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This post was edited by gork at 2013-11-3 03:53|
The New Gold Standard
- BitCoin is Screwed
My understanding of Bitcoin is that the "miners" are really transaction authenticators who get paid for registering an entry on the ledger. This ledger takes the form of a chain of blocks, the "blockchain", with each block representing a transaction.
The early blockchain was hacked and split into two threads. The whole system was then brought to a halt and everyone agreed to revert to an old blockchain. Presumably, the blockchain is much longer now and therefore more difficult to hack.
A second fork occured in 2013, caused by incompatibility problems between versions of the software.
Many other hack attacks have occured on individual exchanges as well as the miners.
But the fact that BitCoin is limited to 21 million causes a problem. Who will bother to run up a massive electricity bill recording transactions on the register, which will be huge by then, if they're not rewarded with new BitCoins? Is THIS why Max Kiester promotes silver and BitCoins? Even if they modify BitCoin to extend it, the blockchain could become unwieldy.
However, we know the central banks are buying gold (NOT silver), the most in half a century: They added a net 536 tonnes in 2012 as they diversified fresh reserves away from the four fiat suspects: dollar, euro, sterling, and yen.
- A new Gold Standard is being born
Of course, Pilchard suggests gold will stand alongside fiat in a new monetary World order. But a bank run is when everyone loses confidence in the paper receipts and demand physical.
Similarly, Forbes suggests a quasi gold standard too: or argument’s sake let’s say the peg is $1,300. If the price of gold were to go above that, the Federal Reserve would sell bonds from its portfolio, thereby removing dollars from the economy to maintain the $1,300 level. Conversely, if the gold price were to drop below $1,300, the Fed would “print” new money by buying bonds, thereby injecting cash into the banking system.
- Advance Look: What The New Gold Standard Will Look Like
This has the same flaw as Pilchard's B.S. and is nothing more than the manipulation of the gold price we already have. Never mind that as bonds mature, there's a big (possibly huge) outflow of dollars and when the price of gold is too low yet more dollars are issued. Furthermore, if the dollar were actually stable against gold then you may as well have a gold standard. Instead, suppressing the gold price just means physical keeps flowing to Asia. It's a totally asinine idea!
And wasn't it on the Schwing-Schwing Show that Ann Barnhardt set her hair alight and ran round and round the room saying the futures market couldn't be trusted?
In a multi-lateral World, you wouldn't want a flexible currency, because you're always tempted to flex it just a little more, until you're massively indebted like the US is now; the worst debts in all of history. You WANT an inflexible currency to impose discipline to nip the imbalances in the bud. It's only because the dollar is a fraud thieving from the rest of the World that the US wants the flexibility.
Incidentally, Max Kiester was dumping silver a while back after having strapped on his suicide poopy-diaper and flushing his savings down the toilet. His attempt to shout down criticism of his B.S. is similar to that of fellow Amerikan, Adam Posen, when Mervyn King suggested fiscal policy adjustment was what was required. Clearly they both went to the John McEnroe skool of puerile behaviour. Just as Posen suggests making QE permanent (!!!), Kiester claims printing money is deflationary. If these are not two indicators that you should dump the dollar before everyone else does then nothing is.