In our newest video, Dr. Chris Martenson and Mike Maloney take some time to discuss Bitcoin, precious metals and the future monetary system.
We first celebrated Bitcoin Invading Mainstream Banking on January 11, then reported here on April 30 that Canada had tightened its grip on Bitcoin exchanges. In another article (with video from Mike), we posed the question: Could Bitcoin Eventually be the New World Currency?
The big deal over Bitcoin is our freedom of choice, because if digital options such as Bitcoin or U.S. dollars were equal in value as money to gold and silver, the owners of the systems wouldn’t need laws to enforce a currency monopoly. Mike has already taken sides in this controversy, saying, “I’m for whatever the free market picks for currency.”
Dr. Martenson agreed, wisely pointing out the ongoing “Cold War race between security professionals and hackers.”
On money, Mike says “I really hope the public learns enough that they refuse a gold standard, and demand gold and silver”—in other words use real gold and silver as mediums of exchange.
“…instead of a national currency that supposedly represents gold and silver, that they’re keeping safe in the vault for you, and they’re allowing you to trade these claim checks on gold and silver
…which give them the ability to put capital controls in place so they can control, and tax, and monitor shifts of wealth … and basically infringe on our privacy and limit our freedom.”
Here is what Nobelist, Friedrich Hayek, had to say about this in his 1944 classic, The Road to Serfdom (cartoon, original):
Nothing would at first seem to affect private life less than a state control of the dealings in foreign exchange, and most people will regard its introduction with complete indifference.
Yet the experience of most Continental countries has taught thoughtful people to regard this step as the decisive advance on the path to totalitarianism and the suppression of individual liberty. It is, in fact, the complete delivery of the individual to the tyranny of the state, the final suppression of all means of escape—not merely for the rich but for everybody.
Mike reminds us that it is dangerous to swim near a drowning man, and as these legacy economies drown in debt, they’ll be grabbing anything they can to stay afloat.
The recent shutdown of the U.S. bank account operated by Bitcoin’s most popular exchange, Mt. Gox, shows us that exchanging currency without registering with the U.S. Treasury is simply not an option.
Mike wonders how converting energy to Bitcoin purchasing power is equivalent to energy embodied in mined and minted precious metals, as it produces nothing tangible. Chris points out that “Bitcoins have value if and only if the Internet is there for you, period.”
“The system being up and running is your central bank in this case,” Dr. Martenson continues.
“The reason I prefer gold is that it’s the only money I can actually hold which is not simultaneously somebody else’s liability.
Bitcoin is still somebody’s liability; there is a server farm out there that has to maintain its integrity, has to stay up and running, for your Bitcoins to have any value at all.”
For more introduction to Bitcoin, a beginner video, and our most recent article, can be found here.
And for more on the connection between redeemable gold money and human freedom, according to Warren Buffet’s dad, click to read the short, 3 page note circa 5/6/1948.