Central Bank “Cryptocurrencies”? Just a Different Kind of Funny-Money - Jeff Nielson

by Jeff Nielson, Sprott Money:

It is quite hilarious to watch the posturing of central banks and their media mouthpieces on the subject of cryptocurrencies. A recent Reuters article on the subject provided numerous moments of mirth. The title alone is good for a chuckle.

Too Soon to Determine Risks of Central Bank-Issued Cryptocurrencies: BIS

It’s always amusing when these shameless con-men (and women) attempt to portray themselves as sober arbiters of risk. Those who understand our monetary system are aware that the funny-money that these shysters are currently peddling is completely worthless.

The “fiat currencies” of Western central banks have had highly questionable value ever since the final connection to the gold standard was severed in 1971. However, since 2009 there has no longer been any question at all – ever since the Federal Reserve launched the Bernanke Helicopter Drop.

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U.S. dollars have value only to the extent that they are strictly limited in supply.

-- B.S. Bernanke, November 21, 2002

Since 2009 and the era of unlimited dollar-supply began, the U.S. dollar (and all its fiat currency derivatives) has been completely worthless. It is with this backdrop that we watch these Clown Princes of our monetary system debating the “risks” involved with crytpocurrencies.

The article starts with a straight line and then heads straight for laughs.

It is too soon to determine whether central banks should issue their own cryptocurrencies, the Bank for International Settlements said on Sunday, as the risks could not yet be fully assessed and the technology underpinning them is still unproven.

Central banks already use electronic money - only a very small proportion of their assets are now backed by gold - but this is exchanged in a centralized fashion, across accounts at the central bank.

“Only a very small proportion of their assets are now backed by gold”. What proportion would that be? Zero – a very small proportion indeed.

Currency reserves (including gold) represent – at best – indirect backing for these worthless currencies. A government trying to prop up their own paper can liquidate their currency reserves, and use the proceeds to buy-up their own currencies. Hardly “backing” in any formal sense.

The whole objective of these criminal central banks in assassinating the gold standard was to completely divorce their money-printing from gold. Gold-backed money is Honest Money , and there is nothing remotely honest about central bank fiat currencies.

Central banks already have their own funny-money that they can conjure into existence in infinite quantities. So why are these institutions of monetary crime openly expressing interest in cryptocurrencies?

Envy.

Blockchain technology enables peer-to-peer payments to be made using decentralized cryptocurrencies like bitcoin, by means of a shared ledger that verifies, records and settles transactions in a matter of minutes.

“While it seems unlikely that bitcoin or its sisters will displace sovereign currencies, they have demonstrated the ability of the underlying blockchain or distributed ledger technology (DLT),” BIS said.

Cryptocurrencies can also be conjured into existence in infinite quantities, limited only by the algorithms that spawn them into existence. But adding blockchain technology adds a money-pump dimension not possessed by current central bank money-printing operations.

“Peer-to-peer payments.”

What is the appeal here? Such a totally electronic means of delivering payment for transactions makes the War on Cash that these criminals have already declared even easier to impose upon us. Furthermore, the whole concept of cryptocurrencies adds an element of quasi-legitimacy not possessed by central bank fiat currencies.

What gives a gold-backed currency value? It is backed by a hard asset with a 5,000 year pedigree.

What gives a fiat currency value? Our (honest and trustworthy) governments say that that this funny-money has value.

What gives a cryptocurrency value? An algorithm.

The vast majority of our populations have no clear understanding of what an algorithm is. That’s how and why the banksters have gotten away with imposing their totally fraudulent trading algorithms on our markets – no one understands the obvious criminality of allowing computers to hijack our markets .

So it comes down to a choice. Are the masses more likely to retain faith in our funny-money knowing that it is “backed” by an algorithm, or “backed” by the good word of our governments? Framed in those terms, the choice seems obvious: fiat currencies out; cryptocurrencies in.

A recent article distinguished cryptocurrencies from real money: gold and silver or precious metals-backed money.

mere currencies (such as all of our paper currencies) are not “money”. They are not a store of value. They are not rare or precious. They have no intrinsic value. Their utility is purely as a medium of exchange.

Crypto-currencies, as the name directly implies, are not money. They are not a store of value. They are mere currency.

They can still be distinguished from our fraudulent (central bank-created) fiat currencies. As was previously discussed, many credible sources will attest to the fact that crypto-currencies are not fraudulent.

Here is the appeal. Cryptocurrencies are not money, meaning they are not a store of value, thus they will notintrinsically help the masses preserve their wealth. At the same time, unlike the central bank’s fiat currencies, cryptocurrencies are not open frauds that are rapidly losing any veneer of legitimacy.

Cryptocurrencies are becoming more legitimate in the eyes of the masses, eyes which (more and more often) are coloured by greed. See how high Bitcoin soared last week/month/year?

For 45 years, all we have seen is the purchasing power of our (so-called) money plummeting. The same chocolate bar that cost a dime when the gold standard was killed costs a dollar today. Now the masses are actually catching a glimpse of currencies that rise in purchasing power , even as the supply increases.

Something for nothing.

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