Thursday, 5 July 2018, 22 Tammuz 5778
This is from John Crudele at the NY Post:
'I thought we'd finally get rid of bitcoin. But the fake "currency," which I like to call bitcon, just won't fade away.
Bitcoin's price rallied to over $6,600 yesterday, but it had been well under $6,000 last week. Even at $6,600, bitcoin is still worth 70 percent less than it was at the beginning of the year.
I use the term "worth" cautiously because bitcoin is really worth nothing, since it's backed by nothing or no one. It's a confidence game that has value only because people are convincing other people that it's worth something.
Got it! Ponzi scheme. Confidence game. Fraud.
Anyway, bitcoin is headed for a value of zilch. It's only a matter of when.'
This is rather amusing, because he has described the U.S. Dollar perfectly! He is correct that Bitcoin has no intrinsic value, just like the US Dollar, and also just like the US Dollar is conjured out of nothing (except electricity used computing the hash). The US Dollar is mostly electronic nowadays also. Just numbers written on balance sheets. Nonetheless, Bitcoin is superior to the US Dollar. Whoa, hold on there. Superior? How?
Physically there is no difference between these currencies. The difference lies in the use of FORCE. It is FORCE that gives the US Dollar its "value". The use or non-use of Bitcoin is completely voluntary.
There are two things that give the dollar "value". The legal tender law and taxes.
There was a time that if you contracted to be paid in something other than "legal tender", like gold, that you could not get a US Court to enforce your contract. Being paid in gold can be a good hedge against the falling purchasing power of the USD because of money printing/conjuring, also known as counterfeiting.
Here is wikipedia on Gold Clause cases:
"All three cases were announced on February 18, 1935, and all in favor of the government's position by a 5-4 majority.[2] Chief Justice Charles Evans Hughes wrote the opinion for each case, finding the government's power to regulate money a plenary power. As such, the abrogation of contractual gold clauses, both public and private, were within the reach of congressional authority when such clauses presented a threat to Congress's control of the monetary system.[2] Of note was Hughes's opinion in the Perry case: in a judicial tongue-lashing not seen since Marbury v. Madison,[3] Hughes chided Congress for its immoral-though legal-act.[4] However, Hughes ultimately found the plaintiff had no cause of action, and thus no standing to sue the government.[5]"
It is interesting to note that immoral acts can be "legal".
Here is additional illustration from the same wikipedia page of the point that FORCE is required to make the USD "valuable":
'The Gold Reserve Act of 1934 abrogated gold clauses in government and private contracts and changed the value of the dollar in gold from $20.67 to $35 per ounce. This price remained until August 15, 1971, when President Richard Nixon, in what came to be known as the "Nixon Shock", announced that the United States would no longer convert dollars to gold at a fixed value even for foreign exchange purposes, thus abandoning the gold standard.
The limitation on gold ownership in the U.S. was repealed after President Gerald Ford signed a bill legalizing private ownership of gold coins, bars and certificates by an act of Congress codified in Pub.L. 93-373[6] which went into effect December 31, 1974. Pub.L. 93-373 did not repeal the Gold Clause Resolution of 1933, which made unenforceable any contracts which specified payment in a fixed amount of money or a fixed amount of gold. That is, contracts remained unenforceable if they used gold monetarily rather than as a commodity of trade. However, the Act of October 28, 1977, Pub.L. 95-147, ยง 4(c),[7] amended the 1933 Joint Resolution and made it clear that parties could again include so-called gold clauses in contracts formed after 1977.[8]'
As you can see it takes physical FORCE to maintain the USD's "value". If this were not so, FDR would not have had to make gold ownership illegal. You should also note that after FDR stole the people's gold at $20.67 per ounce, he raised the price to $35.00!
You also need USD to pay your "income" taxes, even if you did not trade for USD:
"Reporting Bartering Income
You must include in gross income in the year of receipt the fair market value of goods or services received from bartering. Generally, you report this income on Form 1040, Schedule C.pdf, Profit or Loss from Business (Sole Proprietorship), or Form 1040, Schedule C-EZ.pdf, Net Profit from Business (Sole Proprietorship). If you failed to report this income, correct your return by filing a Form 1040X.pdf, Amended U.S. Individual Income Tax Return. Refer to Topic No. 308 and Should I File an Amended Return? for information on filing an amended return."
If you bartered or were paid in gold as your contract demanded, you would have to sell some of your gold for good old USD to pay your taxes. Thus the "value" of the USD is held up by FORCE.
What happens if the US government runs out of busy of little drones that work to pay their taxes? I think their PONZI scheme would be exposed, because they would no longer have obedient slaves to back their "currency" with real work to give it some value.
So, which is superior - Bitcoin or USD? One's value is granted it by voluntary markets. The other's value is FORCED.
© Copyright 2018 John D. Marks. All rights reserved.