Posted on 11/06/2019 2:46:49 AM PST by Kaslin
House members summoned Facebook’s Mark Zuckerberg to Washington, D.C., and grilled him -- harshly -- about his plan to create a new currency, Libra.
“Why should we trust you?!” asked Congressman Mike Doyle.
I liked it when Zuckerberg said, “I actually don’t know if Libra’s going to work, but I believe that it’s important to try new things.”
He was right. That’s very important.
The Libra would make it easier to transfer money anywhere in the world. It also promises stability. Its value would be based on a basket of currencies from different countries, which would protect Libra owners from inflation in any one country.
It’s an idea that deserves a try.
But it may never be tried because the clueless politicians’ threats of punitive regulation scared off many of its supporters.
Politicians want to crack down on Libra “because they’re threatened by it,” says tech reporter Naomi Brockwell in my new video. “This is going to be competition for the U.S. dollar. Government doesn’t like competition.”
Governments also like to control any money that we might use.
“Want to send money to Russia to a family member; it’s going to be censored. You want to send money to a relief effort in Venezuela; it’s going to be censored,” says Brockwell. But if you use a cryptocurrency like Libra or Bitcoin, “your money will get through. That’s an incredibly powerful tool that gives people the freedom to spend their money where they want to spend it.”
Bitcoin is harder to stop than a currency like Libra would be because Bitcoin doesn’t emanate from one company or government mint. There’s no one owner of Bitcoin or most other cryptocurrencies.
“It is the first currency that is decentralized,” Brockwell points out. “That’s why it’s still around, because they haven’t been able to have these hearings, haven’t been able to call the CEO of Bitcoin and say, ‘cease and desist!’ There is no server to unplug, no company to shut down, no CEO to throw in jail, so it persists! That’s really exciting.”
Digital currencies “live” on thousands of individuals’ computers, so no government can stop them by pressuring any one company.
That’s a reason they’re valuable.
When Bitcoin started, it was worth virtually nothing. But two years ago, the price of one bitcoin reached $19,891. Then it crashed to $3,192. As I write, the price is $9,390.
That volatility deters many people from using Bitcoin as money, but to those of us who don’t trust governments, Brockwell points out: “It is the only suitable money for free people.”
Of course, many disagree.
“I think it’s a gigantic classic pump and dump scheme,” says investor Peter Schiff. “There's nothing to give Bitcoin value.”
It’s “a bubble,” vulnerable to attacks from governments. “They can get banks and financial institutions to make it very difficult for Americans to use it.”
Schiff doesn’t claim we should count on dollar bills because he doesn’t trust politicians either. He suggests people buy gold to hedge against politicians’ irresponsibility.
“Gold has worked for thousands of years,” says Schiff. Unlike Bitcoin, “gold has actual value. A huge industry needs gold: jewelry … consumer electronics, aerospace and medicine.”
I’ve hedged against the dollar by buying both gold and Bitcoin. My Bitcoin investment did better. But Schiff says I’m a fool if I don’t sell it now.
I don’t know which way prices will move. But I know that it’s good to have alternatives to government-created currencies. The dollar’s value is only backed by politicians’ promises. I sure won’t trust those.
Even when currency is stable, government can use its power over currency to censor people.
“The government decided that they didn’t want WikiLeaks to receive donations, so they froze transactions,” observes Brockwell. But they couldn’t stop Bitcoin.
She says government has had “a monopoly on the money supply for a very long time, and now consumers finally have a choice. You can send bitcoin peer-to-peer to someone on the other side of the world almost instantly at very low cost, and it can’t be censored. That’s incredibly powerful.”
It is.
Alternatives to government monopolies are very good things.
Except only congress can coin money. That would essentially put fascistbook on par with congress as far as money goes.
While I agree with him on one level, maybe, this statement calls his agenda out clearly, in my view.
“I’ve hedged against the dollar by
...”
Maybe he’s one of the bad guys.
Berkshares. ...funny money or not?
https://en.wikipedia.org/wiki/BerkShares
Ok, here we go.
The government likes to control currency. Our currency has nothing to give it value but being "backed by the full faith and credit of the United States" (that's you and me, folks). The government has consistently abused our backing by diluting the dollar since we went off the gold standard. They get the pre-diluted value when they inject it into the money supply.
Diluting the dollar isn't the only way the government abuses the willingness of citizens to back things (e.g. do you enjoy backing Tesla?). The nation would never survive if all the notes the politicians have guaranteed with our backing were called. Committing our "full faith and credit" is even easier for them than simply spending our money.
In reality, anyone can use any currency they like. This is most often demonstrated by trading favors or items without even using the proxy of a currency. We do it all the time. The government doesn't like this because they have no opportunity to tax the transaction.
The only requirement for a currency to be "valuable" or "backed" is that both parties in a transaction believe in its value.
Boiling it down, the US Dollar is defined as our official currency simply because it is the only currency the government will accept in taxes.
I'm interested to hear other thoughts on these ideas.
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Except only congress can coin money. That would essentially put fascistbook on par with congress as far as money goes.
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...whom shuffled off the job to a non-govt entity. One Pres. stole all the gold he could get from Citizens (using govt POWER) & another removed us from the gold standard.
So, when has our govt CARED to adhere to/enforce the Constitution, let alone our Rights??
As to your point, a FREE People can accept anything they wish for voluntary exchange. IMO, it does NOT push FB on par w/ Congress
“Except only congress can coin money.”
Yep. Sure would be nice if they’d do it. Then there’s that whole “no state shall emit letters of credit” and “make nothing but gold or silver” payment for debts.
Those have been completely ignored for over 100 years.
L
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Boiling it down, the US Dollar is defined as our official currency simply because it is the only currency the government will accept in taxes.
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Slight correction: It’s a ‘Federal Reserve Note’ (fiat) vs. Silver Certificate (exchangeable for [legal tender\money] silver).
The latter (gold/silver) are the ONLY (true) currency, Constitutionally, that can be ‘tender in payment of debts’
Money is data, and money data at its root represents energy. The price of something roughly tells you how much energy was consumed in its production. It requires a stable amount of energy to mine gold or silver (or Bitcoin) which is why they can be used as money. Energy sources such as petroleum, natural gas, electricity could also be used as money except 1) they are hard to store and transfer, and 2) the amount of energy needed to acquire them changes frequently.
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