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Bitcoin Eliminates the Rats
Maybe Warren Buffet and the original Tales from the Crypt host Charlie Munger were right, "Bitcoin is rat poison." If the adage holds, the central banks are the diseased rats stealing time and value from the populace like a plague that once sailed on phantom ships in the Black Sea West to Sicily.
The century of central banking has coincided with the century of war, with millions of deaths attributable to democide funded by dirty rats and their money printers.
Central Banks, Fiat, and The Plague of Inflation
War historically has been expensive, but total conflict is significantly more expensive than conventional war since it requires recruiting people of a whole population to fight. Moreover, it is impossible to wage all-out war without diverting resources away from the creation of life-sustaining products and services and toward the manufacturing of death and devastation.
By 1913, the United States of America and every significant power in Europe had established a central bank. 1914 marked the beginning of the most devastating conflict in the history of the planet up to that date.
Without a central bank or any other mechanism for artificially inflating the currency's value, wars must be financed through either taxes or debt, which also have finite capacities. By increasing the money supply, central banks can conceal some of the costs of conflict, which manifest themselves as rises in the overall level of prices. The consequence of ever-rising prices requires time for something like an expansion of a country's money supply to make its way through the economy to the store shelves and gas pumps. This phenomenon, which Milton Friedman referred to as "long and variable delays," is related to this lag.
It’s no coincidence that the century of total war coincided with the century of central banking… If every American taxpayer had to submit an extra five or ten thousand dollars to the IRS this April to pay for the war, I’m quite certain it would end very quickly. The problem is that government finances war by borrowing and printing money, rather than presenting a bill directly in the form of higher taxes. When the costs are obscured, the question of whether any war is worth it becomes distorted. – Ron Paul
The money machine and the war machine are inextricably tied to one another. Therefore, it is pointless to condemn the immoral atrocities committed by the US without pointing the finger at the unwavering support that enables those atrocities to be executed in the first place.
Suppose we want to oppose the state and its manifestations, such as its foreign policy of plunder, misallocated subsidies, incessant spending, and debt accumulation. In that case, we need to point to the origin of it all, the central bank. This is the state's instrument, and its Cantillon mainstream press and economists will try to protect the institution to their dying days.
The state has convinced the people that its interests are the same as theirs. The state's wars are also their wars. It is the greatest benefactor, and the citizens are happy in their roles as pleasing subjects.
The Fiat Scam Perpetrated by the Rats at the Central Banks
A question not asked enough is, "Where does the money come from?"
Money comes into existence by artificial bank credit growth through fractional-reserve lending or the printing of new money by the Central Bank. After that, the central bank invests the freshly produced money by purchasing assets from private sector banks. The newly acquired assets are then added to its balance sheet. In both scenarios, money is conjured or generated out of nothingness. Then it is pumped into the economy by various mechanisms, resulting in an erosion of the buying power of those not privileged enough to enjoy the new money.
In other words, it is counterfeited by a cartel of banks enabled by the state.
According to Murray Rothbard in "The Case Against the Fed," the process of counterfeiting is made possible by the system of central banking:
The Central Bank has always had two major roles: to help finance the government’s deficit; and to cartelize the private commercial banks in the country, so as to help remove the two great market limits on their expansion of credit, on their propensity to counterfeit: a possible loss of confidence leading to bank runs; and the loss of reserves should any one bank expand its own credit. For cartels on the market, even if they are to each firm’s advantage, are very difficult to sustain unless government enforces the cartel. In the area of fractional-reserve banking, the Central Bank can assist cartelization by removing or alleviating these two basic free-market limits on banks’ inflationary expansion credit. Central Banking is incredibly damaging to the economy. - Murray Rothbard
Since the introduction of the press, the state has been able to substitute hard currency with paper notes, detach hard reserves from those notes by legislative action, and acquire assets using printed paper notes instead of hard money. As a result, the loan procedure may become more complex, but it still works its financial miracle in creating new money.
The institution of Central Banking is located at the center of the state machinery. It is logistically impossible for the state to carry out many of its most harmful atrocities without the exclusive right to produce fiat currency. Any preexisting suspicions of the state are only exacerbated when learning about this vile behavior.
Sometimes the questions raised by the answers discovered on central banking are even more confusing than the answers themselves. How is the truth kept so well concealed from everyone? Why do so many not think to inquire about the origin of money? Why didn't our teachers teach us about something so vital to our future? Is it accidental that such a significant subject is buried so deeply, or was it done on purpose? If that's the case, why? What more is being kept from us that we don't know about?
The Plague of Inflation
Inflation is stealthy, as are the rats that unleash its plague onto society. When central-bank policy reduces money's value, life grows significantly harder. Low-and fixed-income people can least afford the cost of living increase. As a result, most people's savings evaporate, hindering their capacity to plan and care for themselves.
Even so, the government's central bank does more harm. Prices grow, but not predictably, as if "price levels" were real and not artificially constructed manifestations of past misallocation to begin with. What matters are relative costs and rates of interest as well, representing supply and demand in a free market. Market prices communicate overproduction and underproduction. Fed-conjured money floods the economy at certain times, changing relative prices differently than market-based money like Bitcoin. Misallocated wealth leads to chaos in production and planning that would have otherwise benefitted society.
Fed actions modify expectations, which leads to erroneous company and employee decisions after inflation ceases. When the Fed fears conditions are spiraling out of control, it applies the brakes. Then most individuals suffer from the recession, the result of government-distorted signals. Finally, the recession is used to justify more government initiatives, further distorting markets. Politicians' motto: "Never let a good crisis go to waste."
Can we hope lawmakers and the people who prosper from the Cantillon Effect give up power? What option do they have? Inflation and the ability to borrow allow our rulers to preserve constituents' support without explicit levies if no central bank existed. Without central banking, borrowing is constrained. Inflation is covert taxation, embezzlement, not armed theft. We contribute to government largesse, yet much of it evaporates. Most won't realize the state is responsible when they pay, like those who first felt the fever of the Black Death and shrugged it off.
Consider if the government fought decades-long battles using a direct tax. Would Americans support global involvement if the trillion-dollar military was a direct tax?
Bitcoin Poisons the Rats, Ends the Plague of Monetary Tyranny
Financial despotism can be terrible. It may come in the form of purposeful inflation, persecutory capital regulations, banking cartel defaults, or direct governmental expropriation. Unfortunately, these risks exist in practically every country around the globe.
Once the state is withdrawn from the monetary sector and loses the capacity to establish legal tender, it can only conduct legislative and enforcement activities that do not immorally influence a currency. For example, war taxes and domestic escapades can't be funded by debasing the currency.
Much like the Second Amendment is the ultimate protection of free individuals to avoid supreme political repression or early antibiotic treatments that can quell plague, a formidable tool is necessary to prevent State monetary domination. This responsibility has passed to an open-source protocol based on encryption and peer-to-peer computing. Bitcoin offers this protection as a decentralized, apolitical unit of account.
When plagued by rats, it's best to have a little poison on hand.
Written by @SatsforLife