Money from thin air
I recently wrote an article on Bitcoin and Gold. I think what a lot of people, can't seem to comprehend is the difference between money and currency. Store of value and the perception of store of value.
The Governments have played this game for hundreds of years. It's a closed loop system, adding Bitcoin is simply another tool for them to assert control - Perma Bulls will say "it's different, the people have control" - well ask the Chinese, or have you provided utility bills and forms of identification to your exchange or broker? Did you need information such as email addresses when making your wallet?
Guess what KYC & AML is the disguise used to assert control. The blockchain is an immutable ledger; very powerful for tracing payments, especially useful for taxation.
To understand the value you need to look at the scenario with your space suite on - this will help you understand not just Bitcoin or Gold, Bitcoin vs Gold or anything along these lines. If you look at the closed loop systems the governments have created, even if your a Russian Billionaire moving amounts of Bitcoin will end up with reporting being issued to the relevant governments. This is not just a CEO saying yes or no, it will create other types of regulations, possibly even sanctions on the industry.
Look at the current situation debt, inflation - all of which are justified with Covid and a war. But the truth is, it's all fueled by greed and stupidity and this is the fundamental issue. Let's start with the federal reserve.
Funding rates dropped, No big issue I hear some of you say, it's not crypto or I don't trade that chart.
Dig a little deeper; Freddie Mac.
With funding rate lower mortgages become harder to obtain, cost of mortgages become higher. The knock on effect, is the rest of the world feels this as a delayed reaction. Back when the US was in all intense and purpose the "Global Bank" it would issue US Dollars in exchange for gold. The rest of the world kinda woke up and requested some of their gold back instead of the I.O.U's (US Dollar paper money) they had been paid with.
This leads into the US having what's known as a spending deficit.
But what does this mean for us regular citizens? Well, to get to that you need to understand the situation at one level below this;
How is money created? see this over simplified sequence.
Thus leaving a simplified view something like this.
Now you should start to see how it fits together?
Who benefits? Well that's the thing, the banks benefit from buying bonds to earn interest, they sell partial amounts to the reserve for extra profit, they can take this profit to repeat the process. Clever, no?
So why does the government allow this? Well, their in on the scam.
Did you know (1) the Federal reserve have stockholders, made up of now shell corporations, almost un-tracible. In addition to that (2) they earn 6% dividends on this operation.
==========================================================================================
Why is this important? Well, this is not an argument for Bitcoin vs other forms of money. This is about understanding where Bitcoin can fit into the operation. The irony of all of this is you have something that makes it easier to track n trace, you have KYC & AML, yet people see Bitcoin as freedom. The only way to beat the system, is to know the system and ride the waves. The scam is not fiat currency, the scam is the control of how fiat is created and leveraged, taxed and re-used with fractional reserve.
Who knows, we may see a Bitcoin type bond soon. Then we know where the power sits.
Anyway, food for thought.
Here's the post on Gold from a few days back.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
The Governments have played this game for hundreds of years. It's a closed loop system, adding Bitcoin is simply another tool for them to assert control - Perma Bulls will say "it's different, the people have control" - well ask the Chinese, or have you provided utility bills and forms of identification to your exchange or broker? Did you need information such as email addresses when making your wallet?
Guess what KYC & AML is the disguise used to assert control. The blockchain is an immutable ledger; very powerful for tracing payments, especially useful for taxation.
To understand the value you need to look at the scenario with your space suite on - this will help you understand not just Bitcoin or Gold, Bitcoin vs Gold or anything along these lines. If you look at the closed loop systems the governments have created, even if your a Russian Billionaire moving amounts of Bitcoin will end up with reporting being issued to the relevant governments. This is not just a CEO saying yes or no, it will create other types of regulations, possibly even sanctions on the industry.
Look at the current situation debt, inflation - all of which are justified with Covid and a war. But the truth is, it's all fueled by greed and stupidity and this is the fundamental issue. Let's start with the federal reserve.
Funding rates dropped, No big issue I hear some of you say, it's not crypto or I don't trade that chart.
Dig a little deeper; Freddie Mac.
With funding rate lower mortgages become harder to obtain, cost of mortgages become higher. The knock on effect, is the rest of the world feels this as a delayed reaction. Back when the US was in all intense and purpose the "Global Bank" it would issue US Dollars in exchange for gold. The rest of the world kinda woke up and requested some of their gold back instead of the I.O.U's (US Dollar paper money) they had been paid with.
This leads into the US having what's known as a spending deficit.
But what does this mean for us regular citizens? Well, to get to that you need to understand the situation at one level below this;
How is money created? see this over simplified sequence.
Thus leaving a simplified view something like this.
Now you should start to see how it fits together?
Who benefits? Well that's the thing, the banks benefit from buying bonds to earn interest, they sell partial amounts to the reserve for extra profit, they can take this profit to repeat the process. Clever, no?
So why does the government allow this? Well, their in on the scam.
Did you know (1) the Federal reserve have stockholders, made up of now shell corporations, almost un-tracible. In addition to that (2) they earn 6% dividends on this operation.
==========================================================================================
Why is this important? Well, this is not an argument for Bitcoin vs other forms of money. This is about understanding where Bitcoin can fit into the operation. The irony of all of this is you have something that makes it easier to track n trace, you have KYC & AML, yet people see Bitcoin as freedom. The only way to beat the system, is to know the system and ride the waves. The scam is not fiat currency, the scam is the control of how fiat is created and leveraged, taxed and re-used with fractional reserve.
Who knows, we may see a Bitcoin type bond soon. Then we know where the power sits.
Anyway, food for thought.
Here's the post on Gold from a few days back.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.