Months ago I wrote that China could be banning crypto to sidestep a global financial cataclysm. With crypto markets in turmoil & Charlie Munger sharing my sentiments, it's time to revisit the idea.
“It’s evil because it undermines the Federal Reserve System…”. The system that creates the inflation that destroys the middle class? The system that funds every awful and misguided war we get into? I guess that’s the only thing Bitcoin has going for it.
I don’t own any crypto and I mostly agree, but I took issue with that idiotic part of the statement.
China didn't ban crypto because of some prescient knowledge of the danger it may present to their economy. They banned it because they saw it as a challenge to the control of their people and afraid of the power and potential it would hold. Bitcoin is decentralized while the Chinese government holds it's power through centralization. It makes no sense they would ban crypto to protect their economy while allowing something far more devastating like Evergrande to flourish in their country. The Chinese have a history of banning or destroying technologies that could upset the power dynamic of the ruling class. More than 500 years ago the Chinese had the strongest and largest navy in the world. They could have easily conquered the world. However, the merchant class started to gain vast wealth and influence that the emperor at the time saw as a danger to his hold on power. The emperor had their vast and powerful navy destroyed to protect his control. Trade routes were demolished, their maps were burned, their ships were destroyed and sunk. China's ban on crypto also coincided with the crackdown on people like Jack Ma. It is all because of fear of losing political control.
After all this time you still can't go out and spend it at gas stations, stores or restaurants. If you can't use it, it is not a currency. It has always been a get in early Ponzi play.
The problem for BTC, and here everyone must agree, is that is competes with government controlled currencies, and governments have laws and enforcement officers, BTC does not. A country might have the finest culture and economy, but if it does not have an army its toast.
That FUD alone is giving BTC a constant headwind.
Don't get me started on the other coins.
It really a pity, because crypto is literally awesome, in the old fashioned meaning of the word.
' it's evil because it undermines the federal Reserve ' and it prevents the feds from printing their way out of it. Those are features, not problems with crypto. Do I own any? No. I think we should ask Venezuelans, Zimbabweans, and yes even Japanese how money printing has worked out for them.
look, I get fiat printing works great for the moneyed class, but it sucks for everyone else.
1) Everything can go to zero, even supposedly high quality enterprises like GM that were once the overwhelming leader in their industry. 2) Evil is in the eye of the beholder. Many people think the Fed is evil. Maybe the Fed is a necessary evil. Maybe the Fed is the lesser of many alternative evils. Reasonable minds can disagree. But Munger and his ilk, whose privilege directly stem from the Fed, is going to shill against anything that threatens the status quo and his stature within in, regardless of merit. 3) China banned it to maintain control and proactively eliminate competition to its own crypto, pure and simple.
Crypto is just a new wrapper on the old concept of private money, which every government hates because of the competition. Just ask Bernard von NotHaus, and then ask yourself how long until Congress amends 18 U.S.C. § 486 to not just be limited to metal coins.
1. I too am skeptic when come to Bitcoin due to the fact that it can be outlawed in the USA, and it probably will. Only Congress can coin money for legal tender. 2. I'm not convinced that some entity with a supercomputer, perhaps a rogue state, will be able to hack, or mimic, the exchanges, and thoroughly debase the whole system. 3. What happens when, as the author states, there are no bids? Gresham's law takes over and gold an silver reign supreme while Bitcoin tanks into obscurity like the tulip bulbs of Holland.
I've had people show me the value of their crypto accounts on their phones, but never in their bank accounts. Until someone with a currency backed by an army tells me I can trade my crypto for their currency, the value is equal my daughter's artwork hanging on my wall...priceless.
Crypto is just another betting venue, like sports betting, and Las Vegas. The winners are the house, which in the case of crypto are those that create the different types out of thin air and sell them to the gambling addicts.
Tether is a so called "stable coin" that is backed by nothing, and run by criminals largely in China. 80-90% of bitcoin is purchased by Tether, which keeps the bitcoin price propped up. It is supposed to be 1 to 1 with the US dollar, though the company refuses any audits to prove this.
If China investigated Tether and shut them down, it would collapse the bitcoin price, and the entire crypto market cap. Perhaps they are waiting for the right moment to do this.
“It’s evil because it undermines the Federal Reserve System…”. The system that creates the inflation that destroys the middle class? The system that funds every awful and misguided war we get into? I guess that’s the only thing Bitcoin has going for it.
I don’t own any crypto and I mostly agree, but I took issue with that idiotic part of the statement.
China didn't ban crypto because of some prescient knowledge of the danger it may present to their economy. They banned it because they saw it as a challenge to the control of their people and afraid of the power and potential it would hold. Bitcoin is decentralized while the Chinese government holds it's power through centralization. It makes no sense they would ban crypto to protect their economy while allowing something far more devastating like Evergrande to flourish in their country. The Chinese have a history of banning or destroying technologies that could upset the power dynamic of the ruling class. More than 500 years ago the Chinese had the strongest and largest navy in the world. They could have easily conquered the world. However, the merchant class started to gain vast wealth and influence that the emperor at the time saw as a danger to his hold on power. The emperor had their vast and powerful navy destroyed to protect his control. Trade routes were demolished, their maps were burned, their ships were destroyed and sunk. China's ban on crypto also coincided with the crackdown on people like Jack Ma. It is all because of fear of losing political control.
I have seen waaayy fewer "have fun staying poor" tweets of late.
Munger's comments rubbed me the wrong way, but right is right. I have to give credit where credit is due.
After all this time you still can't go out and spend it at gas stations, stores or restaurants. If you can't use it, it is not a currency. It has always been a get in early Ponzi play.
The problem for BTC, and here everyone must agree, is that is competes with government controlled currencies, and governments have laws and enforcement officers, BTC does not. A country might have the finest culture and economy, but if it does not have an army its toast.
That FUD alone is giving BTC a constant headwind.
Don't get me started on the other coins.
It really a pity, because crypto is literally awesome, in the old fashioned meaning of the word.
you could literally take out BTC replace it with stocks and your points would be a lot stronger. Love your work thank you . tim
I get it. People have trouble getting behind BTC. Maybe you feel like you missed the boat, or you don’t understand it (like Charlie).
But what are you going to do if your choice comes down to BTC or CBDC? Maybe people need to decide if it’s time to get busy living or get busy dying.
' it's evil because it undermines the federal Reserve ' and it prevents the feds from printing their way out of it. Those are features, not problems with crypto. Do I own any? No. I think we should ask Venezuelans, Zimbabweans, and yes even Japanese how money printing has worked out for them.
look, I get fiat printing works great for the moneyed class, but it sucks for everyone else.
1) Everything can go to zero, even supposedly high quality enterprises like GM that were once the overwhelming leader in their industry. 2) Evil is in the eye of the beholder. Many people think the Fed is evil. Maybe the Fed is a necessary evil. Maybe the Fed is the lesser of many alternative evils. Reasonable minds can disagree. But Munger and his ilk, whose privilege directly stem from the Fed, is going to shill against anything that threatens the status quo and his stature within in, regardless of merit. 3) China banned it to maintain control and proactively eliminate competition to its own crypto, pure and simple.
Crypto is just a new wrapper on the old concept of private money, which every government hates because of the competition. Just ask Bernard von NotHaus, and then ask yourself how long until Congress amends 18 U.S.C. § 486 to not just be limited to metal coins.
1. I too am skeptic when come to Bitcoin due to the fact that it can be outlawed in the USA, and it probably will. Only Congress can coin money for legal tender. 2. I'm not convinced that some entity with a supercomputer, perhaps a rogue state, will be able to hack, or mimic, the exchanges, and thoroughly debase the whole system. 3. What happens when, as the author states, there are no bids? Gresham's law takes over and gold an silver reign supreme while Bitcoin tanks into obscurity like the tulip bulbs of Holland.
I've had people show me the value of their crypto accounts on their phones, but never in their bank accounts. Until someone with a currency backed by an army tells me I can trade my crypto for their currency, the value is equal my daughter's artwork hanging on my wall...priceless.
Crypto is just another betting venue, like sports betting, and Las Vegas. The winners are the house, which in the case of crypto are those that create the different types out of thin air and sell them to the gambling addicts.
Tether is a so called "stable coin" that is backed by nothing, and run by criminals largely in China. 80-90% of bitcoin is purchased by Tether, which keeps the bitcoin price propped up. It is supposed to be 1 to 1 with the US dollar, though the company refuses any audits to prove this.
If China investigated Tether and shut them down, it would collapse the bitcoin price, and the entire crypto market cap. Perhaps they are waiting for the right moment to do this.
I only have about 1% of net worth in crypto, so I am not pushing my book here.
However, I believe the interest rate move (+1% on 10-year) caused losses in the debt market equal to 3-5X the whole crypto market cap.
Also, a 10% drop in stocks wipes out more than 5X the full crypto market cap.
What am I missing?
Ohhh , i get it !
Bitcoin is bad because bit-coiners don't take part in the fed printing away their currency .
Bailouts are the real evil . Not sidestepping the FED !
dude the crypto market has already blown up. Everything is down 80+%