Listen to your elders. The voice of experience can be quite valuable and very insightful. In this case the “elder” is none other than GOLD.
Naturally being around for roughly 5,000 years it would make sense the precious metal would be overloaded with experience and hindsight. So as gold passes the torch to BITCOIN as the favored flight to safety and store of value asset, what warning might gold have for the “young” digital asset?
Well, to begin with, don’t trust the government. To be fair, don’t trust ANY government.
Gold, and now bitcoin, are considered to be a way to hedge against inflation, geopolitical events, fiat currency demise AND ever present poorly managed government monetary polices. This way to diversify and hedge is allowed (tolerated) as long as it does not conflict with with government agendas.
It was just 90 years ago that gold found itself in a surprise political decision. Gold became a wanted fugitive. A criminal. On the police most wanted list. Gold was deemed ILLEGAL. Here was safe and sound little old gold enjoying life by backing the U.S. dollar, making pretty jewelry and shining brightly and then suddenly waking up to possible jail time. Say what?
In 1933 Executive Order 6102 made it a criminal offense for U.S. citizens to own or trade gold anywhere in the world. Yup, the stroke of a pen by the sitting President changed the “gold rules.” Shortly thereafter the Gold Reserve Act of 1934 was enacted “to protect the currency system of the United States.” It effectively led the way to a devaluation of the dollar. The Act also established the Exchange Stabilization Fund under control of the Treasury to control the dollar’s value without the assistance (or approval) of the Federal Reserve. In blunt terms, the government seized control of the dollar (in the national interest of course).
So what’s with bitcoin? Well it seems the government wants to “tinker” with the currency again. Having had almost 100 years of being able to control (ie. print, manipulate) the currency (again, in the national interest, of course) it’s time for the next step. Why stop with just controlling the currency? The government now wants to control how and where you spend your money. Taking a cue from watching bitcoin, the government thinks it would be really cool to have a CBDC (Central Bank Digital Currency). Forget the “it’s good for you spin,” politicians would be able to influence (control) the population’s daily spending.
Hmmmm, nothing wrong here, right?
Problem. Bitcoin is in the way. Bitcoin could be a competitor to a government CBDC. Better yet, bitcoin IS a competitor to the Fed. So with a precedent going back to 1933/34 (and some obscure laws) bitcoin could be made illegal. An executive order (easy enough) and a stroke of the pen and bitcoin becomes a criminal just like gold was. To be sure, steps in that direction are already under way.
So gold’s warning to bitcoin? Don’t take your eyes off the government. They’re very sneaky.
