I must first warn that some readers may find this article offensive. Some may laugh, some question and others outright hate and unfollow me. I’m okay with that but I refuse to be silent on this issue.
For the record, I love precious metals, hold precious metals and believe they are a store of value and wealth. I also am not selling or advising anyone to be 100% in cryptocurrencies.
In my opinion, Gresham’s law is what we are witnessing globally with the rise of Bitcoin and cryptocurrencies. For those that aren’t aware, Gresham’s law can be summed up like this:
BREAKING DOWN 'Gresham's Law'
Coins were first made with gold, silver and other precious metals, which gave them their value. Over time, the amount of precious metals used to make the coin decreased because the metals were worth more on their own than when minted into the coin itself. If the value of the metal in the old coins was higher than the coin's face value, people would melt the coins down and sell the metal. Similarly, if a low quality good is passed off as a high quality good, then the market will drive down prices because consumers won't be able to determine the good's real value.
So many die hard ‘gold bugs’ just don’t understand bitcoin and I’m afraid they’re missing the boat. I agree with many of their valid points and arguments and I do believe gold and silver is money, however, this is a digital globalized world and transferring value via physical metals is just folly. It is very expensive for me to give Satoshi who is in Tokyo a Canadian silver maple when I reside in Toronto. Transferring value safely is why modern banking was born, but now we can perform transactions without the need of banks or an intermediary without the use of precious metals or paper.
Gold and silver is a pain in the ass to move and store safely. Our ancestors weren’t imbeciles and realized this 400 years ago! Paper money (receipts on gold claims) is what created modern banking, even though the Chinese had used it in the 7th century during the Song Dynasty. Please understand, from here on out I’m referring to modern western banking.
Going back to a gold standard is ludicrous. This means you have to go out into the world with a tonne of energy and man power to dig metal out of the ground and then stick it in a vault. THEN, you have to trust the vault keepers so they don’t steal, cheat or make false claims on what is available. Who is going to perform the physical audits of this gold? How can you be sure that the audit is open and transparent? Again, you need to ‘trust’ someone or some entity to validate the claim what is in the vault. The key word is ‘trust’.
Bitcoin uses open source code that can be viewed by anyone. You do not need to trust a person to perform physical audits of it. The trust is in the code and the decentralized system which is connected globally doesn’t require an audit of the physical by a person or organization. The bitcoin miners via PoW (proof of work) perform this automatically using computers and mathematics.
This is why people are getting so excited about crypto. Bitcoin and platforms like Steemit are changing the way people transfer value and communicate completely outside of the banking realm without ‘trusting’ a third party for validation.
I too at one time thought governments were going to kill Bitcoin, but once I understood the technology the more I realized how they couldn’t stop it. In 2012 I had my business website display a banner that said we accepted bitcoin, but later removed it due to all the MSM fud after the silk road fiasco the following year. You have to understand that at the time, I had just launched my own startup business and the last thing I wanted any new potential customers to think was that we were some drug dealing hackers. Unfortunately, I was allowing fear to impair my better judgment. I regret this now as I’d be a very, very wealthy individual today.
One of the best decisions I made was 2 years ago and ignored all the gold bugs and zerohedgers and converted most of my fiat paper to Bitcoin. Yes I have some PMs and it is money, but today I regard it as more of an insurance policy. It is heavy, a pain in the ass to move and you have to hide it well or trust a third party to hold it for you.
Many zerohedge commenters hate, I MEAN HATE bitcoin. Just read the comments from this article:
Gold bugs won’t admit when they are wrong and even if a Mad Max world doesn’t occur they will still claim that it should have happened. Should have and did are two separate accounts of history. I’m only concerned with what actually occurred or is occurring and how it affects me in the real world.
My advise is to ignore some of the posters on Zerohedge or any other gold bug site that advocates for a return to a gold standard. That objective is to force us to use some kind of a digital token and AGAIN place faith and trust in a middle-man. Once you place trust in a President, government, bank, corporation etc, you’ll just end up repeating the exact same mistakes and the same results which equals fraud. Completely moronic if you ask me.
The genie is out when it comes to bitcoin and cryptotcurrencies and it’s never going back into the bottle. Cryptos are here to stay even if some fail. Arguments that keep arising such as bitcoin could go to zero and the banking system could collapse, are valid points. Also, a nuclear war may happen tonight and end all human life, the apocalypse might happen tomorrow or the power grid could go down by dawn. Yes, all those could happen, so too could a meteor smashing into earth ending all life or a pole shift altering our planetary axis. I can’t worry about such things and I’m not going to spend my life worrying about them and what it does to my bitcoin.
What If The Power Grid Goes Down?
This is a major concern which is repeatedly brought up in rebuttals of cryptocurrencies. If the power grid goes down, here’s why (IMHO) this shouldn’t be a concern for bitcoin holders or if you hold gold and silver.
If an EMP, terrorist attack or Carrington Event occurred, the last thing you’d worry about is bitcoin. Food, water and shelter are your primary concerns. Not even gold and silver would be a top priority. It is estimated that 90% of the population would die, and if one rationally thinks about this it is probably accurate :
We are basically cashless now. I know few people here in Canada that have more than a couple hundred bucks in their wallet and almost none have any stashed at home. Everything is debit/credit and if you need cash you go to an ATM. This all requires electricity. Even if you had cash, good luck buying anything at a supermarket or even a corner store for very long. Everything is digital scanners and electronic cash registers. Not only that, but how will they make change for your 20, 50 or 100 dollar bill? Hmmmmm
All supply chains disintegrate. This means food, clothing, medicine, fuel and a plethora of consumer needs (not wants) toilet paper, maxi-pads, etc dry up within just a few days. Just think logically about this for 4 minutes and use your imagination what this looks like.
Almost all those in hospitals, the elderly, terminally sick would die. Not just that, diabetics that require insulin injections (approx 2.9 million US citizens) would die:
For those living in cold climates (northern Europe, Canada and US) many would die to the freezing temperatures. Yes, even if the natural gas was working for a little while, how is your furnace fan going to work without electricity? Also, how long will the natural gas continue to flow without power at the producers or distributors of it? Not everybody that lives in Canada has access to firewood or a forest near by.
Gold bugs think that magically any survivors are going to recognize PMs as money. Hmmm….and just exactly who is going to know how much ‘stuff’ you can actually buy with a 1oz silver maple? Does a survivor just google what the spot price is? Oops….forgot. No power, no google, no internet. Perhaps before the Mad Max world gets crazier the gold bugs have arranged a method for determining fair market value for silver over short-wave or ham radio. I am fully aware that in India or some Asian countries, gold trading or bartering would be much easier, but in the west I highly doubt it.
It is also estimated that in the US only 1% of the population actually owns physical PMs, and so if 9 out of 10 people die, how many left do you think will have PMs and are going to use it as money? LMFAO. Just think about this for like 5 seconds, its easy math!
I could probably go on for like 16 pages of ‘What if the Power Grid Goes Down’ but I think I’ve stated my case and you get my point.
But ‘The Rich, The Club, The Elite, The Globalists, TPTB, Illuminati, The Bad Guys, The Jesuits, The Rothschilds, The Banksters, Shemitah’ Blah, blah blah….
Another trap is to believe that some oligarch class is going to pull the plug and kill us all. Yes, I do believe that perhaps an oligarch class exists but trust me, they don’t want the power grid to go down or the masses to immediately realize their paper money is dog shit! Again, just take some time and logically think about this.
Do you really think they would have printed up trillions of dollars since 2008 (and continue to print) if they wanted this game to end? They’re terrified of it falling apart, and are probably more fearful than the rest of us are.
The rich despise or don’t know how to perform physical labour. Most couldn’t even make a cup of tea or prepare a sandwich! I’m not talking about the somewhat self-made rich like a Bill Gates or Mark Zuckerburg, but the super rich. The ones that have inherited wealth (land owners) down through generations. The old money. The ones that profit massively from our corrupt usury, debt-based money system.
Even if they had a hide out bunker, do you really think the Queen of England wants to live in a bunker? Seriously? Not to mention if almost everyone is dead, what good is their power over the masses now? The rich need slaves (debt slaves) to provide them with all the resources for their very survival. It wouldn’t take long for the serfs that were still left around to turn on their masters and stop serving them. After all, the serfs have the time to not only provide for themselves, but then still have the time to serve their oligarch masters as well. Who really has the upper hand here? Hmmmmmm
The Future Looks Bright
Yes the banks are crooks, the government is evil, and the system should have melted down and returned to sound money in 2008 but it didn’t. Get over it!
In fact, more people than ever around the world are waking up to the scam of central banking due to their corrupt nature and their effort to save the system. Gresham’s law is going to kick into over drive and that haven for most will be cryptos, not precious metals. This is good news to me. I’m not claiming that society will be utopia but it will be much more prosperous without central banks.
Bitcoin and other cryptos have the potential to destroy the entire old financial order. Yes there will be pain as we transition from the old world to the new but it will be well deserved. And no, I do not believe it is going to happen this fall of 2017 because of a comic book written by the Fed Reserve talking about Wishes and Rainbows or Satoshi Nakamoto is Alan Greenspan! I feel sorry for people paying $200-$300 yr on these internet subscriptions. Just save your money and get some damn crypto people. Geez!!
And I’m tired of hearing from religious fanatics that bitcoin is the mark of the beast from the Bible. Seriously? A system of payment that can’t be controlled by a bank, government or company and last time I checked, my latest bitcoin transaction didn’t require a mark in my hand or forehead. Sorry, the only way something like that is remotely possible is if the international bankers are able to create their own, centralized system that may mimic bitcoin. Bitcoin works completely 100% opposite of that model and I hope it becomes tremendously successful. Could bitcoin or another crypto morph into the mark of the beast? I guess, but that isn’t going to stop me from using it or promoting it. I could just say that I won’t use money any more because someday the beast will come and give me a mark where I can’t buy or sell anything unless I have one. This is just nonsense.
People from around the world are now working collaboratively to develop new decentralized technologies everyday. Their efforts are solving real world problems and providing solutions. Most of this code is open source, viewable by all and transparent. It no longer matters if you are in the jungles of Asia, the slums of India or a western metropolis. These coders, developers, contributors, artists, farmers, tradesmen and all classes of working men and women can transfer value to one other without the need of a bank. That is totally optimistic in my opinion. What an amazing time to be alive.
Due to the nature of globalism and the off-shoring of jobs people have had to create and chart a new definition of wealth. The power has always resided with us and it always will. We are the ones that produce and create wealth. All peoples of different talents from different nations. Hopefully together we can continue to be strong and face our fears and claim what is ours whether the governments of the world like it or not.
Please upvote or resteem if you agree.