Tag: cryptocurrency

[vimeo 132160899 w=640 h=360]

Gold Prices Rally While Bitcoin Bombs

January 19, 2015—Hello, everybody and thank you for tuning in. I want to give an update on Bitcoin.

Bitcoin is in the news right now because the price is very low. At one time it was over $1,000. Now it’s hanging around $200 and sometimes a little bit below $200. A recent article in the Washington Post brought the subject up and they claim that it’s a Ponzi scheme for redistributing wealth from one libertarian to another. I don’t endorse that. I don’t think it’s a true Ponzi scheme. It was a cryptocurrency that was brought about.

I didn’t understand it. Quite frankly if I can’t understand it or feel it and hold it in my hand, I don’t think it’s real money. That’s why I keep thinking gold is real money and reserve notes are not real money. Nevertheless, it’s been used and my position has always been as long as there’s no fraud people ought to have the choice of using it. Even though I want to legalize competing currencies and someday they’ll be much more relevant, it’s very hard to think in terms of a new currency. Those individuals who are using Bitcoin are using them now. They still think in dollar terms.

If something costs $100 and they calculate it in Bitcoins, hey transfer the funds in Bitcoins. So it’s a transfer mechanism rather than it being use as a true currency. As a matter of fact, that is actually true with gold. Gold is real money and traditionally for thousands of years it’s been used. If you wanted to institute a truly parallel currency with gold it would be difficult to get people’s mindset off dollars. You might say, “Well, a gold ounce is worth $1,500. Okay. I’ll give you one ounce of gold for this $1,500.”

People still think in terms of dollars. It doesn’t mean it isn’t necessary to think about parallel competing currencies. There will be times when it will be much more hectic and they will need to have an alternative. It emphasizes that this paper currency doesn’t work.