MCViewPoint

Opinion from a Libertarian ViewPoint

Posts Tagged ‘cryptocurrencies’

EconomicPolicyJournal.com: Trump’s Signals He May Start Going After Bitcoin

Posted by M. C. on July 12, 2019

The “Crypto” in cryptocurrency once meant privacy from government snooping in our spending habits.

That ship is long gone. Anyone who thinks the government would let that happen better get their prescription changed.

Today’s alternative currencies are much closer to commodities as they are not based on a standard like gold.

Today’s alternative currencies, such as Zuck’s ‘Libra’ are meant to be anything but private. Zuck’s and the government’s goal is to know more about your finances than you do.

The government is becoming ultra protective of the dollar now that Russia, China, Iran, Venezuela and others are looking to purchase oil in something besides the US petro-dollar. Note the similarity to the countries named and the countries with which the US wants to go to war.

https://www.economicpolicyjournal.com/2019/07/trumps-signals-he-may-start-going-after.html

The below seemingly came out of the blue, but really not surprising.

Trump’s controls do not want paper currency competition.

The regulations are coming.

RW

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It’s No Bitcoin: Facebook’s Libra Currency Is Tied to Government Currencies | Mises Wire

Posted by M. C. on July 2, 2019

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!

In other words the Zuckerberg’s Libra can be inflated to worthlessness, as has the Continental through the dollar since 1776.

https://mises.org/wire/its-no-bitcoin-facebooks-libra-currency-tied-government-currencies

In 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Currency,” in which he articulated for the first time the provocative demand that the state monopoly on money should be repealed.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.

 

 

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Guardians of money bristle at Zuckerberg’s new financial order

Posted by M. C. on June 24, 2019

Having custody of your own assets rather than depositing them in a bank is a totally different paradigm

The obvious Facebook concerns aside, digital money that the owner can actually control is the problem.

Bitcoin was originally envisioned as private banking. No one could stick it’s nose in your business. Facebook’s Libra? Forgettaboutit.

Privacy – there will be none, this is a Facebook/CIA project. Control – It’s extent is yet to be seen. Don’t get your hopes up.

The point of digital currency from a government/bankster perspective is to control your “money”. The bank wants to charge you to store your electrons. Interest? That’s funny!

Everyone wants to know your business. There will be no “crypto”.

The government wants banks to be able to shut you off at the flick of a switch. The bank and the government want to be able to give you haircut when things get bad.

This is a war on you and your cash.

https://www.bnnbloomberg.ca/guardians-of-money-bristle-at-zuckerberg-s-new-financial-order-1.1277277

Alastair Marsh

–With assistance from Michelle Jamrisko.

Facebook Inc. was hours away from the formal announcement of its ambitious foray into financial services, but French Finance Minister Bruno Le Maire was already broadcasting his discontent.

“It’s out of the question’’ that the social-media giant’s digital money compete with sovereign currencies, Le Maire said.

That was just the first shot in a torrent of criticism and skepticism from policy makers around the world. U.S. House Financial Services Committee Chair Maxine Waters promised an aggressive response from Congress. Former European Central Bank Vice President Vitor Constancio called the initiative “unreliable and dangerous.”

Led by the social network with more users than the combined population of China and the U.S., the project represents a potential challenge that the guardians of money have never faced: a global currency they neither control nor manage. And while the megabanks and their regulators face no short-term threat to their command of finance, advocates of cryptocurrency say the future has arrived and that there’s no turning back.

“It is the beginning of a new financial system where current gatekeepers are substantially less relevant,’’ said Joey Krug, co-chief investment officer at Pantera Capital, founded in 2013 as the first U.S. investment firm focused on Bitcoin.

Called Libra, Facebook’s new currency will launch as soon as next year. It will initially be used for sending money among friends, family and businesses through the Messenger and WhatsApp services and then be used for routine transactions.

Facebook founder Mark Zuckerberg’s ambitions extend beyond simply minting a new coin. The Libra token would contribute to a fairer world, where those now excluded from the banking system would have ready access to cheap and easy payments and financial services, according to a company white paper.

Libra is the latest example of how tech companies including Apple Inc and Amazon.com Inc have ventured into the financial industry, offering everything from payments to money management and lending. While finance currently makes up a fraction of their business, giant companies with huge customer bases have the potential to trigger rapid changes in the industry and introduce new risks, according to a report Sunday by the Bank for International Settlements.

“Technology is changing the basis of competition,’’ says Huw van Steenis, senior adviser to Bank of England Governor Mark Carney. “It’s tearing up walls between businesses. It’s not just Facebook trying to do a currency.’’

Moving into the heavily regulated financial-services industry via cryptocurrencies, which are seen by many officials as nothing more than a conduit for financing illicit activities, Facebook has shown little reluctance to lessen its confrontation with authorities…

Meanwhile, Waters said Libra is “like starting a bank without having to go through any steps to do it,” and that it’s seeking to “compete with the dollar without having any regulatory regime that’s dealing with them.”

While Libra is designed to be less volatile than cryptocurrencies like Bitcoin and is backed by a basket of securities and traditional currencies, some question how a technology company will interact with the monetary system. “I’m not entirely convinced that a tech company, at the end of the day, can be held accountable,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore.

There are still many questions about how it will operate and its success is far from guaranteed. Yet the endeavor is being taken seriously by the financial-services industry because of Facebook’s scale and its already vast impact on the world.

While Facebook is now trying to sign up banks to the association governing the token, its new system is a challenge to banks that often act as middlemen in virtually all transactions, according to Charles McGarraugh, a former Goldman Sachs Group Inc. partner who has moved into the digital world as head of markets at cryptocurrency-wallet provider Blockchain.com.

“We are witnessing a re-orientation of financial services,’’ said McGarraugh. “Having custody of your own assets rather than depositing them in a bank is a totally different paradigm and a superior system to the too-big-to-fail construct that dominates the market now.’’

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Australia Inserting Nano-Chips in $50 & $100 Bills to Track Underground Economy & Coming Barter System | Armstrong Economics

Posted by M. C. on January 4, 2019

The IMF is advocating the end of paper money to kill the underground or black economy solely to aid the hunt for taxes and to PREVENT bank runs. If there is no paper money, how can you run to the bank in a panic demanding to withdraw your money? 

https://www.armstrongeconomics.com/armstrongeconomics101/economics/australia-inserting-nano-chips-in-50-100-bills-to-track-underground-economy-coming-barter-system/

by Martin Armstrong

While the BitCoin people have hated me for not agreeing with them that a private currency could displace the currencies of all nations and BitCoin would be the new “reserve currency” killing the dollar, to me they are in serious need of help. They have ZERO comprehension of governmental power and ZERO understanding of what is going on behind the curtain. The IMF has come out and stated that each nation should issue their own cryptocurrency and these fools cheers claiming I am not with it and do not get this new age of technology. Sorry, but these people are really clueless if not perhaps undercover people with a mission to get people willing to surrender their final liberty – paper money.

While cryptobugs advocate gold is dead and BitCoin will conquer the financial world, they miss the point entirely. The IMF is by no means embracing cryptocurrencies for the same reason these people have claimed it will bypass central banks. The IMF is advocating the end of paper money to kill the underground or black economy solely to aid the hunt for taxes and to PREVENT bank runs. If there is no paper money, how can you run to the bank in a panic demanding to withdraw your money? They also argue eliminating paper money will end crime… Read the rest of this entry »

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