Babylon's Bankers

WALKING AWAY FROM ALL THAT DEBT: CRYPTOCURRENCIES

Today I depart from my usual methodology, wherein I get to my "high octane speculations" at the very end of the blog, after referencing a shared article that prompts the speculation. In this case, there is an article to reference, but it comes in a wider context of activities and so many articles that to reference them all would be impossible. Hence, I start out today's blog with the high octane speculation itself, which I put in the form of a thesis or hypothesis: There is an agenda taking place worldwide, and that agenda is to replace the current financial system with one allowing the banksters even more license to fiddle with money and to walk away from the debts and the money they've stolen over the years. This agenda has two tracks: (1) a move to "cashless" "digital" currencies that are "safe," and (2) in the USSA, to force a constitutional convention, whose ultimate purpose is to allow them to repudiate obligations - pension funds, retirement plans, &c - while simultaneously putting into place a form of "government" more to their socialist-Gramscian liking.

Our concern here today is with the first track, and this very important article shared by Ms. K.M.:

Deutsche Asks A Stunning Question: "Is This The Beginning Of The End Of Fiat Money?

One will note that this "study" is coming from one of the world's and Europe's largest banks, Deutsche Bank, and the conclusions it offers are disturbing and (to economists of a certain school, and to those of us with common sense, a big "we told you so."):

The conclusions? Fiat money and moving off of bullion-based monetary standards are the heart of a looming and very large financial crisis:

Just as striking was Reid's nuanced observation that it was the fiat monetary system itself that has encouraged and perpetuated the current boom-bust cycle, and was itself in jeopardy of becoming extinct when the next megacrash hits:

We think the final break with precious metal currency systems from the early 1970s (after centuries of adhering to such regimes) and to a fiat currency world has encouraged budget deficits, rising debts, huge credit creation, ultra loose monetary policy, global build-up of imbalances, financial deregulation and more unstable markets.

The various breaks with gold based currencies over the last century or so has correlated well with our financial shocks/crises indicator. It shows that you are more likely to see crises/shocks when we break from hard currency systems. Some of the devaluation to Gold has been mindboggling over the last 100 years.

None of this is news to gold advocates nor to critics of the whole "monetized debt-as-facsimile-of-money" scheme. In fact, as I attempted to argue in my book Babylon's Banksters, it's not merely fiat money that's the problem. Fiat money is usually monetized debt, and it's the latter that's the real problem, for the inherent problem with such a system, as the ancient Mesopotamians discovered, is that principal on debt never grows as fast as the interest on it, and hence, debt only grows, and "bad money" (monetized debt) pushes out good money (real money representing the actual production of the society), and by "pushing out" good money, one must include the deliberate act of private banks purposefully removing anything from circulation that doesn't represent monetized debt. When was the last time you spent a United States Note? or a Silver Certificate? or a Gold Certificate?

So back to Deutsche Bank's study: strangely, it echoes former German finance minister Wolfgand Schaueble's statement that the debt growth model is over, and that there's no way forward without a reform of the system.

But what's the reform? Here's where it gets interesting:

And here comes the shocking punchline: not only does Reid concede that the fiat system "may be seriously tested over the coming decade and ultimately we may need to find an alternative" but that one such alternative is none other than cryptocurrencues, i.e. bitcoin, ethereum and so on. Which, while it may be a surprise to institutional investors appears to have been all too obvious to buyers of cryptocurrencies.

If we’re correct, the fiat currency system may be seriously tested over the coming decade and ultimately we may need to find an alternative. This is not necessarily a story for the next few months or quarters but we think the trend reversal is already slowly in place. Maybe we can explore future alternatives to the current monetary system in a second part sometime in the future. Cryptocurriencies are all the rage at the moment and are as much about blockchain as anything else but there could be an increasing desire for alternative medians of exchange in the years to come if we are correct. 
Et voila, there it is: replace physical media of exchange with supposedly secure blockchain technologies. My problem here is that regardless of the hype, there is no such thing as a completely secure cyber-system. I've even crawled way out onto the end of the twig of speculation and proposed that even quantum communication systems will eventually be found to contain a flaw.  Add to this the push for creating human-machine interfaces, and one easily sees the nightmarish scenario being proposed: to access "the system" you will have to have your little implant, and in a world where all sorts of nonsense is being perpetrated on humans without their knowledge or consent, taking that little implant may expose one to all sorts of "other" forms of manipulation from mind manipulation to emotional "stablizers" (or their reverse), or even the "kill switch". For of course, what's being proposed here is a system in which central banks are no longer in control, since blockchains distribute their information over several servers. In short, what could emerge from this is simply a system of interconnected banks since central banks are no longer necessary to the smooth functioning of bankster control. And if one admits the potential for fraud in this scenario, then if you thought the current system is rife with corruption and outright fraud and robbery, then, to put it country simple, "you aint seen nothin' yet."
The other half of this analysis is that concerning gold based currencies. Clearly, with Chinese and Russian gold-buying, we're seeing the attempt to construct a system that restores the idea, at least, in theory. But there are indications that the Russians and Chinese (and others) have in mind to couple bullion to such cryptocurrencies, raising again the question of whether or not those blips on the computer screen actually represent real bullion, and, more importantly, whether that bullion will deliverable on demand to the "cryptocurrency holder". In other words, it still comes back to possession of a real physical tangible medium of exchange that represents tangible value. Without that, one is merely shuffling the chairs on the promenade deck of the Titanic.
And that brings us chin to chin with the gold problem.
But that story will have to wait.
See you on the flip side...

35 thoughts on “WALKING AWAY FROM ALL THAT DEBT: CRYPTOCURRENCIES”

  1. A great article, it is suspicious who exactly is putting the money into crypto-currencies. It all feels a bit too like Charles Ponzi, he made a unbelievable promise, delivered on it to the first in, and then the hordes came.

    It would just take some good money at the start to get the scam rolling, the good money could be pulled out once the deluge of suckers piles in.

    I’ve got some serious questions for all crypto-currencies

    1) If I am totally anonymous, then how do I recover my money if I forget my password or I’m hacked?
    2) How big can the blockchain get? I understand it records all the transactions, but isn’t that infinite in size?
    3) I get it that fiat currencies are dropping in value, that’s why like in Weimar Germany people are putting their fiat into real things (assets ever faster). But as a way to transfer wealth what benefit do crypto-currencies give? How would it be easier and more convenient paying for my shopping?

    When Crypto-currencies stop going up then their value will have to be sustained by their usefulness, or everyone who was buying it because it appreciated gets out. They’re too unstable as a currency.

    Until I hear good answers to the above I’m treating them as a ponzi, real things have value, a house does (although its not an appreciating asset, that’s just fiat falling in value), precious metals do and there is not much of it, shares do. An ordered collection of 1’s and 0’s cannot be an asset, and no one knows if it will in future be a real currency, all I know is that apart from buying drugs online it has no real purpose.

  2. https://techcrunch.com/2017/11/07/a-major-vulnerability-has-frozen-hundreds-of-millions-of-dollars-of-ethereum/
    A major vulnerability has frozen hundreds of millions of dollars of Ethereum
    Posted 7 Nov 2017 by Jon Russell

    “Today is not a good news day for Ethereum. A vulnerability found within a popular wallet has frozen potentially hundreds of millions of dollars of the crypto currency in a second setback in recent months. Parity Technologies, the company behind widely used wallet service Parity, today disclosed an issue that could enable the contents of a wallet to be wiped.”

    Ahh, crypto-currencies. What could go wrong?

    1. Even better, these people can be completely anonymous, so no pesky link between their wealth and actual identity…

      Don’t worry, your wealth is safe, protected…

    2. “$300m in cryptocurrency accidentally lost forever due to bug; user mistakenly takes control of hundreds of wallets containing cryptocurrency Ether, destroying them in a panic while trying to give them back.”
      https://www.theguardian.com/technology/2017/nov/08/cryptocurrency-300m-dollars-stolen-bug-ether
      8 Nov 2017

      “More than $300m of cryptocurrency has been lost after a series of bugs in a popular digital wallet service led one curious developer to accidentally take control of and then lock up the funds, according to reports.

      Unlike most cryptocurrency hacks, however, the money wasn’t deliberately taken: it was effectively destroyed by accident. The lost money was in the form of Ether, the tradable currency that fuels the Ethereum distributed app platform, and was kept in digital multi-signature wallets built by a developer called Parity. These wallets require more than one user to enter their key before funds can be transferred.

      On Tuesday, Parity revealed that, while fixing a bug that let hackers steal $32m out of few multi-signature wallets, it had inadvertently left a second flaw in its systems that allowed one user to become the sole owner of every single multi-signature wallet.

      The user, ‘devops199’, triggered the flaw apparently by accident. When they realised what they had done, they attempted to undo the damage by deleting the code which had transferred ownership of the funds. Rather than returning the money, however, that simply locked all the funds in those multi-signature wallets permanently, with no way to access them.

      ‘This means that currently no funds can be moved out of the multi-sig wallets,’ Parity says in a security advisory.

      Effectively, a user accidentally stole hundreds of wallets simultaneously, and then set them on fire in a panic while trying to give them back.

      Such an act isn’t unheard of: another hack, two years ago, of an Ethereum app called the DAO resulted in $150m being stolen.

      The lost $300m follows the discovery of bug in July that led to the theft of $32m in Ether from just three multi-signature wallets. A marathon coding and hacking effort was required to secure another $208m against theft. Patching that bug led to the flaw in Parity’s system that ‘devops199’ triggered by accident.

      Parity says that it is unable to confirm the actual amount lost, but that the $300m figure is ‘purely speculative’. The company also disputes that the currency is ‘lost’, arguing that ‘frozen’ is more accurate. But if it is frozen, it appears that no-one has the ability to unfreeze the funds.”

      Ahh, crypto-currencies. What could go wrong?

  3. It is likely that cryptos are here to stay, and among other things, I would like to posit, this will mean going back to the multi-currency society that has actually characterised most of history, and NOT a “single world digital currency”. Why? Due to what C.A. Fitts calls the “power of shunning” with respect to systems, products and media that are no longer acceptable. There are too few of “them” to impose such a currency by force, and decades of brainwashing are showing signs of failure all over the world.
    How many of today’s allegedly all-powerful oligarchs have the mental agility (or the spiritual depth) to hold up the Hobbesian, “Thalassocratic” model for much longer?

  4. Let me play the devil’s advocate for a moment. I don’t think there would be many subscribers here if it were not for digital systems. What we call “cash” is in the case of banknotes central bank issued debt. In some countries metallic coins are or were until recently still issued by the State. Many of us nostalgically prefer “cash” also because it is less traceable by Big Brother. Of course no electronic system is 100% secure and reliable; but life itself is not reliable, is it? Tomorrow or even the next few minutes are unfathomable. The same applies to the “powers that be”, which – unless we really do live in a Cartesian mechanistic matrix simulation controlled by an omnipotent deus ex machina figure – are subject to the laws of change and uncertainty. The nature of consciousness suggests that this mechanistic matrix cannot be literally true.

  5. The pensions systems are doomed in any case. There is no system today that anyone is using or proposing that could possibly rescue them given how deep the pension hole is.

    Gold has been and could be used as a governor on the issuance of paper currency or other forms of fiat. The issue here is whether or not anyone has confidence in any national political leadership to honor and maintain a genuine gold regime. History tells us not to trust such regimes.

    The question today is, what could possibly function as the governor of any fiat currency in the future?

    Which cultures or sovereign entities generate leadership imbued with values that put human welfare at the very top of their concerns?

  6. Miles Mathis on bitcoin, Maxcoin, StartCoin, and so on:
    mileswmathis.com/max.pdf
    “I warned my friends bitcoin was another hoax when it first came out, but no one listened. One of my good friends lost his shirt, and learned the hard way. He asked me how I knew. I knew because I ignored all the blather and looked at the story of its founding. The guy that allegedly started it, Satoshi Nakamoto, was a ghost. Let’s see, if we do a direct translation of that, his name means ‘intelligent central’. Flipping it, we get Central Intelligence. He published the invention on Halloween, 2008.

    When bitcoin came out, I asked my friend, ‘Do you really think the bankers are going to allow a real crypto-currency to thrive? You are always telling me they run the world, which is why you need bitcoin: to outsmart them. But if they run the world, bitcoin isn’t going to outsmart them. It isn’t a matter of tricks, is it? It is a matter of control. Plus, in a game of financial tricks, these people will always win. They have been perfecting financial tricks for centuries. They spend every waking hour thinking of new financial tricks, while you have a life to live. You can be sure that any new financial scheme of this sort – especially one that is promoted to this extent – and especially one whose story of creation is such bollocks – was created to steal your money in some novel way’.”

      1. ZDB, it’s not my translation. I copy-n-pasted from the Mathis article. (I did assume he was intelligent enough not to garble a translation central to his argument.)

  7. If the humans want to avoid this Living Supply Chain
    based on algorithms, machines & robo-bees
    finance by privately owned digitized 1’s & 0’s ad infinitum
    NOWS! The time!
    A new economic paradigm based of a
    real-live-biological-food-chain of our living planet Earth.
    We have the smarts and the tools to fashion a system that rewards life giving strategies in cooperation with living ecosystems. It would be life-based economies
    NOT death-debt-based destruction currently being practiced. No more GLADIOs, No more enclosures. Open source everything based upon sharing and living
    the good life for all creatures Great & Small
    [even those you can’t see].

    1. In other words,
      We can’t help it if you trusted us? trusted our news? our economists? trusted all those we paid off to commit treason against their sanity & morals?
      BUT, you know damn well – u can trust us this time!
      ?????

  8. Biometrics, cashless economies, the Internet of Everything, RFID’s/total surveillance/tracking, Agenda 21/30 “Smart City” Human Habitation Zones, Biodiversity Zones, and the roll out of Global governance brought about through stealth at the local level, incrementally in small steps, right before our very eyes. Couple this with weaponized weather, directed energy weaponry, weaponized vaccines/Pharmacology, weaponized plagues/genetics, weaponized food, the sought after total control of all water and resources on the planet and you have the ultimate Technocracy and Eugenics wet dream with your Global governance within a decade or two.
    It’s in your face and in the news every day. It’s being forced upon us whether we want it or not. It has been foretold; therefore, it must be inevitable. The sleeping masses will go to their graves having never realized what happened to them. Those of us who are aware will be targeted for removal; there will be no “re education” for us. It would seem the planet is populated with mindless zombies.
    We have been informed of what is coming (Georgia Guide Stones) and our lack of action has been taken as our permission to allow it to come about.
    Seems to me I have read about all of this somewhere…

  9. And they consider finance a “real” business discipline with rules, behaviors, practices and statistical models. Right. At least in astrology you have some foundation in observation, planetary alignments, celestial influence on the medium and statistical trends. With finance I cannot tell if there is ANY foundation at all. It’s all smoke and no mirrors. Whether or not either have any real scientific foundation is not the point. Both can be full, compact and complete ponzi schemes whose purpose is to harvest all available assets out of the market by social engineering with serious efficiency. If we’re going to go through the trouble of building a new system, build one which serves the needs of everyone. Digital currencies cannot serve the interests of anyone. In that system there’s not even smoke. All you have is vacuum–a vacuum controlled by a hungry AI system with greater greed that it’s creators. Oh, well. No one could ever accuse these architects with the crime of intelligence.

  10. OK, phew! Just stopped laughing… Deutsche Bank telling us what the future of currencies should be — oops, there I go again, hahahahahah….

    Anyway, what a joke. Fraudster, currency and PM manipulator, unindicted money launderer, etc., etc. I like how they proclaim that gold is Mausetot and that the only cryptos can save us (from what they have wrought). It’s the fox watching the hen house, of course. Hubris and chutzpah.

    1. i am so not used to the mod yet.

      my modded comment human translated is:
      kinda like the Fd a and usda telling us to just ear a balanced diet. and take our proFESSIONALzac, statISTICALins and viOLENTagra

      now let’s see if that gets through

  11. Babylon Banking for dummies explains ‘the protocols of the elders of rattus’, that follow the scheme of mastermind rattus rottenchild: Problem-reaction-solution: ‘rattusludus-rattusrex-rattusmedia’.

    First comes ‘rattus ludus’ and sets up a gambling casino, and, in fear of retaliation, places a spy on the sheriff, that eventually, through inbreeding and assassination, becomes ‘rattus rex’. And then ‘rattus rex’ lives in fear of exposure, and places ‘rattus media’ in control of the cultural narrative, to subvert the means, that might expose ‘rattus rex’ and ‘rattus ludus’. They all work together.

    New world order is ‘rattus habitatus’.

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