Perry Glasser

BITCOIN, HUMAN TRAFFICKING, AND DRUG CARTELS

In Economics, Economy, Finance, Political Economy, Politics, Wall Street on February 19, 2014 at 4:21 pm

bitcoinYou’re seeing stories about Bitcoin because Wizards are spraying their shorts at the notion of an unlimited commodity that in a few years went from being worth pennies to being worth thousands of dollars. This is better than selling bootleg whiskey in 1924. No risk, no capital investment, no violation of the law (yet). It’s just a great system designed to lubricate the finances of exporting and importing stoned teenage-girls across international borders, bribing officials, and laundering profit from all manner of illegal activities.
Totally untraceable.
Why else design it that way?
Now that Swiss banks are playing ball with the IRS, someone had to step up, right?

bitcoin

Bitcoin Value in 2 Years

Transactions & Ledgers.
The vast majority of transactions in the financial world are accomplished by ledger entries. Your credit card, your debit card, and even you checkbook are instructions to financial institutions to debit one account and credit another. Cash money is only for poor people and criminals.
Financial institutions get rich by charging by the transaction. They rarely engage in a business that has risk to it. Suppose you were playing a game where you push money at someone at  the other side of a table, and then they push it back at you.  If there is a bank nearby, also suppose that they take $.02 out with each push. Maybe they supply the chairs and the table. It does not matter how much is in the pot, with enough transactions, eventually the bank has it all.
Great business, right?
Your stock broker moves shares from one ledger to another ledger when someone buys (and someone sells) stock, and takes a few dollars for the work, a small commission. With a gazillion transactions per hour, no one on Wall Street is complaining, mind you. Leave it to the Buccaneers to undertake real risk.

Different ledgers have different rules on how they can be credited or debited. Your bank charges for your checking account and your savings account. The Fed has an account for you—it has your Social Security number on it, for example. Everyone has rules.
Except Bitcoin.

Problem
All transactions leave a digital or paper trail. That’s a good thing. It’s a rule. Your bank sends you check images: with the right app, you scan a check and make a deposit. Money needs to leave tracks, otherwise it has a habit of vanishing.
So who wants or uses cash?
Why, anyone who wants no paper trail, of course.buccaneer
• Drug dealers.
• Sex traffickers.
• Diamond smugglers.
• Bribe-takers.
• Bribe-givers.
• Ali-Baba, the Forty Thieves, and their partners in the Oil Cartel.
If you are none of these things, the Bitcoin news is mildly interesting.
But it ought to alarm people.
Money is the lubricant sloshing around the engine of Finance, and the finances of Sin are now available in digital wallets.

Solution: Enter Bitcoin.

Citizen

Citizen

Technology innovations are disruptive when they displace old technologies by being faster, easier to operate, or more rich with desirable features.
Bitcoin’s desirable features are unquestionably a great boost to crime. Even Bitcoin says why.
Buccaneers and Wizards pay HUGE bonuses to freshly minted Wizards to envision means to skirt pesky regulations designed to protect Citizens, the schmucks like you and me who sleep the sleep of the righteous.
The last time the financial community looked the other way at an financial innovation, a few boy-geniuses invented swaps, which were really complicated insurance derivatives but were called “swaps” so they would not be regulated as part of the insurance industry. O, the cash they generated!
When the scheme collapsed, they damn near bankrupted the world economy–and no one has seen the inside of a prison for impoverishing municipalities, bankrupting Iceland, and putting millions of retirees at risk.
So, yeah, shit like this matters.

Currency.

Bitcoin is a free-floating currency backed by no government. The value of a Bitcoin is determined by supply and demand.gold-300x202
Yes, yes, yes, this is also true of every other currency ever since countries the world over abandoned hard metal backing (Remember gold? How about silver?) Dollar$ notes that American currency is now a Federal Reserve Note, which means that if the US needs more, it prints it without any pesky limit determined by the quantity of gold in Fort Knox (reputedly empty by some accounts).
Dollar$ is not among the loons who think the gold is long gone, but Dollar$ notes that it does not matter f it is there or not. Whatever weight of gold is in our national piggybank, the amount of currency in circulation is far, far more.
Should this shortfall of metal make you nervous, do not journey to Kentucky to present your Federal Reserve Note to ask for its value in gold. That will get you a one-way ticket on the train to Looneyville Station
What you’ve got in your hot little hand, Bunky, is currency backed by nothing more than a solemn promise, the “full faith and credit” of the United States, a country sure to pay off as soon as it takes care of the national debt.

Nationa Debt Right Now

Buying Bitcoin

Bitcoin doesn’t even have a promise behind it. Your dollars may not be worth the paper they are printed on, but your Bitcoins are worth less.

Eventually, even Weasels will be so embarrassed by the excesses of Bitcoin, that our elected officials will bring pressure to bear on a system sure to damage us spiritually and financially if left untrammeled.

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  1. […] days ago, Dollar$ predicted the imminent demise of Bitcoin, a death to be caused by the Last Fool, and here it is, even sooner than expected. Mt. Gox is now […]

  2. […] expressed doubt about the entire enterprise shortly before Mt.Gox went dark, but finds the idea that sex […]

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