International Forecaster Weekly

Gold Bitcoins And Money

Throughout history, man has tried his best to avoid getting ripped off by monetary inflation. The most successful way of doing that has been through holding gold and real estate. Thus, you often hear the cry that the only way we can get back to a more stable world of monetary value, is by going back to some form of a gold standard. But is that really true in the digital age? Frankly, no and for several reasons.

Bob Rinear | November 23, 2013

Since the day the Federal Reserve was put in place, our currency has lost “buying power” or what is commonly thought of as value. It is no wonder, since they have this misguided deluded idea that inflation is good. In fact, they like inflation so much they say publicly that they want to guide the economy to a 2% per year inflation rate. Well, I’m no Rhodes scholar by any means, but if inflation is an increase in the money supply that generally causes prices to rise because the currency devalues….wouldn’t it be worth something like “0” after about 50 years of 2%? It would. IN fact, it is.

Our “dollar” is worth approximately 7 cents in comparison to what it could buy back in 1915. So they’ve done a yeomans job of destroying the “value” of our currency, and they continue to make a mockery of it every month by printing an additional ONE TRILLION of them out of thin air every year. This is obviously disturbing to anyone with a brain cell because it stands to reason that if you try and save your dollars, they end up buying you less goods and services in the future.

Throughout history, man has tried his best to avoid getting ripped off by monetary inflation. The most successful way of doing that has been through holding gold and real estate. Thus, you often hear the cry that the only way we can get back to a more stable world of monetary value, is by going back to some form of a gold standard. But is that really true in the digital age? Frankly, no and for several reasons. First off and this is by far the single most important item that we all have to understand. Having a gold or silver backed currency does NOT prevent depressions. We had a pretty hefty one in the 30’s and gold was indeed tied to our currency. But even more important to the concept of sound money is something thing world needs in abundance and lacks abundantly. We need honesty. Morality. Truth. Without those concepts, currency will be perverted no matter what it is supposedly backed with.

Consider this; Years and years ago, entire empires used precious metals as their daily coinage. You literally carried gold and or silver coins in your pocket. But as usual, the king, or the Senate or whom ever was in control of the country would soon outspend the amount of gold in their vaults. So, what did they do, stop waging more wars and stop spending money they couldn’t afford? Hell no, they shaved the gold from their coins. Made them smaller, lighter. They alloyed them with junk metal. Over the years, the currency collapsed. Fraud proved to be its downfall. Dishonesty.

But of course that is simply how they went about abusing the currency that they actually used for commerce. In a “gold backed” currency, where the “dollars” are supposedly backed by gold being held by the Government, they don’t go about cutting the corners off the paper bills. No, in that instance what generally happens is that they either print more notes than they have gold to back them up, or they simply lie about it all in the first place. Consider the US as an example. They could come out and say that they’re releasing 22 trillion “dollars” into circulation as currency, because they have “X” amount of tons of gold in the vaults to back it up. Really? Have you ever seen it? Has it ever been audited and publicly made available? No? Then how do we know it is there?? We don’t. It isn’t.

My point behind this little rant is that while holding gold and silver at the individual level has been a pretty good way to preserve wealth ( as long as they don’t confiscate it like FDR did) as far as being some Nirvanic answer to a sound currency, it is NOT. As long as some thieving slime ball can get his hands on the treasury and lie about the amount of metal they have, or the amount of bills they’ve printed, a gold backed or silver backed or plutonium backed currency is still ripe for all the fraud and inflation of a totally Fiat currency. Until mankind has implanted righteous upstanding men of good character and morals in every government, the idea of a sound currency using any of the methods we’ve employed in the last 6000 years is ripe for abuse. Soundness of currency comes via soundness of honesty, something we severely lack in this day and age.

But not long ago, in 2009 actually; a new currency arrived on the scene that I’ve not made much talk of. Enter Bitcoin. The reason I haven’t made much noise about it is because it is like an experiment, and the outcome isn’t certain. It is something to be watched and studied first. But trust me on this, Bitcoin or something very similar can CHANGE HISTORY. Let me explain…

I have just laid out why currency fails. It fails EVERY time because of greedy, criminal PEOPLE. They lie about the amount they made, they lie about how much backs it up, they lie about the value of it, they lie about the velocity of it, they simply destroy it in their vain attempt to profit from it. But Bitcoin is entirely and completely different than anything mankind has ever seen. We all knew computers would change the world in the most profound way, and it has. But not many ventured to think it could change the historical meaning and distribution and VALUE of “money”. All that is now on the examining table.

Bitcoin is digital currency. I’m not going to go into the mechanics of how it is created, you can google all that, but it is interesting to say the least. But the points of it that I find to be so precious is this…it is transparent in that everyone on the planet can see how much there is. It is immune to Criminal man. He can’t print more of it and he can’t lie about what is out there. While being transparent on one hand, it is also anonymous in a way. When you “buy some” of it, there’s a permanent and public record of the transaction. This is how the whole of the Bitcoin “float” is tracked. But, the record only notes the “landing address” or code of the person that took delivery. The identity of that address’s owner is NOT divulged.

But wait, it does get better. This currency has no boundaries. It isn’t a German mark, or a won, or a dong, or a dollar, or a ruble. It is a bitcoin. It is the same bitcoin in Japan as Canada, as Korea, as Italy. There’s no silly currency adjustments for geography.

Because of its virtues of being an alternative currency, Governments are freaking out. They can’t control it, print more of it, keep it from people, distort it or in any other way take charge of it. That scares the Bejesus out of them. For me it makes me smile. For 6K years we’ve wanted a way to put the power of money into the hands of the people and let the market set the value. Bitcoin or what ever takes its place if this first attempt fails, does just that. Is Bitcoin the real answer to our problems? It’s too early to tell, and there’s been bumps in the road. But here’s the take away. The barn door is open. The first break out has occurred. The world has now seen a digital currency with most of the positives of a normal currency with NONE of the negatives. This is truly mind boggling and important on many many levels. This is disruptive technology of the highest order.

So lets wrap this up like this: Because a select amount of “people” control the treasuries of all nations, and those people often times are corrupt, criminal, evil, Godless creatures, no current money system is above abuse. Not fiat currency, not commodity backed currency. Yes a currency backed by some amount of gold is far preferable to the junk we have that’s backed by nothing. But a new form of currency has been introduced that very well may lead the way to a system of currency that man’s greed can’t abuse. I’m not saying bitcoin IS that currency, I’m saying the ground work is being laid, and it does have the ability to be the first significant change in global currency in tens of thousands of years.

That’s big news.