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Central Bank “Cryptocurrencies”? Just a Different Kind of Funny-Money - Jeff Nielson (22/9/2017)

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September 22, 2017

It is quite hilarious to watch the posturing of central banks and their media mouthpieces on the subject of cryptocurrencies. A recent Reuters article on the subject provided numerous moments of mirth. The title alone is good for a chuckle.

Too Soon to Determine Risks of Central Bank-Issued Cryptocurrencies: BIS

It’s always amusing when these shameless con-men (and women) attempt to portray themselves as sober arbiters of risk. Those who understand our monetary system are aware that the funny-money that these shysters are currently peddling is completely worthless.

The “fiat currencies” of Western central banks have had highly questionable value ever since the final connection to the gold standard was severed in 1971. However, since 2009 there has no longer been any question at all – ever since the Federal Reserve launched the Bernanke Helicopter Drop.

U.S. dollars have value only to the extent that they are strictly limited in supply.

-- B.S. Bernanke, November 21, 2002

Since 2009 and the era of unlimited dollar-supply began, the U.S. dollar (and all its fiat currency derivatives) has been completely worthless. It is with this backdrop that we watch these Clown Princes of our monetary system debating the “risks” involved with crytpocurrencies.

The article starts with a straight line and then heads straight for laughs.

It is too soon to determine whether central banks should issue their own cryptocurrencies, the Bank for International Settlements said on Sunday, as the risks could not yet be fully assessed and the technology underpinning them is still unproven.

Central banks already use electronic money - only a very small proportion of their assets are now backed by gold - but this is exchanged in a centralized fashion, across accounts at the central bank.

“Only a very small proportion of their assets are now backed by gold”. What proportion would that be? Zero – a very small proportion indeed.

Currency reserves (including gold) represent – at best – indirect backing for these worthless currencies. A government trying to prop up their own paper can liquidate their currency reserves, and use the proceeds to buy-up their own currencies. Hardly “backing” in any formal sense.

The whole objective of these criminal central banks in assassinating the gold standard was to completely divorce their money-printing from gold. Gold-backed money is Honest Money , and there is nothing remotely honest about central bank fiat currencies.

Central banks already have their own funny-money that they can conjure into existence in infinite quantities . So why are these institutions of monetary crime openly expressing interest in cryptocurrencies?

Envy.

Blockchain technology enables peer-to-peer payments to be made using decentralized cryptocurrencies like bitcoin, by means of a shared ledger that verifies, records and settles transactions in a matter of minutes.

“While it seems unlikely that bitcoin or its sisters will displace sovereign currencies, they have demonstrated the ability of the underlying blockchain or distributed ledger technology (DLT),” BIS said.

Cryptocurrencies can also be conjured into existence in infinite quantities, limited only by the algorithms that spawn them into existence. But adding blockchain technology adds a money-pump dimension not possessed by current central bank money-printing operations.

“Peer-to-peer payments.”

What is the appeal here? Such a totally electronic means of delivering payment for transactions makes the War on Cash that these criminals have already declared even easier to impose upon us. Furthermore, the whole concept of cryptocurrencies adds an element of quasi-legitimacy not possessed by central bank fiat currencies.

What gives a gold-backed currency value? It is backed by a hard asset with a 5,000 year pedigree.

What gives a fiat currency value? Our (honest and trustworthy) governments say that that this funny-money has value.

What gives a cryptocurrency value? An algorithm.

The vast majority of our populations have no clear understanding of what an algorithm is. That’s how and why the banksters have gotten away with imposing their totally fraudulent trading algorithms on our markets – no one understands the obvious criminality of allowing computers to hijack our markets .

So it comes down to a choice. Are the masses more likely to retain faith in our funny-money knowing that it is “backed” by an algorithm, or “backed” by the good word of our governments? Framed in those terms, the choice seems obvious: fiat currencies out; cryptocurrencies in.

A recent article distinguished cryptocurrencies from real money: gold and silver or precious metals-backed money.

mere currencies (such as all of our paper currencies) are not “money”. They are not a store of value. They are not rare or precious. They have no intrinsic value. Their utility is purely as a medium of exchange.

Crypto-currencies, as the name directly implies, are not money. They are not a store of value. They are mere currency.

They can still be distinguished from our fraudulent (central bank-created) fiat currencies. As was previously discussed, many credible sources will attest to the fact that crypto-currencies are not fraudulent.

Here is the appeal. Cryptocurrencies are not money, meaning they are not a store of value, thus they will not intrinsically help the masses preserve their wealth. At the same time, unlike the central bank’s fiat currencies, cryptocurrencies are not open frauds that are rapidly losing any veneer of legitimacy.

Cryptocurrencies are becoming more legitimate in the eyes of the masses, eyes which (more and more often) are coloured by greed. See how high Bitcoin soared last week/month/year?

For 45 years, all we have seen is the purchasing power of our (so-called) money plummeting. The same chocolate bar that cost a dime when the gold standard was killed costs a dollar today. Now the masses are actually catching a glimpse of currencies that rise in purchasing power , even as the supply increases.

Something for nothing.

Of course, in the real world there is “no free lunch”. Understand that the value of a cryptocurrency cannot increase as the supply increases simultaneously. That is nothing more than the same lie that the central bankers currently peddle regarding the U.S. dollar.

The price of a cryptocurrency can go up (temporarily), but only for so long as holders are willing to bid up that price. As soon as the tide goes out, a cryptocurrency has identical value to a fiat currency: zero. Framed in those terms, it’s no wonder that our monetary con-men are expressing more and more public interest in cryptocurrencies.

Central bank flirtations with cryptocurrencies may be viewed by some as the green light to pile into this new form of currency. Think again. There is a 100% opposite way in which this scenario could play out.

It goes like this. Central banks continue their “risk assessment” of cryptocurrencies as the price of these virtual currencies spirals higher. But before the central banks embrace cryptocurrencies officially, the bottom falls out and these currencies plummet to near-worthlessness.

Sound implausible? Whose money has fueled the spike in value of these cryptocurrencies to date? Very probably it is the dirty money of the banking crime syndicate .

The motivation should be obvious to astute readers. Cryptocurrencies represent competition for the official (but fraudulent) fiat currencies produced by central banks. The oligarchs who control this crime syndicate despite competition in any form – and even more so with respect to their money-printing monopoly.

What is the modus operandi of these oligarchs when it comes to anything which seeks to compete with their criminal empire? Control it. Or destroy it. Or control it then destroy it.

As regular readers already know, the banking crime syndicate has the capacity to legally counterfeit infinite quantities of its fiat currency funny-money. Surely this crime syndicate would not be sloppy enough to simply watch these cryptocurrencies emerge as direct competition?

Throw some of their spare change into Bitcoin et al and they take control of the competition. At that point they are free to promote their success, or to destroy these cryptocurrencies by suddenly and dramatically pulling out all their own dirty money.

Are cryptocurrencies going to become the successor to our fiat currencies, and another stepping-stone toward “a cashless society”? Or, are these virtual currencies destined to be a flash-in-the-pan, destroyed by the banking crime syndicate before they can become formidable competition for our official (but worthless) currencies?

The latter scenario seems the more likely one, for one important reason. If central banks embrace cryptocurrencies and thus confer even greater legitimacy upon them, they would be legitimizing the competition .

The whole theft-by-money-printing scam of the central banks is based upon us holding and using their fiat currencies. If we are holding and using independent cryptocurrencies instead, this weakens their control over us and reduces the amount of our wealth they are able to pillage. It's almost as bad (for the bankers) as if we were holding precious metals .

Central banks are showing cautious interest in cryptocurrencies today. They may even express open admiration tomorrow. However, we may still see the banking crime syndicate completely and utterly destroy these cryptocurrencies the day after that.

Virtual currencies can be destroyed. Real money (precious metals) cannot. All that can be done is what has been done: temporarily suppressing the price of these eternal metals.

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Comments

Babak Abedian
September 22, 2017 at 2:54 PM
Hi, Cryptos are not the only replacement for fiat. They are also different tools there for optimization of the trustless distribution of whatever of value like Gold, Real state, Sand, everything. Secure verifiable trustless platforms like Blockchain, Etherium, Neo network. These platforms work like train reals and Veritaseum, OmiseGO, like locomotives and Smart contracts which are built upon like wagons designed for different businesses. BR/
pgtipster
September 22, 2017 at 7:29 PM
The emergence of crypto currencies as a competitor to central bank fiat issue can only accelerate the understanding that they are both worthless and that the world has been held in thrall by nothing better than a set of bookkeeping entries which everyone other than central banks is legally obliged to follow.
marlon facey
September 23, 2017 at 6:34 AM
Hi Jeff. I very interesting and thought provoking article. I would like to add in my a few pennies of wisdom/knowledge for what it is worth. Central banks globally use private banks to facilitate fractional reserve banking and their payment systems. It is important to know that banking and the payment system are two separate things. It is important in understanding the potential "risks" that the central banks and banks see in gold and indeed anything that is outside the banking system. The Blockchain allows a global payment system to be held in private hands; unregulated by central banks and therefore is a strategic threat since banks have been the only gate keepers in this game; even during the gold and silver standard. Blockchain represents something completely new in Payment Solutions which has never happened before -in the entire history of the human race- since the internet and World Wide Web never existed before @1980. The web offers the ability to operate Blockchain enabled services on a global scale. There are genuine risks around terrorist financing and AML, but this is NOT the "risks" that J.P Morgan's Jamie Diamond is talking about. Fortunately Blockchain and Bitcoin have put into the public domain something which the normal "joe" has always taken for granted; that their assumptions and also what they have been taught in school about money, currencies and banking is ALL wrong. This window of awaking will only have a brief time to flourish but the usual suspects are actively trying to morph Blockchain into a technology that serves their interests and to continue the game of smoke and mirrors. This profoundly powerful Blockchain has generously been bequeathed to us by an inspired -and as yet unidentified - human being. Like most tools it can be used for good or ill. Thus it is no the tool that we as citizens, consumers, business owner and investors etc. should be concentrating on, but who is wielding it and for what purpose. Banks and Central banks will use Blockchain when they have the systems and implementations in place but it will be to reduce costs, increase efficiencies within the banking and payment system that underpins the existing fractional reserve system. Unfortunately for them the cat is out of the bank...sorry bag :-).
RGS
September 23, 2017 at 10:41 AM
Dear Mr. Nielsen Many thanks for a great article. I try to keep up with everything that you write and I find myself agreeing with about 99% of your statements. In your recent article you state: "What gives a cryptocurrency value? An algorithm." An algorithm is a form of mathematics and Mathematics it may be argued is quite powerful indeed! You also state: "Understand that the value of a cryptocurrency cannot increase as the supply increases simultaneously." There will only ever be 21 million Bitcoin. Therefore the supply will not continuously increase. Looking forward to your next article.
Steph
September 23, 2017 at 3:36 PM
Jeff, your comments are always in line with my gut feelings, especially the trend of becoming a cashless society, scary. I want to get in to the cryptos, but reading these kinds of view points and facts validates staying with physical valuables. I am a fan of your work, looking forward for the next one. Thanx.