Cryptocurrency against the system ! Part 2 : Can cryptocurrency defeat private-sector banks ?

This is the sequel to Part 1 : Who’s the enemy?

"Know Thy Self, Know Thy Enemy" - SunTzu

We now know who is our enemy, and we need to learn as much as we can about him.
First of all, I need to clarify some terms that I use (I must tell you I’m French, so I’m afraid I might be misunderstood sometimes). By private banks I mean banks who are owned by private persons, and not the part of a bank that does wealth management.

But all private banks aren’t the same. We can divide them into two main categories :

• Commercial banks : the ones where you have your checking account or your mortgage, they lend to individuals and small to medium companies, they create money by doing these loans, but they themselves borrow from central banks to get liquidity or equity.
• Investment banks : the ones where you can’t even enter as you’ll be shown the way to the exit by a polite yet extremely firm security agent. Their main activity is capital financing for global businesses and governments. They’re essentially intermediaries between big funds providers (central banks, multinational corporations) and big funds consumers (other global companies, governments).
  
  

As we saw in the precedent article, Investment Banks and Central Banks are in fact one – and they represent the global entity ruling the process of currency creation, so I will now refer to this demonic couple as just investment banks.
Investment Banks are the real enemy as they’re on top of the food chain :

Central Banks
Investments Banks
Governments
Commercial Banks
You

So let’s learn a bit about them :

• The main Central Banks are the Federal Reserve (FED) and the European Central Bank (ECB) and more than 95 % of the currency used for international commerce has been issued by one of these two.
• The main Investment Banks are Goldman Sachs and JP Morgan Chase and their assets weigh more than a third of the world annual gross product.
  
  

Amount of currency issued by the FED or the ECB is kept secret, only estimations are possible.
So it’s impossible for you to know what is the value of what you own, of what you have in your checking account or savings (as you don’t know the total amount of currency, you can’t estimate the part you possess).

Another main concept is inflation.
Inflation is fixed by their announcements (interest rates) which guide the financial markets through anticipation but inflation is not at all dependent on the amount of currency that they issue (even if it’s what you learn in economics or what they tell you on television, it’s pure lie and deceit).
Even if central banking promoters claimed, during the process of their creation, that by letting a private-owned, independent from political powers entity control the supply of currency, they will be able to regulate inflation, it was just an excuse for the masses to let go of their power – through their governments (by accusing them of bad management) – of money creation. Letting them only the power to vote for politicians who are now stripped of their only real power, money printing. The only power that remains in the hands of governments are taxation and legal violence, and we can see the result. Endless new taxes to finance endless new wars.

What is important to know is that every dollar or euro that is issued by these central banks are lent with an interest, generating for them huge amounts of profits. For the year 2013, the profits or the FED have been estimated to 5,1 trillion dollars. And they’re doing it since 1913.
No human brain is capable to even grasp the enormity of their assets.

Are they afraid of cryptocurrencies ?

To put it frankly, not at all.
As long as cryptocurrencies are tradeable on financial markets (which investment banks created and dominate, and don’t think the major cryptocurrency exchanges have no links with traditional bankers), they’re not protected of an hostile takeover by these institutions.

Who can say with absolute confidence that 50 % of the circulating supply of Bitcoins aren’t owned by the FED ? Nobody. And be sure that it’s almost certainly the case. What’s a hundred billion to them ? Pennies from your point of view. They can instantly print 250 billion of dollars to buy all the available Bitcoins without even blinking and without having to fill a single form justifying their decision. Bitfinex with Tether is just a wannabe central bank, but they need to respect laws, central banks don't.

The only thing that would terrify them is a currency they wouldn’t be able to control, and that means a currency that can not be exchanged with any existing currency that they control. Here lies cryptocurrencies' major weakness and to avoid being disillusioned, you must know that a revolution won't be possible as long as we will create new currencies using THEIR system (even though it’s based on a different technology), they will be able to and they will buy all the supply to keep their supremacy.

So what’s the solution ?

The solution has just been revealed, it would be a currency that can not be exchanged for an existing currency. But that alone isn’t sufficient, as the way to generate new currency can not be rewards for miners or any other group of people that can acquire a comparative advantage over the rest of their peers and hence control the issuing of the currency.

The creation of new money must be distributed with strict equality between all of the people, who will then dispose of it as they please. But as a lot of people in the cryptocurrency business are still driven by the old system’s instinct (by that i mean GREED), so there’s no chance of such a cryptocurrency appearing soon.

I won’t go much further in the specifics of what a real revolutionary currency should be, as it will be done extensively in the next part of this series : The currency of the future.

Thanks for reading and see you soon !

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