By Anthony Migchels (henrymakow.com)
After five years, the verdict is out on Bitcoins: they represent a 'free
market' Globalist dream, paving the way for a global cashless currency.
Its rise in value is quite
stunning. Bitcoin started trading in early 2009 at just a few cents. Later in
2011, a Bitcoin was worth $6 and today people pay about $650. Recently, it
reached $1000, when Chinese buyers started weighing in but took a big hit when
the Chinese Government clamped down, citing 'lack of consumer protection'.
Bitcoin has crashed a couple of times on the way up, but has always rebounded.
Major retailers all over the world are now starting to
accept it.
But while this remarkable
appreciation is the key to its perceived success, it's actually symptomatic of
its main problem: it was designed to be scarce. Only about 20 million can ever
be mined. Its rising price is a reflection of supply and demand.
When money rises in value, all
other assets decline. It is good for those holding money, bad for those
offering labor or goods and services, i.e. the real economy. In this way it
behaves very much like Gold, which is also infamous for its deflationary
nature.
Because it is appreciating so
strongly, hardly anybody is paying with it. While the total outstanding value
of Bitcoins is now somewhere between five and ten billion dollars, real trade
is minimal. Who's going to pay with Bitcoin, when it is going to be worth another
hundred times more in two years?
To be effective in servicing
real trade, the money supply must grow and shrink with economic activity,
allowing stable prices.
As it stands now, Bitcoin is a
wholly bogus speculative item, with no real economic significance at all.
And it's a pure ponzi scheme,
of course. Later adapters pay for the gains of those holding Bitcoin from the
early stages. As long as there are new buyers, it's party time, but it's
ultimately unsustainable.
MONEY POWER CONTROL
Money Scarcity is, together
with Usury, the hallmark of Money Power control. This week the story broke that Wells Fargo is now
considering offering Bitcoin services. Undoubtedly they'd be interested in
offering saving and interest-based lending 'services'.
Bitcoin is spent into
circulation debt-free, but it will be lent out at interest by the bank.
Compound interest lending will allow the banks to gobble up the whole money
supply in just a few years.
This is why an interest-free
credit based money supply is better than a 'debt-free' one: The debt free money is only debt free at the moment it
is spent into circulation.
The CIA's In-Q-Tel investment arm was involved with
Bitcoin from the early stages and while it's speculation, I'd be willing to bet
a fiver the market has been cornered already.
Left, Gold vs. Bitcoin: both
are artificially scarce
Bitcoins are 'mined':
computers must solve complex algorithms to acquire new Bitcoin. Clearly this is
an irrational way of creating money, again mimicking Gold. Every new Bitcoin
comes with a more complex algorithm, requiring more computing power. At this
point only major players (like banks) have the computing power to mine new
ones.
Clearly there are better
things to do for supercomputers than such an artificial procedure. The more so
since we can create abundant, interest-free money through bookkeeping.
A few weeks ago it transpired
that JP Morgan filed a patent for a Bitcoin like architecture.
But already in 1998 the NSA wrote an extensive report,
'predicting' (or planning) a peer to peer electronic unit, quite similar to
Bitcoin.
Bitcoin's appreciation is of
course an excellent marketing gimmick: the Libertarian techies who picked up on
it early are now rich and are a good fan base to build on. There is a vibrant
Bitcoin community, keeping the dream alive. This is quite similar to what
happened in the Bush years, when the Money Power controlled potential
opposition by selling them a few ounces of Gold, creating a large base of
faithful pseudo-opposition clamoring for the 'reform' they want anyway.
The Mass Media have welcomed
Bitcoin. Sure, in the early stages there was some bewilderment and scepticism,
but we have seen huge media coverage for Bitcoin from the word go. Had it been
a threat, it would have been ignored and if that hadn't worked, attacked.
Bitcoin is not anonymous,
although many believe it is. All transactions are publicly logged. While it's
possible to operate discretely, if the community sees a problem, they tend to
find out quickly who's who. Centralist control of its use is thus possible,
notwithstanding its peer to peer character.
And Bitcoin is a global
phenomenon, which obviously is very pleasant for our globalist masters.
CONCLUSION
Bitcoin is driven by greed,
it's in no way a rational solution to our monetary problems. It's global,
scarce, cashless and soon the first banks will provide usurious lending.
The lesson is: as long as we
hope to breed money from money, not realizing it's usually our own labor that
breeds money for those holding a lot of it, we will be fooled by units like
this.
Money must be cheap
(interest-free) and plentiful, but stable. Only then can it be a good medium of
exchange, allowing the producers of society the benefits of their labor,
instead of the providers of capital.
Bitcoin offers none of these
features. It has the Money Power's fingerprints all over it.
Anthony Migchels is an
Interest-Free Currency activist and founder of the Gelre, the first Regional
Currency in the Netherlands. You can read all of his articles on his blog Real
Currencies
Related:
First Comment from Eliezer:
There is a widely held confusion of basic terminology, specifically the difference between money & currency. Although both money & currency may serve as mediums of exchange, currency may not be "Money." Indeed, the term "Legal Tender" was once expressed as, "This Note is "A" Legal Tender." A deletion of the word "A" from the structure of a Note, is an obfuscation with far reaching consequences. The primary effect is, to remove Money as a discipline of honest weights & measures, thereby commodifying the Note itself. But THIS "Note," is neither a "Note" nor Money, because for a Note to be a Note, it must be payable in real Money. Lawfully understood, even though it has become fashionable to allegedly pay debts with debts, a Note cannot be settled or paid with a Note.
One may ask, "A" Legal Tender for what? Historically, when one submitted a "Note" or a "Bill," one was deemed to have made "A" Legal Tender or "Demand," for payment in real Money, i.e., "This Note Is "A" Legal Tender For Ten Dollars" in real Money, ostensibly meaning Ten Dollars by weight of either silver or gold (Like a "Quart" of milk, 1 "Dollar" = 371.25 grains, a "quantity," of pure silver, or, 15.43 grains of pure gold). What is real Money? Real Money is minted or "coined" in a mint, & has an intrinsic or earned value. One may not create Money out of Money, but rather, by issuing "A" Legal Tender, Note or Bill, make a claim UPON real Money, or conversely, one may by an issuance of more Notes than there is Money on deposit, debase the Money itself. This is known as "Fractionalized" Banking, or more correctly a nefarious slight-of-hand, or system of currency by which the medium itself may be expanded, contracted or debased.
Finally, as a discipline of honest weights & measures, a "Dollar" is a quantity, not a value. The numbers of Dollars traded in any purchase fluctuate, there quantity depending upon supply & demand - the self-regulating mechanism of an open-ended & fair market economy. Today's "Dollars" are not Dollars, but rather like Bitcoins, are TOKENS, each serving as an undisciplined commodified medium of exchange. Real Money or Dollars, are not only "mediums" of exchange, rather, they ARE THE MONEY. Obviously, by referring to Bitcoins as if they had been "mined," its creators are seeking to CAPITALIZE upon the perception of Money & its association with mines, mints & a measured minting of gold & silver coins. However, as with our current "Dollars," Bitcoins also, are those things that appear to be but are not.
No doubt, as a system of shuffling energy or moving"currency," Bitcoins are the ideal structure by which a Global medium of exchange may be enacted. So, on this point, I am in complete agreement with Anthony. The issuers of a System of Tokens, as a commodified medium of exchange, DO have familiar "fingerprints," maybe even footprints.
There is a widely held confusion of basic terminology, specifically the difference between money & currency. Although both money & currency may serve as mediums of exchange, currency may not be "Money." Indeed, the term "Legal Tender" was once expressed as, "This Note is "A" Legal Tender." A deletion of the word "A" from the structure of a Note, is an obfuscation with far reaching consequences. The primary effect is, to remove Money as a discipline of honest weights & measures, thereby commodifying the Note itself. But THIS "Note," is neither a "Note" nor Money, because for a Note to be a Note, it must be payable in real Money. Lawfully understood, even though it has become fashionable to allegedly pay debts with debts, a Note cannot be settled or paid with a Note.
One may ask, "A" Legal Tender for what? Historically, when one submitted a "Note" or a "Bill," one was deemed to have made "A" Legal Tender or "Demand," for payment in real Money, i.e., "This Note Is "A" Legal Tender For Ten Dollars" in real Money, ostensibly meaning Ten Dollars by weight of either silver or gold (Like a "Quart" of milk, 1 "Dollar" = 371.25 grains, a "quantity," of pure silver, or, 15.43 grains of pure gold). What is real Money? Real Money is minted or "coined" in a mint, & has an intrinsic or earned value. One may not create Money out of Money, but rather, by issuing "A" Legal Tender, Note or Bill, make a claim UPON real Money, or conversely, one may by an issuance of more Notes than there is Money on deposit, debase the Money itself. This is known as "Fractionalized" Banking, or more correctly a nefarious slight-of-hand, or system of currency by which the medium itself may be expanded, contracted or debased.
Finally, as a discipline of honest weights & measures, a "Dollar" is a quantity, not a value. The numbers of Dollars traded in any purchase fluctuate, there quantity depending upon supply & demand - the self-regulating mechanism of an open-ended & fair market economy. Today's "Dollars" are not Dollars, but rather like Bitcoins, are TOKENS, each serving as an undisciplined commodified medium of exchange. Real Money or Dollars, are not only "mediums" of exchange, rather, they ARE THE MONEY. Obviously, by referring to Bitcoins as if they had been "mined," its creators are seeking to CAPITALIZE upon the perception of Money & its association with mines, mints & a measured minting of gold & silver coins. However, as with our current "Dollars," Bitcoins also, are those things that appear to be but are not.
No doubt, as a system of shuffling energy or moving"currency," Bitcoins are the ideal structure by which a Global medium of exchange may be enacted. So, on this point, I am in complete agreement with Anthony. The issuers of a System of Tokens, as a commodified medium of exchange, DO have familiar "fingerprints," maybe even footprints.
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