Fools, Cryptocurrencies, and the Planned End of Our Freedom – Finance

It’s hard not to tell you about FTX’s failure. Behind this 3 letter acronym, there is one of the most important cryptocurrency trading platforms that has exploded in midair. The earthquake immediately caused an incredible shock wave on the small world of cryptocurrencies. I prefer to write “cryptoasset” on purpose and not “cryptocurrencies” because Bitcoin and its little brothers are not currencies, but speculative assets, period.

So here is FTX, a trading platform, which a few weeks ago was valued at 32 billion dollars, and which today is worth nothing. Zero dollars, zero euros. In short, an empty shell or almost if we exclude the technology behind this platform.

Bitcoin, which had already hit a limit of around $ 20,000 for several months, obviously plummeted and was only worth $ 16,000 at the time of writing. Drawing their keyboard faster than their shadow, some commentators have spoken a little too quickly about a failure comparable to the failure of US bank Lehman Brothers in 2008. Here, thank goodness, it’s not the same thing. For the simple reason that in the case of Lehman Brothers the bankruptcy was linked to mortgages, therefore to the real economy. For the failure of FTX, however, there is no direct link with the real economy.

The most pessimistic will stubbornly say that it is not true, that even a prestigious investment bank like Goldman Sachs has invested in cryptocurrencies. They will be right, but this investment represents only a small part of its business. According to the same experts, this will not change anything in the balance sheet of this bank. Not even a scar! On the other hand, the failure of this cryptocurrency trading platform will shake the confidence of individuals. I have read here or there that it threatens the wealth of 100,000 investors. For my part, it made me think of a phrase from John Kenneth Galbraith, a famous and rather corrosive economist: “fools part ways with their money sooner or later.”

In reality, the danger is not on the side of cryptocurrencies, but on the side of what our governments and central banks are covertly preparing. Whether in the United States, Europe, China and even Russia, the economists of the central banks of these countries, followed in this by their respective governments, dream of only one thing: to make sure that the dollar, the euro or the yuan Chinese are numeric. In short, that our currencies, the real ones, the ones you still have in your pocket, disappear and be replaced by digital, virtual currencies.

Sure, we’re not there yet, but we’re getting there slowly but surely. Apart from a few specialized newsletters, no one talks about this digital euro and what it could mean if the coffers of our states were too empty. However, as Philippe Béchade, a wise stock market commentator, writes, if cash were to be replaced by digital currencies, it would be “the end of our freedoms”. The reason ? Of course, a digital currency is easy, convenient, it helps fight organized crime, but it is also the open door to possible excesses. Philippe Béchade gives us just a few examples: the state could limit our supplies to a maximum of 2 per month; if we buy too many drugs, our insurance may magically increase; as part of the energy transition, the state may prevent us from flying more than once a year, etc.

Supreme argument: The advantage of a digital currency is that the state could charge a negative rate on our bank account in case of budgetary difficulties. Today the state is stuck with the interest rate at 0%, because below this the citizens would withdraw their money from the bank in order not to pay a penalty. And that’s what happened with Switzerland at one point. On the other hand, if cash disappears, if it no longer exists, what would prevent the state from applying a negative interest rate on our bank accounts? Nothing, since we will no longer be able to withdraw physical money for the simple reason that it no longer exists!

Well, I know, I admit it quite willingly, this “fixed point” sounds a bit like science fiction, but it’s nice to be alerted. After all, who would have ever imagined that COVID would force our governments to confine us to our homes? Who would have imagined that a committee of experts would have told us how many people could have come to have dinner with us? Nobody. And as our friend Jean-Claude Van Damme would say “we are AWARE”.

So here is FTX, a trading platform, which a few weeks ago was valued at 32 billion dollars, and which today is worth nothing. Zero dollars, zero euros. In short, an empty shell or almost if we exclude the technology behind this platform. Bitcoin, which had already hit a limit of around $ 20,000 for several months, obviously plummeted and was only worth $ 16,000 at the time of writing. Drawing their keyboard faster than their shadow, some commentators have spoken a little too quickly about a failure comparable to the failure of US bank Lehman Brothers in 2008. Here, thank goodness, it’s not the same thing. For the simple reason that in the case of Lehman Brothers the bankruptcy was linked to mortgages, therefore to the real economy. For the failure of FTX, however, there is no direct link with the real economy. The most pessimistic will stubbornly say that it is not true, that even a prestigious investment bank like Goldman Sachs has invested in cryptocurrencies. They will be right, but this investment represents only a small part of its business. According to the same experts, this will not change anything in the balance sheet of this bank. Not even a scar! On the other hand, the failure of this cryptocurrency trading platform will shake the confidence of individuals. I have read here or there that it threatens the wealth of 100,000 investors. For my part, it made me think of a phrase from John Kenneth Galbraith, a famous and rather corrosive economist: “fools part ways with their money sooner or later.” In reality, the danger is not on the side of cryptocurrencies, but on the side of what our governments and central banks are covertly preparing. Whether in the United States, Europe, China and even Russia, the economists of the central banks of these countries, followed in this by their respective governments, dream of only one thing: to make sure that the dollar, the euro or the yuan Chinese are numeric. In short, that our currencies, the real ones, the ones you still have in your pocket, disappear and be replaced by digital, virtual currencies. Sure, we’re not there yet, but we’re getting there slowly but surely. Apart from a few specialized newsletters, no one talks about this digital euro and what it could mean if the coffers of our states were too empty. However, as Philippe Béchade, a wise stock market commentator, writes, if cash were to be replaced by digital currencies, it would be “the end of our freedoms”. The reason ? Of course, a digital currency is easy, convenient, it helps fight organized crime, but it is also the open door to possible excesses. Philippe Béchade gives us just a few examples: the state could limit our supplies to a maximum of 2 per month; if we buy too many drugs, our insurance may magically increase; as part of the energy transition, the state may prevent us from flying more than once a year, etc. Supreme argument: The advantage of a digital currency is that the state could charge a negative rate on our bank account in case of budgetary difficulties. Today the state is stuck with the interest rate at 0%, because below this the citizens would withdraw their money from the bank in order not to pay a penalty. And that’s what happened with Switzerland at one point. On the other hand, if cash disappears, if it no longer exists, what would prevent the state from applying a negative interest rate on our bank accounts? Nothing, since we will no longer be able to withdraw physical money for the simple reason that it no longer exists! Well, I know, I admit it quite willingly, this “fixed point” sounds a bit like science fiction, but it’s nice to be alerted. After all, who would have ever imagined that COVID would force our governments to confine us to our homes? Who would have imagined that a committee of experts would have told us how many people could have come to have dinner with us? Nobody. And as our friend Jean-Claude Van Damme would say “we are AWARE”.

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