Libertarian Sheep: Made to Be Sheared by Bitcoin

By Gary North

This week, a perfectly named Bitcoin market called Sheep Marketplace went down, taking $100 million of the sheep’s Bitcoins with it. It announced this.

Sheep is down

We are sorry to say, but we were robbed on Saturday 11/21/2013 by vendor EBOOK101. This vendor found bug in system and stole 5400 BTC — your money, our provisions, all was stolen. We were trying to resolve this problem, but we were not successful. We are sorry for your problems and inconvenience, all of current BTC will be ditributed to users, who have filled correct BTC emergency adress [sic].

I would like to thank to all SheepMarketplace moderators by this, who were helping with this problem. I am very sorry for this situation. Thank you all.

This morning, I received an email from someone named Mike. He is a perfect example of the sheep to be sheared.

Mike does not like my articles exposing Bitcoins as a digital tulip mania. He decided to put me in my place.

The problem with people who have never read an economics book carefully is that they pick up the jargon, but they have no knowledge of the actual logic of economics.

I received an email from a stranger yesterday. It began, “Gary.” At that point, I knew it was from a some 20-something kid. Adults do not begin a letter to a stranger with his first name.

It began:

I’ll try to be brief.

He failed.

Since gov’t fiat usurped the place of real money, fiat now functions as money and we call it money. You call it money. You keep saying dollars are money. Do dollars fit the regression theorem? I think not, except by way of cannibalizing gold. But that’s been a done deal for a long time, so we call all this stuff money now.

I have written about this in 2004 in my article on the de-monetization of gold.

This kid does not understand the basics of arguing. When you write to someone who writes 7 articles a day, you should figure that he has written something on the topic you are raising. When you tell him that he doesn’t understand something on which he has written for 50 years, you should first do a Google search. But kids who begin letters with the author’s first name are not skilled in debate.

Bitcoin is a market response to gov’t fiat. It’s a decentralized fiat, a people’s fiat if you will. It rides the dollar just like the dollar rode gold. It uses dollar values for economic exchange just like the otherwise worthless fiat dollar used the whole price history of gold/silver economies.

First, there are hardly any economic exchanges made with Bitcoins. There is almost nothing offered for sale. Second, the only thing that most people are buying with their hard-earned dollars are Bitcoins. It’s a tulip-mania bubble. Third, because the price of Bitcoins is highly volatile, no one can make calculations about its value tomorrow. This is why Bitcoins are not money. Bitcoins are no more money than tulip bulbs in the Netherlands in 1636 were money.

Read more here.