An interesting AArticle about the value of money

KW: Copied article

There’s a major problem when debt is growing three–four times faster than the economy.  And a big part of that problem is the fact that we’ve adopted an absolutely preposterous monetary system — one where central banks just manipulate money in order to supposedly regulate the economy and summon growth.

The reason trade today is so contentious — and why the whole world economy is convulsed with battles over valuation — is that the biggest industry in the world economy today is currency trading.

Currency trading reaches $5.1 trillion a day. That’s almost 75 times all the trade of goods and services. That’s 25 times all global GDP.  So the world can’t even arrive at a measuring stick, at a monetary value that economies can depend upon. The fact is governments have forgotten what money is for and how it works. As a result, they’re issuing more and more of it on the assumption that somehow money constitutes wealth, instead of realizing that money measures wealth.  They’ve become blind to the real sources of their progress and prosperity.

The problem, of course, is that growth is real. It’s not some kind of illusion that can be conjured up by magicians at the central bank.  You can’t get real growth by fooling people about the value of their measuring sticks. If money is going to be a measuring stick for the allocation of resources and guidance for investment, it can’t float.  It has to actually register real scarcity. It must be a fixed rate. One way to do that is to tie money to physical constants.

It was gold until 1971. And I believe that blockchain — along with cryptocurrencies — offer the solution today (see below for more).  It’s not just about creating a new form of money that the government can’t touch or fidget with. With the help of blockchain, some cryptocurrencies will eventually replace real money and displace wildly floating currencies. There are even efforts to tie cryptocurrencies to gold.  That will create a stable coin standard — from which I think it will be possible to launch digital algorithms that can perform better as money than the various contraptions of gold and fiat (paper money).

With the help of blockchain and some cryptocurrencies, I think we’ll see the emergence of a better global money, which will also resolve these ridiculous trade conflicts between the U.S. and China.  And as a new global money emerges with real money, I think that we’ll see a great new era of capitalism.

So when will we see blockchain make a real impact on the world economy?  It’s happening faster than you think. Just look at Jamie Dimon at JPMorgan — who used to deride blockchain. He’s now devoting much of his technology to developing blockchains for his own bank.  And the owner of the New York Stock Exchange is launching products around blockchain.  But it’s like the internet was in the late ’90s and early 2000s. There was lots of turbulence. There were slumps and crashes. There were frauds and fantasies. And people were inclined to dismiss it or regard it as a criminal conspiracy.

Then today you have companies like Google, Amazon, Facebook, Netflix and Apple that have taken over by leveraging this once-volatile technology.  I expect the same will happen with blockchain technology and many of the market leaders 10 years from now will be the firms that provide a new security architecture for the internet.

That’s why I’ve come out of retirement to reveal the identities of those firms that are leading the way — and stand to make early investors extremely wealthy. Go here to sign up for the July 2 event. It’s 100% free to attend.   We’re looking at the foundation for an explosive new technology — one that will provide the backbone for a more secure internet, along with a revitalized form of money.

It will be nothing short of revolutionary.


George Gilder

Below, I show you why bitcoin shares many of the same monetary characteristics as gold — and how a combination of gold and digital currencies could redeem the dollar and the global economy. Read on.

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