|
I have been asked my opinion regarding cryptocurrencies. Let’s start by
saying I have no doubt within only a short time, “crypto currencies” will be
issued and embraced by central banks. This is not to say I am endorsing
Bitcoin, Ethereum or any other digital currency. It is even possible that not
a single existing crypto will exist when central banks finally make their
leap.
Issuing and embracing cryptos make total sense from the standpoint of
central banks for several reasons. First, what crypto bulls consider as
“privacy” today, central banks will see as “total knowledge” if they are the
issuer. This will mean total knowledge of all transactions which also means a
near impossibility of any tax evasion even down to the lemonade stand
(assuming you have your lemonade permit!). Also, if central banks issue the
crypto currency…you can pretty well bet they will also have a back door …that
allows them to either freeze or even empty “your vault” of digital
coins…whenever or for whatever they choose.
Whether we are headed toward a one world currency or several currency
blocks (this is more likely), digital money is coming if the central banks
have anything to say about it. As I mentioned above, I highly doubt central
banks will want “competition” to their currencies so some sort of legislation
(either by individual sovereigns or collectively on a global basis) can be
expected as an attack on existing “private” cryptos. In my mind, there does
exist the possibility that an existing currency (or a very small handful of
current cryptos) is used as the “platform” for central banks but I would not
place my hope on this. I also would not want to bet “which one” or ones will
be chosen if this is the case?
In my opinion, the volatility of digital currencies while wicked and
speculative (upward so far?) is not the real danger, and the ride is not for
the faint of heart. The real dangers are several and basically involve a
“poof” moment that does not exist with gold or silver. When I say “poof”, I
am talking about “poof, it’s gone!”. Do not say this is impossible because it
is not.
I would ask, what if we experience an EMP and the grid goes down? No
electricity, no computer. Yes you can go to another area or country but good
luck getting there. Another argument you hear for digital currencies is “they
are not hackable”…to which I must call utter bullshit because EVERYTHING
including the NSA is hackable! Even the modern car you drive is hackable and
can be overridden with a joystick today. We see it all the time, this entity
or that entity gets hacked. We have even heard of people’s cell phones being
hacked and digital currencies stolen that way. One must also worry about the
exchange(s) being hacked, we have already seen this where coins just
disappeared. I just recently read this
article for more potential pitfalls or arguments. Suffice it to say, in
the case of Bitcoin, no one even knows who its creator Satoshi is, how does
anyone know he did not install a backdoor when he launched it? It does make
sense that the programmer has a back door doesn’t it? Maybe he was an
“honorable” programmer? Are all the others the same? We do not exactly live
in an “honorable world” no matter how badly you’d like to believe it…
To finish, maybe I am old school but I see a vast difference between
digital currencies and precious metals. Most important of all, precious
metals cannot “disappear” overnight if you have them stored properly. Can
they be made “illegal”. Yes governments can try this but how do you make
silver illegal with all of its medicinal, solar, industrial and technological
uses? Can jewelry be made illegal? An EMP will not destroy the value of
metal. Neither will a fire or flood. They can be taken from you at gunpoint
which is why you should have metal stored in several places. Metal will work
for barter in the situation of a full out meltdown of financial markets. Will
your local farmer trade his eggs, beef, extra tools or diesel fuel for
Bitcoin? Probably not. Will he trade for metal? I think so. Then I would ask,
if you want to “trade” your digital currency when financial institutions are
closed …”how do you get paid” if financial transaction are frozen? The same
can be said of metals but I am pretty sure a guy with two motorcycles might
trade one for 100 ounces of silver …(or less?) …I’m not so sure he’d accept a
digital currency?
I could go on and on with examples but I am of the school that “possession
is 9/10ths of the law”. In the case of outright anarchy, (which we very well
may be facing) “possession” itself may become the law? If you take nothing
away from this article other than just one concept, please understand that
metals cannot experience a “poof” moment where you go from wealth to nothing
in an instant. We face a credit meltdown dead ahead where return “OF YOUR
CAPITAL” will trump return ON your capital. Gold and silver are money, not
credit, they may very well be your ONLY capital before this “credit episode”
is all over?
The entire world faces a “poof moment” because nearly everything either is
itself credit or relies on freely flowing credit for its value. Gold and
silver rely on nothing because they “are” money. They do not rely on credit
nor are they the liability of anyone or any nation. They do not rely on an
internet (which governments do have the ability to shut down) or computers.
They do not rely on a user name or password either. Nor do they rely on the
simple and basic technology of electricity. They can’t even be hacked (unless
you use a hatchet to make change?). Call me old fashioned but subjecting
yourself to a poof moment makes no sense at all when it is the coming poof
moment you see coming …and are trying to protect yourself from!
Standing watch,
Bill Holter
Holter-Sinclair collaboration
https://www.jsmineset.com/2017/09/19/cryptocu...he-poof-moment/
|
|
