This week Bitcoin was in for a rocky ride. The Chinese came out and talked about how it’s banned in China, and wouldn’t be allowed to be used for any transactions. That knocked bitcoin down for a 30% plunge in one day. Why would they do that? Because China has slowly launched its digital Yuan, and it’s not going well. The people are not adopting it and using it as they hoped. So, they did what any communist dictatorship would do. They banned the competition, then they simply repeated the ban to the masses again.
I truly understand the reason why Crypto’s are so popular, I really do. Who wouldn’t want an exchange medium that’s not part of the old boy network that we’ve been slaves to for the last 100 years? No one, because everyone would.
The younger generations are all in on technology. When I have a phone to program, I give it to the neighbor’s kids, and they make it hum. They have grown up with electronic devices of all manner, from laptop computers, to cell phones, to incredible software that can drive cars. So, seeing them adopt the idea of digital currency, was easy.
Think of it! A currency that you can send to anyone on the planet, with no transaction fees, no reporting to some agency that wants to spy on you. It’s what anyone would like to have. So, is bitcoin and the others “it?”
This week Bitcoin was in for a rocky ride. The Chinese came out and talked about how it’s banned in China, and wouldn’t be allowed to be used for any transactions. That knocked bitcoin down for a 30% plunge in one day. Why would they do that? Because China has slowly launched its digital Yuan, and it’s not going well. The people are not adopting it and using it as they hoped. So, they did what any communist dictatorship would do. They banned the competition, then they simply repeated the ban to the masses again.
After getting smacked down to 30K per coin, it rebounded smartly to over 40K very quickly. The bitcoin believers simply “bought the dip” and hey, if you got in at 30K and it bounced to 40 in a day, “Good on YOU!” But here’s the question I will NOT stop asking.
On the tax forms, there’s already a line asking if you’d had any crypto exchanges worth over 10,000 dollars. Why would they ask that? They say that it would help them understand how crypto’s are being used and to watch for illegal activity. Baloney, they’re ultimately going to tax and regulate the snot out of it.
So Friday, China comes out and once again trashes Crypto, and especially bitcoin, saying that they’re going to “crack down on bitcoin mining and trading. “ Once again, Bitcoin took a big slapdown, not 30% but several thousand dollars in an hour. The bottom line is that they do NOT want their people using anything but state controlled digital yuan, and if that means shutting down “mining farms” they will do so.
Well, Consider this from the Federal Reserve itself on Thursday:
Federal Reserve Chair Jerome H. Powell outlines the Federal Reserve's response to technological advances driving rapid change in the global payments landscape.
Technological advances are driving rapid change in the global payments landscape. The Federal Reserve is studying these developments and exploring ways that it might refine its role as a core payment services provider and as the issuing authority for U.S. currency.
"As the central bank of the United States, the Federal Reserve is charged with promoting monetary and financial stability and the safety and efficiency of the payment system," Federal Reserve Board Chair Jerome H. Powell said Thursday in a video message. "In pursuit of these core functions we have been carefully monitoring and adapting to the technological innovations now transforming the world of payments, finance, and banking."
This technology also offers new possibilities to central banks—including the Fed. In particular, it enables the development and issuance of central bank digital currencies, or CBDCs. A CBDC is a new type of central bank liability issued in digital form. While various structures and technologies might be used, a CBDC could be designed for use by the general public.
As the Federal Reserve explores the potential benefits and risks of CBDCs, the key focus is on whether and how a CBDC could improve on an already safe, effective, dynamic, and efficient U.S. domestic payments system in its ability to serve the needs of households and businesses. "We think it is important that any potential CBDC could serve as a complement to, and not a replacement of, cash and current private-sector digital forms of the dollar, such as deposits at commercial banks," Powell said. "The design of a CBDC would raise important monetary policy, financial stability, consumer protection, legal, and privacy considerations and will require careful thought and analysis—including input from the public and elected officials."
Powell announced that the Federal Reserve plans to publish this summer a discussion paper that will explore the implications of fast-evolving technology for digital payments, with a particular focus on the possibility of issuing a U.S. central bank digital currency. The paper will complement Federal Reserve System research that is already underway.
Now it’s no secret that they’ve been developing a Central bank digital currency. I’ve been talking about it for about 6 years now. But it is interesting in the way Powell said one particular part in the above article. Check it:
We think it is important that any potential CBDC could serve as a complement to, and not a replacement of, cash and current private-sector digital forms of the dollar, such as deposits at commercial banks," Powell said.
See the linguistic gymnastics? Current private-sector digital forms of the dollars like deposits at banks. No where did he say private sector digital dollars such as bitcoin, Ethereum, doge coin, or the 2000 other digital tokens out there.
Now, there are those that say the US would never ban bitcoin, because it would look too much like we’re emulating China, to which I suggest this country is being run by Socialists and they adore china, ask Hunter and Joe Biden. But not only that, do you remember any history?
What tends to happen to other nations that decide they no longer want to do global trade in US Dollars? Well, they tend to get blown up. We are running on what’s been named the “Petro-dollar.” For years, you had but one and only one choice when it came to buying OPEC oil and that was US Dollars. But when some folks decided they wanted a change, such as Saddam Hussein, who wanted to sell Iraq’s oil in Euro’s, “things happened.”
Libya comes to mind. The most progressive nation that ever existed on the African continent, Libya was rich in oil, and had used its oil money to help the people of the nation. Education was free, medical was free. The people adored their leader. But, he made mention of the idea that he wasn’t too fond of US dollars any more. He liked gold and Euro’s more.
In Iraq, Syria, Lebanon, Libya, Somalia, Sudan, we’ve been involved deeply. Why? Oil and what else? Dollars.
"What do these seven countries have in common? In the context of banking, one that sticks out is that none of them is listed among the 56 member banks of the Bank for International Settlements (BIS). That evidently puts them outside the long regulatory arm of the central bankers' central bank in Switzerland. The most renegade of the lot could be Libya and Iraq, the two that have actually been attacked.
Kenneth Schortgen Jr, writing on Examiner.com, noted that '[s]ix months before the US moved into Iraq to take down Saddam Hussein, the oil nation had made the move to accept euros instead of dollars for oil, and this became a threat to the global dominance of the dollar as the reserve currency, and its dominion as the petrodollar.'
According to a Russian article titled 'Bombing of Libya – Punishment for Gaddafi for His Attempt to Refuse US Dollar', Gaddafi made a similarly bold move: he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar. Gaddafi suggested establishing a united African continent, with its 200 million people using this single currency.
So what happens to nations that decide that the dollar isn’t their favorite currency any more? We blow them up. Yet somehow I’m to believe that they’re going to let bitcoin and other currencies on our own shore, be untraceable, used for commerce instead of dollars, and replace dollars for savings. Uhm, right. You bet. Sure, while adoption is still in its infancy, they’re looking at it as something just pesky. For now.
So, there’s bitcoin. I’ve said many times that they won’t ban it like in China, but instead they are going to regulate the snot out of it. It will be traced, it will be tracked, it will be taxed. It will be regulated as to what you can and can’t buy with it. They are NOT, repeat, NOT going to let some other crypto, compete with their Central bank digital dollars. Not on any grand scale anyway.
The history is clear folks. The ONLY reason we’ve been able to live so high on the hog, and print endless dollars is because they defend it as being the ONLY money there is. It’s the global reserve currency, and they will not give that up without a fight.
So, I think that you can enjoy bitcoin and the other crypto’s for a while. They’re not going to get too pushy about it until they launch their own digital currency, and even then, they won’t ban it. But I do think it’s a bit infantile to think they won’t regulate it to the point where people say “why do I have this?” And that’s just what they want. So please, enjoy it while it lasts.