During the last crypto boom a lot of people, came to me asking if they should consider entering the crypto world in terms of buying bitcoin / ethereum or starting off with a small mining farm, we’ve all heard stories of major returns, like all stories, some of them are based on fact while others all closer to myths.
I am not going to give you any short term advice on what cryptocurrency to buy, or when. That’s for you to figure out, But I noticed most of us are looking at it the wrong way, and possibly missing the whole novelty of the crypto currencies and the freedoms they allow us compared to state backed currencies also called FIAT. My point of view is quite long to explain in full so I realized i’d be better posting online on the subject, As I sadly find this reason vastly neglected.
Those of us living in democratic states quite familiar to the concept of citizen rights, to quote from the US citizen rights “...Freedom to pursue “life, liberty, and the pursuit of happiness.”
It appears one of the most basic principles of democratic societies is one should have the liberty to move his efforts, labor and time in which directions he see fits whenever he wants to. That’s the true concept of freedom.
As this concept might sound quite obvious to most people, our current monetary system may not always play along to this.
to further understand the differences we have to realize why the current money system around the world is sick and vulnerable to exploit.
FIAT Currency markets around the world proven to be easily and effectively manipulated by central banks and governments around the world, those entities powered by interested parties control the flow of money and are exploiting their watch over our money as means of control of people. Quite a claim right?
control is made possible by limiting the free flow of currency in the worldwide economy, manipulation of interest rates and exchange rates, manipulating statistics data, such as price index tuning to match the politics they are trying to make and further distort the real picture. Our money is no longer ours, we are selling our liberties by the hour (at least in democratic states) but the output of our work is still controlled by an interested few and we expect them to play it fair.
"Quis custodiet ipsos custodes?" - who will guard the guardians?
the harm done by artificially controlling the money supply, directing credit via artificial rates results in blowing bubbles on assets, disguising risky markets as safe and leading to corruption in resource management. Low central banking rates are pushing people to take higher risks using “cheap” money, risks they wouldn’t have taken given normal conditions.
Higher risks come with higher chance for defaults those creating a more “wasteful” economy. The problem gets worse when consumption is financed by artificial ultra low interest rates further affects prices when mostly considered by the markets as GDP. practically speaking in terms of the United states spending lets them spend even more by getting more loans, leading to more future debt sold worldwide for to be paid by the younger generations. the strong distortion of consumption spending financed by debt sold to future generations without a true DEBT-LIMIT, debt later "packed and shipped" abroad for a promise that in time the debt will be paid with interest. zero interest? remember? We are invested into this by the trillions.
is there no limit to the "pre sell" of the freedom of all people?
The global debt is Too big to put under the carpet, over 220 trillion USD, the global GDP is about 75 Trillion per year.
Do the math,
that's the result of letting others keep the fruits of our creativity, productivity, labor and time for us risking it with nothing on stake. our decision makers cannot face reality because no one wants to be on the job when reality will eventually hit and hard decisions will have to be made.
when the bubble bursts the “pain” of all incorrect decisions created by manipulated markets. programs like "Quantitative easing", that's a very nice name for something very "nasty" to do. lets inflate a wall st. bubble instead of a housing market, They are just spending into the future irresponsibly, creating bigger problems for later instead of fixing while it’s still fixable.
Controlling the flow of money is slowing progress, adding costs and preventing the markets from self regulation, over ages it resulted in huge loss of value to the people, if you don't believe me check the value of the USD over the last two hundred years adjusted to inflation. we recently experiencing the greatest artificial shift of value created by the US central bank in recent history, named "Quantitative easing", the total USD added to the world economy during QE in all it's phases exceeded 12 trillion USD, total US tax collection is 3.25 trillion USD a year, the US government is running in deficit financed by more loans. I suspect there is no sane human still thinking the debt will be paid in full. we are selling our mistakes of incorrect management to our children, making them pay that with interest.
During the last few decades we've had a major advancement in all major fields of study. we conquered space, reached to the moon and beyond, discovering the benefits of science through physics, chemistry and biology.
Those advancements were made possible by the free flow of ideas in those fields. Economy is different, the closed nature of the banking industry is blocking progress in that field.
We are Learning more about our place in the universe, the availability of resources and the possibility to exploit them while the theories that support this growth are decades old, even tho' providing all industries a tremendous growth factor ,to look in terms of worldwide production capacity it have risen like a hockey stick, still the Dollar has lost so much of his value, how does it make sense?
When holding stocks, a stock is a representation of a company's economy, you get to decide what stocks to buy and what to sell, by that delivering signals to the markets regarding all factors you've considered making that choice regarding that company, you are voting with your money, good companies "create" higher demand for their stocks thus' rising in price to reflect the new worth.
A currency is a representation of a country's economy, holding a currency gives you the power "voting" by the value encapsulated in that currency, a good and growing economy should see their currency getting stronger, similar to stocks.
the USD had failed the world in terms of being the reserve currency the day it parted the gold standard and sent inflation into a freeride for the next decades, thus' proving once again people will exploit power given the opportunity.
the US is effectively shipping their inflation overseas enjoying it's crown status as a reserve currency, driven by higher spending to guarantee higher future loans. cheap money markets leaving them exploitable to inflation, excessive margins on financial markets.on recent changes to regulations (since 2009), people are told where to invest, where and what to buy, all of that by influencing the FIAT value of the specific products by taxes and regulations, those actions lead to high price difference over the same goods worldwide which in turn leads to more regulation on already sick markets used to cheap credit.
Bitcoin started the revolution by introducing a medium of exchange truly decentralized with a supply that isn't controlled by any entity nor any entity has special control over other participants in the network, bitcoin is governed by the powers of mathematics and "game theory" and free markets, as such it will answer to them only.
so to all of you are worried regarding some country blocking crypto, rest assured they will try but they will fail.the source of the value of all currencies is our daily use with them, and the world economy is mostly accumulated debt. for that I say, Let them keep it. Let them choke on it and let them pay for their mistakes.
The writer is an economics and banking degree graduate.
feel free to share, I'd like to hear your comments. Thank you for your time reading this.
