Wednesday, December 18, 2013

Gary North's Latest Comment on Bitcoin

He writes:
At any time, the FED can pull the plug on what remains of the Bitcoin mania. Any programmer who thinks differently has had too much Jolt Cola. He needs to sober up.

The suggestion that Bitcoins are now, or ever will be, an alternative currency that will do an end run around the central banks is silly.

Wild volatility is fine when an investment is popular with programmers. But currencies are not volatile. They do not swing wildly in price. Penny stocks do. Currencies don't.

31 comments:

  1. Thanks Gary....Robert, you are quoting a man who believes Noah fit 60 million species into a boat. His rationality is already suspect. Nice ally Wenzel.

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    1. Talk about an ad hominem attack. Does it really matter what North thinks on other topics if Wenzel ONLY quotes him when his analysis is correct?

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    2. Yeah, its ad hominem. It was intended as such. Wenzel and North won't listen to the Austrian refutations of himself or North on the subject of Bitcoin. So I'm left with explaining how the man's logic is clearly faulty in general. If his logic is faulty, it follows that his logic on Bitcoin is likely faulty. Q.E.D.

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    3. Well actually it does give some background. Also this guy has been pretty sure of some things in the past only to be proven dramatically wrong. But, given the substance of what is quoted here, it absolutely matters.

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    4. "Thanks Gary....Robert, you are quoting a man who believes Noah fit 60 million species into a boat. His rationality is already suspect. Nice ally Wenzel."

      Not relevant. Idiot.

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    5. His analysis is correct? This is a bunch of meaningless bluster. The Fed cannot pull the plug on bitcoin entirely. The best that can be done is to regulate it enough that the vast majority of transactions are done openly. It still has several advantages cash does not.

      Bitcoin may well be in a bubble, but the volatility itself is not reason enough to make it not a currency. Look at countries with currencies with very heavy inflation. Even with that the currency does not die instantly. It may be that some get around it, but not everyone does. Not even the majority do. The reason for the volatility is that bitcoin is new. If gold was brand new and there was suddenly a huge discovery of new gold the price of gold would fall drastically. It would mean the properties of gold that make it viable as money all changed.

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    6. Do you have a source for that? Or can we assume that was a complete fabrication?

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    7. The refutation is not Austrian in origin. The refutation of Bitcoin is force.

      We all know the Bernard von Nothaus story regarding Liberty Dollar. That's where Bitcoin is headed. Death. Assassinated by interested government entities.

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  2. In my book, bitcoin has already succeeded. I can store, protect and spend my capital much easier than I ever could with bullion.

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    1. How can you store and protect your capital in bitcoin when it can lose half its value in a week or two? It I had purchased bitcoins a couple of weeks ago at over $1,000, as you were advocating, I now would have lost half my capital. How would I have preserved my capital doing that? Maybe someday that will happen, after its price stabilizes, but not today. I truly hope bitcoin succeeds, but its not helpful to offer arguments in its favor that fly in the face of the actual facts as they stand today.

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    2. I bought in around $100, and also set a few computers to mining the algorithm. When China banned Bitcoin, I sold.

      Bitcoin supporters are emotionally invested, and not looking at the system logically. Yeah, it's a great idea, but governments will crush it.

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    3. Honey Badger just got owned by Alan Anderson. Hahahahahaha. Shitcoins will be gone soon. Youbetter cash out now! Honey badger will be one of those people that Wenzel tried to warn. He'll be the one who went get out until shitcoins is zero. Aren't you glad you didn't take my bet, honey badger? You'll sit here and keep defending shitcoins even when all the evidence points to them being just that...shit!

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    4. Bitcoin is many things but it is not a good store of value yet. In order for it to qualify for that, it has to have many years of stability under its belt. Bitcoin is good for sending money from place to place quickly without a bank. If you store your money in it in the hopes that you will be able to get it out again years later, you are taking a big risk.

      Of course, if Bitcoin goes viral and spreads everywhere, you will have made a very good bet. Sadly, with Crony Capitalists like VISA, Master Card and American Express using Congress as their private enforcement arms and Wenzel and North doing their part to pour lies over it from "the other side", the risk is even greater. Nevertheless, Bitcoin will be as big as the pirated music and movie scenes combined, despite all the attacks against it.

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    5. @ Alan Andersen December 19, 2013 at 3:22 AM

      Bitcoin has been more than a great store of value for me - up 10,000% since I acquired it. It all depends on your time horizon. I took the long view and recognized the censorship resistant nature of the technology. People who look only at short-term swings do not understand the technology nor the world we live in. Yes, bitcoin will be attacked. Its use is not for Armchair Libertarians. If you can't handle the heat, get out of the kitchen. You will still be welcomed in later on when the bitcoin price has stabilized at a much higher value.

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    6. @ Honey Badger
      You say you are up 10,000% since acquisition. I assume that means you were up 20,000% before its latest price fall. However, what you are referring to are your unrealized gains due to your admittedly admirable foresight near bitcoin's inception. However, you lacked similar foresight in not realizing on those gains by selling out before the latest price plunge and then buying back in. Sure, you take the long view and one cannot time the market, but this is cold comfort to the shlups that took your advice and bought in at $1,200. And in any event, when you say bitcoin has been "more than a great store of value," it certainly had better be more than that, since it has not been a great STORE of value at all. It is more accurate to say that it has been a great source of unrealized PROFIT, not value, albeit, half as much profit as a couple of weeks ago.

      And I don't understand how bitcoin's advantages apply selectively depending on one's ideology, like "it's use is not for Armchair Libertarians?" So bitcoin is a great store of value for hardcore, long-term Anarchists, like me, but not for Armchair Libertarians? Your prior advocacy of bitcoin seemed to cross all ideological divides. I happen to be a gold advocate who takes the long view on that, and like you, I have lost some of my unrealized gains in 2013, but not nearly as much as you have in bitcoin. And more importantly, even though I advocate gold, whenever anyone asks me if they should buy it, I tell them that I have no idea what is right for them, that gold is volatile in price, is not currently money, and may never become money again.

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  3. -- But currencies are not volatile. They do not swing wildly in price. Penny stocks do. Currencies don't. --

    One can argue that penny stocks, at least, are issued by companies that actually MAKE something.

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  4. So it's not money now..fine. But the question North doesn't address here is "can it ever become money?"

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  5. "Wild volatility is fine when an investment is popular with programmers. But currencies are not volatile. They do not swing wildly in price. Penny stocks do. Currencies don't."

    Ummmm.......

    http://www.cashgoldexchange.com/product_images/uploaded_images/gold-price-graph.png

    I guess Gary isn't a fan of gold as a currency either.

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    1. North's quote does not say that gold is not volatile. He says currencies are not volatile. And what does being a fan of gold or bitcoin, for that matter, as a currency have to do with whether one thinks it actually is or can be a currency today? Gold stopped being a currency long ago and currently is too volatile to be one, but is still is much less volatile than bitcoin. I am sure that North hopes that gold will one day become currency again, just like bitcoin advocates hope that bitcoin will someday become money. And North, regardless of his faults, is much more realistic in hoping that gold someday will become a currency again than the bitcoin hopers as its volatile is much less than bitcoins.

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    2. Is it gold that's volatile? Or the "currency" is it valued in?

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    3. And at least gold has stood the test of time, and everyone knows what gold is. Hardly anyone uses or knows what shitcoins are.

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  6. Gold isnt a currency. Gold is money. Learn the difference. Additionally, look up Basel III and educate yourself.

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  7. Where are the wild swings coming from? Would it not be accurate to say that there are forces directly acting against bitcoin to see it destroyed? To accuse bitcoin of instability while watching governments trying to actively destroy it is a little bit self serving.

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  8. I find it so funny that instead of refuting what North has said about shitcoins everyone starts attacking him about another subject that isn't relevant. Too much begging the question and not enough refuting what he has said. Which, when you can't (and you can't) you instead attack him. Imagine the poor fools who bought shitcoins for $1200. They should have been paying attention to Wenzel, North, and Bionic Mosquito. Pro-shitcoin people are worse than anti-IP people.

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    1. North is saying bitcoin wont last as a viable money :great, I believe he will be right. But ecrypted currancies and the idea behind them won't be going away. Which is where he will eat what he is saying.

      As for IP, please, it simply can not be inforced without the state apparatus.

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  9. While I agree with most of Dr. North's analysis of Bitcoins future, I believe he may be taking a bow a little early here. One crash (this one) does not the end of a bubble make, necessarily. The mania could drive it much higher - or not. There is no real way to tell. The mania will end when it ends. But is that now? I have no idea, and neither does anyone else.

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  10. Anti-Bitcoin people are simply betting the government will shut it down.Hurray your right. To claim that bitcoin is a bubble or ponzie is silly, the government goons will never let it prove one way or the other. Its nice to see when they do come to shut it down they can quote Wenzel and North and happily confiscate away.."Its for your own good" ..."it was a scam anyway".

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    1. "Anti-shitcoin people are simply betting the government will shut it down."

      Uh, no. We realize it's not worth the paper..uh, the.....uh....the code? it's written on. It will fail miserably (if it already hasn't...what's the price now? $500, $250) who in there right minds would take cash (which is also useless fiat money) that is accepted everywhere and trade that for shitcoins??? Just send you cash/gold/silver to me and I'll give you nothing for it, which is what shitcoins will be "worth" soon. Basically the same thing but at least someone (me) is benefiting from the transaction. Well, sorta like the pump and dump operators at the top of this whole scheme.

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  11. The question truly is what will end Bitcoin...The government, or that it's a flawed idea? I'm betting on the former. Whats upsetting from a libertarian stand point is that the act of government to end it will be proof it was a fruad

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  12. State related currencies are backed by a society, central bank, gold, or whatever that that shoud express an value of TRUST. Bitcoin or any other virtual currency can be backed by TRUST as well... some day and my believe is that at the end there will be just one to stay, the one that can get the ultimate trusted worldwide currency. Imagine for instance that Ripple gains some attraction and start to grow, backed by some bigger trusted names like Google. don't you thing mane BTCs will wille changed to Ripple, making BTX price tumble and causing even more Xchanged for Ripples ?

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