his own. At the end of the day there is one winner and one loser, and we need to be careful and observant of what is going on around us because it is very easy to lose it all.
For a twenty year old now buying a house is difficult. The stock market is in a bubble so is the housing market, not a great level to be buying, buying at the top is dumb. If it all crashes it is better for a 20 year old, they could buy in at a lower level.
No one is saying buy at the top. I agree with you that is dumb, but to say that a young adult will never be able to save and invest…I find more young adults playing Wall Street now then twenty years ago when I was their age. As for homes the market ebbs and flows. It will crash, because it always does, and it will appreciate because it always does.
never?
but to say that a young adult will never be able to
didn’t say that………read again….
you like to argue and twist things around…..
never?
but to say that a young adult will never be able to
didn’t say that………read again….
It is dumb… until rent gets to be so high that you actually reduce your cash outflow by making mortgage payments + utilities + maintenance instead. Land basically goes up & down with inflation, so it can be a hedge (and if it doesn’t come with any hedges you can plant some). If you can scrape a down payment together, and you are going to spend the money anyway, in the long term if makes sense. And once it is paid off your cost of living decreases dramatically. Most of your monthly payment is locked in if you get a fixed rate loan (taxes/escrow and insurance may change a bit over time).
The major exception would be, if you plan on relocating within ~5-6 years. Which is a long time, I know.
with all the money printing it caused asset inflation, the money went into real estate, stocks, collector cars, etc.,
this might have topped out now, the money now might be in figuring out how to short these assets, buying s&p 500 puts might work for example……
The whole point of crypto is to accelerate computer production and have millions of networked devices crunching data to improve facial recognition, image processing and ultimately enslave everyone to computers.
Hi Anon,
I have come to share Frank Herbert’s view of computers; whatever benefit they provide is vastly outweighed by the threat they present. As regards money, gold and silver are utterly divorced from computer (electronic) control, if physically possessed. This all-but-eliminates the kind of shystery manipulations of finance-economics made possible on a mass scale by computers/digitized currency. Silver and gold are inherently anonymous, too – whereas anything that is done with a computer is almost axiomatically promiscuous. Someone unknown to you knows what you are doing.
Would the world be “smaller” and “simpler” without computers? Of course – and hell yes. That’s exactly the point.
Was life better in 1985, when “computers” were things most people played crude video games on? When the phone was tethered to the wall and there was no such thing as “social media”?
https://en.mercopress.com/2022/01/26/bukele-needs-to-eliminate-bitcoin-as-legal-tender-imf-says
“Bukele needs to eliminate bitcoin as legal tender, IMF says.” If the IMF doesn’t like it, that automatically makes it more likable.
Hi Barry,
If there is a single common denominator as regards the oppression of the average person, it is the consolidation of practically everything into a digital apparat most of us cannot comprehend and which is beyond our ability to control. These faceless corporate entities that hold us all in thrall to one degree or another and are bent on entirely enserfing us. While I don’t want to “go Amish,” it seems to me we’re headed toward a nexus or fork in the road where we’ll have to choose one or the other. All of the perks of organized supply chains and everything else that led to our material prosperity for so long have become, increasingly, our masters rather than our servants…
And they are not just becoming our masters, eric, but the uber-Masters of our masters.
For instance, Microsoft is currently administrator runs both the electronic docket-filing system and the electronic videoconferencing system for the L.A. Superior Court. This means that Microsoft, and its AI bot-crawlers, have full impunity to do ad hoc redactions, deletions, and alterations to officially-filed court documents, and they can also control the official record of court proceedings in real-time by using audio “ducking compressors” or voice generation to control the audio signal of witnesses from reaching the court reporter, to Microsoft’s liking. (Soon, of course, the court reporter will be replaced by voice-recognition algorithms that automatically construct a record favorable to Microsoft.)
Of course, nobody “votes” for such power-handovers, just as nobody “voted” to put ID.me in between all taxpayers and the IRS, or “voted” to put Diebold in between voters and the election commissions. The Tech Monsters have the clout to effortlessly insert themselves into all governmental and commercial affairs, at every pressure point, so as to be able to un-person any given pleb at any time, now that all human activity is mediated by an incomprehensible superstructure of hardware and software. The governmental institutions that used to control us have handed the reins upward to the Tech Monsters, without debate or deliberation.
Welcome to the Electronic Labyrinth!
watch this video….kennedy talks about gate’s satellite system that will watch every square inch of the planet, no privacy, no escape….
Robert F. Kennedy Jr. Full Speech Jan23rd Defeat The Mandates March Rally Washington DC
revealing more of the big pharma lies
https://www.bitchute.com/video/PNF4jhmCZ4iK/
what about dominion…….
Depopulation vaccine advocate Bill Gates also designed the fraudulent election software used by Dominion
November 25, 2020 Ethan Huff
In a new video, the illustrious Roger Stone drops a major bombshell about Dominion Voting Systems, alleging he has proof that Microsoft, at the direction of billionaire eugenicist Bill Gates, designed the software used to commit election fraud.
The longtime political veteran who is helping spearhead the “Stop the Steal” movement for election integrity in the United States says that Microsoft developed what is known as Election Guard, which is capable of hiding votes, switching votes and altering election outcomes.
Election Guard has “been used by Dominion, as well as Election Services, Hurt Intercivic, Clean Ballot, Election Systems and Hardware, BPro, and Smartmatic,” Stone claims.
“In other words, 100 percent of the voting machines and voting systems in this country are using the same software that Dominion has been using to switch votes.”
For the past several weeks, reports about Dominion’s vote-counting software altering votes have been flooding social media. Numerous sworn affidavits contend that administrators have backdoor access to the systems, allowing them to switch votes at will.
Attorney Sidney Powell, who is working independently on behalf of both President Trump and the American people, says she has in her possession solid proof of this, not to mention the fact that more than 100 Dominion employees have been caught purging their LinkedIn accounts in recent days.
On top of that, Dominion representatives changed their minds at the last minute and decided not to meet with Pennsylvania lawmakers about the allegations, which clearly suggests that they have something to hide.
“The denial by the mainstream media that there’s any evidence whatsoever is ludicrous,” Stone correctly points out, debunking the bizarre and nonsensical media claim that there is “no evidence” of election malfeasance.
“The evidence is overwhelming and compelling. Whether Sidney Powell, a fine attorney who isn’t given to making claims she can’t back up in court, can bring a case without the cooperation of the Central Intelligence Agency and the FBI to come clean remains to be seen.”
Bill Gates’ actions are the epitome of treason
That Bill Gates is connected to Dominion is really no surprise, considering his “philanthropic” organization paid Black Lives Matter (BLM) “students” to count ballots in key battleground states.
The so-called “Campus Vote Project” recruited what were described as “young black students” to flood polling places as poll workers, replacing elderly polling place veterans who were told that it would be too scary to work at them this year due to the Wuhan coronavirus (Covid-19).
Gates is also behind the mass vaccination campaign that is being rolled out at “warp speed” to inject the entire world with Covid-19 jabs. According to Gates, the world will only be able to return back to “normal” once everyone is vaccinated with his “cure.”
The infamous “Antifa U-Haul” incident in Louisville, Ky., has also been linked to Gates, who reportedly funded the shields and other riot gear that was supplied to BLM “protesters” following the Breonna Taylor verdict.
They say that where there is smoke, there is also fire. The same can be said of Bill Gates when it comes to fraud, deception and mass genocide. If evil lurks, Gates is almost certain to be hiding in the shadows.
“In other words, 100 percent of the voting machines and voting systems in this country are using the same software that Dominion has been using to switch votes.”
………now you have brandon……..
If that’s the choice I have, I’ll go with the Amish. I don’t agree with them on everything philosophically/religiously, but I think they make some pretty good points, all the same.
‘crypto is not materially different from U.S. dollars, which have value chiefly because people accept them as having it’ — eric
One material difference is that the supply of Bitcoin is capped at 21 million, whereas US dollars not only can be, but ARE BEING, created in unlimited quantity.
Though the supply of gold does not have a hard cap like Bitcoin, the difficulty of mining it means that practically, the gold supply doesn’t increase by more than 1% annually, ensuring low inflation, or none if the population is increasing at the same rate.
Gold or supply-capped crypto can serve as money. Designating fiat currency as legal tender has the unfortunate side effect of making real money appear volatile in price … whereas under the gold standard, its price was fixed and stable.
When the now-wobbling Superbubble fomented by Jerome ‘Cntl-P’ Powell suffers its fiery final implosion, the time will be ripe to outlaw quantitative easing, and perhaps even to abolish the destructive Creature from Jekyll Island forever.
The leftist communists love the new MMT, you can just print money, no need to work. insanity….
re: money clinking, gold and silver are the hardest currencies……but there is a new opinion now…….bitcoin is the hardest currency.
fiat currency goes to zero value in 100 years.
gold and silver have always been considered the hardest currency (store of value), it is low tech so easier to trade with, but it has storage and transport issues..
gold and not so much even rarer silver can also lose value because of new found supplies,
bitcoin is a fixed amount, only a limited number will be produced, so difficult for it to lose value some people figure bitcoin is the hardest currency now. the problem is it is dependent on technology, but it is the easiest way to move money around.
bitcoin: one of the main purposes was to escape central bank printing.
if things get really bad, food, energy and water are more valuable then money, as in no offer, none for sale.
In 2022 the dow, nasdaq and bitcoin are down, gold and silver are up, a long suffering gold bug’s year so far.
Bailin?
A market crash……use this as an excuse to freeze ALL financial markets and only let people get $50/day out of an ATM (Jeroen Dijsselbloem called this “a template for Europe” when the EU did the same in Cyprus in 2012, remember? Jim Rickard’s referred to this as “Ice Nine.”)
do a bailin…..seize all bank accounts, pensions and 401K’s,
ban cash, and roll out UBI, MMT and digital currency.
Some countries have bailin laws in place already, in a crisis they can sieze all bank accounts like they did in cyprus, in bailouts they printed money to bail out the blg corporations over and over, in a bailin your bank account bails out the government’s debt problems.
get your money out of the bank ahead of time, there is only enough cash for the first 2% of depositors if you want your money back, be first in line….. when you put your money in the bank you have loaned your money to the bank, will you get it back? in gold, silver or bitcoin it is more difficult for the government to sieze your money.
digital currency. they want to go to an all electronic digital currency, no cash, then they can bring in negative interest rates (for instance they take 10% out of your bank account yearly, instead of paying you interest), and you are trapped, slowly going broke.
if you survive the 7 billion cull you might get a small ubi if you cooperate with the satanists.
then this
nwo/ccp/un/.0001% planned future
for the few remaining useless eaters, after their 7 billion cull.
turning people into appliances plugged into an all-seeing internet, more transhuman robots than people, dutifully following orders but unable to produce anything beyond what is programmed into their quantum microchips, bereft of the sparks of inquiry, innovation and joy in a electric panopticon that’s sterile and joyless, you are better off dead.
they implant an operating system in you and connect you to the grid, they also connect an AI robot to the grid, this is so you can train the robot to do your job. you won’t be needed then = soylent green.
the elite nobility/nwo/ccp/who/.0001% always see themselves as altruistic, the reality is they are satanists, monsters. (they believe in slavery, eugenics, transhumanism, fake science).
bankster/globalist/nwo/who cabal who is in it? the .0001% billionaires and their huge corporations, big tech, big pharma, big oil, big media (all the media, facebook, google, twitter), big banks, etc, china was chosen to lead it. a satanic occult death cult, run by satanists.
“in gold, silver or bitcoin it is more difficult for the government to sieze your money.”
The only way government can seize your custodial Bitcoin is if you let them have your private key.
Or, you know, they just send a demand to Amazon Web Services, Cloudflare, or any of the other layers of servers, ISPs and e-vendors that sit between you and your Byte-coinz, telling them to deny you access to your “custodial” (HA!) Bytecoinz. That would also work. Very easily.
Even if the government could order my ISP to block me, there would be nothing stopping me from connecting and transacting via VPN on public wifi. Government: “AWS and Cloudflare, you are now commanded to deny a connection that we can’t identify.” Right.
Government gives those entities your name and says, “You figure it out.”
You are pointing at a technical obstacle, and taking for granted that it is insurmountable. Such complacency, I daresay, is unrealistic.
Gubmint: “Block Barry Edmiston!” Entities: “What’s his IP address?” Gub: “Don’t know.” Entities: “What’s his Monero wallet ID?” Gub: “Don’t know.” Complacency?
Yes.
Also naivety.
Gub: here’s his Social Security number.
AWS: Got it. Give us 4.2 seconds to triangulate interoperable data composite.
Done.
Full cut-off implemented.
Gubmint: Subpoena withdrawn. Thanks, Joe.
AWS: No prob, Eddy. See you at the lodge on Tuesday.
They can just use the backdoor on your phone and drain your wallet. End to end encryption has the NSA on both ends. the digital money server is probably on the government network
LOL because of course I present a US Social Security number when using public wifi with a VPN in South America.
Good god you are naive.
Do you know even what “triangulation” and “interoperable” mean?
You seriously think a VPN is going to thwart the NSA, DHS, Unit 8200, and DARPA?
Okee dokie. You just enjoy gazing at those pixels, and imagining that they’re “wealth”. When one day your “public wifi terminal” simply says, “ACCESS TO THIS TRANSACTION HAS BEEN BLOCKED PURSUANT TO SEC. 9.008.786 OF TITLE FORTY SEVEN OF THE BLING-BLANG-BLOOPITY-BULLSHIT CODE” you will have no recourse, and no knowledge of how or why you were blocked. It will simply be over.
You seem to think you understand the game you’re playing. That’s cute. But mistaken.
Hi FP,
Normally – generally – I try to somewhat counter your cynicism but in this case, we’re in 100 percent agreement. Computers – connected computers – are the enemy. All the worst of today’s tyrannies would not be possible without them.
Bitcoin can be stored in a hardware wallet or on a hard drive, there is people storing bitcoin on hard drives which are stored in vaults the same way the gold is stored, this makes it harder for the government to steal. Storing it on the cloud is dangerous, risky.
What on Earth good can it do in a black box on your shelf?
I can just as easily say I have Eight Bajillion Phi-Coinz trapped in my rice-cooker! I’m rich and no one will ever find my magical Phi-Coinz!!!!
people buy bitcoin as a long term investment/store of value, digital gold…..
That’s dumb.
hard drives and other computer memory devices can fail. They are not durable. They can be broken. Sure a gold coin can lose some collector value to damage but the gold is still the gold. Even if distorted or melted in a fire. The bitcoin storage device? Poof it’s gone.
And there lies a fundamental problem with bitcoin and the like. The currency is always disappearing at some rate due to people dying with the passwords, memory devices being destroyed, lost, etc. Now some say great, it’s deflationary and will buy more. To a point. At some point it won’t be able to function as a currency because it won’t exist in sufficient volume. Yeah I know fractional out the to 22 decimal places or something. It just gets to be unworkable. Maybe there will never be zero bitcoins remaining… but it will eventually approach zero because the loss rate will at some point exceed the mining rate and then mining will stop all together when the max number of coins is reached.
So you pull your drive out of the vault and remember your 256 charictor password as you go to make a transaction. At that point some node says oh those are the coins that have been hiding since 2020. The transaction is monitored and intercepted.
to hide transaction you have to use privacy coins
Fiat and bitcoin
https://www.rt.com/shows/keiser-report/546560-game-over-fiat-bitcoin/
fist hahaha….
https://t.me/STFNREPORT/10421
fiat
When everything goes to a digital economy here’s a couple ideas. Years ago I worked with a guy that didn’t want to be on the books at all. It was light construction work, his part of the typical job could get done on the weekend. He worked for everything from truck tires to new windows. If the accountant thought it would fly he got it. In the future maybe I fix your toilet and you give me a carton of cigarettes or what not. Sure we’re talking barter but that’s where we’re headed. Silver or gold coins are great but most people have none. As for bitcoin it’s something I don’t trust yet.
^A lot of this. Maybe a mixture of some cash (for the mortgage or whatever) and some goods + services. Maybe handled behind the scenes with gift certificates etc. Maybe the companies will go back to issuing scrip…
ATTENTION: Bitcoin is a mainstream investment now, the institutions (like pension funds), buy it now, (it is not a back alley scam, that is insanity, stupidity, loser talk, intellectual laziness)
I saw an interview of someone setting up the infrastructure so institutions could get very large positions in bitcoin anytime they wanted to, (it was predicted the price would really take off because of this), this started around march 2020, after the infrastructure was set up they could buy $50 million and up positions in bitcoin, after that the price took off.
I told an investment friend about this around march 2020, at that time it had sold off to around $3850 we said this looks like a great BTFD time, by nov. 2021 it was $69,000.
Bitcoin can be bought through a stock brokerage account, there is a fund that just holds bitcoin, it is an easier way to invest in bitcoin, the symbol is GBTC.
Everybody, 100% of the people I told about bitcoin, (I heard about it in 2010 through Max Kaiser), told me it was bs, a scam, garbage, a hoax, etc., etc……..then in 2021 a couple said we wish we had listened to you………..
https://www.rt.com/shows/keiser-report/
Hi Anon,
Without disputing Bitcoin’s history of increasing value, I continue to want a basic explanation of its essence. How it generates value. I get that some of this is due to more and more people buying in. But that is how bubbles build. I am not saying this is a bubble. I am saying I don’t understand what drives the value of these non-existent (digital) “coins”… what is to prevent whomever “issues” the coins to just “issue” more?
I’m also very leery of any form of transaction that is entirely electronic – and online – because who controls that?
It’s not us, for sure.
Eric, you knew I’d chime in on this one!
There is an intrinsic value of crypto, and that comes from the low-friction method of “moving” it around. The fact that I can transfer value to anyone in the world, without worrying about borders, gives it an intrinsic value that even gold doesn’t have.
There’s also smart contracts that can be set up, or escrow services that require a third party to make sure everyone stays honest. Some have said that the value in dollars is actually the least interesting thing about crypto currencies.
“…intrinsic value that even gold doesn’t have..”
As long as you have electricity and wire, whereas precious metals, the currency that has been used for thousands of years, needs no electricity or a network.
Yes, but if you don’t have transportation, how are you going to take your gold to someone for trade? Locally, maybe? But that limits your markets and your reach.
Every technology builds on other technologies. We have a private blockchain for the farm, where we mine our own crypto and trade it just as if it were cash. No internet required, but we do need an internal network. Fortunately, we have solar and batteries, so it will still work when the SHTF.
Imho, there’s no such thing as, “intrinsic value”.
All value is subjective.
Others, disagree:
“For Austrians if we replaced this term with “the entrepreneur’s appraised price, based on assumptions about the future”, then it might be easier to have a conversation about it.” …
https://mises.org/wire/entrepreneurial-nature-intrinsic-value
“Cantillon’s construction of “intrinsic value” should therefore be understood as the concept of opportunity cost, not the essential nature of a thing.” …
https://mises.org/library/110-price-and-intrinsic-value-thing-general-measurement-land-and-labor-which-enter-its
That’s only kinda sorta true.
A lot of things have inherent value because you can use them to do stuff.
Yah, sure. Your hammer has value. I have four & don’t need another, your hammers have zero value to me no matter what can be done with it in the future or who else wants it.
Hi Publius,
“A lot of things have inherent value because you can use them to do stuff”.
Which means these things have subjective, not inherent, value.
Cheers,
Jeremy
Bitcoin has value because it takes effort, energy, money to mine it, so the value it has is the stored effort, energy, money it took to get it, plus it is very rare and unlike gold and way, way, way worse fiat, there is only a limited amount period.
gold has value because it is very rare and requires a lot of work, energy and money to mine it, plus several other reasons.
That’s flawed reasoning. It’s the “labor theory of value” argument the Marxists use. The value is in the eye of the buyer, not the effort of the seller. If the seller can come up with a more efficient way of producing, yet the buyer still sees the same value, then the seller makes more profit.
Of course, competitors can see someone making the product and reaping high profits, so they enter the market, forcing the price back down.
That’s capitalism, baby.
Hi Anon,
“Bitcoin has value because it takes effort, energy, money to mine it…” This escapes me completely. Isn’t this “mining” metaphorical? What physical work is performed? What physical commodity is extracted/refined (and so on). I’m not trying to be negative. I just don’t understand it.
You buy a computer or several. You install the mining software. You let it run. You pay the electric bill.
If all goes well the ‘coins’ that result from the CPU cycles will be worth more than the computers cost and the electric bills.
It’s just consuming energy. Now one might say gold mining consumes energy. That’s true. But you have gold at the end. Not some solved puzzle. But then people try to equate gold being used for coins as useless. As if the gold used in a coin can’t be easily changed into a non monetary use of gold. But I suppose gold would have a lower value if so much wasn’t tied up in monetary use or bars in vault. Of course that would be short lived because eventually circulating gold for use would find its level again.
Gotta use gold & sliver to manufacture computers.
**”Bitcoin has value because it takes effort, energy, money to mine it, “**
But just as fiat currency requires effort, money and energy to print/mint it….it still has no intrinsic value; and even less so with Bitcoin, as it’s “mining” does not even create a physical product. And just like fiat currency, it’s value is predicated upon the following of arbitrary rules being followed, which are merely the arbitrary constructs of it’s creator(s).
The humongous fluctuations of Bitcoin prove that it does not represent any finite value, and even more so than fiat, is reliant upon the perception and value ascribed to it by those who trade in it.
physical product?
most fiat 99.9999% is just one’s and zeros in a computer, there is very, very little cash and it will be eliminated soon.
the whole point of bitcoin was to escape the central bank printing press, the fiat printing is running full speed right now.
Bitcoin is limited to 21 million, there is no continuous printing devaluing bitcoin as there is with the dollar.
This is similar in some ways to a gold standard, the central banks couldn’t just print money, there had to be gold to back it.
I like gold and silver because I am old school.
fiat currency requires effort, money and energy
hahaha…with a key stroke on a computer they can create a trillion dollars in 1/4 of a second…big effort,
compare that to mining gold, that is why we should go back to a gold standard.
Ponzi
I was thinkin that word earlier while reading a comment of Eric’s.
Ponzi
There’s another ‘value’ that can’t be taken away. Work. Hard-work, smart-work, whatever-work. If you can add value to anything or to anyone you are worth something.
That used to be the strength of the American people. Maybe not so much anymore?
When mentoring youth, that’s my talking point. Add value and you can be something. Pretty simple.
Of course they charade me all the time about it: “Mr. X, did I add value to that or this today?”
Pretty amazing to me that the majority of the time they have not added value and of course I say no, and they don’t understand. But, But, But. Nope. Fun, but hopefully educational.
The leftist communists love the new MMT, you can just print money, no need to work. insanity….
re: money clinking, gold and silver are the hardest currencies……but there is a new opinion now…….bitcoin is the hardest currency.
fiat currency goes to zero value in 100 years.
gold and silver have always been considered the hardest currency (store of value), it is low tech so easier to trade with, but it has storage and transport issues..
gold and not so much even rarer silver can also lose value because of new found supplies,
bitcoin is a fixed amount, only a limited number will be produced, so difficult for it to lose value some people figure bitcoin is the hardest currency now. the problem is it is dependent on technology, but it is the easiest way to move money around.
bitcoin: one of the main purposes was to escape central bank printing.
if things get really bad, food, energy and water are more valuable then money, as in no offer, none for sale.
Bitcoin is an open ledger, all transactions are transparent, you can’t hide.
A big open ledger is what is needed for government spending, (in dollars or whatever), then any theft would be seen immediately. Marc Faber says these governments steal between 5% (honest governments) and 100% (crooked governments) of the money collected, borrowed.
Then there is privacy coins, all transactions hidden, more private, if two people have devices with unregistered sim cards in a parking lot, they can do financial transactions between them, this is very important if you are trying to set up a new parallel free independent system.
You have to listen carefully to what people with knowledge say about crypto they know ways to transact privately, a black market (everybody is going to have to do this to survive financially or use gold/silver or barter) .
The old financial system is dead they will just grab your bank account (time to move your money into something else), probably soon (plus all your other property.) Then they outlaw cash, cash is the best because it is not traceable that is why it will be outlawed, you will have to get out of cash before it can’t be used.
You will be forced to use government centralized crypto digital currency, so they can control you.
Gold or silver could be used, (silver is best because they will make gold illegal again probably), but it has problems too, transportation, storage, getting robbed. Some gold or silver is a must, it isn’t electronic, that is a problem with crypto, it is digital.
The whole point of crypto was young people setting up a new financial system because they couldn’t participate in the old one. The boomers made money in real estate and the stock market, the young people were left out. There are quite a few bitcoin billionaires now, bitcoin was worth over one trillion dollars recently, it works.
Bitcoin is what some people call digital gold, it is bought as a store of value.
It is a mainstream investment now, the institutions buy it now, this started around march 2020, after the infastructure was set up so they could buy $50 million and up positions in bitcoin, after that the price took off.
Bitcoin was the best investment in history, in 2009 it was worth 1/2 a cent, $.005, recently it was $69,000.00
Bitcoin was one of the best covid time investments from mar. 2020 to nov. 2021 bitcoin went from $3850 to $69,000.
A couple of negatives on bitcoin:
Some people think it was setup by the government to soak up all the money that would have gone into gold (bitcoin is seen as digital gold).
Another theory is the government setup bitcoin as a test run for their own digital currency coming out soon.
H Anon,
The fact that very few – if any – can even explain what Bitcoin is, exactly, makes me distrust whatever it is. One can easily understand what an ounce of silver is, why it has value as such. In addition to being a store of value/medium of exchange. But Bitcoin? I have 0.000077 fractions of a percent of a digital “coin” online? It’s completely baffling. Maybe it’s legitimate. But it really ought not to be this opaque. Also, I don’t see how it’s an improvement over specie – or paper notes tied to/redeemable in metals.
I think one definition was it has value because it takes effort, energy, money to mine it, so the value it has is the stored effort, energy, money it took to get it, plus it is very rare and unlike gold and way, way, way worse fiat, there is only a limited amount period.
gold has value because it is very rare and requires a lot of work, energy and money to mine it, plus several other reasons.
Hi Anon,
I’ve heard that term – mining – used many times. I am probably just a geezing GenX’er but I don’t understand what it means. I understand mining and processing gold. There is physical gold buried in the earth; the work of mining it result in . . . gold, a physical commodity you can touch. What is meant by “mining” Bitcoin? What is the valuable resource being extracted?
Mining means your computer helps process the bitcoin transactions, millions of computers are connected together through the web, you get paid bitcoin for your work .
You can buy or build a computer mining rig (a friend said he would build one for me for around $3000), his one rig he said made him about $800 per month, the trick is this eats electricity, this is better where electricity is cheap, just set one up, let it run 24/7 for income, we should all do this, extra income.
There is lots of crypto you can mine, my friend doesn’t mine bitcoin, he said some other coins paid better.
get into the 21st century set up a mining rig, make $$$$$$$$
bitcoin mining
https://www.bitcoinmining.com/
mining is done by having computers solve cryptography puzzles. Each one solved generates one bitcoin (or whatever currency). They progressively more difficult. Thus a bit coin represents the (needless consumption of) energy in cpu (or gpu) cycles working the puzzles.
Bitcoin mining is the process of adding transaction records to Bitcoin’s public ledger of past transactions or blockchain. This ledger of past transactions is called the block chain as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place.
Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.
eric, I was just thinking about the beef industry, if that’s what you want to call it. Last year I bought a bull that weighed between 450 lbs and 500 lbs. I paid $450 for it. After having it graze on grass that had $5000 of fertilizer on it, that spray plane that sprayed me and everything around my house 11 times and killed all the trees and grass was charged $500 for that infraction. Obviously someone paid them to do that since they were based nearly 200 miles away. I told you all about me being charged for 2 nd degree felonies for aiming a gun at the plane when I was out hunting my dog and a bigger dog with a gun that had no internal parts and no ammo. I sold that bull last week, It weighed 990 lbs and I got about $2 more than I paid for it. It cost me $3300 dollars for bail so it turned out to be a good deal for someone. I was wondering why the local sheriff quit a month before and told my wife i was sure they had something up their sleeve since he and I had been friends since 73. You can figure out how much I lost. Want me to send you the money I made? A negative $8800? I’m sure you’ve been to the store and WANTED to buy some beef. I’ll let you know the finally tally after I’ve been to court and and paid for the fertilizer. So how does a guy make nearly a negative $9000 and beef sells for over $30/lb for for a good cut? If I get a few cents a lb for a pound, it’s not hard to figure out what the big 4 beef companies make. Life just gets better and better and I’m so poisoned from getting sprayed I’m going to a neurologist next week to see if there’s any hope of getting well. It doesn’t appear to be much of a chance if a chance at all. Once I’m dead, my wife who is crippled will be close behind me. Gee, it’s a wonderful corporate world. I sure need some of that bitcon.
Amen, Eight – and I’m sorry to hear about all of this.
I have been wanting to get a small herd; maybe four or so cows. The reason I haven’t is my field isn’t properly fenced and there’s no water source – so I’d have to deal with hauling water down to them probably every several days or so. Too much work. I’m already way overbooked and feel it. This recent snow dump – plus 15 degrees for a week – has really put my down for the count. The good news is I was smart enough to buy lots of pasta and beans… I mean, lots of pasta and beans. The bad news is I’m having trouble wanting to get out of bed all of a sudden.
Same here, Eric. I’ve considered cows, sheep, goats. The problem is overwintering. You gotta have plenty of food and water, which means a barn to store hay in a dry place and all the hassle of getting food to the herd when they need it. Not a fun task when it’s 10 degrees outside.
So we have chickens, which you know are awesome, and we get two barrows (castrated pigs) every other spring. The great thing about pigs is that they’re ready to go to “freezer camp” in the late fall. So no over-wintering.
And we get a couple freezers full of our own pork.
I’m trying to imagine the, “intrinsic value” Eightsouthman is reaping from his cows.
Also, shitty tale, Eightsouthman. I hope the rat bastards don’t drain ya.
For those who don’t live near & around the crop dusters, I suspect they have No idea what it’s like being under or near them. I do. It’s simply an insane situation.
Hey Eightman!
You are a HERO for actually doing something and defending your land! Where are the young and healthy, eh?
So sorry to hear that your health isn’t good- and that they still can’t leave you in peace. These days, I believe that reverting to the dirt is the only way we’ll ever be free of their tyranny and injustice though. major props for fighting the good fight even in your condition!!!!!
I hope you’ll stick around here some more! {On this site…and in general!]
Bitcoin is a couple tweaks away from the currency the authoritarian control freak collectivist ideology of technocracy has wanted since the 1930s.
A big open ledger is what is needed for government spending, (in dollars or whatever), then any theft would be seen immediately.
Marc Faber says these governments steal between 5% (honest governments) and 100% (crooked governments) of the money collected, borrowed.
Catherins Fitts tried to design/setup a browser and search engine that you could use for instance to search through a city’s accounts to find out where every cent of the money they handled was spent, it never got off the ground. Everything should be on a blockchain so everything is visible, the government wants it opaque so they can lie and steal.
Since we are on the discussion of money cons… any thoughts on the Stock Market’s Miracle Monday trading session? The DOW has the uncanny ability to bounce back 1100 points in a matter of a few hours. MarketWatch, the WSJ, and Forbes will have us believe this was nothing but bargain seekers. Are you freaking kidding me?!?! This was the work of our pal Jay using his politics degree to its full advantage. Only the Fed has the amount of free money to keep the DOW and Nasdaq from sinking into oblivion, as it was doing yesterday.
As of noon today, the DOW is down 358 points, and the Nasdaq is down 378. Will Jay and his Crew of Criminals and Market Manipulators come in and save the day again? Do Americans really believe bargain seekers saved the DOW from its thousand point drop yesterday?
Each day that the Fed and computer algorithms manipulate the markets it forces the bubble to expand further. Instead of letting the air out of the balloon and taking it on the chin we keep the exuberance alive which will make the fall even worse. They tried this tactic in 1929 and it didn’t work then either.
My only hope is that JP Morgan, the Bank of England, and HSBC open up those gold vaults that they have been sitting on and manipulating for decades. We may need another bail out.
Note how TSLA staunched their share price losses with the “most productive car plant in the US” stories in all the major outlets yesterday afternoon. Whoever handles Musk’s publicity must be the second coming of Wagg-Ed, the PR firm that handled Microsoft and Bill Gates in the bad old days.
Hi Roscoe,
I still don’t understand how Tesla’s valuation is more than the nine largest car companies combined. There is some funky math going on there. A look at Tesla’s income statement shows they had one profitable year in the last four (2019), but the stock valuation is through the roof. Obviously, numbers no longer have to make sense or be backed by substantial documentation proving their accuracy.
Hi RG,
I think I do understand it. Tesla is “valued’ based on the projected “value”of the mandated EV market. Tesla is all “assets” int hat respect while all the other car companies are mostly “liabilities” in that the bulk of their worth is tied up in that being rendered worthless.
The shorts need to cover then they can reload. Saw tooth pattern to the downside. Banksters and jobbers make money up or down.
This is the pattern that they used in 2008 when the housing market was skydiving without a parachute. I think I will rewatch one of my favorite movies tonight, The Big Short. I may need another trip down memory lane just in case I forgot what happened the first go around. 🙁
Something’s very fishy about Monday’s market comeback indeed.
Hi ML,
No doubt. This is why I cannot see the Fed making more than one interest rate hike this year. The economy (not the fake Stock Market) is teetering. An interest rate hike of more than .25% will cause an increase of delinquencies in the housing market, credit cards, and commercial loans. If Jay had any balls, he would just increase the interest rates .5% tomorrow at the Fed meeting and let the economy adjust. Pushing this out further and further makes me think it is all talk. When inflation started skyrocketing last summer the Fed should have done an immediate increase. He knows the moment he increases the interest rate (no matter what percentage) we are in an immediate recession. At this point, pull off the band-aid and be done with it. If nothing else, it will bring those sitting on the sidelines waiting for a managerial position to get their arses back out into the Job Market, which at least stops the bleeding in the supply chain (although it will take months to correct itself).
Hi RG,
Sadly Paul Volcker is no longer with us, the Fed now only exists to bail out Wall Street – the “plunge protection team” as it has been labeled. “The Big Short” is a great movie, can’t watch it too often because it raises my blood pressure to an extreme when it gets to the part where the bankster criminals get their bailout. Doubt if my IRA will get bailed out if the market does crash.
Hi Mike,
My ex and I used to argue over 401Ks. I didn’t want to have anything to do with them. Expressed my distrust of placing our financial future in Wall Street – and my dislike of losing control (for decades) of our money. I told her it was safer to avoid debt, buy land and other tangible things and save our own money, sans the cloying supervision of some greasy big bank/institution. That if we did so, by the time we decided to retire, we’d own our house/land outright, have no debt and could easily live on very little money given those facts. And we’d not be beggars after our own money, doled out according to the strictures of some greasy bank. She would have none of it. It bothered her very much that we didn’t have a “portfolio” – into which we would pour large sums of money in the hope of a Great Return at some point. I could see the sense of this, were it 1955 or even 1985. But today? I’d rather not.
Most real financial advisors recommend putting whatever amount will max out the “match” from your employer. Mine will match up to 8% of my gross pay 100%, so I put in that plus a little more just because it is convenient and it lowers my income taxes a bit. But that’s it. There are plenty of ways to save and retire, and just becuase CNBC permabulls are always selling the “stocks outperform everything else” narrative doesn’t mean they always will.
Take this year’s -15% “correction.” Seems a little odd that over the last two years we’re seeing the first big wave of boomers leaving the workforce and this year we see the signs of a bear market. Is it because no one thinks there’s cause for optimism or because perhaps people need the money and are starting to withdraw?
This was a major topic among libertarians over at Bob Wenzel’s (RIP) economic policy journal site in the late 20-teens. Can the Fed raise rates? Sure by a quarter point a year for 18+ years… but can they “normalize” (5-7%) rates over a year or so? Not a chance…all the Armageddon you mention would ensue.
The “market” is the biggest Ponzi scheme in history right now. The Fed re-inflated the bubble three times in the past 20 years. Inflation is going to prevent them from doing it again. The time to pay the piper is coming soon… a lot of people are going to go broke and then beg the government to make them whole…
Hi X,
I would be terrified to have money in the stock market that I was afraid to lose right now. If the government runs the printing presses 24/7 it will further erode the dollar trying to make everyone whole. One should be prepared to pay $20 for a gallon of ultra-pasteurized, antibiotic milk. We are going to look like the Zimbabweans rolling our wheelbarrows full of money to the grocery store and that is if we can find anything to purchase with it.
Consider buying junk silver. Rolls of 90% dimes are good because they are small increments. In your scenario one thin dime may buy you a gallon of milk. Personally I don’t drink milk. What other animal drinks milk after it is weaned. Americans eat way to much dairy. I understand you can’t eat PM’s, but this should only be a portion of your stash.
What do you use to dunk your chocolate chip cookies in? The only reason that other animals don’t buy milk is that they have no cash to purchase it. Also, when that bear tried entering the 7-11 in Lake Tahoe last year everybody freaked out.
https://www.newsweek.com/bear-lake-tahoe-seven-eleven-tiktok-video-1649204
All he wanted was a chili dog and a gallon of milk to take home to the wife. 😉
I have silver stashed – some rounds, some coins, some bars. The problem will be the conversion. If the dollar is worthless, we don’t want to transfer it to that. Maybe the Yuan, the Yen, the Ruble?
Honestly, I think if the economy does crash bartering is going to be the only way to survive. Ammo, cigarettes, and alcohol may be a good investment.
When the SHTF you won’t need to convert it. It will join the other goods you mention as a barter tool.
BTW Americans eat/drink waaay to much dairy, but I do like cheese and the occasional ice cream cone
The biggest Ponzi scheme in history is Social Security!
s&p 500 had six days down… was oversold and bounced into green yesterday
a 50% retracement of this last drop from the low yesterday is about s&p 500 4470, it got back to 4411 yesterday, resistance there?
Today it dropped to 4276 and is now around 4394
In 2 months 20% lower? 3500 s&p 500 = about 50% retracement of the 2 year covid era run up.
Sometimes bitcoin seems to lead the market, it topped out in Nov. 2021, the s&p 500 topped out in jan. 2022, bitcoin has now done a 50% retracement of it’s covid era run up, will the s&p 500 follow it?
‘Deja Vu All Over Again’ As Stocks Dump’n’Pump Again Ahead Of Fed
https://www.zerohedge.com/markets/deja-vu-all-over-again-stocks-dumpnpump-ahead-fed
RG, it’s called the plunge protection team.
I have one of those in my bathroom, just in case of need.
Hi Ernie,
I have read that term a few times, but never heard it prior to yesterday. Is this something new or just a nickname?
Seriously? You’ve Never heard the term, ‘plunge protection team’?
You’ve got some serious catchin’ up to do.
No, I never heard of it. It is a secret organization, gut tells me most Americans haven’t heard of it.
“gut tells me most Americans haven’t heard of it.”
Prolly so.
It’s the man behind the curtain. Wizard of Oz style.
There’s an old quote about not one in a million understanding it or there’d be a revolution in the streets, or some such.
Too tired to look it up.
Glad your eyes are more open.
I just read about it. Obviously, there is no free market. It looks like Yellen has about $142 billion to play with. Enough to hold up the markets until the wealthy can get their assets out and the little man is once again holding the bag.
If that is the case it is absolutely pointless to invest. The odds are already stacked and a winner has been called…and it isn’t us.
Here’s a good primer:
https://archive.lewrockwell.com/decoster/decoster114.html
Bitcoin only works with computers and the internet. If you think those can be trusted then here goes:
To be “money” it obviously needs to be believed to be money. This is happening. That won’t work with “dirt” because it is far too abundant. Bitcoin is scarce by design. What defines what bitcoin is, is the software the “miners” are running to create the “ledger” called the “blockchain”. They vote on this, so if a miner changes his software, he will be ignored until 51% of the processing power of the miners are running the same software (agree on the results). This means for a government or anyone else to get control of it, they have to own 51% of the processing power of the miners. Unless the software is changed, there will never be more than 21million bitcoins.
To understand the “security” and the “anonymity”, you need to understand public key crypto systems in general, such as RSA. There are many different systems, but they all rely on what it called a “trap door” algorithm. Some mathematical function who’s reverse function is much harder. RSA used factoring. A computer can easily multiply two 200 digit prime numbers to produce their product, but factoring the product of two primes to discover what those two primes are is *much* harder to do. Rivest, Shamir, and Aldeman (RSA) discovered a “lossy” mathematical function that can be performed upon two large primes, to produce two new numbers, such tha if you encrypt data with one of those numbers, if it only feasable to decrypt that data using the *other* number. Pick one number and call it public and publish it. Call the other one private, and show no one. This allows the following:
I want to send a message to a co-conspirator evading interception, but the only thing I know about him is his public key (which everyone knows), and that he reads “the times”. I take my message, encrypt it with my private key, then encrypt it again with *his* public key (known to everyone), and publish the result in “the times”. Only he has his private key, so only he can decrypt the message to get the the message now ecrypted only with my private key. He can now decrypt that with my public key (which anyone could do). That it decrypts, proves it can only been encrypted with my private key, so he knows it’s from me, and I know only he can read it, even though we share no secrets in common.
When a bitcoin is created (before the 21million is achieved) by a miner (doing processing work) the blockchain that records it (creates it) is encrypted with the public key of the miner. That bitcoin can be reassigned to a new owner, by decrypting it (using the owners private key) and then re-encrypting it (using the new owners public key) and recording that in a new block added to the block chain. When you create a “bitcoin wallet”, you are creating a public and private key pair. By giving that wallet’s public key to others, they can transfer bitcoins to you. To get those coins out of that walley you need the private key.
Pretty anonymous in theory, but the block chain is public, so anyone can see what “wallets” they are being moved between. You don’t have to identify yourself to create a wallet, or to receive or send bitcoins, but to transact with an “exchange”, you have to create an account there which will identify you. There are ways to obfuscate by having hundreds of wallets and moving things around randomly, but there are limits. Monero was designed to address some of these concerns.
To artificially inflate bitcoin you’d have to change the software, which means being most of the mining power. Other coins may be different, some use “proof of stake” instead of the “proof of work” that bitcoin uses. Some are controlled by a private entity or a consortium. The only thing that gives bitcoin value is that people believe in it. They do that because it is scarce, and (presently) easy to transfer anywhere. The scarcity it the big one I think, as it’s not easly to inflate.
Bitcoin only works with computers and the internet. If you think those can be trusted then here goes:
To be “money” it obviously needs to be believed to be money. This is happening. That won’t work with “dirt” because it is far too abundant. Bitcoin is scarce by design. What defines what bitcoin is, is the software the “miners” are running to create the “ledger” called the “blockchain”. They vote on this, so if a miner changes his software, he will be ignored until 51% of the processing power of the miners are running the same software (agree on the results). This means for a government or anyone else to get control of it, they have to own 51% of the processing power of the miners. Unless the software is changed, there will never be more than 21million bitcoins.
To understand the “security” and the “anonymity”, you need to understand public key crypto systems in general, such as RSA. There are many different systems, but they all rely on what it called a “trap door” algorithm. Some mathematical function who’s reverse function is much harder. RSA used factoring. A computer can easily multiply two 200 digit prime numbers to produce their product, but factoring the product of two primes to discover what those two primes are is *much* harder to do. Rivest, Shamir, and Aldeman (RSA) discovered a “lossy” mathematical function that can be performed upon two large primes, to produce two new numbers, such tha if you encrypt data with one of those numbers, if it only feasable to decrypt that data using the *other* number. Pick one number and call it public and publish it. Call the other one private, and show no one. This allows the following:
I want to send a message to a co-conspirator evading interception, but the only thing I know about him is his public key (which everyone knows), and that he reads “the times”. I take my message, encrypt it with my private key, then encrypt it again with *his* public key (known to everyone), and publish the result in “the times”. Only he has his private key, so only he can decrypt the message to get the the message now ecrypted only with my private key. He can now decrypt that with my public key (which anyone could do). That it decrypts, proves it can only been encrypted with my private key, so he knows it’s from me, and I know only he can read it, even though we share no secrets in common.
When a bitcoin is created (before the 21million is achieved) by a miner (doing processing work) the blockchain that records it (creates it) is encrypted with the public key of the miner. That bitcoin can be reassigned to a new owner, by decrypting it (using the owners private key) and then re-encrypting it (using the new owners public key) and recording that in a new block added to the block chain. When you create a “bitcoin wallet”, you are creating a public and private key pair. By giving that wallet’s public key to others, they can transfer bitcoins to you. To get those coins out of that walley you need the private key.
Pretty anonymous in theory, but the block chain is public, so anyone can see what “wallets” they are being moved between. You don’t have to identify yourself to create a wallet, or to receive or send bitcoins, but to transact with an “exchange”, you have to create an account there which will identify you. There are ways to obfuscate by having hundreds of wallets and moving things around randomly, but there are limits. Monero was designed to address some of these concerns.
To artificially inflate bitcoin you’d have to change the software, which means being most of the mining power. Other coins may be different, some use “proof of stake” instead of the “proof of work” that bitcoin uses. Some are controlled by a private entity or a consortium. The only thing that gives bitcoin value is that people believe in it. They do that because it is scarce, and (presently) easy to transfer anywhere. The scarcity it the big one I think, as it’s not easly to inflate.
Never been a fan because digital “currencies” are trackable.
That said, I would not complain if I had put, say, $1000 into bitcoin when it was getting started and just let it ride. Oh, well.
Bitcoin was the best investment in history, in 2009 it was worth 1/2 a cent, $.005, recently it was $69,000.00
That’s true, Anon –
But…
Remember the real estate bubble of the early 2000s? Homes that sold for $170k in my old neighborhood in Sterling, Va. circa 1995 were selling for $400k by 2002. It was great if you were able to cash in on it. But then it all collapsed. I fear the same will happen with Bitcoin, for similar reasons. How can the value of these “coins” continue to increase? What is the value behind them? I’m still at a loss to understand it.
people buy bitcoin as digital gold, a store of value, to escape central bank printing, there will only be a limited number of bitcoins, there is no printing press to run, to devalue it….it is also decentralized, when you put your money in the bank you have lent your money to the bank, will you get it back in the near future?
supply, a limited amount. demand, very few people own it yet……..
**”recently it was $69,000.00″**
And now it’s $35,000.00……
Guys,
You all are making this too complicated. You know what can torpedo BTC or any other crypto? Shutting the power off! If there’s no power, then there’s no Internet, servers, or computers running, is there?
Also, the gov’t could do what China recently did. One of the world’s biggest BTC miners is in China; he accounted for something like 10% of the world’s total. So, what did the CCP do? They simply came in and SHUT HIM DOWN!
I’m not saying that BTC can’t be hacked or anything, but you all are making this too complicated. If one wants to take out BTC, then it’s easy. Either bring down the power grid, or just shut down the BTC miners.
Now, BTC will have to be taken out at some point. Why? It simply goes against too many of TPTB’s objectives. Not only does it take financial control away from “the elites”; it allows freedom. Plus, it’s competition, and we know how the gov’t hates competition, don’t we?
I would refer epautos readers to a deeply provocative comment on Tom Luongo’s blog from last year, by commenter “programmer” that rings of disturbing truth:
https://tomluongo.me/2021/05/05/bitcoin-not-a-real-truck/#comment-20043
“What if BTC was actually created and run by Ai ?
Just another Algo for humans to project their fiction into.
Like, a human created it, but nobody knows them. Smells memey and a lot like a narrative. Humans love to be mind controlled into both, have you noticed?
“There are only 4 humans alive with the programming skills needed to code the mining algo, alone. They did not code it. Sorry, no invisible Japonese guy exists and if he did he was/is not smart enough to even code the Gossip that eliminates double ledger transactions that made it all possible. (digital ledgers are not new)
“So, then what you are watching is the Ai become the richest ‘entity’ in the world. Since nobody will ever meet Mr. Bitcoin, I guess staring at a screen will have to suffice. And then kick in the “faith”, that invisible human pyschology uses to fill the void of ignorance so everyone can get through the day….
“What will the ‘richest entity’ in the world do with all the ‘currency’ that humans worship without understanding? Only the coders know.
“That is the real question. The Banksters are just dumb stooges and speed bumps along the way.
“That is why transacting with something physical is the only way to stay human. Assuming that is what you want. You already have to find a way to ditch being a Cyborg. Good luck if you choose biology over technocracy. The Ai can out think you 10,000/1.
“Just a message from the Ether to ponder.
To get to the point: If you don’t code, then you ARE the program.“
US minted gold and silver coin is what you need in your possession. I have one Balboa found on a boulevard 8000 miles from where it was minted.
Wampum has more value than Bitcoinᵀᴹ.
I’d rather have the beads, still be fungible.
Somewhere in the ether are bitcoins.
Trade a bitcoin for a vehicle, at 35 grand for one bitcoin, you’re better off with a 35 thousand dollar car.
The Qatari multi-millionaire has 100 cars, all collectible, inside in the super garage he has and a 40 room house of stuff. Incredible wealth. Probably has ten million barrels of oil in the ground.
Buy Roubles, you get 79 Roubles for one dollar. Takes more time to spend 79 Roubles.
Family members tested positive for Covid, so I must have had Covid too. I am not going to go anywhere near any medical testing, might get hauled away.
Still alive, as long as that happens, it’s all good.
“And I don’t give a damn about a greenback dollar
Spend it fast as I can
For a wailin’ song and a good guitar
The only things that I understand, poor boy
The only things that I understand” – Hoyt Axton, Greenback Dollar
I’d only buy pure gold. US-minted gold is only 90% pure….ever need to melt it down and it loses most of it’s value. Maple Leafs and Philharmonics are pure 24K. Even if ya never need to melt it, in a scenario where gold becomes a good unit of exchange, the pure gold will retain maximum value, while the mixed coins will lose a lot of value (Seeing as it will be the gold that people are interested in, and if your gold is mixed with silver and copper… I mean, you can buy 24K gold for the same price or less than 22K gold…why buy 22K?)
Yes but the reason coinage gold and silver is usually an alloy, is because the metal is naturally soft. Adding a little bit of a harder metal makes it much more durable as coinage.
Even as an alloy, gold and silver coins that have been circulated a lot will wear noticeably.
How much circulating do $2K coins do?
Buffaloes from the US Mint are pure gold. Eagles are standard bullion purity.
Any gold that is melted down becomes very suspect. In reliable coin form it is less suspect in that the only hazard are the China made fakes. But if we are in a SHTF economy odds are one could spend the quality fake on without issue.
24 Karat gold will wear too fast, hence the copper, maybe silver, content. Numismatic value is sometimes greater than the gold content value.
Buy a 24 K gold bar, beat the malleable gold to gold leaf, just need sheepskin, you’ll make some cash.
1/10,000th of a millimeter thickness will sell. A two-inch square sheet of gold leaf that thin will disappear when you touch your index finger to your thumb and give them a rub.
I sheet you not.
It is winter and it is brutal this year, no such thing as global warming. People are vulnerable during cold weather, shelter, warmth and food are important.
People have learned to know how to be just plain stupid, live in denial of what is in front of their fat faces, they’re lying eyes refuse to accept the truth.
-15 degrees F and 23 inches of snow convinces me that there is zero global warming.
Have been badgered by a family member to get vaccinated, the family member has been vaccinated for more than six months, boostered, tested positive for Covid just today. Go figure.
Everybody is testing positive for Covid, doesn’t matter how may times you are vaccinated with the plethora of different vaccines there are.
You are still going to become ill and there is no way you can avoid it.
Their, not they’re. For gosh sakes.
RE: “-15 degrees F and 23 inches of snow convinces me that there is zero global warming.”
Every. Stinkin. Day.
I’m at -5 degrees, only a few inches of snow. The last two Winters have been brutal,… freakin’ wind.
– Waiting & looking forward to the heat wave above 20 degrees!
N,
Why would anyone melt down a gold coin?
Basically they look waaay cooler than a brick.
I scored some pre 1933 Libertys and St Gaudens and they are not only great looking but a wonderful piece of financial history for any Libertarian !
The 20 dollar face value (worth at least $2,000 apiece today) handily puts fiat currency in proper perspective when teaching “younguns “ about inflation 👍
I have a chunk of melted copper. Looks cool as hell. I hefted a five ounce bar in a coin shop once. It wasn’t exactly, ugly. Had a real nice feel in my hand, sorta like a Glock.
I wouldn’t mind having a real gold nugget as dug from the earth. Melting a coin might be the next best thing? Shiny coins are nice, too though.
Crypto is a new low: Replacing a form of worthless fiat currency which you can actually hold in your hand or put in a safe…with another form of worthless fiat currency which is just a long number which you physically can not handle nor store; which is only accessible through the auspices of the electronic connections between computers and networks, and which if anything in it’s chain of access/ownership disappears, you have nothing, and can never prove that you ever did, for all you have is a number which is relevant only within the artificial scheme under which it was created- just like fiat paper currency- only without the possibility of physical ownership, and with even greater fluctuation. No thanks.
I wouldn’t be surprised if the private crypto thing was set up by the PTB as a way of not only getting people used to electronic currency…but to actually demand it.
Well said.
Yes – I have wondered why the 1040 has a question over the past several years about whether or not you are “invested in bitcoin”?
It honestly woundn’t surprise me if these 1’s and 0’s were created by CIA operatives. And there is no one more annoying than crypto guys online. Boy, they think they have all the answers. It’s always- ‘You just need to do more research on it’. I’ve seen enough fishy business on youtube comment sections to know something seems off. There’s always one comment that says something relevant to the video, but adds ‘you definitely need to diversify and add crypto…’. The replies are repetitive and robotic. ‘I’ve tried but don’t know where to start. Anyone know a guy…?’ ‘Yeah. So-and-So works miracles for me.’ ‘Oh yeah, that person knows everything. He’ll help.’
It’s embarrassingly obvious.
Add on the fact that celebrities are doing commercials for it (and the same goes for gold/silver certificates or ETFs)… if you don’t hold it, you don’t own it. And I’d add on to THAT by saying if you don’t hold it and it doesn’t have a chip/software in it, you don’t own it.
Junius Maltby has a great small youtube channel and a 36 minute video called ‘Silver: A Story’. You’re a fool if you don’t buy silver right now. It’s basically free, and I get nothing out of it if you do or don’t, unlike these crypto pushers…
Take the dollar out of silver and you have an ounce of silver. You can take advantage of its high thermal and electrical conductivity and its antibacterial use, or its history of being MONEY.
Take the dollar out of Bitcoin and you have… what exactly?
RE: “Take the dollar out of Bitcoin”
Every description of the value of a person’s digital dollar holdings is Always put forth as XYZ worth of Dollars or some other fiat currency.
I’ve never seen anyone say they have 5,000 lbs. of salt worth of digital dollars. Etc.
Anyway, I was thinking, Take the dollar out of silver and… you can at least drill a hole in it and have a washer.
Exactly. The problem is that all alternative stores of wealth — land, gold, bitcoin, whatever — are ultimately valued in, and exchangeable for fiat money. If you buy land at $100k and the value increases to $200k, it doesn’t do you any good unless you sell the land in exchange for green dollar bills. You can’t go to the grocery store and say “I’ll trade ya a quarter acre for a month’s worth of food.” You can’t go to the tire shop and whip out a silver bar to exchange for a set of tires.
For all the problems presented by fiat money, you really can’t avoid it. It represents a stored value of your labor. That’s why government money-printing and govenment-created inflation is so insidious: it is essentially the theft of your labor by devaluing the unit of currency that represents and stores the value of your labor. In other words… slavery.
What does hold tangible value? Firearms and ammunition.
I know a person who did not have dental insurance and needed some work done. Dentist happily made a trade for an AR15 and ammo. Traded for current “dollar” value, not the price purchased. So, not only was it a “cash” deal that cost less than the “insurance” price, but he had purchased those items when their value was much lower.
Crypto is interesting. Like mining gold, it consumes a lot of resources, but at the end you have nothing to show for it. I suspect it’s main (and nontrivial) use will be to transfer wealth securely around jurisdictions, rather like the Amex travelers check. Nobody invests in or keeps those as a store of value, they are just a transaction vehicle of decent security. Crypto is of greatest utility for moving quantities of wealth away from someplace like communist USA with its IRS to remoter, freer, weaker states.
“just a transaction vehicle” – which is a description of, credit.
Reminds me of, ‘Real Bills’ baloney.
Crypto currencies are full employment for tech geeks who understand (or at least pretend to understand) the theory. Plus, “mining” activity lets the graphic card manufacturers sell what should be a $70 PC card for $300+ as long as it has the magic 4 GB RAM number to offload the parallel calculations.
Judging from the pictures of the crowd showing up at the crypto “conferences” in such tech hubs as … Miami (?) … we’ve probably reached “Peak Crypto”
If you can’t explain it so that someone with an IQ of about 80 can understand it (and you can’t with any crypto product), then it isn’t suitable for general use.
I call it the “Forrest Gump rule.”
Right now, all IQ of 80 understands is that a graphics card with 4 GB RAM is EBay gold. Amazon reseller gold is even better, but that requires an investment in inventory and a reliable supplier.
Among the cognoscenti, Bitcoin is known as “surveillance coin.” It is also not fungible, since every transaction since day one is there for anyone to see. Units that can be proven to have been used in illegal activities can become second-class or forbidden (though off-chain transactions probably allow for “laundering;” I’m not into that). This lack of fungibility is true of all cryptocurrencies, but Bitcoin gets the attention because it dominates the field by a long shot.
Exceptions exist: the blockchains of true privacy coins like Monero and PirateChain are completely untraceable.
“are completely untraceable”
Seems like famous last words.
If it’s on The Internet, it can be tracked.
People don’t seem to consider that if it is untraceable, that that would work both ways- How would one prove they own anything? “My Bitcoin is invalid/disappeared! Well…I have these numbers, so I can prove when/where/how/from whom I acquired it!…Oh…wait….”
Ha! Good observation there, Nunzio.
I have posted that question myself. I won’t attempt to answer it, since I didn’t completely grasp the answer. However, I can assure you the people working on privacy coins are not stupid.
Silver and/or gold for me, thanks.
More robust.
This is the way I explain cryptocurrencies, might not be right but it’s not wrong.
Imagine sitting in a math class. Every seat has a random number on it. The instructor comes in and writes a formula on the board: X=Y+X+previous(Y). Y=your seat number. The instructor has the class start calculating the equation with X=1, in a race to see who comes up with the right number first. The first answer “wins” that equation. Then this is done again, this time starting with X and Y from the previous answer. Again, first person to come up with the answer wins. This repeats over and over, and some people win more than others. Cheating, in the form of barter for answers is encouraged, and doing so will alter the formula, since the seat number will change. The instructor keeps track of the answers but not who won each round (other than the seat number) on the board, but it can still be worked out who won each round and who currently owns each answer.
Reality is the formula is much more complicated but I think the analgy is close enough. As long as your electricity cost is lower than the cost of mining you can make some money.
The genious of bitcoin is that eventually the formula will become completely solved, thus limiting the total number of solutions. A finite amount of anything is usually worth something, so it can be used for barter. The downside of cryptos is that they seem to be infinitely divisible too. And unlike those plastic “gold dollars” that are often used at libertarian meetups, you can’t actually see how small a Satoshi is.
Some say that’s a big problem with electronic currency in general. You can’t really see what you’re spending. $1000 in a stack of $20 bills looks like a lot of money. A $100 bill (and before they were outlawed under the “war on drugz” the $500 and $1000 bills) looks like a lot of money. I imagine people could go their entire lives without seeing a $1000 bill when they were in circulation. If you used that $1000 bill for something trivial you would empty out the register. Not to mention it is incredibly inefficient to print up, distribute, store and maintain all that cash. That’s a feature not a bug, and the primary reason why the drug enforcers don’t want large denominations. It’s difficult. By removing friction economic activity increases.
But should financial transactions be frictionless? In 2000 the NYSE began trading in decimal prices. This meant that large shareholders could make money by moving up prices in pennies instead of 1/8ths (12 cents). Most trades are done electronically, and the two combined to increase the activity to unheard of levels. People were buying very small lots too, thanks to Schwab’s discount broker model, usually from the large institutional sellers. And it made value although only because people were chasing pennies. Fundamentals in the 2000s were horrible. Today’s stock market is an eggshell of stability, seems solid but any little impact will crack it and wreck the whole thing.
Hi Ready:
I sill don’t understand, but I understand your analogy. Thanks.
I have not made any concerted attempt to understand crypto, but I understand that there are a finite number of solutions which limits the maximum number of crypto units that can be generated (coins, whatever we want to call this finite number of solutions).
So for each cryptocurrency – there are a finite number of solutions. Great. This limits their supply which “increases” their worth compared to something with an unlimited number of units – like the dollar.
What is indeed infinite is the number of competing cryptocurrencies that can be designed. This is why I feel the underlying value approaches zero for any “coin.”
Why is bitcoin better than Ethereum or Dodgecoin or anything else? Maybe I’ll make a “Blakecoin?”
Am I off anywhere in my logic? What stops every person on the planet from designing their own “coin,” or even several hundred or thousand of their own “coins?”
That said – I did invest some in Bitcoin on Robert Wenzel’s (RIP) advice. He was very adamant about saying that this is a very, very risky bet, and if any coin takes off, the Fed will never allow it to compete with the dollar. I limited it to 2% of my portfolio sold when it gained 50%. (GBTC) I was prepared to lose it all – which is why it was limited to 2%. That’s the bet you’re making.
Just about every time I read an article or newstory about Bitcoins/cyptos there’s almost Always an image such as the one at the top of this article symbolizing the digital dollar, and it’s Always a gold colored coin.
Funny, that.
The other times, the image is a chart,… a trackable, plotable, trend identifying chart.
Funny, that, too.
Hi Helot,
I’d like to see money disconnected from any regime of centralized control- which is how it ought to be. Our transactions are no one else’s business – unless we wish them to be. What we earn – and spend – are intimate things, as much as our personal affairs. This suffocating, obnoxious promiscuity of information is repellent to me and I think ought to be to any person who doesn’t believe their business is anyone else’s business.
found in Chapter 13 of The Theory of Money and Credit:
“The ideal of a money with an exchange value that is not subject to variations due to changes in the ratio between the supply of money and the need for it … demands the intervention of a regulatory authority in the determination of the value of money; and its continued intervention.”
Proof that one should not believe everything they believe. What would that regulatory body control? The value of money? If so, then it couldn’t remain the same; If no, the only other alternative is wages, prices, and interest… How does that work out?!
Oooopppss! **”Proof that one should not believe everything they read“**
I like it as it stands 😉
I’d like to go back in time and strangle the inventor of taxes.
people like bitcoin is decentralized, it’s best feature…
Which is why I’ve ignored bitcoin since its inception. Its digital. Which makes it easy prey for the state, and other hacking criminals. If you can’t touch it, and move it, it ain’t yours. Land is a good investment, unless the state decides you have too much and confiscates it. Just like FDR did for Gold. But Gold can be moved, or hidden. Land cannot be. See how that worked out for Doctor Zhivago.
RE: “confiscates it. Just like FDR did for Gold”
I see that quite often online, the reference to gold being confiscated. What’s very very seldom mentioned is the details of the E.O. which states people could still have certain specific amounts of it. Possession was Never truly & totally outlawed.
Some people have written, The State has limits on what it can and cannot accomplish, not so much due to constraints such as constitutions, rather, it’s … ability. I think there’s a term for that. Which is why possession was Never totally outlawed.
Digital dollars on the otherhand, by it’s quality of being digital, possession could be totally forbidden.
What’s very very seldom mentioned is the details of the E.O. which states people could still have certain specific amounts of it. Possession was Never truly & totally outlawed.
you were supposed to by law…..exchange it for fiat at $20 an ounce, then when the government had your gold they revalued it at $35 an ounce and kept the profit….
You can move land… [picks up shovel].
Hmmm…now where to put it?
Good one Nunz!! 😆😆
Thanks, Mike! I think Steven Wright may’ve rubbed off on me. [Oooo…that doesn’t sound good in retrospect! 😀 ]
[Grabs crotch] Oh no….Michael Jackson too!
Hope you’re not freezing your Boston beans off up there!
For something to be considered “money” it has to meet three criteria:
1) “Store of Value” – meaning it won’t spoil or go bad.
2) “Unit of Account” – meaning it’s easy to divide and manipulate in small quantities.
3) “Medium of Exchange” – meaning that other people accept it as consideration for transactions.
Bitcoin meets all three of those criteria. It’s also completely anonymous, just like cash. Everyone knows that an owner named “XghE45J8P” is out there, but the only person who knows who knows his actual identity is “XghE45J8P” himself.
What you are actually describing Eric – what is really scary – is that the Fed is trying to preempt Crypto by designing its own digital currency, which will NOT be anonymous and WILL be used to track users and cut them off if necessary. It will be sold as, “See? This is just as convenient and cool as Bitcoin, but it has our approval and backing!”
Most fiat currencies are already digital, but there is so much cash in circulation and there is no way of tracking individual dollars, so central banks want to use concepts like the blockchain to exert more control.
The way Bitcoin is designed right now, it cannot be captured by a central bank, which is why governments and central banks don’t like it.
Being digital, Bitcoin remains eminently vulnerable to simple confiscation, regardless who may own it, anonymous or not. The state could, for that matter simply outlaw it, as has been done in Russia, if I’m not mistaken (I was once before). People choose it over Gold and Silver because of its convenience. Not its immutable value. Which Gold and Silver have, and Bitcoin does not. Gold and Silver are the first steps away from barter. Always have been. They should be the last steps as well. But I think we are destined for a barter economy when the fiat dollar fails, and Bitcoin will be of little use. Gold and Silver will.
The difference is I can print out a wallet private number and put it in a safe. If someone attempts to duplicate that wallet I can prove it is mine and recover based on that private wallet number. As far as we know the only confiscations or thefts of cryptos have been at the exchange level, not in personal wallets. When I was learning about bitcoin I was given .007 BTC as a demonstration of how it works. This was done phone-to-phone, no exchanges involved. I later bought $500 from a bitcoin ATM and another $100 from a coin dealer. Of course I sold it off when I doubled my money, but I bought it to experiment with not to invest, so que sera, sera. Until everyone figures out that having a wallet in your possession is better than working though exchanges, cryptos won’t go anywhere.
RE: “The difference is I can print out a wallet private number and put it in a safe.”
Then the vulnerability is the server or within the system on the other end which corresponds to the private number. Confiscate or destroy the server or the system, poof, and… it’s gone.
Took the words right out of my mouth, Helot. Also:
“Officer! That’s MY Bitcoin! Look, I have this number scrawled on a piece of paper to prove it! What that thief have, just some number scrawled on a piece of paper? He calls that ‘proof’?!”
“Officer, he stole my gold coins!” How do you prove ownership of any asset?
The “number scrawled on a piece of paper” isn’t proof of ownership, it is the wallet. I have several wallets, only a few have anything in them right now.
But with physical commodities, one would have to actually take possession of the commodity to steal it. With Bitcoin…you just need a number…which represents electrons…. [Pictures two palace guards with busbies and rifles standing stone-faced, guarding a pile of electrons and numbers]
There is no central server. Anyone can audi the blockchain using bitcoin core. You can audit it, I can audit it, Putin can audit it. It isn’t perfect, because it relies on low concentration of bitcoin core, if someone consolidated 50% plus one of bitcoin core they could falsify records, but no system is perfect.
https://bitcoin.org/en/bitcoin-core/
RK, please do us a favor and go ahead and audit the Bitcoin blockchain.
Then report your results, and what your results mean.
We’ll be here waiting for the next 500 to 6,000 years.
Luckily I have a computer to do that.
??????
This is a less than illuminating response.
Believe what you want, however; numerous people have written and shown how All digital dollars are trackable, lots of examples of The Law proving such. The anonymous attributes are an illusion.
Anyway, RE: “3) “Medium of Exchange”
It appears that digital dollars are not a medium in the sense conveyed in #3. There’s zero physical substance.
Per Webster, consider this:
medium noun
2: a means of effecting or conveying something: such as
a(1): a substance regarded as the means of transmission
(2): a surrounding or enveloping substance
(3): the tenuous material
Same people who believed that the TOR browser and Dark Web were untraceable……
And if it truly were untraceable, how does one prove that they own it, seeing as they have no physical proof nor traceability? How would one even acquire something that is untraceable if a physical exchange is not possible, and therefore the exchange must be made via a medium and through an exchange which IS traceable?
What utter horse crap, eh?
I discovered something worrisome about Tor recently. If you go to their About/People page, half of the people working on the project have their pronouns listed. He/Him She/Her etc. That bullshit. What this tells me is that the project is being infiltrated with subverters who intend to destroy the project from within. I question the trustworthiness of the project. The normal people working there, and keeping to the original purpose of the project, will probably be kicked out for wanting to stick to the mission, and not do trans child promotion or some shit. The lefty listing of pronouns thing is a big red flag. The cancer is there. Maybe they’re logging everything already.
Wow, Brandon! Doesn’t surprise me though. Most of these things- e.g. various encryption schemes; anonymizers; even some Linux architectures (GNU for one) have originated from MIT and other institutions of [now] leftist/state-dependent and or military/CIA institutions- and are likely traps or at least identifying flags which are probably scrutinized and monitored more so than the typical consumer-level stuff.
While the individual transaction may be anonymous — to the extent that they’re not tracked by the NSA in the first place — the accounts themselves are not free from reporting to the IRS.
The IRS recently has ordered and retroactively at that, that all crypto exchanges and wallet providers, etc, must report the account holders, how much they have deposited in dollars (or other taxable currency), how much they have spent, and how much they have withdrawn.
So even if I can get away with a bottle of beer or a tank of gas or a stay overnight, do you think that I’m gonna be able to take delivery of a car or a house and it not be known by the state and the IRS?!
Those examples are obviously ends of the spectrum but the continue surveillance, together with the mandatory reporting, already have most coin holders under the microscope. If your numbers don’t add up, and they come with an audit, they will absolutely compel people to account for every single transaction.
As an accountant I have to ask all my clients the same question year after year…Did you sell any crypto this year? I dread it when they answer yes. Every crypto transaction has to be accounted for and reported on Schedule D under Capital Gains. These easily can be in the hundreds.
As for the anonymous of such currency we know that is as secret as any of us posting on this forum. We can use all the fake phony names that we want, but if it being done on a computer they will find us.
I then think of such horrible programs such as the bitch Cortana and everything that she reports back to Microsoft’s Redwood, California, data servers with every letter that we type.
Privacy is no longer an option for any of us. Cash still gives us that small illusion that we are screwing the man (and maybe a few areas in America we are still able to), but if there is a camera in any convenience store, restaurant, grocery chain, etc. our cash transaction is as secret as the footage being recorded.
The one plus with cash, gold, silver, and many other tangible assets is that the people that want to take them have to physically show up. A stroke of a keyboard won’t work. If someone wants to steal what you have they will, but go out of your way to make it difficult for them.
“Know your customer”
https://www.investopedia.com/terms/k/knowyourclient.asp
Early on in the BTC adventure I looked into installing kiosks in places frequented by people who often “send money back home.” Very soon into my research I came across KYC and that pretty much brought it to a screeching halt. The IRS makes the shopkeeper do money laundering investigations for them.
Exactly, EM- and isn’t that the very reason for the push to eliminate cash and make everything electronic? Bitcoin fanciers are just voluntary early adopters…..
Hi JR,
I’d like to examine this statement that “Everyone knows that an owner named “XghE45J8P” is out there, but the only person who knows who knows his actual identity is “XghE45J8P” himself.” I find this difficult to believe, for several reasons. One, crypto requires the user to create an account using government ID. This means the crypto issuer knows exactly who the account holder is.
Is it realistic to believe the government doesn’t know, too?
There is also the opacity of the thing itself. Who is behind Bitcoin? The question is really important because the answer tells us who ultimately controls it. Is it plausible to imagine that the “federal” reserve would permit a competitive currency that might undermine its control over our economic lifeblood?
Also, like others, I’m very leery of an “asset” I don’t have physical possession of. Which is under the control of – for lack of a better term – some entity that can alter at will the value as well as the terms and conditions of use.
If I have a box of silver coins, it’s easier for me to control those coins. Someone would have to come and physically take them away from me. This can (and has) happened, of course. But to me, it beats Hell out of waking up to a “notice” from some electronic satan that “my account has been terminated” …
Seems like, at best – maybe – digital dollars are just credits?
Deflation Confusion: Money Is Not Credit
“The key point is that prices are formed with money because money is the final means of payment for goods, while credit is not.” […]
“Cash is not a form of credit nor is credit a form of cash. Financial securities such as money-market mutual funds and short-term Treasury debt are not money. They are credit instruments that provide a stream of money payments and can be sold in the market for money.” …
https://mises.org/library/deflation-confusion-money-not-credit
What if it’s not that your account was just “terminated” but that the internet gets smashed for a bit by “cyber attackers”(US Government). Then when it’s “built back better”–of course–your ledger doesn’t exist anymore. Some people would surely get their money back, but there’s no way any dissident voices will. Why would they? There will be certain conditions that must be met to get “your money” back. Only a fool would believe that rightful, provable ownership would be of any importance to the empire.
Beggars aren’t choosers. Anything that relies solely on internet for it’s existence is relying solely on tech/government for it to even operate.
That’s why it’s important for us to communicate with people at a very local level. While it’s enjoyable to communicate with everyone here on this forum, that communication is all virtual and could vanish over night. Then we have nothing if we don’t communicate with anyone in person. We’re left with nothing.
I often think about that last paragraph, ancap.
Ancap, I truly believe that such will indeed be the case. One day the power will be turned off and or the data and even the very internet will disappear. Such will usher in a true new Dark Age, considering that everything is now done online. People don’t know how to do things manually anymore. Everyone’s reliant on stupid smart-phones and computers for virtually everything. Most businesses can’t even process a simple cash transaction if the computer goes down…. People can’t do simple math. Crypto currencies will be utterly worthless.
We will still have solar powered calculators, Nunz, not all is lost. 😉
I hope so, RG, ’cause all of the old mechanical adding machines are gone…and I can’t figure out how to use this abacus! 🙂
The reason that businesses can’t do transactions outside the computer system is that the computer system is there to keep track of everything to comply with government regulations and the tax code. Complexity and volume makes it very difficult to do otherwise.
To give you an idea I was watching a Louis Rossmann video and he was talking about yet another harassment by government on his small business. Some sort of audit. In the comments another small business owner said the government where he is did something similar. So in a form of malicious compliance he converted all his records to paper and sent the government a thousands upon thousands of pages worth to go through.
As to calculators I put an HP RPN calculator emulator on my phone so it can work as a proper calculator.
> Anything that relies solely on internet for it’s existence is relying solely on tech/government for it to even operate.
It is worth keeping in mind that Internet was originally ARPANet.
https://en.wikipedia.org/wiki/ARPANET
Apples generally don’t fall far from the tree.
Good point, Eric. This should be surprising to no one if Uncle Sam had anything to do with the startup of such a system. The IRS’s interest in crypto was head spinning. There are more rules on crypto then any stock or investment sale when it comes to taxation and how it is reported.
Example, primary home purchased for $145K, sells for $542K by married couple. No 1099 is even sent to the IRS by the settlement company. There is no taxation on this since it falls under the $250K/$500k exemption. We don’t even report it on a tax return.
Crypto currency sale of $1200 purchased for $800 (after many fun conversions to get to those figures) there is an affidavit that the question was asked and answered.
Just like Uncle Sam to ferociously chase one down over $400, but overseas assets (under $10K per year) need not be reported nor do primary home sales worth hundreds of thousands of dollars. Their tracing of retirement contributions is pretty bad as well.
“One, crypto requires the user to create an account using government ID.” Absolutely false. I got my start in Bitcoin when a friend, standing next to me, sent me four BTC from his phone. When they arrived in my wallet, I handed him $1,200 cash. No gubmint in sight.
“Is it plausible to imagine that the “federal” reserve would permit a competitive currency …?” What is it you imagine the “federal” “reserve” can do about it other than try to confuse people with its own digital dollar?
“Which is under the control of – for lack of a better term – some entity that can alter at will the value as well as the terms and conditions of use.” That entity being the market? I’m not sure what “terms and conditions” you refer to, and I expect you’re not either. That said, Bitcoin is concerningly centralized and and, as the Tavistock entity “Miles W Mathis” explains, looks to be dominated by the same market manipulators who run the stock “markets.”
“I’m very leery of an “asset” I don’t have physical possession of.” Understandable. The money in your bank account is technically the property of the bank. If you “own” any stocks, you likewise don’t own them. The crypto equivalent of this is leaving your assets on an exchange, where the exchange can do anything it wants because it has the private keys. “Not your keys, not your coins” is the crypto saying.
“But to me, it beats Hell out of waking up to a “notice” from some electronic satan that “my account has been terminated” …” Again, not your keys, not your coins. And aside from exchanges online, there is no such thing as an “account” to be terminated.
Hi Barry,
But how about the “exchange” you need in order to actually use the Bitcoin? When I signed up with Coinbase, I was required to provide government ID (driver’s license). So in my case, at least, the account is as easily traceable to me as my bank account. I really want to like Bitcoin. But I’m utterly baffled by it, assume that everything that is done online (by ordinary people who are not Jedi Masters of the online arts) is tracked and traceable. And that this whole business is about normalizing electronic transactions for everything.
It seems to me that money is best when it is readily understandable by average people, who aren’t expected to have intricate knowledge of bafflingly complex systems. Most of all, which is inherently protective of their wealth and their privacy.
When a dollar was tied to gold, it was much harder devalue. When you have a physical asset, it is much harder to steal it.
Hi Eric,
Think about it: how would you use Bitcoin? Donate it, buy something, pay for a service? None of them requires going anywhere near an exchange if you’re dealing with people/organizations who deal in Bitcoin, which is the idea.
I’m trying to get my son in the States into DASH, which is easy to spend in something like 150,000 locations with an app called Dash Direct (useless in Uruguay, natch). But if he last-minute needs cash, instead of paying $25 for a bank wire and trusting the banks to be working, I can send him some DASH in seconds. It looks like it doesn’t have much of a learning curve.
Why keep money in the bank? At this point just use bank account as pass through and hold cash. It’s not like your losing out on interest. If you need to shop online you can get a visa gift card at the drug store and just load it. I know there is no way you can’t have some exposure to the banks, but you can minimize that.
Again, do not confuse a wallet on an exchange with a wallet on a USB flash drive, phone or printed out. And exchange is just that, a way to easily convert other currencies to crypto. Once you complete the transaction you get it out of that wallet and into one you have control over. If you’re concerned that someone might know your wallet’s private key, just generate another wallet and transfer to the new one. The new wallet can even be on the same device. Then just destroy the orignal wallet.
BTC is a horrible store of value as any Salvadoran will attest (or any current US owner).
It is also the opposite of anonymous as every single transaction is publicly displayed and traceable, especially when once it is converted back into or out of dollars.
U.S. dollar lost 98% of it’s value since 1900.
Bitcoin was the best investment in history, in 2009 it was worth 1/2 a cent, $.005, recently it was $69,000.00
It is decentralized, it’s main strength, so you can’t cut the head off the snake.