Wednesday, February 18, 2015

Missing The Point On Bitcoin

I came across this article a few days ago, basically a hit piece on Bitcoin. There's quite a number of these types of articles out there with more being penned almost every day. This one is a fine example of people who just plain miss the point of Bitcoin, which is similar to how some miss the point of owning precious metals. 

The author, Isabella Kaminska, runs down a list of common slams on Bitcoin and other cryptocurrencies: the value of Bitcoins in United States Dollars (USD) terms has collapsed, drug dealers and money launderers have used it, speculators took a ride on it, some Bitcoin-based operations have failed, etc. 

And you know what? That's all true. But it doesn't matter. To understand why, just replace "Bitcoin" with "USD" in that list of woes, or any other currency for that matter, and it's all still true: the value of the USD has collapsed before, drug dealers and money launderers use USD, speculators trade on wild swings in the value of USD relative to other currencies and to commodities, and plenty of USD-based operations have failed (banks).

The most damning thing on that list is the collapse of the price of Bitcoin, but like any other such event it must be understood in context. Yes, Bitcoin is down massively from its historic high. But as I type this, with Bitcoin sitting somewhere in the ballpark of $241, it's also still up astronomically from where it started: zero. The only people who got stung by the fall from its peak are people who tried to speculate on it and rolled snake eyes. People who mined their coins, or who purchased Bitcoin as insurance against a declining currency (much like the proper use of precious metals) probably are not feeling the sting so much.

That said, as an alternative store of value, Bitcoin's price movements do have to be understood in relation to the relative value of USD. As of now, USD is on a tear globally for several reasons, and therefore things priced in USD will tend to fall in price. Thus, when you compare gold and Bitcoin to the USD, similarities emerge. Have a look at these two charts, and mentally draw a line from peak-to-peak; notice the angle from left to right that they both follow?

One year gold chart sampled from the Money Metals Exchange website,
18 February 2015

One year Bitcoin chart sampled from, 18 February 2015
The only thing that is really holding Bitcoin back is adoption and use. Kaminska tried to dismiss the level of use at present by making an apples-to-oranges comparison of current daily totals with a long-established credit card processor, failing to take into account (or deliberately ignoring) the massive growth Bitcoin use has undergone since its inception.

Meanwhile, unlike Bitcoin's built-in ultimate limit of twenty-one million Bitcoins that will ever exist, the USD continues to be conjured up out of thin air (the cause of inflation and the loss of purchasing power of each dollar). The USD is teetering on the brink of losing its status as the world's reserve currency, too, which will cause its value relative to other currencies and commodities to plunge. In that environment, alternative stores of value, such as Bitcoin, will rise in relative terms. And that's the point, not all of this other nonsense that Kaminska is throwing at it. When that happens, people like Kaminska who put their energy and time into bashing something they clearly don't understand will be caught out in the financial downpour with no umbrella.

Tuesday, February 10, 2015

Proposed Seal of the State of Madison

This was posted to the State of Madison Initiative Facebook page this morning, a draft seal and flag of the proposed new state:

I suggested that they change one feature of it: I don't think the mountains in the background represent the area likely to be proposed as the new state very well. There certainly are mountains here (some of them would probably serve as the dividing line between much of the new state and Washington state, and there are the Blue Mountains in the southeast of the current state, which I live right up against), but wheat fields, apple orchards, vineyards and such placed in the background behind Madison would capture more of the spirit of this region. After all, the creators of this placed "Agriculture" right there in the seal. Other than some logging here and there, there's not a lot of agriculture going on up there in the Cascades that I'm aware of.

It's also good to see "Liberty" and "Molon Labe" right there in the proposed emblem of the new state. As an indication of the character and direction the new state could take, it's very encouraging.

Saturday, February 07, 2015

Attack ISIS Central Bank Style

I came across an article this morning about the possible establishment of a new hard currency in the world, one to be issued by the terrorist group, ISIS:
"ISIS has announced plans to mint its currency in gold, silver and copper. In a statement the group said that it wanted to stay away from the “tyrant’s financial system” and issue a currency that would be “dedicated to God” and get Muslims out of the “global economic system that is based on satanic usury.” -- John Weru Maina
 This isn't a surprising development with these clowns from a theological/historical perspective. Using precious metals as money doesn't eliminate the possibility that someone might charge someone else interest of some kind, but it does go a long way toward curbing or even eliminating the worst kind of financial monkey wrenching: deliberate money supply inflation done to facilitate out-of-control .gov spending, which ultimately falls on you and I like a ton of bricks.

It's a bit ironic then that this fiscally sound move by ISIS could instead be one of the best weapons to use against them, simply by applying some central banking stupidity to the situation: their new money could be gathered up, melted down, and replaced with an increased quantity of cheap fakes, much like what has been done to our coinage here in the U.S. We do it to ourselves, so why not do it to them, too?

State actors and/or enterprising individuals could carry out this financial sabotage of these assholes, and potentially at a nice profit. This would simultaneously drain ISIS of more of their assets and destroy all confidence in their money as their supply of precious metals is depleted and rampant inflation rocks their domain. Since no nation state recognizes them, uncontrollable inflation of their money supply will not be absorbed by foreign central banks using their money as reserves. That would put these shithouse rats on a collision course with the same fate as Venezuela, a country that also has oil wealth but thanks to sheer .gov stupidity really can't benefit from it, and it might even screw over anyone who does business with them.

We get their gold, we get their oil, and all they get in return is funny money and a whole bunch of bombs dropped on their heads, possibly even paid for with what was their gold. Sounds like winning to me!

Wednesday, February 04, 2015

Oil Change and Podcasts Day

It's time to change my car's oil (probably a bit past due, really), so maybe a half of an hour or so of my day will involve that. A 1.5 liter engine with an oil capacity of just 3.5 quarts doesn't take very long to do (and it's nice to get the job done for less than half of what a lube shop would charge).

I've been taking advantage of the wonder that is podcasting lately to tune into news and other information, utilizing my phone as the receiver and replay device. This has been a money saver, too, as I have my podcast client configured to only download new episodes of the podcasts I've subscribed to when my phone is connected to wi-fi. It looks for new stuff at 3am and grabs whatever is out there.

Currently my roster includes:

The Clarey Podcast

I'm keeping an eye and an ear out for more, as one thing I discovered about listening in on this medium is that one can get hooked and burn through new content very quickly. I'm learning about a lot of stuff and being entertained at the same time, so it's easy to go on a listening binge and use it all up quickly. 

Sunday, February 01, 2015

College Humor: "I Don't Care About Sports" Friend

Here's a little something for game day. I'll admit, I'm not a huge football fan, but I do at least enjoy watching the big game. I guess it becomes interesting to me when the stakes are as high as they can get.

But then there's these people, and we all know one...


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