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Why I Quit Investing In The Fiat Ponzi And Started Saving In Bitcoin

The tired argument that Bitcoin is a Ponzi scheme is really more applicable to fiat, which makes it impossible for us to retain savings.

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6 months ago

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The tired argument that Bitcoin is a Ponzi scheme is really more applicable to fiat, which makes it impossible for us to retain savings.

This is an opinion editorial by Mickey Koss, a West Point graduate with a degree in economics. He spent four years in the infantry before transitioning to the Finance Corps.

Always up, always having to add more lest you fall behind. I could feel the American dream slowly slipping away every year. We dutifully paid our bills, contributed to retirement accounts, invested prudently and yet it felt like every year things got a little tighter. A little harder to contribute what we needed to. When we found Bitcoin, it gave us hope.

“Striking is mutual suffering. A game of chicken. Bitcoin changed the game. It made striking valuable to the striker.”

–Matt Hill on “Bitcoin Audible,” episode 75

Now my wife and I are on strike, like many of you reading this article probably are. Once the money printers started roaring after the COVID-19 lockdowns began in 2020, I felt a sinking feeling that the world would never be the same again. Ungodly sums of money were thrown around on the news stations with such causal indifference. Ultimately, the results speak for themselves:

Top central bank balance sheets

We Need Better Critics

One of the most commonly-cited critiques I hear from seemingly-sophisticated investors and economic PhDs alike is that Bitcoin is a Ponzi scheme: a game of the greater fool buying from the scammy huckster as the earlier investors dump their bags on the new.

LinkedIn post that inspired this article, accessed on November 27 but since deleted

The above post beautifully illustrated the complete lack of understanding, let alone critical thinking, surrounding this particular line of FUD. The abject lack of intellectual curiosity is astonishing, yet somehow unsurprising given my recent stint in academia:

“The whole thing depends on even more people parting with their savings…”

Is this not true for the stock market? The housing market? The commodities market? By that logic, every market with fluidity of pricing based on supply and demand is a Ponzi scheme. I guess it’s time to go back to the barter economy? Or does the stock market go up on earnings alone without any buyers or demand?

In fact, It appears to me that prices have been going up faster than earnings since about 1980, even when taking inflation into account:

Source

The above image depicts the Shiller PE ratio for the S&P 500. It is the price-to-earnings ratio for the stock market, but adjusted for inflation. Can anyone say “Cantillon effect”?

Fiat Is The Ponzi

Crypto is a symptom, not the underlying problem. Years of pent up nihilism unleashed into get-rich-quick pump and dumps as the world seemingly falls apart around us. It’s not hard to see why. But Bitcoin is not crypto, and crypto is not Bitcoin.

Federal Reserve economic data: M2 money supply vs. S&P 500

In what now feels like the blink of an eye, trillions of dollars were created to prevent the system from imploding. Suddenly, the stock market was booming while it seemed like everything was crumbling. I don’t even blame the central bankers. They responded to their incentives and did what they had to, but the effects were dire. If you weren’t already invested, you lost big, making it just that much harder to get your dollars to work for you, to escape inflation and eventually escape the rat race.

One of the most salient illustrations to me is the below graph. It demonstrates that you should buy a house, any house, it doesn’t matter. Because if you don’t already own a house, if you choose to save instead, you may never actually be able to afford one. It doesn’t take a lot of empathy to understand the financial desperation many are feeling today. 

Federal Reserve economic data: M2 money supply vs. housing price index

Now, I admit that I’m not a professional statistician, but the charts appear to have some significant correlation. Perhaps CPI inflation may not be the only problem. Perhaps asset price inflation may be forcing savers to become part-time investors. Supply and demand has a price impact on bitcoin, yes, but does the stock market not require new money to support prices as well?

Bitcoin Is Savings

Savings: Money put by the excess of income over expenditures.

–Merriam-Webster

So, why can’t we just save money anymore? The FRED graphs included here tell it all. If you don’t become an investor, you will never keep up. That is, until now.

Bitcoin is our savings in a world bereft of things worthy of investment. Even if it hits $1 million tomorrow, we’re not selling. What would we even sell it for? To diversify? Into what? A stock market completely dependent upon money printing? An investment property where our tenants won’t have to pay rent following the stroke of a politician’s pen? A shiny rock with “intrinsic value”?

You see, how could Bitcoin be a Ponzi when Bitcoiners don’t even want your dollars? What you don’t understand is that we’re playing a different game now. What you don’t understand is that we’re trying to build something new; a better future for our children and grandchildren.

So, if you think bitcoin is doomed to crash and burn then short it. Try to profit off our demise, though I don’t think you will.

We will just keep buying and holding, continuing to front-run you and Wall Street, and everyone else who refuses to even try to understand Bitcoin. We hold no anger or resentment toward you. We don’t want to eat the rich, or to burn the system down; we just don’t want to play by your rules anymore. And if we go down with the ship, at least we lost it all fighting for something we believed in.

This is a guest post by Mickey Koss. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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“What’s More Tragic Is Capitalism”: BLM Faces Bankruptcy As Founder Cullors Is Cut By Warner Bros

"What’s More Tragic Is Capitalism": BLM Faces Bankruptcy As Founder Cullors Is Cut By Warner Bros

Authored by Jonathan Turley,

Two years…

Published

11 hours ago

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May 28, 2023

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"What's More Tragic Is Capitalism": BLM Faces Bankruptcy As Founder Cullors Is Cut By Warner Bros

Authored by Jonathan Turley,

Two years ago, I wrote columns about companies pouring money into Black Lives Matter to establish their bona fides as “antiracist” corporations. The money continued to flow despite serious questions raised about BLM’s management and accounting. Democratic prosecutors like New York Attorney General Letitia James showed little interest in these allegations even as James sought to disband the National Rifle Association (NRA) over similar allegations. At the same time, Black Lives Matter co-founder Patrisse Cullors cashed in with companies like Warner Bros. eager to give her massive contracts to signal their own reformed status. It now appears that BLM is facing bankruptcy after burning through tens of millions and Warner Bros. cut ties with Cullors after the contract produced no — zero — new programming.

Some states belatedly investigated BLM as founders like Cullors seemed to scatter to the winds.

Gone are tens of millions of dollars, including millions spent on luxury mansions and windfalls for close associates of BLM leaders.

The usual suspects gathered around the activists like former Clinton campaign general counsel Marc Elias, who later removed himself from his “key role” as the scandals grew.

When questions were raised about the lack of accounting and questionable spending, BLM attacked critics as “white supremacists.”

Warner Bros. was one of the companies eager to grab its own piece of Cullors to signal its own anti-racist virtues.  It gave Cullors a lucrative contract to guide the company in the creation of both scripted and non-scripted content, focusing on reparations and other forms of social justice. It launched a publicity campaign for everyone to know that it established a “wide-ranging content partnership” with Cullors who would now help guide the massive corporation’s new programming. Calling Cullors “one of the most influential thought leaders in American public life,” Warner Bros. announced that she was going to create a wide array of new programming, including “but not limited to live-action scripted drama and comedy series; longform/event series; unscripted docuseries; animated programming for co-viewing among kids, young adults and families; and original digital content.”

Some are now wondering if Warner Bros. ever intended for this contract to produce anything other than a public relations pitch or whether Cullors took the money and ran without producing even a trailer for an actual product. Indeed, both explanations may be true.

Paying money to Cullors was likely viewed as a type of insurance to protect the company from accusations of racial insensitive. After all, the company was giving creative powers to a person who had no prior experience or demonstrated talent in the area. Yet, Cullors would be developing programming for one of the largest media and entertainment companies in the world.

One can hardly blame Cullors despite criticizism by some on the left for going on a buying spree of luxury properties.

After all, Cullors was previously open about her lack of interest in working with “capitalist” elements. Nevertheless, BLM was run like a Trotskyite study group as the media and corporations poured in support and revenue.

It was glaringly ironic to see companies like Warner Bros. falling over each other to grab their own front person as the group continued boycotts of white-owned businesses. Indeed, if you did not want to be on the wrong end of one of those boycotts, you needed to get Cullors on your payroll.

Much has now changed as companies like Bud Light have been rocked by boycotts over what some view as heavy handed virtue signaling campaigns.

It was quite a change for Cullors and her BLM co-founder, who previously proclaimed “[we] are trained Marxists. We are super versed on, sort of, ideological theories.” She denounced capitalism as worse than COVID-19. Yet, companies like Lululemon rushed to find their own “social justice warrior” while selling leggings for $120 apiece.

When some began to raise questions about Cullors buying luxury homes, Facebook and Twitter censored them.

With increasing concerns over the loss of millions, Cullors eventually stepped down as executive director of the Black Lives Matter Global Network Foundation, as others resigned.  At the same time, the New York Post was revealing that BLM Global Network transferred $6.3 million to Cullors’ spouse, Janaya Khan, and other Canadian activists to purchase a mansion in Toronto in 2021.

According to The Washington Examiner, BLM PAC and a Los Angeles-based jail reform group paid Cullors $20,000 a month. It also spent nearly $26,000 on meetings at a luxury Malibu beach resort in 2019. Reform LA Jails, chaired by Cullors, received $1.4 million, of which $205,000 went to the consulting firm owned by Cullors and her spouse, according to New York magazine.

Once again, while figures like James have spent huge amounts of money and effort to disband the NRA over such accounting and spending controversies, there has been only limited efforts directed against BLM in New York and most states.

Cullors once declared that “while the COVID-19 illness is tragic, what’s more tragic is capitalism.” These companies seem to be trying to prove her point. Yet, at least for Cullors, Warner Bros. fulfilled its slogan that this is all “The stuff that dreams are made of.”

Tyler Durden Sun, 05/28/2023 - 16:00

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Biden reaches ‘tentative’ US debt ceiling deal: Report

United States President Joe Biden has urged the United States Congress to “pass the agreement right away.“
Amid growing concerns…

Published

21 hours ago

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May 28, 2023

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United States President Joe Biden has urged the United States Congress to “pass the agreement right away.“

Amid growing concerns of a potential default by early June, United States President Joe Biden and House majority leader Representative Kevin McCarthy have reportedly reached an “agreement in principle” to raise the federal government’s multitrillion-dollar debt ceiling.

According to a May 28 report from Reuters citing two sources familiar with the negotiations, the “tentative” agreement to raise the $31.4 trillion debt ceiling was reached after a 90-minute phone call between Biden and McCarthy on May 27.

Since publication time, Biden has confirmed via Twitter the existence of an “agreement in principle," explaining that it will prevent the U.S. from facing a “catastrophic default.“

Biden noted that “over the next day,” the agreement would go to the U.S. House of Representatives and Senate. He urged both chambers to “pass the agreement right away.“

Meanwhile, McCarthy also took to Twitter to confirm the agreement in principle, alleging that Biden “wasted time and refused to negotiate for months.“

Reuters reported that while “the exact details of the deal were not immediately available,” an agreement has been made to limit the U.S. government’s spending for the next two years, excluding expenses related to national security.

“Negotiators have agreed to cap non-defense discretionary spending at 2023 levels for one year and increase it by 1% in 2025,” a source familiar with the deal said.

Related: Debt ceiling crisis: Best practices to navigate this market

This comes only weeks after U.S. Treasury Secretary Janet Yellen warned of a default risk as soon as June 1 if the debt limit isn’t suspended or raised, urging Congress to “act as soon as possible.“

Additionally, The U.S. Congressional Budget Office published a report on May 12, emphasizing that if the debt limit remains unchanged, there is a significant risk “that at some point in the first two weeks of June, the government will no longer be able to pay all of its obligations.“

In recent times, several analysts have shared a similar view that raising the debt ceiling could see more capital inflow into Bitcoin (BTC).

On May 17, MacroJack, a former Wall Street trader, warned his followers in a tweet that the U.S. debt ceiling talks are “all show.“

He emphasized how important it is to own hard assets as the dollar will be “printed into oblivion,” while stating that Bitcoin is the “fastest horse in the race.“

Meanwhile, Jesse Myers, chief operating officer of investment firm Onramp, reminded his 50,100 Twitter followers of what happened during the COVID-19 pandemic, stating that “Bitcoin was the winner during the last round of stimulus.“

He proposed the idea that history might repeat itself if the debt ceiling were to be raised, as it would prompt the Federal Reserve to print more money.

Update on May 28, 2023, at 03:15: This article has been updated to include United States President Joe Biden's tweet.

Magazine: Visa stablecoin plan, debt ceiling’s effect on Bitcoin price: Hodler’s Digest, April 23-29

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Biden reaches ‘tentative’ US debt ceiling deal: Report

United States President Joe Biden has urged both the United States House and Senate to "pass the agreement right away."
Amid growing…

Published

1 day ago

on

May 28, 2023

By

United States President Joe Biden has urged both the United States House and Senate to "pass the agreement right away."

Amid growing concerns of a potential default by early June, the United States President Joe Biden and Republican Kevin McCarthy have reportedly reached an "agreement in principle" to raise the federal government's multi-trillion dollar debt ceiling.

According to a May 28 report from Reuters, citing two sources familiar with the negotiations, the "tentative" agreement to raise the $31.4 trillion debt ceiling was reached after a 90-minute phone call between Biden and McCarthy on May 27.

Following the publication of this article, Biden has since confirmed via Twitter the existence of an "agreement in principle," explaining that it will prevent the U.S. facing a "catostrophic default."

Biden noted that "over the next day," the agreement will go the U.S. House and Senate. He urged both chambers to "pass the agreement right away."

Meanwhile, McCarthy also took to Twitter to confirm the agreement in principle, alleging that Biden "wasted time and refused to negiotate for months."

Reuters reported that while "the exact details of the deal were not immediately available," an agreement has been made to limit the U.S. government's spending for the next two years, excluding expenses related to national security. 

"Negotiators have agreed to cap non-defense discretionary spending at 2023 levels for one year and increase it by 1% in 2025" a source familiar with the deal said.

Related: Debt ceiling crisis: Best practices to navigate this market

This comes only weeks after U.S. Treasury Secretary Janet Yellen warned of a default risk as soon as June 1 if the debt limit isn't suspended or raised, urging Congress to "act as soon as possible."

Additionally, The U.S. Congressional Budget Office (CBO) published a report on May 12, emphasizing that if the debt limit remains unchanged, there is a significant risk "that at some point in the first two weeks of June, the government will no longer be able to pay all of its obligations."

In recent times, several analysts have shared a similiar view that raising the debt ceiling could see more capital inflow into Bitcoin (BTC)

MacroJack, a former Wall Street trader, warned his followers in a tweet on May 17 that the U.S. debt ceiling talks are "all show."

He emphasized how important it is to own hard assets as the dollar will be "printed into oblivion," while stating that Bitcoin is the "fastest horse in the race."

Meanwhile, Jesse Myers, chief operating officer of investment firm Onramp reminded his 50,100 Twitter followers of what happened during the Covid-19 Pandemic, stating that "Bitcoin was the winner during the last round of stimulus."

He proposed the idea that history might repeat itself if the debt ceiling were to be raised, as it would prompt the Federal Reserve to print more money.

Update on May 28, 2023, at 03:15: This article has been updated to include United States President Joe Biden's tweet.

Magazine: Visa stablecoin plan, debt ceiling’s effect on Bitcoin price: Hodler’s Digest, April 23-29

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