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Cryptocurrency: Dreams in a Bottle or a Bubble?

Cryptocurrency: Dreams in a Bottle or a Bubble?


Dear Cryptocurrency and Freedom Lovers of Earth:

We are just dreamers waiting for the big bad bubble. Lean over and kiss your bitcoins goodbye.


Bubble Trouble

Cryptocurrency is a bubble.

It’s the 2.0 try-outs, since we didn’t believe them the first thousand times.

We love Ponzi, they insinuate. We probably initiate chain-emails in our sleep, insert cryptocurrency miners on your webpages, and dream of pyramid schemes…as we pay our extremely reasonable .gov taxes.

Cardano (ADA) will surely explode.

Monero (XMR) will implode.

Electroneum (ETN) will evaporate.

Ethereum (ETH) will wither smartly, and die.

Cheaters and meanies are hiding in the dark corners of those ICO-laced cryptocurrencies.

Bad people, the lot of them.

Run back to gold?

“Hey! But we love the blockchains! Just not the ‘people’ running them.

“You see, us banks and .govs – we do a much better job popping fiat bubbles. We just go around, blowing them up, making you go broke and then we do it all over again!

“And us metallic mega-hoarders, well, we can dig it too! And hopefully, one day in the far-flung future, gold will become what it once was: money. And then us mega-hoarders will win the day. We will say, on that day, if that day ever comes again that — we told you so!

“We can’t wait. It’ll happen soon, we promise!”

At least some of the gold bugs are on board the crypto-train. Guys like Mike Maloney. He’s a forward thinker, unlike others…

The lesser numismatic gods, the ones still hoping to influence President Donald Trump – to take the US back to gold – are instead bashing away at crypto. Maybe they don’t realize that they are, at the same time, bashing away at liberty itself. Not such a brilliant tactic as it is a calculated risk.

“Tell these Millennial dolts that cryptocurrency not stamped IN GOD WE TRUST and FEDERAL RESERVE NOTE is NOT money. Jeez, the humanity of it all. Tell them gold is the answer – immediately.”

Is that the general feeling you get from some of the golden metal-heads? The ones who warn of crypto-bubbles and hope for altcoin death, in situ.

And the best gold bugs? The proud Sharia Law complaint versions of them? “Oh Canada!” they sing aloud on their days off, from those frozen roof tops.

I take you now, dear reader to the halls of GoldMoney. In Canada. There, the money (no not money yet) is GOLD! Actually, the company was called Bitgold before that, but cited regulatory problems and low demand, before shutting down.

These golden folks have allowed to be posted on their website (and I’m almost certain it will be taken down like another YouTube video that fled in haste — business is war, right?) are the illustrious words of one Bubble Attacker: Alasdair Macleod. For shame. (My opinion.)

Macleod is an apparent researcher for the company in question, hence not the best disinterested party, right? A mouthpiece? Hmmm.

Then there is a far more corrupt banking industry to consider. Finance houses practicing insider trading. A Fed that feeds the US with worthless notes. Just read the headlines. Wells Fargo. JPMorgan Chase. Bank of America. Quantitative Easing. (Not an opinion. Facts.)

Need I say more? Aren’t you sick enough yet?

It’s not the banks or the .govs this time, however. It’s gold. Or more precisely, a troubled offshoot of gold bullion pushers surveying the crypto-landscape and taking careful aim.

 

Crypto Kills Fiat

To talk of cryptocurrency bubbles that will occur and describe them as a dire menace to .gov fiat is pandering to the .govs of the world. Gold money is a far worse threat to the .gov machinery and they – the bullion dealers — know it.

If people were actually allowed to use gold, silver, copper – as money – the Fed would close its doors and the Military-Industrial Behemoth would most definitely become rather irritated, if not hungry.

The .govs would need to finance themselves with real money then. No longer could they pass on the costs via inflation taxation. They would need to beg, borrow or steal the gold – again – from their subjects.

And that is always a problem, isn’t it? Gold theft?

And why can’t some companies see that? Especially ones in North America? Don’t they understand that before gold can become money again – that the entire centrally planned economic model must be dismantled? That laws must protect the people from their .gov?

It appears that Our Golden Savior of Canada is sounding that alarm, however. Or at least helping to ring a few bells to scare the cryptocurrency birds away. Darned pesky eagles just won’t die. They want to fly at any cost, even if it means creating their own crypto-fiat money in a world gone money-subservient.

It’s also a way of diverting attention – heat – from them. And a way to “sell more gold!” Soon they might begin knocking on our doors. Or you’ll see them at flea markets, not buying gold, but selling it!

Congratulations bullion traders of the Great White Socialistic North. Not that the US is that far behind either, but strike while the bubble is hot! And the bubble attack is ongoing.

But we need new material, not tired old rinse-and-repeats.

It reminds me of Chicken Little when he yelled, “the sky is falling!”

I’ll call them, those Gold Money guys and gals, Our Golden Savior. The bell ringers, who are losing investors to cryptocurrency. And who only want to make sure you and I aren’t being swindled, right?

After all, gold is money. No, it’s not. Not yet anyway.

 

The Warning

One Macleodian article on their website (and also here) talks to us about bubbles. But this does not irritate me as much as the Canadian based Sharia Law Compliant company does.

I mean, gold and precious metals are no doubt great value keepers, but dear fellas, we do not live in a golden age. I swear. I just called my bank. They said that they can arrange to store any gold I might wish to purchase; however, I can’t use it as money. (No thanks.)

You can’t spend it, your gold – in the US – like money. The IRS wants an accounting of each transaction. Just like cryptocurrency.

We live in a fiat-currency age – in the US. We are jammed in tight. Well, there is one out. It’s called cryptocurrency.

Gold is taxed as property in the US, which makes it terrible to use as money – even debit card based. I believe Peter Schiff advised this long ago, but now – he has joined them. And now…these facts seem to have drifted away. Little tax bombs ready to go off in April, when you have that “awe shucks” 1040 moment.

Don’t get me wrong, I would rather use precious metals, as money. I’d love to have a sound money system, but this fiat thing is just going to have to burn itself out first. Venezuela style. A little Greek fire, as it were.

The article in question asserts that gold is on the minds of many. Granted. Any form of sound money ought to be. If gold was money today it would be on everyone’s mind. Well, most everyone. Some actually like the fiat money system and socialist governments.

The write-up also warns, yet again, about the pure and shiny new bubble. The cryptocurrency bubble that is sure to burst – someday.

The problem is the golden .gov wall, however. We are all looking at that wall and asking ourselves the same questions.

Is there an alternative to gold, since I can’t spend it like cash?

Should I buy a few pieces of a precious metal and store it myself or should I use a gold bullion dealer in Canada? A dealer with gold all over the world in nice vaults – all on the ‘up and up’ – but far away…?

 

Crypto is NOT Money?

The primary debate against cryptocurrency, that it is not money, ought to be jettisoned.

We know this. We know it is not money.

Gold can be money, but it’s not either. It’s just gold, for now.

Cryptocurrency is more closely related to a functional currency or a service money, but it is a form of fiat currency as well. But a far superior fiat currency, for many reasons. And rather crappy, as well.

That’s what we are living with. We can use cryptocurrency, with all the associated risks or we can obey. Now do you understand?

Why did people risk their lives to come across the oceans in hopes of a better life? By comparison, this rather low-key way of transferring wealth is lame by comparison. It’s an exercise in freedom, however frail. The thing is, the .govs need to crush it in order to stop the virtual and peaceful sit-in.

 

A Bridge to Sound Money

Cryptocurrency is a bridge. It is a way back to sound money over the river of .gov fiat systems currently in place. It is the bank waiting to store the gold, so to speak. Only, the .govs stand in the way, so there is an impasse.

Who will blink?

How could crypto bridge to gold?

View it as a check or a contract.  A voluntarily enforceable one for now, but one that would easily fit in as a legally binding instrument against a rare commodity, such as a precious metal. Banks could accept cryptos in exchange for silver coins in some enlightened future. That ‘backing’ would likely stabilize cryptocurrency values.

The problem is that precious metals are currently locked out of legal tender status. The same can be said of cryptocurrency, except it has many other advantages neither fiat money or gold has – at present.

A gold bullion dealer is no less vulnerable to .gov regulations, than are most public cryptocurrencies. There are more private cryptocurrencies, however.

 

Privacy

And that brings up the idea of privacy. The love-child of cryptography and blockchain services.

Unlike the bullion company in question, where I need to give my name, address, income, photograph, ad infinitum – let them dig into my personal life – I don’t need to do that with many cryptocurrencies. Not with CryptoNote versions; and I can find ways around those exchanges now asking for my goods, as well.

The argument that the cryptocurrency companies, promote their own coin – buy in, pump it up – is a given. This is also true across the spectrum of stocks and bonds, in the restricted .gov regulated trading houses – where the brokers take their cuts and fees; and slice the pie more often than the average cryptocurrency exchange. All at the pleasure of .gov.

 

Early Adopters

Certainly, early adopters could make the most profits in a cryptocurrency economy. Ground floor opportunities have that potential, but this does not validate that a bubble is on its way. This is unlike the fiat cash flowing into the stock market and extinguishing any semblance of a P/E Ratio.

The obvious measure that bitcoin, for example, is a self-verifying property mechanism, is difficult to ignore. The limited virtual supply of bitcoin can drive its price. It’s ability to maneuver unhampered is juxtaposed with the .govs’ desire to bring it to heel. There is no P/E Ratio here. It’s absorption of one unstable fiat by a stable one.

Can that be said of our bullion buddies? Not the ones who sell us gold and silver and we stash it elsewhere, but the one in question. The one that essentially keeps our metal safely locked away where we will never see it and where any wayward .gov can grab it.

You call that safety? Try and grab my fiat crypto. Go ahead.

How did that work out for you?

It didn’t, huh?

 

The Undermine

And the fact that cryptocurrency can “undermine” capital controls is not a weakness. Money, ultimately, should be private. Taxes, ultimately, should be voluntary.

Did you not read the word “controls?” Who is doing the controlling and why? By what right?

Why must I send my cash via banks, be over-charged, wait days, when I can zip crypto to my Aunt in South America in seconds and do it much cheaper?

Hence, cryptocurrency is pro-freedom, whereas the company under scrutiny is compliant. But it must be, right? It has chosen the obedient path.

And fiat currency issued by .gov, is, of course, fiscal subservience.

If allowed to go mainstream, those cryptocurrencies that wish to comply with the long list of rules and fees, could certainly see radical value booms and busts. Obedience will have its profits.  After this alleged legal adoption, when the investment houses flood in, the public will take notice, as the assertion goes. The bubble will come as a result.

 

Pre-Bubble

So, the article in question makes the assumption that the .govs will eventually acquiesce to the public cryptocurrencies. Ones like traceable Bitcoin, Litecoin or Cardano. Then it all goes pop!

Why are the bubblers so certain? Past comparisons?

The South Sea bubble, where corruption was rampant? Government granted monopolies are not comparable to voluntarily purchased, transparent cryptocurrencies.

The Tulip Mania bubble is often cited, but the fact that much of Europe was debasing their currency at the time, is not often explored. Interesting parallels, but tulips aren’t cryptos.

Additionally, since many CryptoNote based cryptocurrencies are not designed with regulations in mind, this bubble warning only seems to apply to the public blockchains, like bitcoin and family.

According to the assumptions in the article, this future flood of bubble wealth into public cryptocurrencies will also cause prices to rise. Another dire warning.

That’s the static world view. In other words, more money into crypto equals more spending, equals less goods available, equals higher prices.

The problem is, when demand increases, in a free trade economy, the supply is often increased, and everyone wins. Prices often come down, in such economies.

This static theory of rising prices also ignores non-spenders. Some will save and not spend.

 

Choking

Yet another bubble warning is the “choke-off fable.”

Once and if .gov fiat currencies begin to falter, interest rates will be raised to entice crypto-investors away.

One problem with that scenario is rising interest rates slows the economy and could explode the debt and pop the fiat bubble all the faster.

Another? That crypto holds far more promise of profit than bank certificates.

If .gov could lure the crypto enthusiasts away from their chosen altcoins; however, what would stop them from also confiscating all the gold? After all, gold does compete with fiat currency and it makes fiat devaluation clear. An embarrassment to be certain, but one that can be easily remedied with an official announcement of fiat currency to gold conversion. It’s happened in the US before. Quite a choke I would say.

And we are only talking about the US here. There would need to be an international effort to quash crypto. Raise interest rates all over. And suffer the consequences.

A credit crisis would be the least of our problems then. Fiat currency would falter and I’d posit that cryptos, absent a move to a sound money standard (gold) by .govs — would maintain their purchasing power, so long as .gov didn’t zap the internet. Then we’d need to use stored reserves (gold/silver), eggs, canned goods and wine.

 

Conclusion:

The upside is that gold is real money, but it is not legal tender. Until then, it appears rather sluggish.

To state that private cryptocurrency is a threat to .gov fiats, that they could hasten their demise, is a bit disingenuous. Fiat currency is a threat to all of us already. If crypto hastens its demise, so be it.

The company in question is no less a threat and perhaps even more dangerous to investors, when one considers all the precious metals under their private control and the ability of any one .gov to remove said stores on a whim – or a “trumped up” national emergency.

In short, to return to a precious metal standard will require new laws in the US and elsewhere. It will require the closure of the US Federal Reserve, unless they begin to issue gold backed currency. It will then open the doors for competition between banks, with real money in their vaults. Money that should also be in your country of residence and not Dubai, Toronto, or Hong Kong.

Until then I’ll risk a crypto-bubble and pass on the debit card of gold, from the company in question. While waiting for the laws to embrace sound money, I will grow old and I hope rich, on the only form of successful liberty-currency I have ever witnessed in my lifetime: cryptocurrency.

 

Sincerely,

 

Jack Shorebird

 

P.S. Don’t let the .gov buttheads get you down. And think before you buy into Bitgold GoldMoney.


The above is my opinion. Make sure to consult your gold bullion dealer, economist, attorney, accountant and hair stylist, before you chance the Greatest Crypto Bubble of all time!

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One response

  1. Pingback: Dreams in a Bottle or a Bubble? – The Crypto Papers | Blockchain Wiki

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