Gold vs. Bitcoin
Gold has been considered money for centuries; although, FED chairman Ben Bernanke would disagree. In his now infamous answer to former Congressman Ron Paul's question: "Do you think gold is money?" Bernanke had a very puzzled look on his face when posed with such a straight forward question. His answer was an emphatic "No". If you understood the position of the Federal Reserve Bank, you'd understand why such a question is a double-edged sword. The lifeblood of the Federal Reserve Bank is DEBT, and to them, anything other than debt is one more nail in their monopoly coffin.
Ron Paul followed up with the question: "Why do central banks hold it (gold)?". Bernanke's response: "It's a form of reserves, its tradition". The dirty little secret is that "reserves" are money, and these gold reserves were confiscated from the people in 1933 by the United States Government. This is important, the US confiscated every ounce of gold from the citizens of the US, and transferred it to the private banking cartel known as the Federal Reserve Bank. The FED was formed in 1913, and it took them merely 20 years before they consolidated what Bernanke would classify as "Non-money" (Gold) into their "reserves".
The partial gold standard lasted until 1971, when President Nixon pulled the United States completely off the Gold standard, thus ushering in the 100% debt-based, fiat monetary system that we have today.
The massive debt the world has amassed in the last 50 years is insurmountable. The current national debt is over $17 trillion USD, if you include unfunded liabilities the national debt is approximately $126 trillion. A more detailed description can be read here.
What do we do about a monetary system that is based on debt, when in order for the monetary system to survive it needs more debt? The answer from the government, and the federal reserve is, you guessed it, more debt. What they don’t tell you is the debt is growing exponentially by design, it has to in order to maintain the monetary system. Blowing up financial bubble after financial bubble, and consolidating wealth & assets with each bubble/bailout cycle.
If history is our guide, it should be clear that any debt-based, fiat monetary system can’t survive forever. What we are witnessing today is the final stages of the current monetary system’s life cycle. Although, this time it's the largest financial bubble in world history, and when the bubble pops it will be catastrophic for everyone. If we take this to its logical conclusion, what would a government do in this situation?
Many of the financial analysts propose holding gold as a "Protection" from a monetary crisis. This is sound advice if you hold physical gold, as gold has been used as money, and a store of wealth for centuries, but when they confiscate all available assets, gold will be among them. Many of these financial analysts I'm in agreement with, but I don't think they go far enough to shield their clients from the coming financial pain. Simply recommending commodities, and other financial instruments to protect wealth, is akin allowing the fox to sleep in the hen house. All of those financial instruments are easily accessed & controlled by a central authority. If the financial collapse is as big as the analysts think, then why would they believe that the banks, and the government would give up the honey pot they already have their fingers in? Consider this:
- How much gold does the average person physically possess?
- Who owns or possesses the majority of the gold today?
- What if the government confiscates not only gold, but silver, pension funds, IRA/401K, Bank accounts?
Other than jewelry, the average person in the United states does not own physical gold. They may have some gold investments in their 401K/IRA, but in a currency crisis none of that gold will be accessible. Most of the gold coins & bullion are centrally stored by banks, mints, or vaults acting as a warehouse for large investment funds. The overall point here is that the gold is already centralized, you may own it on paper, but you'll never take possession of it in a crisis.
Would the government confiscate gold again? The answer is yes; however, what other financial instruments are equally accessible in a crisis? The answer is your retirement/investment & bank accounts. The central power have the right to freeze your accounts as they see fit, and with a couple of keystrokes they can take large percentages, if not all of your account balance. It's the lowest hanging fruit, as they don't have to leave their office to do it.
Criminal penalties of violation of executive order $10,000 fine or 10 years imprisonment, or both, as provided in section 9 of the order ~ Gold Confiscation Executive order 6102
Bitcoin is an all digital currency, it exists on the world wide web (the internet). It's protected by military grade cryptography, and is not centrally controlled by any government, or corporation. It's semi-anonymous in the sense that your "account" is a string of alphanumeric characters, and is stored inside a public ledger (blockchain). It's your own personal bank account, that sticky fingered politicians or bankers can't automatically access. When the world is being choked by massive amounts of fiat debt, bitcoin is truly revolutionary.
I constantly hear negative arguments about bitcoin. Things like "bitcoin has no intrinsic value", or "what if they turn off the internet?" These are just a sample of the typical arguments against bitcoin. Let me propose a new way of looking at it.
The inherent nature of bitcoin is that it's decentralized, secure, divisible, portable, and semi-anonymous. If bitcoin cannot be easily confiscated, inflated or controlled by governments or bankers, isn't that valuable? After all other precious metals, pension funds, and bank accounts are easily taken over, bitcoin users will still remain unaffected.
If you decide to move to a different country, how are you going to take your physical gold, silver, cash & diamonds across the border without the threat of confiscation or theft? Let's hope you make it, because your bank & retirement accounts are already frozen.
adjective \in-ˈtrin-zik, -ˈtrin(t)-sik\
In a sense, bitcoin does have intrinsic value; although, it's lacking the "physical" properties that gold has. That doesn't remove the inherent technological properties it holds. Is bitcoin a replacement for gold, absolutely not. Does bitcoin have properties that are superior to gold? Absolutely yes, as well as the rest of the banker/government run monetary system. Should you invest all of your life savings in bitcoin? Absolutely not, but bitcoin is still in its infancy, and when wider adoption happens there is no limit on how valuable bitcoin can become. Bitcoin can be the great equalizer in this failed monetary system, and a great addition to your gold holdings.
Come join the peaceful bitcoin evolution