Bitcoin and the fall of banks

 

Banks, lenders of money, rose in prominence many thousands of years before Jesus overturned their tables. Banks rose like weeds wherever people needed money to trade. 

When development grew as the immigrants to America overtook the continent, rich people saw the opportunity to become banks. With enough investors and stock holders, they printed their money backed by gold they stored and with the promise of redeeming the money for gold at any time. 

They lent out their money to governments, farmers, business men and home buyers at an interest to be profitable. They became very powerful. 

When President Lincoln proposed that the government print their own money to pay for the civil war, rather than borrow it from the banks, he was assassinated. The private banks led by the richest people got so powerful and so greedy that they printed more money than they had gold. 

When people started to redeem their gold, the banks were forced into bankruptcy and many people lost their wealth. 

To save the situation from escalating, the richest of the bankers formed a union and convinced the politicians to accept a radical change in bank regulation to prevent any more run on banks and bankruptcies and disruptions to the national economy. This union became the bank of all private banks. Instead of private banks issuing their own money, the FED as it became to be called issued one money for the entire nation called the dollar based on gold. They would lend it to the private banks at an interest rate so that the private banks could make a profit by lending it to the people at a higher interest rate. The more profitable a private bank was, the more it could borrow from the FED. This union of banks was just what the politicians needed to make a big profit from the inevitable war that was brewing in Europe and the rest of the world.

The FED became the national bank to finance the war.

After the war, America celebrated for a decade. Using the stock markets, the Americans gambled and lost all they had and suffered a decade of severe depression. 

To placate the suffering people and save them from overthrowing capitalism with communism, President Roosevelt enacted expensive social measures. 

To print money to pay for the social measures, all privately held gold was confiscated. This lasted for 40 years. Like from WWI, 20 years earlier, the banks profited greatly by WWII.

In 1963 President Kennedy signed executive order #11110 which restored the U.S. Government's authority to issue currency without the Federal Reserve. President Kennedy was assassinated 90 days after signing this executive order and the executive order was never carried out. 

To pay for the war in Vietnam, President Nixon needed to print more money than there was gold to back it up and there was no gold left to confiscate. He convinced the world banks to adopt a new fiat dollar, no longer based on gold to become the world reserve instead of gold. America was able to do this by agreeing with oil producing countries to develop and protect their oil fields as long as oil traded only for dollars.

Banks were forbidden to speculate with money. They could only lend it out and distribute it to where it was most needed and most profitable. When president Clinton allowed banks to speculate, banks saw this as a new way of acquiring profits. As the government had laws to protect the savings of people, the banks had nothing to lose, so they speculated. When governments lowered taxes to encourage corporations to grow, the CEOs instead used this money to buy back their stock to increase their value for the benefit of the shareholders and their bonuses. 

Banks play a vital role in distributing money in both socialist and capitalist societies.

The communist countries led by Russia and China adopted capitalism. Their governments allow capitalistic corporations to thrive, but they control and regulated them for maximal profits. They do this for the long term benefit of the entire country at the expense of individual rights and freedoms. The people gladly trade their freedoms for security. 

The reason that socialism fails is that it promotes collectivism over individualism. People are inherently individualistic. They sacrifice everything for themselves and their children. This drives incentive to improve and excel and share knowledge and expertise for a healthy profit which leads to capitalism. The reason that socialism does not work is because people lose incentive to be productive when they do not individually gain by making a profit. Those in power cling on to their power and become corrupt. They must be changed regularly by informed people free to vote them into office and out of office.

The capitalist countries led by Europe and US adopted socialism. Their governments are controlled by corporations that thrive because of their short term self interests putting profit over over long term interests of the nation. To appease the discontented population, capitalist governments adopt socialistic programs that greatly reduce individual freedoms. The people gladly trade their freedoms for security.  

The reason that capitalism does not work is not because of the greed of capitalists, but because capitalism requires a market where people are free to make rational choices. With fear propaganda and brainwashing, people are irrational. They unknowingly allow themselves to be enslaved and become incapable of making rational choices. They falsely believe that they are free because they are free to choose one of 2 men to lead them, and so many consumer products to choose from. 

US with its control of the dollar is the main consumer in the world. They pay for everything they consume in dollars. The main producer is China.

As the world business uses dollars, China is happy to have as many dollars as it can have. It lends back dollars it gets from American consumers just to keep them consuming. It lends its dollars to finance its global projects in strategic locations. The countries that borrow dollars from China and that have to pay back those dollars at an interest slowly fall into a dollar debt where they are short on dollars. This dollar shortage drives up the price of the dollar. As the dollar is the world reserve currency, nobody complains when US dollars get printed. As their own currencies are tied to the dollar, they just print more of their own currencies to keep up. 

China prints as much of its currency as it needs to keep its economy growing. China understands that the US must print as many dollars as it takes to bail out failed corporations that are needed for the health of its nation so that it keeps consuming products from China.

The corona 2020 pandemic hit US like it found itself in a sudden world war. But instead of producing weapons, people were on lock downs quarantined at home. Schools closed and small business were taken over by global corporations.

The FED issued free money to the banks at 0% interest in an effort to motivate them to lend it out to the people. The banks use this money to speculate and increase their share price instead of lending it out and risk losing it.

The government realized that the only way to revive the economy and get money to the people where it is needed is to totally revamp the banking system. It proposed changing the debt based economy to a debt free based economy. The FED stopped lending money that it created from thin air. It converted all bank accounts into digital wallet apps and issued money directly to the accounts. It replaced all cash by the digital dollar. This new new monetary theory of economics called MMT was hailed as the solution to the failing economies.

Instead of using taxation and borrowing for its needs, the government issued debt free money at 0% interest rates to the economy to fund social and public programs, as well as to finance private corporations, small businesses and provide mortgages. The government used taxation as a way to control inflation. This was what China was doing.

The dollar was the world reserve currency, and America was using it under the threat of sanctions to maintain its world influence. Many countries began to use gold and its digital version, Bitcoin to free themselves from the constraints that the dollar presented. This move drastically raised the price of Bitcoin as well as its global adaptation. When the dollar faltered and began to lose its value, other nations, corporations and the people stated to move their reserves and savings into gold and Bitcoin. 

When governments started to confiscate gold, Bitcoin became the only safe haven as it could not be confiscated. When governments outlawed the use of Bitcoin, other governments promoted its use and many legal loopholes were used to buy and sell Bitcoins.

Bitcoin offered an international form of money that was issued at a predetermined rate that could not be manipulated or forged, and was as easy and safe to trade with as anonymous cash. Unlike bank accounts that require identification, and that can be closed by the bank, Bitcoin accounts can be opened by anyone anonymously. Unlike the centralized data bases used by bank accounts, requiring trusting the banks, Bitcoin accounts use a decentralized database called the Blockchain that requires no element of trust and no centralized control.

This power of Bitcoin allowed people to become their own banks, buying bonds and shares as investments and saving their wealth freely and securely. 

Banks became financial consultants connecting investors with entrepreneurs. They provided facilities with fire-proof safety boxes where people stored their private keys that secured their Bitcoins. In this way people secured their private keys not only from loss or prying eyes, but also ensured that their inheritors had access to the safe in the event of their death. 

In China, the government controls both the banks, the corporations and the people. 

In America, the corporations controls both the government and the banks and the people. 

Would it not be nice if the people controlled both the government and the corporations? 

Money runs the world and Bitcoin allows people to be in control of their money. By 

• voting the right politicians to represent us, 
• voting with our wallets to control the corporations, and
• adopting Bitcoin to take control of their money, 

people have a chance to free themselves from enslavement and make a better world for their children.

In 2009, Bitcoin was worth 1$. 4 years later in 2013 the price had risen to 1,000$. 4 years after that in 2017 the price reached 20,000$. This price increase closely follows the increase in the scarcity which is halved every 4 years.   

If this trend continues, 2021 should see prices as high as 100,000$. 

As you can see from the figure above, most of the Bitcoins have been already mined. On the other hand, Bitcoin adaption is just starting. with less than 1% of people having Bitcoin. Some believe that Bitcoin can be worth 1,000,000$ within 10 years. 

Inflation proof:

Saving in fiat currencies, especially at zero interest rates, is seeing the buying power of your saved money slowly weaken by inflation as more and more money is issued into the economy to try and save it. This is much like trying to keep a leaky bucket full. 

The rate of Bitcoins issued is fixed and limited to 21 million. Most of the Bitcoins have already been issued to relatively few people who are using Bitcoins as a way of saving. Their interest is to raise the price of Bitcoin and if they manipulate the price, it will be to raise it. This make saving Bitcoins as a safe way to save wealth, either for short term private investments or long term investments for your children and grand children.  

Can not be seized:

While gold, property, houses, and bank accounts can be seized, as long as you or your inheritors have your key, your Bitcoins are secure from loss, theft, or seizure.

What do you think? Your comments are appreciated. 

  

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