Bitcoin a virtual currency that defies the NWO

Bitcoin the emerging monetary phenomenon created by a pseudonymous Satoshi Nakamoto in 2009 is no longer a joke, but a potential real threat to the neofeudal NWO whose visible components are the western Central Banks, from the Federal Reserve (FED) , to the European Central Bank (ECB), to the Bank of Japan (BoJ), to the Bank of England (BoE), to others.

Bitcoin poses a direct challenge to fiat based Central Bank created currencies that are continually being debased in order to maintain a “dual” economic system in which the banking industry is continually being subsidized (thru access to cheap money via the Central Bank, thru continuous bailouts paid by taxing the rest of the economy, thru covert inflation achieved by distorting the inflation measures).

It is likely that if the threat posed by Bitcoin materializes, Central Banks will fight it (they have already started), but whatever the outcome, Bitcoin is the most brilliant and lethal tool devised so far to fight a social order described decades ago, in “1984”. Forget, “Occupy Wall Street”, forget “indignados”, Bitcoin might be “it”.

It should thus not be a surprise that, as Zerohedge reported today, “US Begins Regulating BitCoin, Will Apply “Money Laundering” Rules To Virtual Transactions”.

So…What is Bitcoin?

According to Wikipedia, “Bitcoin (sign: BTC) is a decentralized digital currency based on an open-source, peer-to-peer internet protocol. It was introduced by a pseudonymous developer named Satoshi Nakamoto in 2009.”

“Internationally, bitcoins can be exchanged by personal computer directly through a wallet file or a website without an intermediate financial institution. In trade, one bitcoin is subdivided into 100-million smaller units called satoshis, defined by eight decimal places.”

According to Erik Voorhess, that provides an excellent introduction to Bitcoin in his blog, “Bitcoin is two things: it is a digital currency unit and it is the global payment network with which one sends and receives those currency units. Both the currency unit and the payment network share the same name: Bitcoin.”

“As a currency unit, consider Bitcoin like other currencies. The world has euros, dollars, yen, gold and silver ounces, and now it has Bitcoin as well. The properties of the Bitcoin currency unit are as follows:”

  • There will never be more than 21 million in existence, and they are released over time at a declining rate (at the time of writing, about 8.5 million Bitcoins exist).
  • As new coins are released on the set schedule, they are given at random to those who contribute computing power to securing the network. This is called “Bitcoin Mining” but it should more accurately be called “Bitcoin Auditing.” Those who contribute more computing power to this work have better odds of receiving the new coins, but the rate of new coin creation never increases (in fact it diminishes over time until all 21 million coins exist). Inflation is thus pre-determined and ever-decreasing toward zero. The below graph shows the release schedule and inflation rate:

  • Each Bitcoin is divisible by one hundred million. You can thus possess 0.00000001 Bitcoins.
  • Bitcoins are perfectly fungible, they are divided and combined seamlessly in your account.
  • It is theoretically impossible to make a fake Bitcoin (to fully understand why this is true, one needs to study cryptography and fairly advanced mathematics).
  • As a currency existing in a perfectly free market, Bitcoins always have a market price. At the time of this writing, this price is about $4.80 each. Because Bitcoin is global, there are also market prices for Bitcoin in every major national currency from yen to Brazilian reals.
  • Bitcoins are traded like other currencies on exchange websites, and this is how the market price is established. The most prominent exchange is MtGox.com

“So those are the details of Bitcoin as a currency unit, but Bitcoin is also a payment network. As a payment network, Bitcoin replaces the function of banks (especially the Federal Reserve as money creation is not at the whim of any person nor group), inter-bank funding networks (like SWIFT and SEPA), payment processors (like PayPal) and remitters (such as Western Union). The entirety of these massive industries as they relate to the creation, storage, accounting, and transfer of money has been usurped by Bitcoin. If Bitcoin succeeds, it is likely that PayPal and Western Union would be removed from the marketplace. The Federal Reserve (and every central bank) would be made redundant. “Disruptive technology” is thus an understatement.”

Is Bitcoin “money”? Does it have the characteristics that define that elusive concept called “money”. According to the traditional definion, “money” should be a store of value, a medium of exchange and a unit of account. Let’s see:

  • Is it a store of value?. Yes. Why?. Because it cannot be counterfeited and because it is scarce. Only 21 million Bitcoins will ever be issued by 2140. Being a store of value is based on being scarce, and Bitcoin is scarce.
  • Is it medium of exchange?. Yes. Why?. It is used to purchase and sell products and services.
  • Is it a unit of account? Yes. Why?. It is fungible, divisible and can be used to accumulate wealth.

Bitcoin is an experiment, and it could fail. Its success depends on its creators fulfilling the pledge never to issue more than 21 million units, on keeping it scarce. But so far it is succeeding. Check the price of the Bitcoin in USD in this chart provided by Blockchain: It went from 10 USD in July 2012 to 70 USD this last week. Check also the market capitalization of the Bitcoin market in this chart also provided by Blockchain: It went from 100 million USD in July 2012 to about 800 million USD this last week.

Its success also depend on it being widely accepted. This condition has the characteristics of a self-reinforcing loop: The more it is accepted, the higher the chances of it succeeding as a medium of exchange. So far the prospects are good. Transactions mediated by Bitcoin are growing fast.

As Bitcoin is decentralized, it can be hard to find all the resources one might want. Below is a list of some of the most useful websites and tools for learning about and engaging the Bitcoin economy (compiled by Erik Voorhees)

Paytunia.com – Very nice online ewallet service with Android app. Store your coins here.

BitSpend.net – Enables you to buy ANYTHING online by paying with Bitcoin. Very cool.

Bitcoin.org – Official site of the Bitcoin project, download the wallet software here.

MtGox.com – The leading Bitcoin exchange. Buy and sell Bitcoins here.

BitcoinTalk.org – The official discussion forum, and large enthusiast community.

Wiki.Bitcoin.it – Encyclopedia of most aggregated Bitcoin knowledge, very extensive.

Bitcoin.it/wiki/trade – Partial list of companies that accept Bitcoin as payment.

Blockchain.info – Tool for viewing accounts, payments, and numerous economic statistics.

BitcoinCharts.com – Shows current market prices and economic statistics.

Preev.com – Super easy Bitcoin<->fiat calculator, multiple currencies supported.

BitcoinMonitor.com – Live view of transactions as they happen on the Bitcoin network.

Paysius.com – Enables businesses to automatically accept Bitcoin payments on their website.

Bit-Pay.com – Another excellent merchant solution for businesses that wish to accept Bitcoin payments.

Coinabul.com – Leading gold and silver bullion seller for Bitcoin

Coinapult.com – Send Bitcoin via Email or SMS

WorkForBitcoin.com – Bitcoin job board – freelance projects which pay in Bitcoin.

Back to Mesopotamia by the way of Cyprus

In Back to Mesopotamia? a now prescient report by the Boston Consulting Group (BCG) published in September 2011 it was argued that, while inflation is the unstated and preferred “solution” to the present debt crisis in the western societies, for a variety of reasons, among them the deleveraging pressure, low demand for credit and potential social upheaval, the inflation “solution” might not work or not be enough to solve the debt overhang in most western countries. Other “solutions” would have to be found. The report of the BCC explores what other options would western governments likely undertake to address the crisis, arguing and concluding that “it is likely that wiping out the debt overhang will be at the heart of any solution”.

This weekend we have found out that Cyprus is on the route to Mesopotamia.

Some excerpts from the BCG report:

“In ancient Mesopotamia, debt was commonplace; individual debts were recorded on clay tablets. Periodically, upon the ascendancy of a new monarch, debts would be forgiven: in other words, the slate would be wiped clean. The challenge facing today’s politicians is how clean to wipe the slates. In considering some of the potential measures likely to be required, the reader may be struck by the essential problem facing politicians: there may be only painful ways out of the crisis.”

“If the overall debt load continues to grow faster than the economy of the euro zone, at some point the politicians might conclude that debt restructuring is inevitable. For this to be effective, they would need to restructure all debt, probably at around a maximum combined level of 180 percent per country. This number is based on the assumption that governments, non Financial corporations, and private house-holds can each sustain a debt load of 60 percent of GDP, at an interest rate of 5 percent and a nominal economic growth rate of 3 percent per year. Given this assumption, the total debt overhang within the euro zone amounts to €6.1trillion.”

“The probability of economies growing out of their debt problem is therefore limited, and the authors conclude that “the debt problems facing advanced economies are even worse than we thought””

“These write-offs would have to lead to a real reduction of the debt burden of the
debtor, and not just to an adjustment on the creditor’s balance sheet. If governments chose this course of action, only true debt relief (and thus an end to the painful deleveraging process) could lay the foundation for a return to economic growth. To follow this path, they would need to convince themselves that the overall benefit of an economic restart outweighed the risk of moral hazard in some areas.”

“Writing off more than €6 trillion would have significant implications for lenders. Just look at the numbers. Assuming a proportional distribution between banks and insurers, banks in the euro zone would have to write off 10 percent of total assets (€3 trillion out of €36.9 trillion in total assets).”

“If politicians pursued this course, the losses would almost certainly exceed the equity of the banking sector— making it insolvent at an aggregate level.”

“Restructuring the debt overhang in the euro zone would require financing and would be a daunting task. In order to finance controlled restructuring, politicians could well conclude that it was necessary to tax the existing wealth of the private sector. Many politicians would see taxing financial assets as the fairest way of resolving the problem.”

“For most countries, a haircut of 11 to 30 percent would be sufficient to cover the costs of an orderly debt restructuring. Only in Greece, Spain, and Portugal would the burden for the private sector be significantly higher; In Ireland it would be too high because the financial assets of the Irish people are smaller than the required adjustment of debt levels. This underscores the dimension of the Irish real estate and debt bubble.”

TYR reads “… a de facto coup d’état by Wall Street”

David Stockman On “The Great Deformation” And The US Treasury As “The M&A Department Of Goldman Sachs” @ Zerohedge Zerohedge publishes this excerpt from David Stockman’s upcoming book The Great Deformation: The Corruption Of Capitalism In America

David Alan Stockman (born November 10, 1946) is a former U.S. politician and businessman, serving as a Republican U.S. Representative from the state of Michigan (1977–1981) and as the Director of the Office of Management and Budget(1981–1985).

Excerpts from the introduction to The Great Deformation:

“The fiscal cliff is permanent and insurmountable. It stands at the edge of a $20 trillion abyss of deficits over the next decade. And this estimation is conservative, based on sober economic assumptions and the dug-in tax and spending positions of the two parties, both powerfully abetted by lobbies and special interests which fight for every paragraph of loophole ridden tax code and each line of a grossly bloated budget.”

“Fiscal cliffs as far as the eye can see are the deeply troubling outcome of the Great Deformation. They are the result of capture of the state, especially its central bank, the Federal Reserve, by crony capitalist forces deeply inimical to free markets and democracy.”

“Why we are mired in this virtually unsolvable problem is the reason I wrote this book. It originated in my being flabbergasted when the Republican White House in September 2008 proposed the $700 billion TARP bailout of Wall Street. When the courageous House Republicans who voted it down were forced to walk the plank a second time in betrayal of their principled stand, my sense of disbelief turned into a not-inconsiderable outrage. Likewise, I was shocked to read of the blatant deal making, bribing, and bullying of the troubled big banks being conducted out of the treasury secretary’s office, as if it were the M&A department of Goldman Sachs.…”

“By the end of the Bush administration it was starkly apparent that a Republican White House had wantonly trashed all the old-time fiscal rules, and it had been done by political neophytes: Hank Paulson and his posse of eager-beaver Goldman bankers. But I had been at the center of the most intense fiscal battle of modern times during the early Reagan era and had learned something they apparently hadn’t: that the Congress is made up of representatives from 435 mini-principalities and duchies, and they reason by precedent above all else. Once Wall Street, AIG, and GM were bailed out, the state would have no boundaries: the public purse would be fair game for all.”

“I found this alarming in view of the long ago Reagan-era battle of the budget that had ended in dismal failure. Notwithstanding decades of Republican speech making about Ronald Reagan’s rebuke to “big government,” it never happened. In the interim, Republican administrations whose mantra was “smaller government” only made Big Government more corpulent, so plainly by 2008 there was no fiscal headroom left at all to plunge into “bailout nation.””

“After I left the White House in 1985 I wrote a youthful screed, The Triumph of Politics, decrying Republican hypocrisy about the evils of deficit finance. But I had also tried to accomplish something more constructive: to systematically call the roll of the spending cuts not made by Ronald Reagan, and thereby document that almost nobody was willing to challenge the core components that comprise Big Government.”

“Thus, the giant social insurance programs of Medicare and Social Security had barely been scratched; means-tested entitlements had been modestly reformed but had saved only small change because there weren’t so many welfare queens after all; farm subsidies and veterans’ benefits had not been cut because these were GOP constituencies; and the Education Department had emerged standing tall because middle-class families demanded their student loans and grants. In all, Ronald Reagan had left the “welfare state” barely one-half of 1 percent of GDP smaller than Jimmy Carter’s, and added a massive structural deficit to boot.”

“But that was twenty-five years ago, and whatever fiscal rectitude had existed among the Republican congressional elders at the time had long since disappeared. During the eight years of George W. Bush, the GOP had pivoted from spending cuts not made to a spending spree not seen since the presidency of Lyndon Baines Johnson—adopting Medicare prescription drug benefits, massive growth in education spending, the monstrosity of the Homeland Security Department, sky-high farm subsidies, and pork-barrel excess everywhere. Worse still, the defense budget had doubled and the so-called Republican brand had been reduced to tax cutting for any reason and in whatever form the lobbies of K Street could concoct. George W. Bush thus left the White House trailed by previously unthinkable bailouts and a deluge of red ink which would reach $1.2 trillion and 10 percent of GDP, even before the Obama stimulus. What was truly galling, however, was that the Wall Street satrap occupying the third floor of the Treasury Building had talked the hapless Bush into a $150 billion one-time tax rebate to “stimulate” the economy.”

“I had long since parted ways with the supply-siders and had left the White House with my admiration for President Reagan considerably dulled by his obdurate inflexibility on the runaway defense buildup, and his refusal to acknowledge that the giant deficits which emerged in the 1980s were his responsibility, not Jimmy Carter’s. But despite all this, I thought that the Paulson tax rebate was a sharp slap in the Gipper’s face. President Reagan’s great accomplishment had been the burial of the Keynesian predicate: the notion that Washington could create economic growth and wealth by borrowing money and passing it out to consumers so they would buy more shoes and soda pop.”

“Now Paulson was throwing even that overboard. Didn’t the whirling dervish from Goldman know that once upon a time all the young men and women in Ronald Reagan’s crusade, and most especially the father of supply side, Jack Kemp, had ridiculed the very tax rebate that he peddled to Nancy Pelosi in February 2008 as Jimmy Carter’s $50 per family folly? At length, I saw the light, and it had nothing to do with Paulson’s apparent illiteracy on the precepts of sound fiscal policy. The bailouts, the Fed’s frenzied money printing, the embrace of primitive Keynesian tax stimulus by a Republican White House amounted to something terrible: a de facto coup d’état by Wall Street, resulting in Washington’s embrace of any expedient necessary to keep the financial bubble going—and no matter how offensive it was to every historic principle of free markets, sound money, and fiscal rectitude.”

TYR watches “Jim Rogers: We’re Wiping Out The Savings Class Globally, To Terrible Consequence”

Jim Rogers: We’re Wiping Out The Savings Class Globally, To Terrible Consequence @ Peak Prosperity

Chris Martenson interviews Jim Rogersan American investor and author. Rogers is the Chairman of Rogers Holdings and Beeland Interests, Inc. He was the co-founder of the Quantum Fund with George Soros and creator of the Rogers International Commodities Index (RICI). In the interview Jim Rogers draws attention on this unique moment in financial history where most central banks engage in “money printing”, wiping out the western world’s saving class, and creating the foundations for a potentially devastating future.

“For the first time in recorded history, we have nearly every central bank printing money and trying to debase their currency. This has never happened before. How it’s going to work out, I don’t know.”

“Throughout our history – any country’s history – the people who save their money and invest for their future are the ones that you build an economy, a society, and a nation on.”

“In America, many people saved their money, put it aside, and didn’t buy four or five houses with no job and no money down. They did what most people would consider the right thing, and what historically has been the right thing. But now, unfortunately, those people are being wiped out, because they are getting 0% return, or virtually no return, on their savings and their investments. We’re wiping them out at the expense of people who went deeply into debt, people who did what most people would consider the wrong thing at the expense of people who did the right thing. This, long-term, has terrible consequences for any nation, any society, any economy.”

TYR 10 March 2013 reads “Corporatism: A System Of Control Designed By The Monopoly Men Of The Global Elite”

Who Runs The World - Solid Proof That A Core Group Of Wealthy Elitists Are Pulling The Strings

Corporatism: A System Of Control Designed By The Monopoly Men Of The Global Elite @ The Economic Collapse

“The Dow is at a record high and so are corporate profits – so why does it feel like most of the country is deeply suffering right now?  Real household income is the lowest that it has been in a decade, poverty is absolutely soaring, 47 million Americans are on food stamps and the middle class is being systematically destroyed.  How can big corporations be doing so well while most American families are having such a hard time?  Isn’t their wealth supposed to “trickle down” to the rest of us?  Unfortunately, that is not how the real world works.”

“Today, most big corporations are trying to minimize the number of “expensive” American workers on their payrolls as much as they can.  If the big corporation that is employing you can figure out a way to replace you with a worker in China or with a robot, it will probably do it.  Corporations are in existence to maximize wealth for their shareholders, and most of the time the largest corporations are dominated by the monopoly men of the global elite.  Over the decades, the politicians that have their campaigns funded by these monopoly men have rigged the game so that the big corporations are able to easily dominate everything.  But this was never what those that founded this country intended. ”

“First of all, we continue to see incomes go down even though we live in an inflationary economy.”

“Today, corporate profits as a percentage of U.S. GDP are at an all-time high, but wages as a percentage of U.S. GDP are near an all-time low.”

Corporate Profits After Tax

“Meanwhile, wages as a percentage of GDP continue to fall rapidly…”

Wages And Salaries As A Percentage Of GDP

“Most of the jobs being created in America today are “low wage” jobs.  Tens of millions of Americans are working as hard as they can only to find that they can barely put food on the table and provide a roof over the heads of their children.  The ranks of the “working poor” are exploding and the middle class continues to shrink.”

“Right now, the system is designed to continually funnel more money and more power to the very top of the pyramid.  The global elite are becoming more dominant with each passing day.  Unless something dramatic happens, at some point the American people will become so powerless that they won’t be able to do anything about it even if they wanted to.”

“The idea of a very tiny elite completely dominating all the rest of us goes against everything that America is supposed to stand for.  In the end, it will result in absolute tyranny if it is not stopped.”