Tag Archives: Cryptocurrencies

Under this new law, cryptocurrency could become illegal, by Simon Black

The US government has long sought back doors into encrypted systems and Congress is at it again. From Simon Black at sovereignman.com:

In early 1775, Benjamin Franklin and his European colleague, Charles Dumas, developed a secret method of communicating with each other.

Dumas had spent years gathering intelligence in Europe to assist the Americans in their revolt against Britain. But the two needed a secure way to pass information across the Atlantic.

So they developed a special cipher– a crude form of encryption where letters and words were substituted for numerals.

The decryption key changed with every letter; so, for example, in a letter from Franklin dated March 2, 1781, the word “MERCHANT” was written as “23. 3. 4. 13. 6. 14. 24. 18.”

At the same time, the physician James Jay (brother to the first Chief Justice of the Supreme Court, John Jay) developed an invisible ink so that revolutionary leaders could communicate in secret.

These encrypted communications became critical to the Revolution. And it’s safe to say there would probably not be a United States if they hadn’t developed a secure way to send information.

Ironically, politicians are trying to destroy modern methods of encryption.

Over the past few months while everyone has been in mandatory isolation, cowering in fear in their homes… and over the past few weeks while the Land of the Free has been consumed with rage. . .

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Time to learn about money, by Alasdair Macleod

Alasdair Macleod, the best monetary economist on the internet and probably on the planet, writes long articles that are well worth taking the time to read. In this one he explains how currencies collapse: slowly, and then very fast. From Macleod at goldmoney.com:

An unexpected destruction of fiat currency has been advanced by the monetary and fiscal response to the coronavirus. Financial markets have yet to discount the possibility of such an outcome, but in the coming months they are likely to awaken to this danger.

The question arises as to what will replace fiat currencies. In the past the answer has always been gold but today there are cryptocurrencies as well, whose enthusiasts are more aware than most of fiat money’s failings.

This article describes the basics about money, what it is and the role it plays in order to understand what will be required by the eventual replacement for fiat. It concludes that gold will return as the world’s medium of exchange, and secure cryptocurrencies, unable to provide the scalability and stability of value required of a medium of exchange will be priced in gold after the demise of fiat. But then the rationale for them will be gone, and with it their function as a store of value.

The destruction of fiat money

These are strange times. Circumstances are forcing governments to destroy their money by debasing it to pay for their obligations, real and imagined. If central bankers had a grasp of what money really is, they wouldn’t have got into a position where they are forced to use their seigniorage to destroy it. They are so ignorant about catallactics, the fundamentals behind economics, that they cannot see they are destroying the means of exchange they have imposed upon their citizens with far worse consequences than the abandonment of the evils they are trying to defray.[i]

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The Real Reason for the Shocking New Developments in the War on Cash, by Jeff Thomas

When cash vanishes so too will any vestige of financial privacy other than transactions in real money, i.e. gold and silver. From Jeff Thomas at internationalman.com:

war on cash

International Man: Australia has proposed a law that provides a $25,000 fine and two years in jail for those who make cash transactions of $10,000 or more. If passed, the Currency (Restrictions on the Use of Cash) Bill could be implemented in 2020.

Do you see this legislation as Orwellian?

Jeff Thomas: Oh, yes, very much so. The claim by the Australian government’s Black Economy Taskforce is that the law will help stamp out tax evasion, money laundering and other crimes.

What we’ll be seeing is a plethora of laws popping up in all the countries that were a part of the post-war prosperity boom – the US, Canada, Japan, Australia, Europe and others. All those jurisdictions dove headlong into the debt pit that the US created after 1971. All of them are now facing an economic crisis as a result.

Consequently, all of them will be creating capital controls. My belief is that each will host several of these laws, and the others will all adopt them. Each law will be justified as protection against money laundering, terrorism, tax evasion, a rising black market or a combination of those scare tactic focal points. As such, the populace of each country will welcome them, not understanding that the real purpose is to have the banks determine how much you’re allowed to spend.

By having each country put forth a portion of the laws, then having all the others copy them, they’ll hope to make the laws appear to be less draconian. After all, how bad could they be, if all these countries support them?

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Farewell to Paper Money? by Jeff Thomas

Governments want money to be all electric, so that they can keep track of it and what people do with it, and so they can keep it in banks should the banking system run into trouble (they call it a bail-in). From Jeff Thomas at internationalman.com:

A decade or more ago, I began to discuss with associates the possibility of governments and banks colluding to eliminate physical cash. Back then, the idea struck most everyone as poppycock, that governments could never get away with it.

I didn’t write on the subject until 2015, when several countries had begun to limit the amount of money a depositor could extract from his bank account. At that point, the prospect that central banks might conceivably eliminate cash was looking less like an alarmist fantasy, and it became possible to write on the nascent issue.

In a nutshell, today, in most of the world’s most prominent countries, the people who control banking are the same people who pull the strings in government. A cashless system therefore seemed to me to be a natural, as it dramatically increased both profit and power for both banking and government – an opportunity that can’t be passed up.

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It only costs about 20 grand to get away with murder, by Simon Black

Simon Black’s weekly collation of government-related absurdities, from sovereignman.com:

Are you ready for this week’s absurdity? Here’s our Friday roll-up of the most ridiculous stories from around the world that are threats to your liberty, your finances, and your prosperity.

Kentucky Governor Pardons Murderer after family’s fundraiser

Kentucky Governor Matt Bevin lost reelection in November.

But the governor still had some campaign debt to retire. And it’s not easy to convince people to donate to a campaign that already lost.

Still, one family managed to raise over $20,000 for the governor at a fundraiser they held for him after he lost the election, but before he left office.

Why would they do this? Perhaps it is related to the fact that a few weeks later, Governor Bevin pardoned the fundraiser’s brother– a convicted murderer.

The brother was serving a 19 year sentence for dressing as a cop, invading a man’s home, and shooting him to death.

Believe it or not, that wasn’t the only questionable– to say the least– pardon of the 428 issued by the governor since he lost reelection.

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The Rush To A Cashless Society Only Serves Globalist Interests, by Brandon Smith

Brandon Smith is dead on, warning that cryptocurrencies could well be a Trojan horse for the cashless society, where governments, or a one-world government, and central banks or central bank know every unit of currency you spend. From Smith at alt-market.com:

A fundamental pillar of true free markets is the existence of choice; the availability of options from production to providers to purchase mechanisms without interference from governments or corporate monopolies. Choice means competition, and competition drives progress. Choice can also drive changes within society, for if people know a better or more secure way of doing things exists, why would anyone want to stay trapped within the confines of a limited system? At the very least, people should be allowed to choose economic mechanisms that work best for their particular situation.

This is NOT how our society functions today, and free market do not exist anywhere in modern nations including the US. Whenever I hear someone (usually a socialist) blame free market “capitalism” for the oppressive ailments of the world, I have to laugh. The alliance between governments and corporate monopolies (what Mussolini called national socialism or fascism) makes free markets utterly impossible. What we have today is an amalgamation of socialist economic interference and corporatocracy. Our system is highly restrictive and micro-managed for everyone except the money elites, who do not have to follow the same rules the rest of us do.

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Plans for a global Dystopia, by Alasdair Macleod

The globalist financial powers intend to use what’s not working on a national level on a global scale. What could go wrong? An excellent article from Alasdair Macleod at goldmoney.com:

Global policy planners intend to deliver replacements for both dollar hegemony and fossil fuels. Plans may appear uncoordinated and in their early stages, but these issues are becoming increasingly linked.

A monetary reset incorporating state-sponsored cryptocurrencies will enable exchange controls to be introduced between nations by separating cross-border trade payments from domestic money circulation. The purpose will be to gain greater control over money and to direct its investment into green projects.

The OECD will build on current tax disclosures to make everyone’s income and capital known to governments and therefore readily taxable, money destined to kick-start economic growth. Under the guidance of supranational organisations, governments will redirect investment into green technology. The objective, particularly for Europeans, is to neutralise Russia’s increasing dominance of the global energy market by becoming carbon neutral by 2030.

But perhaps as Robert Burns put it, “the best-laid schemes o’ mice an’ men gang aft agley”. They are based on Keynesian fallacies, but cannot be ignored.


There appear to be policy areas being driven by statist responses to events, encouraging global institutions to take on a coordinating role. It means deeper levels of centralised planning by unaccountable bureaucrats. Assuming their plans continue to gain credence, we could end up with a dystopian world where supranational bodies direct individual governments to conform. We are already on this road to perdition. The OECD has coordinated attempts by governments to restrict the freedom of their citizens to avoid taxes by forcing over a hundred jurisdictions to automatically supply information on the financial affairs of every citizen, irrespective of nationality and where they reside.

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Set Money Free, by John Stossel

Money completely free of government is the only money that has a chance of being honest money. From John Stossel at townhall.com:

Set Money Free

Source: AP Photo/Susan Walsh

House members summoned Facebook’s Mark Zuckerberg to Washington, D.C., and grilled him — harshly — about his plan to create a new currency, Libra.

“Why should we trust you?!” asked Congressman Mike Doyle.

I liked it when Zuckerberg said, “I actually don’t know if Libra’s going to work, but I believe that it’s important to try new things.”

He was right. That’s very important.

The Libra would make it easier to transfer money anywhere in the world. It also promises stability. Its value would be based on a basket of currencies from different countries, which would protect Libra owners from inflation in any one country.

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It’s No Bitcoin: Facebook’s Libra Currency Is Tied to Government Currencies, by Ralph Fucetola

The Libra cryptocurrency will be, unlike many cryptocurrencies, closely linked to existing currencies. From Ralph Fucetola at mises.org:

Nobel laureate F.A. Hayek was, as he says in the 1990 introduction to his Denationalization of Money: The Argument Refined, one of the chief “gold bugs” of the 20th century. And he reminded us, so long as politicians want to control money, gold-backed currency is essential to protect our liberty from the politics of inflation.

But his concern for money and market reached back to his earlier work, as noted in a number of articles posted in recent years at mises.org. As noted by Nikolay Gertchev:

In a series of five lectures delivered in 1937, and published under the title Monetary Nationalism and International Stability, Hayek offers an in-depth analysis of the main deficiencies of the present-day monetary system. In a nutshell, he identifies two factors that disrupt international economic relations: the fractional reserve commercial banks and the national central banks. The former are the primary source for the international transmission of the business cycles, while the attempts of the latter to correct the imbalances de facto amplify the resulting instability.

And Demelza Hays writes:

n 1975 Hayek eventually gave a lecture entitled “Choice of Currency,” in which he articulated for the first time the provocative demand that the state monopoly on money should be repealed. The publication of the monographs Free Choice in Currency and The Denationalization of Money followed a year later, in which he expanded in greater detail on his ideas on competition between private money issuers. …

What shape would an order reflecting these power-sharing principles take, and how could it emerge? Hayek argues that such an order would take shape if the following liberties were granted:

Fast forward nearly a half century and Hayek’s call for the denationalization of money seems to be a real possibility, not just a crank libertarian position safely ignored by the monetary authorities.

The coming of the block chain technology and cryptocurrencies certainly suggest that the original post-World War II Bretton Woods “settlement” of the status of money, that gold and US dollars, redeemable in gold, were the basis for international settlements, failed. As have later revisions of the idea. Thus, an era of monetary uncertainty may give rise to possibilities for market-oriented reforms.

Bitcoin, as an example of “virtual gold,” gains its value from the limited number of units of that cryptocurrency and the expense in “mining” more of those units, not unlike real gold. While Bitcoin is the best known of the cryptocurrencies, CoinMarketCap.com lists over a thousand crypto currencies that are traded (though a significant percentage of these are actually ICOs — Initial Crypto Offerings — a way to raise funds for a particular project). Much of the power of the cryptos is that they can be easily, and privately, bought, sold, and exchanged.

Hayek predicted that normal market forces would apply to the goods we use to facilitate exchange (“currencies”) if only governments would get out of the way. In a free market for money he suggested that major financial institutions would sponsor competing currencies, probably defined by “baskets” of commodities. He speculates on how the market would maintain the value and stability of such currencies, far better than any political system of legal tender.

To some degree, this seems to be happening with cryptocurrencies.

And then along comes the 900 pound gorilla. Facebook, with two billion users, has decided to enter the cryptocurrency market with its Libra coin. Since the Libra would be usable as a currency on Facebook itself, the company probably has calculated that it will have a strong competitive advantage over any of the competing currencies.

Ah, but … and here is the rub, the Libra is not a naturally limited good, as Bitcoin is, but can be multiplied to infinity. It is not stabilized by reference to a basket of commodities as Hayek recommended. Rather, it will be defined by a changeable basket of fiat currencies!

That’s right. Facebook and Libra’s cooperating founding organizations (including PayPal, Visa, Uber …) hope to provide a stable cryptocurrency by tying it to a group of government currencies! According to Techcrunch:

A Libra is a unit of the Libra cryptocurrency that’s represented by a three wavy horizontal line unicode character like the dollar is represented by $. The value of a Libra is meant to stay largely stable, so it’s a good medium of exchange, as merchants can be confident they won’t be paid a Libra today that’s then worth less tomorrow. The Libra’s value is tied to a basket of bank deposits and short-term government securities for a slew of historically stable international currencies, including the dollar, pound, euro, Swiss franc and yen. The Libra Association maintains this basket of assets and can change the balance of its composition if necessary to offset major price fluctuations in any one foreign currency so that the value of a Libra stays consistent.

Well, that’s it. Zuckerberg is no Hayek. And the Libra is no Bitcoin.

Ralph Fucetola, JD, is a retired lawyer (1971–2006), teacher, and writer who offers legal consulting services to the natural-products-and-services market through his website, www.VitaminLawyer.com. He graduated Rutgers University in 1967, B.A. with Distinction, and from Rutgers Law School in 1971. Counsel Fucetola is a trustee of several religious bodies and foundations, including the Natural Solutions Foundation and LifeSpirit Center.


FacebookCoin is a Trojan Horse of Corporate Oligarchy, by Michael Krieger

Mark Zuckerberg is not to be trusted. From Michael Krieger at libertyblitzkrieg.com:

ZUCK: yea so if you ever need info about anyone at harvard
ZUCK: just ask
ZUCK: i have over 4000 emails, pictures, addresses, sns
FRIEND: what!? how’d you manage that one?
ZUCK: people just submitted it
ZUCK: i don’t know why
ZUCK: they “trust me”
ZUCK: dumb fucks

– Leaked messages sent by Mark Zuckerberg to a friend at Harvard as he was building Facebook

Years ago, Mark Zuckerberg made it clear that he doesn’t think Facebook is a business. “In a lot of ways, Facebook is more like a government than a traditional company,” said Mr. Zuckerberg. “We’re really setting policies.” He has acted consistently as a would-be sovereign power. For example, he is attempting to set up a Supreme Court-style independent tribunal to handle content moderation. And now he is setting up a global currency.

– From Matt Stoller’s recent article: Facebook’s Undemocratic Currency

For a long time, I’ve maintained there’s no doubt the current system/paradigm we live under will collapse under its own weight, but that doesn’t keep me up at night. What keeps me up at night is understanding we still have no idea exactly what will replace it. It could very well be a more decentralized and free world, a world less defined by brute force, grotesque power concentrations and coercion, but it could also very easily go the other way. The coming out party for FacebookCoin (aka Libra) is in my view the first real indication the forces of corporate oligarchy are determined to ensure the new world reflects their vision and is under their control.

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