The former chief economist of the World Bank says bitcoin should go away.
“Bitcoin is successful only because of its potential for circumvention, lack of oversight,” Joseph Stigliz said in an interview on Bloomberg Television. Bitcoin is currently trading around $10,000.
“It seems to me it ought to be outlawed. It doesn’t serve any socially useful function,” he said. Predicatably he wants digital money but not with a bitcoin style arrangement.
Digital money should be controlled by government. “Let’s move away from paper into the 21st century of a digital economy,” he said.
He believes bitcoin is a bubble that is going to burst. It will offer exciting times on the way up and then on the way back down. He believes Washington could stop it any time … and that sooner or later would probably try.
Stiglitz may be correct about Washington’s stance. But not for the reasons he cites. If Washington tries to shut down bitcoin and other cybercurrencies, it will be because the government doesn’t want challenges to the Federal Reserve.
The Fed fixes the value and volume of money and price fixing never works. All around the world, central banks set interest rates and define monetary mass so it is not just the Fed. Hundreds of central banks remove the free market functions from money and operate by decree.
For thousands of years, money was entirely private and not influenced by what people said about it. People could not influence its value or volume and it was only in the 1500s that money started to come under control of a very few people when the first British central bank was set up.
That bank’s primary function was to provide money for British wars that were directed by the King himself. In return, the King gave the bankers and jewelers a monopoly on currency. The British model now extends around the world.
There are only a handful of countries without a central bank and many of these are under attack. Money will have to return to the free market in order to function effectively once more. In the meantime we will have constant bubbles and crashes because money is directed rather than free flowing.
One response to the article read:
How? All these: “central banks will kill crypto/blockchain” type of comments. It’s easy to type this sentiment out, but HOW? to end crypto?? Not so easy after you consider that it’s online, living and breathing for all to study and make it stronger and better. Remember Napster…? Sure it was eventually shut down but a hundred Napster inspired sites sprang to life offering searches for free music, tv, movies, computer programs, video games, etc. Good luck banksters! You’re going to need it.
It is more likely that central banks will collapse over time than cryptocurrencies. That because central banking doesn’t work in the long term. It collapses and needs to be reconfigured before it collapses again. It is much more likely in the long-term that some form of cryptocurrency will continue and expand.
Central banking is an abomination that impoverishes every nation where it is tried. Sooner or later money will be free again, just as most cybercurrencies are free.