Expect Desperate and Insane Behavior From Government in 2018 – Part 2 (Bitcoin)

33 thoughts on “Expect Desperate and Insane Behavior From Government in 2018 – Part 2 (Bitcoin)”

1. HI Michael,

   Long time reader, first time commenter.

   I love your coverage on Bitcoin, as it’s something that I’ve personally been dedicating a lot of time learning about lately, and I share with you a lot of hope about its potential to positively alter the course of humanity’s future. That said, I actually do think that Bitcoin is a bubble, and here’s why:

   Too many people view it as a financial asset rather than a currency. Uneducated investors see its chart, and want to get in on it without really understanding how revolutionary a concept it is. Additionally, it is difficult to even use it as a currency, as there are fairly significant transaction costs and times tied to its transfer. When these facts start to become obvious to investors, it isn’t too farfetched to believe that they might take their money out of it.

   That said, I truly believe in the transformative potential of cryptocurrencies and blockchain technology in general. Frankly, I think there are better coins than BTC, but since BTC was the first, it gets all the hype. Litecoin is free and instant to use; Electroneum, a crypto that was just released to the public, can be mined over a mobile app and is also easy to transfer. Bitcoin is the Model T; these newer coins represent a modern day Ferrari. Even more, the potential applications of blockchain technologies like Ethereum span into countless fields. It’d be awesome to see your opinion on these alternative uses of blockchain technology, as well as the different types of currency that could, in the not-too-distant future, supplant BTC as the world’s dominant cryptocurrency.

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   • Wait till lightning network and rootstock come online…it will make most of these other cryptos obsolete

2. “Anyone who bets against this overall space will ultimately end up historical roadkill.”

   I don’t know. I think it’s less about Bitcoin and more about alternatives to the current system.

   Michael, I know you have read some of Ken Wilber’s work. I don’t know if it is explicitly mentioned by Wilber, but I understand he does reference Ilya Prigogine and his work on open systems and chaos. According to that model, we are at a bifurcation point: the current system cannot handle anything more, lest it either collapse to an older order, or birth a new one. Bitcoin would be a new one. Gold would be an old one. Either way, I would rephrase the quote:

   “Anyone who bets [on the status quo] will ultimately end up historical roadkill.”

   I prefer the latter, because I don’t think humanity has currently evolved enough to make the jump up to higher order. I am not a pessimist in that regard. It is likely if not inevitable, given that the overall arc of history is upwards (check out a great book “Non-Zero: The Logic of Human Destiny” by Robert Wright), that humanity will get to the next-higher order. It just might take another century (or two) to do it.

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3. Very good Sabu014

   And at what point do the central bankers quit and buy bitcoin themselves?

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   • Think about this:

     Blog/Cryptocurrency
     Posted Dec 3, 2017 by Martin Armstrong

     QUESTION: You have said that the future will be cryptocurrencies. The Bank of Canada has come out and acknowledged what you have been saying that such private issue challenges the government’s profit structure. Do you think electronic money will be viable sooner or later down the road?
     PG

     ANSWER: Electronic currency is ALREADY the bulk of the money supply. When you deposit $100 in a bank, it lends out $90 from your deposit and your bank statement still reflects you have $100. However, the person who borrowed the money now has $90 in their account. The government did not “print” money to cover that extra $90, rather they just created “electronic” money.
     So what is the big thing about cryptocurrencies? The idea is that it is money that will not depreciate and is strangely not “fiat.” Yet, it is no different than the electronic money created by the bank, which is also outside the strict domain of government.
     If you just look at the price of Bitcoin, it demonstrates that this is merely a speculative boom indistinguishable from the Dot.COM Bubble, which also reflected a new era in technology. If Bitcoin was truly an alternative currency that was supposed to retain its value, the mere fact that the rice has soared like any stock proves that it is by no means a “store of wealth” that somehow is better than currency in which it must still be converted to use in the bulk of the economy.

     If the power grid failed, everyone would be broke. You could not even buy food. Society would revert immediately back to barter. There are risks to any form of electronic money be it a bank or crypto. The government WILL move toward cryptocurrencies THAT THEY WILL CONTROL, not the private sector. I have stated before, they argue electronic money eliminates cash crime from bank robberies, drugs, prostitution, etc., but it introduces more sophisticated hacking computer crimes.
     The crime issue is the excuse, but the real issue remains the hunt for taxes. I have to wonder if the government is not behind this entire cryptocurrency phenomenon. Satoshi Nakamoto is the name assigned to this mysterious unknown person or people who designed Bitcoin and created its original reference implementation. Nobody knows who invented this technology. It is entirely possible that this movement is a false flag created by the government to move society to accept the end of tangible money. It is very strange that the person who invented this technology is unknown and has not stepped forward to demand some royalty.

   • Let me tell you a little story about the only interaction I ever had with Martin Armstrong. Back in 2013, I spoke at a conference where he was also a speaker. I was really excited about his talk because I had been a big fan of his work. During the Q&A, I asked him a few questions about Bitcoin, and he completely dodged them and what he did say was completely nonsensical. I lost a lot of respect for him that day. I know he is a highly intelligent person, and for him to give such ridiculous answers made absolutely no sense. He’s still saying the exact same stuff about Bitcoin now. He’s been scaring people away from it for years. People who could have made generational wealth had they not listened to him and bought.

     We all make mistakes, but he seems to genuinely have a chip on his shoulder when it comes to Bitcoin, and his head is not clear on the matter. Perhaps that’s a result of how the U.S. government treated him which caused him to just give up and think we can’t ever change the world for the better and that the powerful always win. Not only do I find such a defeatist attitude counterproductive, but in this case with Bitcoin, it kept people from making a fortune. Bitcoin was around $100 when we both spoke at the conference.

   • Systems like bitcoin stand a good chance if the Rothschild’s and their ilk are exiled to a gulag in Siberia.

     Let’s hope this can be accomplished.

   • CRYPTOMANIA!
     http://cluborlov.blogspot.com/2017/12/cryptomania.html#more

4. http://www.thecommonsenseshow.com/2017/12/03/paul-craig-roberts-calls-the-american-government-the-most-corrupt-ever/?utm_source=rss&utm_medium=rss&utm_campaign=paul-craig-roberts-calls-the-american-government-the-most-corrupt-ever

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5. is the following relevant to desperate and insane government ?? or promote bitcoin sales ??

   ***

   Are the beneficiaries of Stephen Mnuchin’s Trump Budget, with humongous increases in National Debt similar to programs Goldman Sachs has used for decades to impoverish nations, clearly visible to you?

   Have you ever wondered how the New York banks have been so successful that they can give million dollar bonuses and buy interlocking director control of Fortune 500 companies ?

   Or how the Federal Reserve system conceals billions of dollars of profit in accounts that are not audited ?

   Permit me to offer a succinct revelation for your consideration. How these funds are used to the detriment of society is detailed in footnotes 17 and 18.

   The future of the United States may be in your hands.
   Olde Reb
   [email protected]
   ***************
   FISCAL BLISS*

   “What difference does an increase in the National Debt make? We owe it to ourselves.” Nancy Pelosi has declared. Such a paraphrased statement, reflecting on the exoskeleton structure of the Federal Reserve, ignores the inner historic mechanisms of Rothschild banking, the intense subterfuge and arm-twisting of the Fed’s creation, and the proven destructive forces inherent but hidden therein. 1

   The medieval Rothschild Banks established a line of credit for the King provided the King issued a written promise to pay gold, with interest, to the bank at a time in the future. The book-entry Rothschild credit was used to pay for obligations incurred by the king and the credit continued to be circulated in the kingdom between merchants. The bankers sold the king’s interest bearing promise of gold to investors. The promise was renewed on its maturing date and was perpetually rolled-over. 2

   VOILA !!! The king made the suppliers of services happy with Rothschild credit; the bankers had the gold; the public had a promise that the king would eventually pay them in gold—which would never happen. 3 Everything went smoothly as long as the bank could sell the promise and the people did not demand the gold. 4 As Benjamin Ginsburg has lamented in FATAL EMBRACE; (bankers) AND THE STATE 5, eventually the schemes, which stole the wealth from the people, would come to a catastrophic climax. 6

   The Federal Reserve 7 does the same thing for the U.S. government’s deficit spending. Their wizard is hiding behind Frank Baum’s curtain as obscurant to any public inquiry.8

   The Federal Reserve Bank of New York will grant credit (not “create money”) in an account of the US government with an amount that the government will pledge. 9 The government will expend the book-entry-credit account (deficit spending) to pay for goods and services consumed by the government. The suppliers are content. Evidence that the supplier has received a credit voucher is obvious. [It is touted to the public as a loan.] The heading of the currency given to the supplier by a local commercial bank is Federal Reserve Note; i.e., a debt obligation of the Federal Reserve also identified as a “tender” (substitute) required by law to be accepted for an imprinted number of dollars. 10

   To sell the pledge from the government (the Treasury security) at the highest price, the Federal Reserve will hold an auction but will camouflage it as an auction by the government.11 Acceptance of bids, determining the interest rate, and the amount of deficit spending permitted is controlled by the BOG.12 Government regulations clearly establish the funds from the auctions are controlled exclusively by the FRBNY; i.e., a franchisee of the BOG. 13

   In addition to the approximate $1 trillion annually auctioned for deficit spending (new cash), the roll-over of approximate $10 trillion debt from prior years (publicly held maturing) is annually auctioned and disbursed by the FRBNY. 14

   The difference in handling of the two accounts is the supreme camouflage. Funds for roll-over securities are credited by the FRBNY to a government account. The FRBNY then pays the Primary Dealers (from the government account) for their task in collecting the maturing securities from the public. There is no increase in the National Debt nor is there any inflationary resultant from these transactions.

   If the funds from deficit spending securities were to be used in redeeming Treasury securities in the market (i.e., paid by the FRBNY to the government), it would eliminate any increase in the National Debt. It would also eliminate any increase in money in circulation (inflation). That clearly does not occur.

   WHERE DO FUNDS FROM THE AUCTIONS OF DEFICIT SPENDING SECURITIES GO ??

   The only viable dispersal of funds identifiable to this writer is the funds are commingled with funds to select Primary Dealers. If the Primary Dealers include shareholders of a privately held incorporated Board of Governors of the Federal Reserve, they would not have to reveal corporate records.15 The profit could be completely hidden from view. 16 The deficit spending amount 17 would be clear profit for the owners of the BOG.

   The statutory charter of the Federal Reserve stipulates profit of the operation belongs to the government. Concealment of funds that belong to the government appear to be embezzlement, among other crimes.

   Various theories abound on how the purloined funds have been utilized to the detriment of society. 18

   If the scheme is not exposed, Wall Street internal memos identify collection of the $20 trillion debt is the “ultimate goal” and would reduce the United States to the status of Greece. 19 Wall Street’s objective in Greece 20 is not to exploit, but is to destroy the nation. 21 Indeed, national sovereignty has been acquiesced by Greece to the Troika (financiers) as the terminal end of Goldman Sach’s “shitty” three billion Euro debt. 22

   The proposed Goldman Sachs government budget (whoops, Trump’s budget) includes huge deficit spending increases (increased military spending with cuts in social programs) with unrealistic increases in national productive/tax base.23 This is the same scheme Wall Street and the CIA have used to bankrupt other nations for four decades. 24 The psychopathic Wall Street warmongers demand a humongous deficit busting military expenditure, but this statement may reverse cause and effect. 25 The people will submit to anything if they are induced to fear a foreign threat.

   Get ready to kiss your 401(k), your government benefits, your pension, and your bank accounts goodbye, with strikes prohibited, health care costs escalated, perpetual war, mass layoffs (including government personnel), and economic chaos—among other dire occurrences. 26 This is the utopian government controlled by bankers that David Rockefeller 27 so proudly promised for the world in his autobiography MEMOIRS and Carroll Quigley touted in TRAGEDY AND HOPE.

   We can rest assured the same scheme is used by the ECB with the Euro.

   The U.S. has two options:
   The entire situation can be ignored with the public meekly submitting to Wall Street’s collection of the fraudulent $20 trillion National Debt and accept the fate of Greece [Greece has surrendered national sovereignty control to Goldman Sachs/Troika];
   or
   They can assert public pressure on congress-critters to audit relevant accounts and indict Wall Street.

   PS: How can banks with (deficit spending) liquidity that borrowers will not accept for loans laundry the money? Well, they can buy stocks (and watch the price go up and say the corporations are buying their own stock) or they can buy bonds (and watch the yield go down as demand increases). Have you seen any evidence of this happening ?

   * Ignorance is Bliss

   Footnotes are available at https://www.scribd.com/document/355085824/Embezzlement-by-Federal-Reserve if they are deleted by software.

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6. Blockchain crypto-currencies are a disruptive technology that is peer to peer. As I’ve already said, it’s really no different than Napster, etc.

   Only this time it’s the central banksters who are going to see their business model destroyed, instead of the major labels.

   By creating i-Tunes, Jobs actually did the major labels a favor because those dinosaurs had no idea what to do once they realized that suing music lovers (aka/ customers) was not only not stopping P2P, it was driving more people to P2P. All they knew was sell CD’s and hookers and blow.

   That’s where this is headed for Blankfein, Dimon, etc. But you can count on them trying to kill it first and foremost.

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7. I have been following you via the Keiser Report for years. I think BTC is most valuable as a disruptive asset in the short term and as a currency in the long term, once it’s mostly all mined and the futures frenzy subsides. Then BTC can take its place as a true peer to peer currency. It’s not BTC per se that will crash the banks, it’s the greed of those late to the party who don’t hold physical. Would you agree?

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8. Olde Reb,
   1 ) Read the first paragraph. “Such a paraphrased statement” Wait, did she say that or not? When?
   2) “medieval Rothschild Banks” The same one founded in 1811? Medieval?
   3) “Acceptance of bids, determining the interest rate, and the amount of deficit spending permitted is controlled by the BOG” BOG? Bank of…?

   Stopped reading after that. This is why books and newspapers have editors.

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   • Btn, the Rothschild bloodline goes back to the middle ages. But I think the use of “medieval Rothschild Banks” is confusing.

     The rest of it is dead on.

   • I should also add that when the Rothschild’s kept holding high profile elitist fund raising events for your candidate Hillary that they were pulling a classic cover their ass bait and switch and were actually going to f*$k her badly.

     Look what happened.

9. I’m in agreement with Sabu014 that crypto currency could be the future, yet bitcoin could still be in a bubble. Beside the exponential valuation increase, there’s also the fact that bitcoins can be created at a much lower cost than the price of a bitcoin.

   Also, the creation of a Bitcoin is quite expensive and produces very little benefit to society. It’s an artifical production cost that waste resources (energy mostly, but also computing hardware) just to make Bitcoins rare and hence valuable. An ideal currency would be difficult to create/duplicate, but should not be expensive to create. That is why I don’t think bitcoin itself will be the long term cryptocurrency of choice. Imagine if a US $100 bill costs $50 to print…

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   • ” there’s also the fact that bitcoins can be created at a much lower cost than the price of a bitcoin”

     What kind of “fact” is that?

10. > While the fairytale we’re conditioned to believe tells us government exists to protect us and create an environment in which humans can thrive, the reality is quite clearly the opposite

    It is not that simple, black and white.

    Thing is, governments are CREATED to maintain the said environment (that is why they are so universal).
    But as soon as they become self-sustained organizations, they grow their own “private” interests, detached from interests of public once created them.

    In the end you would come to Lenin’s sad reflections in 1923 like the famous
    “Как нам реорганизовать Рабкрин”

    Lenin failed to design the system, where government would be both strong managerial protection and controlled by public.
    So did Founding Fathers, though their system lived longer than Lenin’s one.
    Mankind history is the history of such attempts.

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11. The blockchain algorithm is a novel distributed accounting method, but it is hardly a “wealth creation machine”.

    Speculation in the price of Bitcoin tokens, penny stocks, tulip bulbs or Leonardo paintings does not “create wealth” — it merely transfers existing wealth.

    Bitcoin “mining” also involves the pointless waste of many gigawatts of electricity which could have been applied to productive activity. This does not “create wealth” either.

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    • Agree with your point on wealth creation vs. transfer. However, the criticism in your last paragraph would apply to any form of money backed by work/cost, as for example gold. (not saying bitcoin is such money)

12. Karl Denninger on why he believes bitcoin is a ponzi scheme…https://market-ticker.org/akcs-www?post=232646

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    • Ah Karl Denninger. I have a Bitcoin story about him as well. Similar to Armstrong, I got into it about Bitcoin with Karl back in 2013 on Twitter. We argued about the merits of Bitcoin and then he blocked me. The price was $100. People who listened to him, likewise lost an opportunity to create generational wealth for their families.

      I find it pretty incredible how so many people continue to choose to care about the opinions of those who have been wrong the entire way, versus those who have been right.

      No skin off my back, I’ve just tried to help people these last five years whether they care to listen or not.

    • MK: You repeatedly get back to the issue of people who lost the “opportunity of wealth” becaused they listened to those who spoke skepticism on bitcoin. It sounds like you blame them for expressing their opinions on the matter. And regarding this wealth, don’t you agree that this wealth, as pointed out by another commenter, is nothing “created”, but a continious transfer of wealth – from latecomers to those who got in earlier? Anyway, there is a difference between being skeptical to bitcoin and fighting it on behalf of the existing status quo.

    • I focus on that because it was a once in a lifetime opportunity for people with very little money to seriously change the lives for them and their families. Many of the people buying now are very wealthy and older, as compared to early adopters, many of whom were computer geeks and younger.

      But I respect your views on Bitcoin and it doesn’t bother me if people are skeptics, although I do have a track record and I told everyone how I see it from day one and still do. I don’t trash on skeptics, but I do trash on know it alls who dealt with Bitcoin in a dishonest way from the beginning like Karl and Armstrong, and yes I believe they hurt people who might have bought but listened to their overconfidence on the matter.

13. How about this:

    The current debt based money system is broken, therefore it must be replaced.

    When the current system implodes (hyperinflation) Bankers will introduce “Fed Digital” which of course will be “backed by gold”.

    Fed Digital solves a lot of problems:
    It saves the “official system” and gives the public confidence.
    It allows Bankers to continue making money for nothing.
    It gives the Govt. a much improved way to tax and control.

    At this point, bitcoin is not good for our rulers.

    What have I left out?

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    • It’s being replaced right now, right in front of our eyes, with Bitcoin and other crypto assets.
      I don’t deny that the status quo won’t like it, or that they won’t try some scam FedCOIN.
      My view, as I have articulated repeatedly, is that the cat is already too far out of the bag.
      The future will be decentralized.
      Of course, we can all have different opinions of how this will work out and time will tell.
      That’s my view.

14. Nothing could be better for the planet than for decentralization to occur, and the central bankers dethroned and thrown in a ditch.

    But that’s a fairy tale. The central bankers are trillionaires, and they are not stupid.

    It is probably THEM manipulating the bitcoin market right now by blowing this bubble. And when they are ready, they will take their chips off the table, and bitcoin will come crashing down. The bitcoin market cap is nothing to them. They can do whatever they want with bitcoin just like the gold futures market because:

    1. It is good for them, and
    2. They have unlimited money.

    (But I hope I”m wrong.)

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    • Not only do I not think it’s a fairytale, I believe we are in the early stages of it happening right now.

      But this conversation isn’t going anywhere. We will know for sure where things are headed as the years ahead unfold.

    • Seems to me that the bitcoin bubble is being blown because billionaires are trying to escape their own bankers. Who says a billionaire loves the guys who are leeching off them day in and day out? Quite the opposite. In fact, its the cupidity of central banks in Asia that have done most to drive their customers’ money into the bitcoin bubble. We’re witnessing the consequences of a very long stretch of banker abuse. The shapes of these consequences cannot have been foreseen — many alt-economists swore it’d be in the shape of a wholesale system crash long before now — but I think we all knew they were bound to happen one way or another.

15. Genaro,
    Hillary was NOT my candidate.

    SG,
    The mining cost = price of hardware + price of electricity
    Look up “bitcoin mining cost” and do the math

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16. On another subject.
    Make time to listen to this BOMBSHELL interview.

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17. Michael,
    The more I think about it, the more sure I am that crypto currencies are the future, but BTC will be obsolete in 5 years (replaced by something better). It just has too many drawbacks as a currency.

    A good crypto currency should be (among other things)
    1) Energy efficient. BTC is most defintely NOT, due to the huge processing power needed to create them
    2) Stable in value: Fixed maximum quantity and built-in escalation of mining costs make it highly deflationary. This is multiplied by the fact that these same two properties mean people are much more likely to save/hoard it than spend it, creating liquidity issues (spikes and crashes in price).
    3) Decentralized in nature. Hash-IO controls 41% of the hashing power, and apparently 51% control (which they can obatin with collusion) means that you can double spend.

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18. Nice to read someone who understands the comming SOVEREIGN DEBT CRISES , and the ramafications of such a catastrophe.
    The odd thing is is that in the US , you will never read about it !
    Funny how the Cartoon Network ( CLINTON NEWS NETWORK…..CNN ) constantly rambles on about Russians as the fiscal cliff approaches !
    Funny / not ! How Americans are all clueless about the catastrophe approaching world governments as they keep / taxing and spending themselves into the abiss , yet how one man ( MARTIN ARMSTRONG) , keeps trying to get his out about the impending financial collapse of government / pensions ….and know one but a few ..like yourself are reading !
    Great piece !! Keep up the great work .

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