By Henry Delacroix for the American Sun
New administration and new rumblings appear. Bitcoin is inefficient. Bitcoin is used by criminals. The treasuries across the world all speak of a digital dollar, euro, or yuan. How is that any different from what the FED does now? It might just be code for eliminating cash bills, but then why would they also bring up turning the $20 into Tubbies? The noise is constant and contradictory, but this regime is not agreement capable. It does make perfect sense that the regime would attack bitcoin.
To understand why, look at the attacks on oil, gas and natural resource extraction. Oil does underwrite a lot of our nation’s modern history, but it is demonized because what oil and gas can create for power nodes. Ownership of this mineral wealth and oil rights would place one outside the current wage slave system. North Dakota farmers began to collect oil royalty checks over fifteen years ago, and this was a dangerous enough development that the NY Times amped up the demonization of North Dakota’s boom. This income flow makes one harder to nudge or coerce into compliance with the central power. It creates wealth and builds capital that is not due to government largesse.
The only power they have against such wealth is government regulation, environmental limitations and media demonization. This offers insight as to why the Clinton administration sat on its hands as the oil industry consolidated. Regulatory costs make wildcat drillers operating margins slimmer, so only bigger coopted players can pump. For the record, the Obama admin did the same with airlines for eight years, so now air fare is more expensive despite lower oil costs. This applies to the massive consolidation across all sectors of the economy that seem to all be bunched into a cartel of five big playrs that dominate 80% of the market and then niche players for the rest. This consolidation made coordination for policy and goals far easier. After all, people predicted British Petroleum would never recover from the Deepwater Horizon spill, yet savvy observers knew that all that would come of it was a fine. A big player is easier to shake down than a sea of smurfs.
Bitcoin is the same thing. It is wealth outside the system, albeit defined in dollars, but still outside the current financial system. These are just individuals so it seems sillier to attack than big bad oil, but there is another group of individuals who the system has long tried to pull in, and finally succeeded in the 2010s. Private medical practices are small businesses. Always having need, they can be very profitable. The average doctor who runs one is a small entrepreneur. Many individuals who run them can build a successful clinic and sell it to a bigger health network, and then turn around and repeat the process with another idea.
These individuals were attacked and successfully pulled into the massive health bureaucracies with the Obamacare legislation and the FED’s ZIRP. The regulatory world became incredibly difficult for these small businesses to comply with, making them easy for broad health networks to absorb. The ZIRP allowed these large health care networks to consolidate business for a full decade. Healthcare was a continuous jobs making machine that states enjoyed as it replaced the productive economy. Obamacare and ZIRP allowed for consolidation, and then replacement of staff with more equipment. A common occurrence was seeing them gobble up doctor’s clinics, keep the docs and lay off the rest of the clinic’s staff as services were relocated to a central hub in the health network.
Doctors went from small businessmen to regular employees. Small business is the enemy of the central power. Look at all of 2020’s lockdown policies destroying the middle to enrich the high. With the 2010s regulatory work, these doctors are no longer a potential bloc of antagonistic donors and a rising class as health care takes on more focus in our sick, aging society. They are just employees and subject to HR rules like anyone else.
Bitcoin now has too many big players in the game for it to be killed. A rising bitcoin aristocracy has buy in from established figures and entities within the current financial system. It will be regulated. All financial products and all gambling enterprises are regulated. Derivatives slid through the system because Wall Street spent years and millions buying politicians and installing friendly bureaucrats and regulators to make it so. There was the gold forced conversion of 1933, which could see a repeat or they may just deploy windfall taxes. What other asset has ever been discussed as facing windfall taxes? None, no matter how big and fictitious the bubble, but windfall taxation does get tossed around for oil and gas firms when prices rise.
The danger for any potential power node to amass wealth and capital outside the current centralized authority is too great for that authority to ignore. This will grow in danger as monetary debasement ramps up in the near future and bitcoin is priced in dollars. Appropriate for our digital age, the old touchstone of watching the gold price to see how strong or weak the dollar is might as well be replaced by the eyes of America looking at the price of bitcoin. Each milestone will only harden the FED’s and the feds resolve to bring this asset to heel.