The infuriating irony of libertarians' wet dream, bitcoin and cryptocurrency
Cross-posted from Real Economics.
I suspect that most people do not understand bitcoin and cryptocurrencies because they also do not understand how money is "created." The reality that money can be created out of nothing is so ludicrously simple that most people simply cannot believe it. John Kenneth Galbraith observed that "The process by which banks create money is so simple that the mind is repelled."
I am going to go out on a limb and assert that if you do not understand the creation of money, you cannot be truly progressive on economic issues. You can support progressive positions on economic issues, but until you understand how money is created, you will always be vulnerable to being herded into a veal pen for slaughter by financial oligarchs.
If you want an explanation of money creation, in January 2015 I posted Creating money out of thin air on DailyKos, TOP.
If you want an examples of so-called progressives freaking out because they refuse to believe money is created out of nothing, read the comments. The hostility and arrogance of certain imbeciles is part of what pushed me away from TOP.
Cryptocurrencies, of which Bitcoin is now the best known example, with the highest market capitalization -- $217.8 billion the minute I write this -- are nothing more than computer programs creating their own units of money. Libertarians love it, because it is money that is NOT being created by governments. No small number of libertarians also hate the big banks almost as much as they hate government. So, I think cryptocurrencies are going to be more than a passing speculative fad simply because they are a libertarians wet dream. Nothing will happen to knock cryptocurrencies that libertarians won't shake off as they cling to their anti-government, anti-"crony capitalism" ideology.
The infuriating irony is that one of the things libertarians hate most about governments and central banks (which are often quasi-government entities controlled by the very financial oligarchs who control the big banks of Wall Street and the City of London) is that governments and central banks issue fiat currency that is backed by nothing. Libertarians insist on a return to the gold standard, so that money has "value."
What about cryptocurrencies, though? I have yet to hear any libertarian denounce Bitcoin or any other cryptocurrency because it is not backed by gold, or backed by anything else of "value."
So, while the speculative frenzy of Bitcoin and cryptocurrencies is bad, the one good thing is that it is teaching people that money can be created out of nothing. I suspect that's why Dimon of JP Morgan hates Bitcoin and cryptocurrencies so much. Either that, or Dimon is just talking them down to manipulate the price.
(A note on why the speculative frenzy is bad. Because it is a misuse and misapplication of society's talents and resources at a time when the only frenzy should be building the Tesla and electric car recharging stations, wind turbines, solar energy arrays, geothermal generating plants, urban mass transit systems, and upgrading and replacing every man-made structure on the planet to, to transition as quickly as possible away from burning fossil fuels and worsening climate change.)
Comments
Ironic indeed.
'Libertarian' is just a politically correct term for what these jackoffs really are: Sociopaths. These are the same assholes who scream about socialism killing charity, yet charities are nothing more than slush funds the Scrooges of the world can hide behind in order to say they're moral.
Modern education is little more than toeing the line for the capitalist pigs.
Guerrilla Liberalism won't liberate the US or the world from the iron fist of capital.
Sociopaths - yes, many are
My preferred word for Libertarians is now Greedster. Seems to cover them pretty well on all counts.
greedsters
Or Greedhead, as Hunter S. Thompson called them.....
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
Your neologism is also more inclusive than Libertarians
It includes bankers, Wall Street moguls, billionaires, Hillary Clinton, Orangutan, DNC, and global oligarchs. So when writing about greedsters, please remember the specific classes: specific greedsters versus generic greedsters. Generic isn't cheaper however.
A brush too broad
Yeah, you're right. Greedster paints too widely for just the Libertarian crew. As you have shown, quite a few others deserve a swab with that mop. The slop needs be shared more equitably. So, we can certainly have Libertarian Greedsters, but the Libertarian mob probably deserves even further categorization.
Having said that, I have friends who are most definitely Libertarians. There are a few things we can agree on, but they all fall down when I want to know what Socialist highway they'll be using when they drive home.
Family Greedsteria
Indeed, we're dealing with the Family Greedsteriae and you've listed several of the Genera (i.e., plural of Genus) therein by their common names. Other Genera in the Family include Fox News, the Republican Party, the RNC, the Ku Klux Klan, the several Neo-Nazi movements, the Evangelical Religious Right. etc.
"The coining of suitable Greco-Latin names for these Genera is left as an exercise for the student."
"US govt/military = bad. Russian govt/military = bad. Any politician wanting power = bad. Anyone wielding power = bad." --Shahryar
"All power corrupts absolutely!" -- thanatokephaloides
Birchers
comes to mind for me.
Neither Russia nor China is our enemy.
Neither Iran nor Venezuela are threatening America.
Cuba is a dead horse, stop beating it.
$700 Million For Worthless Coins
I got this from the Naked Capitalism links a couple of days ago:
https://www.nakedcapitalism.com/2017/12/links-121917.html
(near the top)
Chasing the Next Bitcoin, Investors Shell Out $700 Million for Coins With ‘No Purpose’
Startup block.one is benefiting from a boom in initial coin offerings as bitcoin’s price surges to dizzying heights
The full story is behind a pay wall, but seems to be the final step for cryptocurrency madness:
https://www.wsj.com/articles/chasing-the-next-bitcoin-investors-shell-ou...
"They'll say we're disturbing the peace, but there is no peace. What really bothers them is that we are disturbing the war." Howard Zinn
@Meteor Man
Might this perhaps be to launder dirty money from the theft of the Empress' invisible clothes after Her lucrative run on the Presidential donor-purchase market left Her with the blow-back of Her own hurled rotten eggs on Her face and merely hundreds of millions of dollars and rotten book sales for her apparent income?
Psychopathy is not a political position, whether labeled 'conservatism', 'centrism' or 'left'.
A tin labeled 'coffee' may be a can of worms or pathology identified by a lack of empathy/willingness to harm others to achieve personal desires.
The collapse of the US dollar...
or petro-dollar has many concerned. They are looking for a safe place to park their dollars before the fall. Additionally China is dumping US bonds (and refusing our trash ie plastic for recycling) https://www.youtube.com/watch?v=g3ul_cyFExo (1st 15 min)
Of course Max Keiser is a big proponent (and bitcoin profiteer) but he often argues with gold proponents. Here he is from a couple of days ago claiming bitcoin has crushed gold
https://www.youtube.com/watch?v=FBW5xolM7Ls (1st 15 min)
Here's an economist claiming gold is best (8 min)
https://www.youtube.com/watch?v=6r04gfWfRkE
Neither has much intrinsic value from my view. I don't have either, but both can be purchased here: https://www.goldmoney.com/ ((just an example not a recommendation)
Where they claim Bitcoin traffic is twice the gold trading. People wonder about using these commodities, but companies like the one above issue a you a credit card...a regular Visa. So when people make the argument you can't spend bitcoin anywhere...you can spend them (or gold) anywhere that takes credit cards (with the right account).
bitcoin has fallen from nearly $20,000 back down to about $13,000 in the last couple of days...
https://www.youtube.com/watch?v=d2pEbpgh-t4 (3 min)
I recommend investing in a little property where you could grow food, but I'm no investor nor economist.
Thanks for the essay.
“Until justice rolls down like water and righteousness like a mighty stream.”
I too, own no bitcoin...
it is way too volatile. But if I did this would be my plan.
Considering the slow time it takes to make a sale through an exchange and how exchanges (Coinbase especially) go offline with what seems like only a moderate amount of traffic, if a crash were to happen a very few who cash out early would be winners, the vast majority would be left holding the bag. (Peer to peer transfers can also be made but most bitcoin transactions are done on exchanges.)
Knowing this the only way I'd be comfortable owning bitcoin would be to take my initial investment off the table as soon as a large enough increase in bitcoin would allow me to and then ride what was left as nothing but gains relieving me of the initial investment exposure.
In other words let's say I get in when btc is $10,000 and I buy one bitcoin. I would wait for a decent increase, let's say it goes up to $15,000, I would then sell enough to cover the $10,000 initial investment and let the rest ride. I've then covered my exposure and if I lost the rest it wouldn't be a tragedy. Of course I'd probably have a heart attack riding the roller coaster waiting for it to increase enough.
It's a game for those with a strong heart and a steely eye because eventually the ponzi will collapse when there is not enough buyers to cover the sellers.
Johnny
The Federal Reserve is a Ponzi game. They reset the value continuously so that they never run out of money.
They're counterfeiters...
printing fiats backed by nothing but the full faith of US military might. Kind of like the mob, no?
Of course . . .
if you bought one bitcoin at $15,000 and it dropped to $10,000 you'd have a different sort of problem.
That would be...
rush me to cardio quick.
When you note that NSA
introduced crypto currency 20 years ago...
https://inpursuitofhappiness.wordpress.com/2017/12/14/evidence-points-to...
"The NSA, in other words, detailed key elements of Bitcoin long before Bitcoin ever came into existence. Much of the Bitcoin protocol is detailed in this document, including signature authentication techniques, eliminating cryptocoin counterfeits through transaction authentication and several features that support anonymity and untraceability of transactions. The document even outlines the heightened risk of money laundering that’s easily accomplished with cryptocurrencies"
...and wrote the code that's the basis of the transactions made possible ...
...and add those facts to the bankers' push to end cash ...
It doesn't take Einstein to figure out the endgame: Bitcoin etc get outlawed, co-opted after the public has accepted non-cash as acceptable, and government (the actual government not the 1%s frontmen) has us all on a leash.
I do find it stunning that advocates claim the currencies escape centralizatio, when it all goes over the internet; and that it is anonymous when practically every device to get on the internet has backdoors and keystroke captures built-in. Not to mention that any coding is hackable given the will to do so.
Buy Tulips!
Orwell: Where's the omelette?
It's tulip bulbs,
but they do seem to be attractively priced at the moment.
money
If you want an explanation of money creation, in January 2015 I posted Creating money out of thin air on DailyKos, TOP.
Is this, or something similar, posted anywhere else? Thank you.
Beg to differ that Central
Beg to differ that Central Banks are quasi-governmental. The Federal Reserve has been repeatedly held by the courts to be a private bank and thus Federal Reserve notes are bank notes not government notes at all. The Federal Reserve Board is a government "agency" but it is totally independent and has no actual principal to answer to ( it does not answer to the executive, Congress or the Courts) and thus the "agency" designation is nothing but a legal fiction. To call this Central bank a quasi-governmental entity is just bogus.
So the money issued by the Federal Reserve is not governmental in any way shape or form no matter what the deluded libertarians think.
True government money are the coins issued by the treasury which the treasury mints without having to borrow from a bank or having to require taxation by the people to issue them. There is no cost to the government or the taxpayers other than the cost of minting them when coins are issued. Additionally there is a paper form of coins, called in the Constitution, bills of credit. The government prints these bills and spends them into the economy. Well it has in the past. It no longer issues bills of credit.
But during the civil war, when banks wanted to loan Lincoln money to finance the war, they were issued to great effect when banks wanted 30% interest. Lincoln declined their generous offer and issued 450 million dollars of bills of credit (known as greenbacks). And this was before the income tax amendment passed in 1913, so he didn't tax the public either. At the end of the war, bills of credit and coins constituted at least a quarter of the money supply. The banks were furious and in 1864 jammed Congress with bank supporters who promptly put an end to the issuance of bills of credit.
Lincoln didn't call his bills of credit, bills of credit; he called them US Treasury notes. When the issuance of these bills was later legally challenged, the US Supreme Court correctly identified them as bills of credit and held they were constitutional for two reasons. First, states were expressly prohibited from issuing coins and bills of credit. The federal government was expressly granted the right to issue coins but the Constitution was silent about bills of credit. The Supreme Court said that since they were not disallowed by the Constitution and since they worked exactly like coins, they were Constitutional. The Supreme Court also gave another very important reason as to their constitutionality. That Congress could issue bills of credit as part of its war powers.
What bills of credit really are, in today's vernacular, are circulating tax credits. Coins are also circulating tax credits. Banks can not issue tax credits and that is why they hate them. It keeps them out of the money issuing racket.
You may have heard of the trillion dollar coin put forth a couple years ago by an MMTer? He was poo-pooed by the economic establishment. But he was absolutely right. The government can easily issue 20 trillion in bills of credit tomorrow (or coins) and demand they be taken as payment for the government debt. The US government could literally be debt free tomorrow. That is why the federal government can never go bankrupt. But don't look for the government to pay off the debt with bills of credit or coins because the banks have owned the federal government since 1864 and they like the gravy train. That is as quasi-governmental as the banks get.
If you really want progressive money, bills of credit are the people's money. Bankers' money, banknotes, are not; they are the rich man's money. Nevertheless, every progressive should understand that since the government can pay off all its debt tomorrow with bills of credit or coins, the government always has money for social security, and any welfare program for the people. Always. Give me my social security check in the form of a bill of credit any day.
States, because they can not issue bills of credit or coins, can go bankrupt and must operate like a household. This whole system of bills of credit works because bills of credit can be used to pay state, county and local taxes. The federal government never needs to tax except to take money out of the system.
Bills of credit and coins are money created out of thin air. As you say. It is easy to do.
As for bitcoins, they are like all private money; they are IOU's. All private money is just a promise between two people. Who is going to enforce that promise? If no government will enforce these contracts, they are just a ponzi scheme.
You are correct about the federal reserve.
Many, if not most, central banks are quasi governmental.
@FuturePassed I seriously doubt that.
I seriously doubt that. The Bank of England was always considered to be a private bank. The Federal Reserve was modeled after it.
The Euro is bank currency and not a governmental currency in any shape or form. Is the EU a governmental entity? It is a loose association of countries. But these countries all consider themselves to be independent states. I am not sure if the EU has a standing army of its own. If it does, then that would be an indication of a true government. If not then it suggests otherwise. George Washington had a very succinct definition of government: "Government is force." So whether the EU has the ability in and of itself to raise an army capable of defending itself, I really don't know. But I have never heard that it does.
If you really dig down and look at the organizations, they really are not attached to the government except in the way I describe -- they have infiltrated the governments to the point of capture. That is the only way they are governmental.
The European Union is a confederation.
So it can't have a central bank in the traditional meaning. Shares of the European Central Bank are owned by the central banks of member states. Shares are not transferable. The level of control governments in the EU exercise over their central banks ranges across a continuum.
In Canada the Minister of Finance holds the entire share capital of the Bank of Canada "on behalf of her majesty in right of Canada." I believe the Australian Central Bank is controlled by the government.
Rules surrounding central banks are sufficiently complicated that we could debate them one by one.
Look its really pretty simple
Bitcoin is one of many (paper) or digital speculative instruments like fiat currency, bonds, derivatives, etc. 95 percent of US currency is digital, the forex market dwarfs the stock market, trading trillions 24/7. Cyber currencies aside from being apparently easy to create, there are now hundreds of them are extremely useful for one thing. That is moving money unobstructed across borders. Whether money wanting out of China or Russia or whatever without central bank control. Food stamps, bonds, put options, bitcoin, real estate whatever speculative instruments are just that...,risk. The only real wealth is food, water and health. Choose wisely!
Fiat currency is not speculative
in the sense of the other instruments you mention. Every Federal Reserve Note carries the phrase THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE. It applies to electronic US currency too.
John Oliver was a twit about this
He had the nerve to accuse Jill Stein of not understanding how the Federal Reserve works by saying that it can’t create money out of thin air like she suggested, when that is precisely what it does.
We can’t save the world by playing by the rules, because the rules have to be changed.
- Greta Thunberg