Why the Fed Loves Bitcoin pt 3
‘Jailers are most happy when their prisoners either cooperatively or unknowingly build their own prison..’ – C A Fitts
The ‘unknown war’ is the reserve currency war, a war which has been raging in the background for years. I first covered this topic seventeen years ago in my Sourcewatch 2004 article, “Iraq: the Road to War”. Quote:
“Essentially the energy business is a dollar business – oil is priced in dollars and traded in dollars, and so long as the dollar substantially underpins international trade then foreign government currency reserves must be backed with dollar purchases..”
The above monetary equation – in one form or another – has been understood by the Great Powers for centuries – if not millennia – while people fighting their wars have been unknowing and subject to the monetary system’s inimical influence. Such a reserve currency war is important because real power is not wielded by militarism, but by owning the global monetary hegemonic*. Wars provide cover to Central Bankers, such that people fighting wars never know the true motivation .
For years the US dollar has been gradually losing market share with respect to the euro and SDR revival, and even to the renminbi. The decline of the dollar began as soon as the Nixon Shock unleashed it from gold. The dollar was then linked to oil and the global petro village, as described by my 2004 article. The end monetary game has been pending since the 2008-2009 US monetary collapse, with result that the dollar can no longer be backed by oil or by duplicitous weaponization of the dollar, which is failing right now in the Middle East, Africa, and Asia.
So what about bitcoin? When the United States embezzlement scheme collapsed in 2009, a fictional Satoshi Nakamoto appeared, somewhat reminiscent of the John Titor hoax. Except this time he-she (or it) incidentally introduced bitcoin. The fictional ‘Nakamoto’ purposely or inadvertently created an eventual $1T US fiat phenomena. The beta idea here is for a Fed-sponsored digital currency to eventually provide a successor to the oil-pegged reserve dollar, where oil is no longer a reliable factor for deriving US dollar value. The bitcoin derivative of the dollar as it shall evolve, is thus a successor to the gold-pegged / oil-pegged dollar. Bitcoin’s eventual primary focus (as adopted by the Fed) will be as an alternative to China’s CBDC crypto-currency in the reserve currency war.
Alas, our centralized digital monetary planners may not be as clever as they seem. Bitcoin is a centralized gambit competitor to China’s challenge to US dollar hegemony and there are truly just four core bitcoin developers, being Wladimir van der Laan, Jonas Schnelli, Pieter Wuille, and Cory Fields. That centralization of protocol development voids any ‘distributed’ claim bitcoin advocates may assert. These four “core developers” have already changed the protocol, removing the Alert Key function from the blockchain.
These “core” developers will (supposedly) make bitcoin ‘scalable’ via the so-called lightning network, which will require a major change to the bitcoin protocol as I’ve written about before. And those who tout that a hard fork makes the blockchain distributed equates to fantasy. A hard fork is not decentralization. Yes, bitcoin by its ‘core development’ is far more centralized than Fed fiat, which evolves by collective Fed sleight-of-hand, where the Fed forever pulls new debt-instrument rabbits out of its hat. Concept ACK.
While blockchain bitcoin is a derivative of fiat by definition, there are derivatives upon derivatives on top of that, being the digitized virtual ‘currencies’ that layer on top of what is supposed to be a currency but is not.** One such artifact is a highly suspect token gamed by a highly suspect bank in the Bahamas, which fuels most BTC speculative activity and has been declared illegal in New York State.
The point of this article however is that ‘Satoshis’ appear to be a trial run, for a new technology Fed-sponsored global reserve currency. The Federal Reserve will allow blockchain evolution to proceed before pre-empting it (ie ending beta BTC). The Fed will introduce digital dollars, being mandatory legal tender in the United States. China’s ‘progress’ in the introduction of its centralized digital currency allows that luxury of time to the Fed, to pursue such a strategy, where the Fed hopes to pre-empt China in its run for control of the digitized monetary hegemonic going forward.
Now, having adopted MMT the Fed must engineer its new blockchain to allow infinite creation of currency and maintain centralization, while putting Satoshi’s out of business. There is the rub. As I’ve written about in “Why the Fed Loves Bitcoin Pt 2”, the Fed/Treasury will do this by preventing BTC market cap from rising too high.
Again, the Fed’s iteration of blockchain will not closely resemble Satoshi’s BTC. It will allow for an unlimited amount of digital currency to be created, and will be centralized in all regards. The question is how the Fed will phase-out ‘Satoshi beta’, or allow it to continue as an adjunct to assist ESF black ops. (So, when the Fed finally makes its move on its own digital currency existing BTC holders may not lose all their speculative fiat in bitcoin! -ed.)
Pursuant to the above, the Fed gets luxury of time versus China’s introduction of CBDC, because the yuan/renminbi is not freely convertible and China has maintained strict capital controls. China maintains strict control of its currency, preventing it from fully competing with the dollar, and that provides a luxury of time to the Federal Reserve. The Fed is gambling that it can introduce its digital currency before China’s CBDC evolves beyond China and the Axis of Resistance.
Unfortunately, we are left with one last truth: “Crypto Currency is a denial of reality and it’s a denial of even the depiction of reality…” Something that future generations will discover in time, after years of war and deprivation. And by the way. There is no evidence anywhere to show that bitcoin allows ‘oppressed people’ to ‘screw the man’ or evade sanctions by America’s vicious and murderous warfare state. No one can provide that proof and no one has ever seen it.
*No government will ever outright say, “We need to win the reserve currency war!” but many innocents may die in pursuit of that goal.
**Bitcoin – like the Fed itself – is an Epictetus appearance of the fourth kind.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of The Duran.