The Fed is the Market, Until Someone Bigger Comes Along..
UPDATE:This editorial was written 3 days ago in reaction to
reading the Zerohedge post As
Bitcoin Nears $10,000 "Central Banks Kept Up At Night"
by Vince Lanci
“Free markets for free men”- patch worn on the Nymex floor
during Iraqi war.
The reality: We were cheerleaders for Halliburton and naively thought we
were on the same team. Money that can’t cross borders freely for its
citizenry is not a free market. There was a time before each government
sought to secure its tax base through FIAT that money was universal.
That time, when gold was money, is back. But gold isn’t currency. BTC
is currency. And their combination, whether in a single product, or on
2 different fronts, will take the fight for economic freedom to
the Fed doorstep.
Economic freedom is a right corporations enjoy but most citizens do not.
And those that do, must pay a tax and withstand a full body cavity search to
play. Meanwhile, the west’s corporate controlled government enables its own
demise via these uneven playing fields. No matter, the last US
middle class people will pay a 300% income tax to cover government
spending we bet.
The Fed Has Forgotten The Market’s Basic Rules
The axiom “no one is bigger than the market” has held true forever.
When the 2009 stock market reinflation began to be understood by
professional traders as the Fed becoming the ultimate backstop to the
market, that axiom was discarded by many. And that was wrong.
You see, the largest marketmaker, backstop, supporter, is always
eventually supplanted by a successor. The king will die. Long live the next
king.
The thing that will eventually dethrone the US govt as market
backstop may not come as many see it coming including myself : via a
fundamental reckoning or a credit downgrade. No, those things may be
resultant of an outside disruptive force on the very nature of centralized
power.
It may come like it does in most markets; when the big fish has a
position that leaves it too little room to maneuver ( debt service
etc) and then a bigger fish comes along that can take advantage of the
next thing. That fish could be Russia, China, or a state controlled
capitalist set up that can mandate controls more easily
to what it wants. Meanwhile the west’s pesky democracy, or what’s left
of it will need to be eradicated. Then they can put down any egalitarian
economic forces.
So in the west, with corporate controlled governments, the king will be
dethroned only by true economic grass roots revolution. And that will
only happen if they do not put us down before hand.
Decentralization Kills Power Abuse
Either way the killer concept that will be used is the same thing
that has disrupted how we communicate, fight wars, and handle work. That is
decentralization as the ultimate disruptor ofcoalesced incumbent power.
The playing field will be leveled.
 
That is what BTC and it’s ilk are. They represent the re- democratization
of money. This will openup the markets to a bigger, dare we say it, more fair
and definitely more like the real invisible hand that free economic markets
aspire to.
The question is how will the incumbent central bankers handle it. It
certainly won’t be to our benefit. I write as if the success of a truly free
economic society are a given. But they are not.
Control of money is being threatened by a grass roots movement. State Run
capitalism will just ban or claim the new tool as its own. China and Russia
are already doing oil for gold deals via Blockchain. And why not? They own
their banks. The western governments will try to co-opt, restrict,
demonize, and finally replace the money of choice with a castrated version
that offers convenience at the price of losing that rediscovered financial
freedom.
Those on power have no incentive to say “we are wrong, we accede to the
public’s desire for an evolutionary government.” Lol.
This will end badly when the Fed gets its shit together.
When that happens, expect a multi-year smack down attempt as they’ve seek
to tame crypto currencies they can’t own. And when you think it is
over, that is when it is just beginning. The tech ain’t going away.
But if there is one thing that will make enemy governments unite in
defense, it will be the true democratic society that can happen. It won’t be
martians that bring governments together. It will be it’s own citizens
chafing at modern feudalism.
Sincerely:
Vincent
vlanci@echobay.com
About the Author: Vince Lanci has 27 years’ experience trading
Commodity Derivatives. Retired from active trading in 2008, Vince now manages
personal investments through his Echobay entity. He advises natural resource
firms on market risk. He pioneered and executed the Nat Gas EOO arbitrage
trade of 2006 to 2008, netting over $90MM for a NYC hedge fund before
retiring. Over the years, his expertise and testimony have been requested in
energy, precious metals, and derivative fraud cases. Lanci is known for his
passion in identifying unfairness in market structure and uneven playing
fields. He is a frequent contributor to Zerohedge and Marketslant on such
topics. Vince contributes to Bloomberg and Reuters finance articles as well.
He continues to lead the Soren K. Group of writers on Marketslant.
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