Bitcoin: only Millenials would think this is a good idea.

 WHY WOULD ANYONE STORE THEIR ASSETS IN THE CLOUD?

WE HAVE ALL WITNESSED CLOUDS DISAPPEARING

Only Millennials would accept storing their hard earned wealth in cyber space where it could disappear in an instant. I believe many millennials are smart and do have a view of the future, but they obviously have a very limited understanding of history. The history of money, and what it is supposed to be. The history of governments ability to debase and devalue money and implement policies to benefit government over citizens.

Recently bitcoin has traded at over $37,000. It began at 30 cents in 2011. Many believe its value is unlimited, because it is a fixed limited supply. This is reminiscent of Tulip Mania in Holland in the 1830's  and the Pine lumber bubble in early America and the more recent bubble in silver prices in 1980's. These are commodity bubbles and after their collapse at least you still owned tulip bulbs, pine boards and silver, while the value was dramatically lower, you still had something.  I don't know if you can classify Bitcoin as a commodity, it is sold as a currency.

I  suppose we have been conditioned to put our faith in intangible things. Money up until the late 20th. century was always gold or silver. Our paper money, up until the 1970,s was a receipt for a certain weight of gold and silver. Our coins up until 1964 were silver. Now our paper money only has value because people will exchange goods and services for it. It has no real value in itself. It is continually losing its buying power due to government budget deficits and unlimited supply of so called money.

We often hear the term when reminiscing about what things were worth years ago as increasing in value, but in effect they have not, just the value of money has been debased. This is why many believe bitcoin is a good investment, because it cannot be debased by government action. The problem is you cannot put it under the mattress and it is probably the most vulnerable asset ever created. Does anyone believe that governments around the world will allow transactions to occur that are not taxed, regulated and controlled by them? Government regulation can and will likely sentence bitcoin and other digital currencies to disappear into thin air.

They will likely actually replace these digital curriens with their own, controlled, taxed and regulated by governments around the world. It is their perfect dream. They will be able to fine, tax and confiscate without any restraint. Have no doubt, I suspect the planning is already in the works. 

When I was a young boy in the 1950's, I spent a lot of time with elderly people in my neighborhood, who relayed stories of the depression. They did not trust banks, they often kept their money hidden somewhere in their house. They saw many peoples money just disappear overnight. They unanimously were deathly afraid of debt. They remember the confiscation by the government of their gold. 

My parents generation, the WW2 generation, did regain their trust in banks and the government but they also were very wary of debt.

My generation, the boomers have embraced debt as the only way of doing business, never counting the interest they have paid over their lifetime, some never actually acquiring a positive net worth.

The present generation has thrown off all restraint and their faith is in the clouds, not anticipating that anything bad can ever happen. Maybe the wariness of earlier generations has pushed off the inevitable day of accounting. Bitcoin is just a symptom of the times.

originally published 2/5/21

Bitcoin and other crypto currencies have recently plunged in value. It is inevitable to eventually be worthless.