Central banks will go back to #gold.
But this is a sh*tty solution:
1- The gold price will be manipulated
2- No independent audits of gold reserves
https://primal.net/e/note1k6eyxqysgz4u7dkjv0kll7aj4ywpcrnwzd5ggjsjt6cssywz25dq62u56l
It will be a long and painful struggle for West Africa to get rid of đ«đ·France and the CFA.
What's waiting for it at the end of the struggle is #Bitcoin adoption.
This will start its rejuvenation.
#Bitcoin #art:
The Death of Cleopatra (1881) - Juan Luna
The gold-backed BRICS currency is never going to happen.
The BRICS nations love the money printer too much.
I published a new public macro article about the complexities of the current attempt to re-shore some manufacturing to the United States:
https://www.lynalden.com/reshoring/
Specifically, it dives into the energy capital and the human capital that needs to be re-accumulated in order for such a trend-change to be successful.
To visualize this situation, basically the U.S. industrial base increased for most of the 20th century but has spent the last two decades stagnating, which is increasingly becoming a talking point among politicians and corporations:
How long do you think this process of re-shoring would take?
Decades..?
Why Peter Schiff is wrongâŠ
...about the solution!
In a previous post I wrote about Peter Schiffâs spot-on analysis of the issues with our current financial system. He shared some great insights he shared in an interview with Jordan Peterson.
Where Peter Schiff falls spectacularly short however is in the solutions he proposes. His proposed solution to the problems of our current system is of course #gold.
But #goldâs failures are the reason we have our current #fiat system.
At the same time he is venomously anti #Bitcoin. Which would be comical if it werenât so damaging to the many people listening to his advice.
If Peter Schiff really wants to help fix the issues with our financial system, he would study #Bitcoin and realise it is the solution that #gold (due to its characteristics) could never be..
From the same interview with Jordan Peterson here is where Peter Schiff falls short the most when it comes to #gold and #Bitcoin.
1. Central banks will go back to gold
âWhat are the reasons that countries would want gold, as opposed to the US dollar, is that the US government doesnât have any control over itâ
The US government indeed doesnât control #gold the same way it controls #fiat. But #gold was never able to fix the problem of fractional reserve banking.
Gold however is stored in a central location, and we simply have to trust the government that the gold is really there.
Do we really know how much gold is stored at Fort Knox?
With gold-backed currencies it is easy for governments to print more money than the peg allows, because they control the gold in a central location.
âTrust me, broâŠâ
That the US government canât be trusted with this was shown in 1971. The US was printing more money than the peg allowed and was forced to declare bankruptcy and move the dollar of the gold standard.
This was the birth of the #fiat system as we know it again. And any future gold-backed currency will end up the same way.
2. Why does gold have intrinsic value?
âGold is the most valuable, the most useful metal on the periodic table. Gold became money because it was such a valuable commodity. Gold has a lot of properties that make it uniquely qualified to be moneyâ
Peter Schiff evades the question without answering directly. Gold has intrinsic value because it's durable, scarce, and hard to mine (this prevents sudden supply increases).
This is what gives gold its monetary premium. But Peter Schiff canât admit that without arriving at a very uncomfortable conclusion (for himâŠ).
It would mean acknowledging Bitcoin scores better than gold on the properties that are required for a commodity to be good money.
3. Bitcoin isnât a store of value
âBitcoin isnât a store of value because you canât store something you donât haveâ
This argument is typical of gold enthusiasts who insist that if you canât physically touch something, it isn't real.
If you follow this line of thinking you would also conclude that gold-backed currencies have no value. They would be mostly digital (like todayâs fiat currencies) and thus have no value according to Peter Schiff.
Intangible things can be very real. Love, reputation, email, streaming TV, social media, and video games are proof of that!
4. Bitcoin is similar to fiat
âBitcoin is similar to fiat in that all its value comes from faith and confidenceâ
Fiatâs value comes from faith and confidence in the government issuing the fiat currency.
Bitcoinâs value comes from its properties of:
1- Digital scarcity
2- 100% ownership rights
3- Permission-less network
Gold has always been money because it was the scarcest commodity we had, with the highest stock-to-flow. It was the best we could get for 1,000s of yearsâŠ
Until Bitcoin came around. Now gold only has value because the world needs time to get off 1,000s of years of thinking of gold as the primary monetary asset.
Fiat is the complete opposite of Bitcoin. It is based on debt, and the government can add as much of it as they want.
And they have been doing that abundantly!
5. Gold-backed cryptocurrency
âA cryptocurrency that is a digital representation of that gold. An IOU for gold. And then if I wanted to give you some of my gold, I wouldnât have to ship you my bar. I can just send you my tokensâ
Really Peter? A digital IOU for gold?
This is literally the solution we had in the past with gold-backed currencies which lead to the current fiat system.
We used to store our gold at a trusted entity (like a bank) and received an IOU which served as money. This way we could pay with the paper representing the gold, instead of the gold itself.
The problem was it turned out these trusted entities could not be trusted. They issued more IOUs than there was gold in the vault.
While very profitable for banks, this fractional banking artificially inflated the money supply. And eventually led to the fiat system we know today.
Itâs shocking Peter Schiff is advocating for the same system, but then with a digital spin.
How can the outcome be any different than for previous gold-backed currencies?
Bitcoin solves this weakness of gold-backed currencies by allowing individuals to own the asset themselves, independent of a third party.
No need for a paper or digital IOU...
#gold is the reason we the current fiat system exists.
Gold led to fractional banking, which led to fiat.
Gold is not the solution.
#Bitcoin is...
Private property is the bedrock of civilisation.
#Bitcoin is the ultimate private property and hope for any civilisation.
Looking good my friend!
It's sad that Peter Schiff is spot-on about the failures of our financial system, but at the same time completely misses the mark with his proposed solution.
#Gold
#Bitcoin
Antagonising đ·đșRussia and about to be kicked out of West Africa.
Strategic blunders by đ«đ·France.
It's real competition with đčđ·TĂŒrkiye over the Mediterranean hasn't even started but đ«đ·France is already at a disadvantage.
#geopolitics
Great story and I love it you are sharing it.
For me it also shows that Bitcoin gives Africans the chance to participate in the global digital economy and provide value in exchange for Bitcoin.
đȘ
"There is a kind of serenity in #Bitcoin which is almost a paradise."
-Alain Badiou
#Bitcoin #art:
The Balcony (1868) - Ădouard Manet
Will the #Bitcoin standard do to Central America in the 21th century what the #gold standard did to Europe in the 19th century?
"#Bitcoin is a glimpse of the unseen."
-Anaxagoras
