Quo Vadis, Bitcoin?
Have you been keeping up with Bitcoin's latest ups and downs? I love this stuff! Even if it ends up at zero, it will have been a hell of a great ride.
Bitcoin seemed a great buy when the thugs at the FBI shook up the black (free) market with their seizure of the first Silk Road which took the price down to around $100. Those who scooped it up then must have been feeling awfully bright as it hit $250 just days later. I was excited to see it heading down to $235 all of a sudden and very publicly cheered on a crash back to $100 (so I could get even more). Instead Bitcoin charged up to about $400 this weekend. As of this writing, my hopes for another nicely priced buy-in are back up as it took a brief plunge below the $300 mark.
I can see why the naysayers dismiss Bitcoin as nothing more than digital tulip bulbs. But for the philosophical, non-aggression crowd uploading their lives into the digital realm to get away from the violent, penurious feudal world of the state, Bitcoin is a lot more than a shot at getting rich quick. It's a shot at getting rich quick fueled by philosophy and logic and most of all by the ongoing collapse of the dollar.
Bitcoin is morally pure. It's a means of storing wealth in something that the market has created and which is outside the control of the state. It makes ownership anonymous which in turn makes taxation very difficult. And since there is no state-backed cartel with the ability to arbitrarily increase the supply, Bitcoin does what stored wealth is supposed to do; it gains value over time.
Looking at Bitcoin right now, however, it would seem that it's not so much gaining value over time as it is drunkenly stumbling about. But that's the close up view of a tiny part of what we expect will be a much longer timeline. Imagine in the next few decades, if you will, that Bitcoin is trading between $10,000 and $12,000 for months or years during the dollar's undignified dotage . These swings between $2 and $20 or $100 and $400 will seem for what they are: the unsteady first steps of a toddler.
Or the whole thing could collapse into a big dark hole of nothingness. I say these things with full knowledge that I risk looking like an absolute idiot if Bitcoin does indeed collapse. We can't guarantee success, good reader. But we can deserve it.
Either way, it is fun to dream of riding a Bitcoin horse into life-changing wealth while knowing that this particular horse is truly a free market creation. And not only does this glorious steed get stronger from the inevitable collapse of the state; it is helping bring that collapse down that much faster.
Hi ho, Bitcoin! Away!
Regards,
Gary Gibson
Editor, The Dollar Vigilante
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Before we get to the review let’s have a look at what you missed in this week’s TDV Dispatch.
First, I looked at the scourge of central planning run amok in my “Memory Hole”. Next, Jeff Berwick revisited the ongoing Bitcoin narrative, and got us up-to-date. Ed Bugos follows with his “TDV Portfolio: Review & Outlook”.
Then, Jeff took us around the world of the absurd in his weekly “Other News from TEOTMSAWKI and TDV Related Tidbits”.
Finally, we profiled Leonard E. Read.
If you’re interested in receiving articles like these, consider our weekly subscriber-only publications, like our Issue, Dispatches, and Homegrown. You may subscribe here.
Here’s what we wrote about this week…
MONDAY, November 4
Are You Prepared for a US Bank Bail-In?
Jeff Berwick on the next great banking heist.
“If you have cash in a US bank, you can expect to have the federal government take it all the next time US banks find themselves in trouble.
The days of the federal government stealing money from taxpayers, or borrowing it from the Federal Reserve, to save troubled banks — as in they did in the 2008 crisis — may be over. Congress is considering imitating the theft in Cyprus and letting troubled banks "bail-in" depositor money in order to make themselves solvent.”
TUESDAY, November 5
An Open Letter to Russell Brand
Jeff Berwick pens a letter to the comedian/activist/ill-informed Brand.
“You've certainly been in the spotlight since you called for revolution on BBC. Some hate you, some love you, but most of all, you got yourself some excellent press. I've got to admit: well-played.
You're obviously a brave man. You've appeared on The Alex Jones Show. You are outspoken. You are unswerving in your dedication to justice and an end to global inequities. Me too, Russell. I feel your frustration, your anger, your dismay.
You amused me on the BBC. Thank you. I spend a life in airports, and mainstream media television is on in each one I find myself in. It is mind-numbing. "Low-vibration," communication, as you call it. And it drives me insane.”
WEDNESDAY, November 6
Yellen More of the Same at the Fed
Ed Bugos on the new Fed chairwoman.
"I missed this when it first came out because, to be honest, I am not all that interested in Janet Yellen, or whoever takes lead of the Federal Reserve Board. I am already convinced it is going to be someone like Bernanke, or worse, because these nominations are political, and we all know which way the political winds are blowing these days. Certainly not in favor of any form of actual austerity. As a result, I ignored the Yellen criticisms from other gold bulls.”
THURSDAY, November 7
America: Rumors of Food Riots, Realities of War
Wendy McElroy on food stamps and fear.
"The Department of Homeland Security (DHS) spent $80M to fortify federal buildings in New York apparently in preparation for civil disturbances and possible food riots on November 1st. The DHS plans included armed private guards who would protect IRS and other buildings against attack by fellow Americans.
Other officials joined in ringing an alarm bell. Margarette Purvis, head of New York City's Food Bank – the largest one in the nation – also suggested that food riots were likely to break out in NYC. In a well-timed interview with Salon (10/29/13), Purvis hinted she might not even be averse to unrest. Salon reported, ‘Rather than 'trying to raise a dollar' to avert disaster privately, she [Purvis] said, a solution will require Americans to 'raise their voices', because 'the avenue has to be activism'.’”
FRIDAY, NOVEMBER 8
Twitter, Bitcoin, and Precious Metals: Choices of Our Times
Jeff Berwick on the Twitter IPO and it’s role in a larger discourse.
“As I have stated in print, online, and in numerous interviews, we are now living in the most dangerous time for human capital in the history of the world.
Millennials are facing the brunt of this desperate time. After all, what kind of investments are Twitter, Bitcoin, and, namely, silver (since millennials, I assume, have less money than older more established precious metals bugs)?
Historically and relatively speaking, they are extremely risky choices, at least in the eyes of most professional financial analysts. More importantly, they are a sign of the times, which are extremely risky as well.
I wonder what Amerika's retail darling Macy's is thinking, now that Twitter, after but one day of trading and no revenue, has a bigger market cap than it? Surely, they must be slightly curious about market distortions.”
SATURDAY, November 9
The Weekend Vigilante — November 9, 2013
In his weekly address to TDVers, Jeff Berwick checks in from Lima, Peru.
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