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here's the interesting story I am I'm I'm curious
if you have ever had any experience with bitcoins I have not I've been watching
this thing I've talked on the
on the radio and television a few times about how I think the big queen is the
new Dutch tulip bulbs its
the new South Sea issue it's the new bubble
but
the the mountain Mount GOx which is actually
eighty an acronym for Magic the Gathering online exchange which was
originally a place an online exchange
sir online version of the eBay I suppose or some variation that where people
traded do
cards trading card game
an arc trading game cards or whatever I don't know all the details but they
started accepting bitcoins and then they became a big coin exchange in they
became the largest
are one of the largest but can't change exchanges in the world
and they just went black yesterday
the website they took down their Twitter feed they just
vanished with what might be four hundred million dollars for the big points
or I shouldn't say worth I
bitcoins that people worry they're willing to pay for or had paid $400
million dollars for
and there's a buncha protesters out front of the now empty office buildings
with signs like
where is our money 744 thousand bitcoins
2.6 percent above the 12.44
million big points in circulation and nobody knows exactly what happened
as a couple articles about today's financial times elsewhere all around the
web you can easily find an
are the effect the headline in the financial ties between exchange
fears $400 million dollar theft now
what i think is particularly interesting about this is
if you've all heard the libertarian argument and the
in the Rand Paul argument eg in favor putting the US back on the gold standard
which is that without the gold standard we have what's called a fiat currency in
other words a currency that is
brought into being with nothing behind it and I would argue that the US dollar
is not a fiat currency
at least not in the sure a sense of the term but the
it quiets that
big wind does not have a sovereign nation behind it
there is nobody guarantee net with
assets whereas the US dollar is
EPA you could say well what are the assets the back up the US top dollar
the fifty six trillion dollars worth of assets that the federal government owns
is the full faith and credit of the United States it's every federal
building it's all our parks it's all our natural resources that are federally
owned
and beyond bad it's the it's the
the power and vitality and strength over $15 trillion dollar a year
GP economy it's america
the backs up the dollar and
just like the countries of Europe back up the euro and in fact
I would submit to you that it would be stupid to go to a gold
base currency would be a big mistake because
you want the amount of currency in circulation to be a reflection
up the amount of economic activity is happening so that at
as economic activity contracts never dollars contracts
as economic activity expands number dollars expands
so that basically he the value of the dollar remains the same over time
or close to the same you want a small amount of inflation every year
a for a whole variety have rather
arcane reasons
the most obvious one being that if you get at zero are you start seeing
deflation bending
the good economy sirs to spiral down and slides into
deflation equals depression
now a lot of inflation can be very very problematic
but this is this is the the problem the Richard Nixon was facing in 1971
when we were arguably still on the gold standard
and that was that as the economy was growing
deal on a goal that we had to have in order to back the dollar's the number
dollars in circulation Inc grew and he couldn't get the gold
so do you you know and I or as the value of gold as the price of gold rather
varied wildly used to fix it at thirty five dollars an ounce and simply make it
illegal for Americans to hold gold that's what FDR did
during the Great Depression in order to stabilize the dollar
and Nixon said now and I can do that we're gonna let you know goal float
and we're gonna diss disconnected from the dollar
which i think was the right thing to do say the dollar
you know is represented by the full faith and credit United States
but this whole big going thing shows you what a true fiat currency is
bitcoins a fiat currency it's a currency that has been brought into bean
by virtue of a computer algorithm
that does not have an issue an agency that stands behind it and says we will
make you whole
if you are you know if if your currency collapses or if your currency is gone
our
now course the US government if you if you're robbed if order billion dollars
is not gonna go get come in and say okay here's your forty million dollars back
but when your currency exists virtually on computers
and
n mine bitcoins by just running their computer all day long like the you know
we use to participate
in the early days in the said he thinks some love you may be old enough to
remember that back in the late 80's early 90's
where a lot I was I did this for
like a year when your computer's not running in the background he just run
this program where we're
were researching this massive database that nasa had
of satellite you know de beers listening to outer space
looking for recurrent
patterns in the noise that might indicate
a distant intelligence civilization and there was so much data available because
we had so many these
satellites and satellite antenna arrays and so little computing horsepower
because we were just early on in the state in in a in the early days at the
computer revolution
that the government didn't have the budget or the ability to actually listen
all this data
and so people would dedicate computer processing power to it
and hundreds of thousands millions of people were
we having their computers discretion away in the background when they were
using their computers
looking for intelligent life it was like a really cool thing
but that's kind of a different thing than saying I'm gonna have my computer
crunching away in the background
making me money bad
very much sounds to me like the
the Dutch tulip bulb thing or the South Sea Island issue these were
you know famous inflationary bubbles in Europe
back in the 17th and 16th centuries as I recall
and you know where
where the value of something just went nuts because
everybody thought they had to have it everybody thought they get rich on it
was like you know agreed on steroids
so
any others is my thoughts on on big clinton and if Rand Paul really
you know objects to Ino wants us to go back to bosnia New Year got a real
problem or you get all I bought from what's going to the price a goal was to
go to the value of the dollar
and what happens when we can't get more goals but we have to expand our
our economy what happens is that the value dollars starts going south it
actually
actually go up the value will go up the ability to get dollars you go down on
you throw the economy into a depression
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