As the gas is being let out of the latest memecoin tonight, it might be a wise time to review some monetary history and the dangerous place that the incoming administration might put our nation in as he sometimes he wishes to duplicate the policies of President Andrew Jackson.
Before my readers think I’ve lost my mind or my sanity, no this is not going to be some long rant about the Hawk Tuah coin, memecoins, or cryptocurrency in general. There is a more direct cause as to why the evolution of digital currency has occurred, and it’s not because Elon Musk like a dog memecoin or the insanity of people who think government doesn’t have a “true” digital currency yet.
To be honest regarding the latter, I rarely use cash and thus the evolution of a digital currency has been underway for decades, people are just desperate for adoption of “their” digital currency by the US government so they can sell at the top.
Sound familiar?
Everyone wants the adoption of “their” crypto or blockchain system by the Federal Reserve or implied approval of widespread for use by he masses. What they do not understand or care about it is that in the end, their profits are eradicated by the actions of the Fed and other central banks as it took over a century to acquire the power they exercise now.
What inspired yours truly to write about this was an article in the Financial Times on Saturday (account required):
What Christmas cash scheme from the Great Depression tells us about money
The essence of the story was the due to the lack of a universally accepted Federal Reserve currency during the great depression, the small town of Harwaden, IA generated a paper scrip which was used as stimulus to pay unemployed men for work needed to be completed in the community. There were numerous bank failures and notes at the behest of the state by the local banks was in extremely short supply. It was not until the Fed began issuing the Federal Reserve Notes we all know and love in 1933 that some measure of the shortages start to alleviate.
The bottom line is that many small communities to this day still issue paper scrip which is legal to this day but not a substituted for Federal Reserve Notes. It allows commerce to continue, just like it did in 1932 and 1933, but with understanding it serves more of a purpose as a coupon or Chamber of Commerce promotion versus real money.
What lesson could the digital maniacs learn from that article above?
No matter how much a government attempts to impose a system on the masses, until there are substantial penalties, especially obstructing the ability to obtain necessities, people will continue to look for alternative stores of value or ways to “beat the system” imposed by the financial elites.
If any of my readers honestly think that America is going to re-adopt a decentralized financial or monetary system ever again, perhaps reading this excerpt from the book America’s First Great Depression by Alasdair Roberts should remind my readers as to why:
Van Buren was not only preoccupied with the public impression of White House vacillation. The federal government also faced a budget crisis. All of its revenue was deposited in state banks, most of which had suspended, some of which had failed. The federal government “has not a dollar of gold or silver in the world!” the Whig National Intelligencer exclaimed in May. The USS Independence, scheduled to carry Van Buren’s ambassador to St. Peteresburg, was reported to be marooned in Boston harbor, lacking the coin needed to pay its crew.
The Great Financial Panic of 1837 is something most Americans never study, most financial media never discuss, and few understand that the lessons learned then have been applicable from that era forward even in the modern age.
Despite almost 200 years of financial trial and error, believe it or not there are still people that actually think the Federal Reserve will permit much less endorse the idea of a national Bitcoin reserve or funding system. Bitcoin and other cryptocurrencies are simply non-monetary speculative instruments of which many are controlled by mysterious offshore financiers with the ability to inflate or deflate the valuation of said digital currency on a whim. The Fed would never permit such a liability to become part of theirs or America’s balance sheets.
The US is at a crossroads and to weaken the US dollar further by diluting it with more government debt or following the advice of certain idiotic billionaires to adopt a decentralized financial option is a fool’s folly. The largest banks on Wall Street nor our central bank will never permit such a surrender of their power nor the risk of subjugation to anyone outside of the club.
Remember this a real ongoing economic crisis as America’s propensity to obtain, expand, and obfuscate the debt issuance and types of debt becomes a reality in 2025. Sadly, I fear the US does not have the legislative, financial, or executive branch leadership quality needed to take the harsh steps required to prevent the potential credit and currency crisis looming on the immediate horizon.
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The only difference between crypto and a dollar bill is the dollar has the backing of the US Government. Crypto has absolutely zero intrinsic value.
These days the backing of the US Government isn't worth much either.
Not for much longer. This is the death spike, a final rally before it rolls over as we hyperinflate to pay our bills.