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Digital Currencies – why they can not work (much longer)!

July 10, 2017

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Let’s think about all the digital currencies now in vogue within all our markets. We have some 800+ cryptocurrencies which are all digital. We have some 150+ official governmental currencies which are now MOSTLY digital (some 95% of all money transactions are done digitally). Today’s Wall Street Journal had an article entitled “Why Bitcoin Is Booming”. This article implies that Bitcoin can/will succeed as this currency is non-political and does not rely on centralized law. The authors of the article were Mr. John O. McGinnis and Kyle W. Roche. But what are these author’s missing in their understanding?

First of all, Bitcoin and all the other 800+  cryptocurrencies are really inner (metaphysical) currencies. The Bitcoin image is virtual and it derives (initially) from one’s consciousness (also called one’s ‘mind’). All these cryptocurrencies are inner (metaphysical) units and the image I witness within my computer screen is virtual/imaginary. The unit has no outer existence (as a paper note or a silver coin). I can not exchange the unit from my hand to yours. I transfer this unit within my inner mind (consciousness) and accept its legitimacy as valid because I can use math and numbers to create a ‘value’ for this unit (as of today).

But would this metaphysical/virtual currency have any validity as a stand alone currency? Could we eliminate the official fiat dollar (for example) and still consider this currency valid for international trade? What gives this Bitcoin image its ‘value’ in the marketplace now? I can transfer the unit from person to person, but what happens when I desire to ‘spend’ this unit for goods/services? Don’t I need to convert the unit (Bitcoin) to dollars prior to spending? So what good is Bitcoin as a replacement currency for one of our official currencies (or all of them)? Where would this virtual image currency get its ‘value’?

Let’s assume that we eliminate ALL official governmental currencies via a reset. Now let’s implement Bitcoin (or an equivalent) as the new currency. Could this virtual image within the computer screen work as a unit of ‘value’ for trade? Who (which counterparties) would desire a ‘virtual’ image in the computer screen as a unit of ‘value’ for oil, wheat, consumer products, or automobiles? How could it be ‘valued’ given that all official currencies are eliminated/abolished (say via a reset)? I don’t think anyone with economic common sense would desire this virtual image as an exchange for real production (autos, steel, oil, grains, etc.). Think on this!

Now let’s briefly think on the issue of our official fiat digital currencies ($, euro, pound, krona, yen, etc.). These currencies are also digital images (virtual) within our computer screens (for the most part). Some 95% of all money transactions are now done digitally and via computers. These virtual units get created by a decision (a human being with consciousness). The $ (for example) gets typed into the computer screen and then is declared official legal tender. There is no ‘tie’ of this unit ($) to anything material (like silver or gold). This makes this unit an image ($) in the computer screen created from consciousness. Think on this!

What is an image ($) in the computer screen created from consciousness? Does it have any material existence within our real-time markets? Does it ‘exist’ as a unit of matter/energy? If not, what is it (in reality)? Would it not be a metaphysical unit of the mind? Would it not be a non-material unit? Would it not be a subjective unit? Does this type of money unit ($$$$$), mere numbers within the computer screen, have any ‘value’ or long-term sustainability as a price discovery mechanism? The unit enters our markets surreptitiously via a bankers stroke of the computer key. This makes it subjective and an ‘invented’ unit with no outer ‘value’. Think on this!

Today, we have a global electronic/digital currency system which consists of cryptocurrencies and official currencies. Both of these currency types are mere images within the computer screen (inner units of consciousness). Can inner units of consciousness (mere mental abstractions/virtual images) work longer term for trade and a store of value? What happens when our markets finally decline precipitously and meaningfully (a serious 20-30% correction)? Do not all these currencies disappear back into our consciousness? Value certainly disappears as asset prices decline…so what gives any of our digital currencies stability during a serious downturn?

I think we need to start thinking about a serious correction within all our bubble markets. This will happen at some point down the road. When this happens, what survives as a ‘store of value’? Can images of the mind (all our current digital currencies) survive/exist during this value collapse process? I don’t think so! All these metaphysical currencies (we could also say ‘spiritual’ currencies) will vanish and disappear during this major crash event within our electronic markets! Digital money is worthless after this next major crash event! Can anyone go into their inner consciousness/mind and fetch this assumed ‘store of value’?

What is now happening within all our markets is similar to the Tulip Bubble markets back in the 1600’s. Traders, investors, speculators are using mere mental abstractions/virtual images to pump up all our bubble markets with math/numbers. This is perceived as ‘making money’ for all these persons. But will these deceived persons understand what happened when our markets finally correct (significantly)…say 20-30% or more? My sense is that most investors and traders today are grossly deceived about the nature of reality. REALITY will prevail eventually! Isn’t it time to get REAL? I am:https://kingdomecon.wordpress.com.

Some additional images for your consideration:

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Cryptocurrencies are technically imaginary. We call them virtual. They do not have any outer existence. They are units of consciousness (inner)!

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Bitcoin is a virtual image (a unit of consciousness) which gets its assumed ‘value’ from bouncing off an official fiat currency like the Dollar ($)! It can not stand alone!

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Some additional cryptocurrencies which are getting pumped up in ‘dollar value’ at this moment! These will disappear back into our consciousness when demand vanishes!

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Most all official currencies are now digital (virtual) and derive from a banker’s consciousness (their inner mind)! Who understands ‘consciousness’?

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All digital currencies will eventually vanish and disappear during a major financial crash/correction! Why? Ask yourself: What are they (in reality)?

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This is what happens during a digital financial crash! The banks close, the gas stations close, the super markets close! The system implodes!

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When the Bubbles finally burst, then the games of bankster manipulations END! The Keynesian economic experiment would be OVER! All debt is cancelled!

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Bankers who have created (invented) all our imaginary credit/debt will cry that the game has ended! Their power wanes immediately!

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Traders will watch as their imaginary money vanishes and disappears (back into their inner consciousness…where it all started)!

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These well-known power brokers will sense their loss of self-esteem and ego powers as their casino will have ended!

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This billionaire will not lose everything as he has already purchased a hoard of physical gold as his insurance policy!

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Bitcoin investors will have lost all their value in an instant of time! How could this happen to me?

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The Donald’s hotels will decline in value to a fraction of what they are valued today!

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This lady of finance will rush for some solace from her contemporaries who have given her all their advice to follow!

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Theses investors over in China will wonder what happened as their leaders promised that China would grow indefinitely!

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These experts will talk on the internet and TV about why the crash of all history was unexpected and not their fault!

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This gold investor will smile as his ego is inflated after this coming historical crash of all history! But can gold return to our markets as money?

This author thinks that barter, private enterprise money, and debits/credits, will replace money. But does he understand this concept called ‘value’? His ideas are worth evaluating, however, to get a sense of where events are going!

Image result for Kingdom Economics

My ‘alternative’ to our money/economic problem is outlined within my blog: https://kingdomecon.wordpress.com!

 

 

5 Comments leave one →
  1. therooster permalink
    July 10, 2017 2:11 pm

    Did you somehow overlook the fact that goldmoney is a digital market currency and is fully gold backed with mass as the unit of account for the bullion and for the digital currency, alike ?

    The system bridges the physical and the cyber worlds, both. Debt-free liquidity all governed by market means as per the law of weights and measures.

    Like

    • July 10, 2017 3:21 pm

      What happens when the $ is abolished? What will you use to value gold? D

      On Jul 10, 2017 2:11 PM, “Kingdom Economics – The Future Is Now” wrote:

      >

      Like

      • therooster permalink
        July 10, 2017 4:53 pm

        I’m going to answer you on the basis of two different scenarios.

        1) Gold can be priced in dollars of by its natural mass.
        In a trade for a measure of gold for a new suit, the dollar or gold mass can be the pricing tool.

        2) If and when gold gains currency momentum to the extent of gaining critical mass, about 1% , it will snowball , imo. In real-time digital transactions, when gold is trading for a widget that is priced in ANY fiat currency, that currency and the USD are used as measurement tools for valuating the proper settlement mass in order to close out the trade. The dollar is “the measure of measures”.

        The price measures have value in all digital real-time trades. They generate revenue as intellectual property used in the algorithms in support of all DEBT-FREE trades. These trades include goldmoney and all crypto currencies. Crypto pundits are blind to the need for using the global price model for settlements. This a blind-spot that is all too common when people default to the use of the dollar as being a currency (debt), while overlooking the pricing tool service.

        This is how the global price model now supports debt-free trades by way of simple price comparisons. This strengthens the value of all currencies, not just in the measurement roles, but also in the debt purging that takes place, thus creating less circulating debt supplies.

        When gold circulates, it has a very symbiotic relationship with the USD. They strengthen each other.

        Like

      • July 10, 2017 5:18 pm

        Assume the USD is eliminated. It is abolished, let’s assume. How do you price gold ? What would gold sell for in Bitcoin’s? D

        Like

      • therooster permalink
        July 10, 2017 5:31 pm

        There is no need for the dollar to be abolished if gold is acting as a currency. The dollar gets a wonderful new job. Who the hell needs the petro-dollar to be oil’s price tool when the dollar can partner up with gold-as-currency and be gold’s price measure ?

        If that symbiotic relationship was ever messed with, the gold payment orientation gives the world’s merchants a lynch-pin by moving toward mass based pricing as a choice. That would make the bankers sit up very straight.

        I don’t fear that relationship going sour , based on the balancing of power between the banking sector and the free market. The banks want this relationship, IMO and have been courting gold to the alter of debt-free trading since the creation of the price model in 1944.
        They knew the fixed peg would eventually have to be severed and BW served as the beginning of the end for the gold price peg. Once the peg was severed, the market was free to monetize and distribute gold currency when the market was ready, willing and most of all, able.

        Like

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