Yellen’s Terrorists: The Bitcoining Middle Class – Trustnodes

Yellen’s Terrorists: The Bitcoining Middle Class


Grandma Janet Yellen kept to the script in front of her 200 year old colleagues at the Senate.

“I think many [cryptos] are used, at least in transactions sense, mainly for illicit financing and I think we really need to examine ways in which we can curtail their use and make sure that anti-money laundering doesn’t occur through those channels,” Yellen said.

Just recently there was a suggestion they don’t actually like using bitcoin because of its volatility, but Yellen doesn’t really think what she said. What these centenarians really think instead is that bitcoin is a silly kids plaything because they didn’t have it while growing up and they never heard of it during their prime time up the career mill, so now of course it’s not the time to think of harnessing innovation because they hardly have any brain cells left.

Their job is to do things as they always have done them, and pretend nothing has changed because the past is the present to the dinosaurs and the future is someone else’s business.

Our business thankfully, and we’re happy to get on with it as long as grandpas and grandmas lock themselves up in their ivory towers and leave us alone.

Not that they have much choice because they too probably understand they have no business in the matters of those that are in their prime time in their careers.

So we didn’t hear anything she said except that the Treasury’s view is no one should care about the debt – Yellen definitely doesn’t – as now is the time to add a lot more to that pile to give free money to the poor.

Why they are poor is also presumably something they don’t think about as that would then open questions on whether the bitcoin way is the better way.

Afterall, who really wants to be paid in a currency that falls in value, like the dollar? Certainly not workers who since the 70s have seen their earnings fall in absolute terms.

Bitcoin and eth on the other hand dip and jump, but they tend to appreciate. They offer these workers the opportunity to save.

The Systemic Assault on the Middle Class

A 9 to 5 job to cover the mortgaged house and the paid by installments car as well as the weekly shopping is a decent way of going about presuming you have $200 left to save at the end of the month.

The problem is this $200 is an assault on the current financial system. You get punished for it more and more, nowadays with no interest at all if you keep it in a savings account.

You persevere. $200 a month, $2,000 a year, $20,000 in a decade. Or is it? You see that 2% a year in inflation is just $20 the first year. But now it’s 4% on $1,980, and then 6% on $1,900, giving you $1786 in just three years compared to year zero. You add $2,000 a year though so it is still increasing, but you end up with $15,000 or less.

That’s the end result of 2% yearly inflation. Because most can do maths and understand that the system orders you to spend this money and not save it, much of it goes to housing. You’d be lucky therefore if that $20,000 is even $1,000 by the end of the decade where your housing deposit is concerned.

Nonetheless it doesn’t look like you are being punished because your wage has perhaps even increased a bit by 1%. The problem is all bills have increased as well, including food, some by more than 1%, so you still just about keeping this $200 a month target.

You’re middle class, and the value of saving money has been instilled in you since childhood. So when you hear on TV the newsanchor saying people are not spending and they need to spend for growth so we need inflation, you take this to apply to ‘people,’ not you, the individual.

Overtly, especially if you studied economics at university, you even strongly agree with the suggestion we have to encourage spending through inflation to grow the economy because the dogma towers don’t teach Hayek. However, you personally do save because its benefits are self evident.

We therefore have a contradiction. Saving is good and even necessary, but saving must be punished. Now this has taken a different level where monetary policy is concerned: debt is good, saving is bad.

So one reason why these people are poor, systemically speaking, is because they are unable to save and they are unable to save because someone like Yellen will ensure they will be punished severely if they do save in a non spending manner.

She does so not out of ill intention, to the contrary. She does so because it’s what has worked for all her life and the idea that something has changed is obviously not something she can consider at this very old age when the ability to learn is known to have fallen to near zero.

What has changed is the seen unseen. That encouraging spending while punishing saving can be good, but only with significant constrains and for a very limited time because it is effectively cheating.

Growth didn’t come from thin air. That growth came from the delay of expending value contained in those savings. Now that you’re delaying no longer, naturally there will be some growth, but there will also be less or no savings. In effect you’ll be poor, living paycheck to paychek.

A $1,400 from Biden or a $1,800 from Trump is not going to change this systemic assault on the bedrock of the middle class: savings.

Yet without this assault it is not clear the current financial system can work. Many say it can not. Thus having sucked Americans dry of their savings by forcing them to spend, the grandma now wants to tap into the debt buffer.

Americans of course are wealthy. They get nice pay, food is cheap, costs have increased but they can probably afford some debt. This too is nice initially. You’re creating ‘savings’ out of nothing except there has been no delay of value expenditure, there is instead now a requirement to somehow create even more value to pay back the extra value spent.

Now America is not only without savings, but also in debt. A problem the current government says it can easily solve by taking more debt, something that ends in hyperinflation which is another word for government bankruptcy.

The End of Money

The government does not work like a family budget, the government can not go bankrupt, the government can always mint its own money.

So we’re told. Except the government is not minting its own money, it is borrowing it primarily from the Fed, or from China.

In effect, Americans are paying the Chinese government to continue spending at an accelerating rate and/or 6% to commercial banks that have shares in the Federal Reserve Banks.

Interest rates are low, however, so they can borrow even more, but no one feels richer by being deep in debt, and that includes the government.

This debt binge is a punishment squared for the savers or for workers who are seeing their $2000 turn into $1,500 or even $1,000.

You don’t feel this transformation, it’s not instant, but Chinese goods are more expensive now, American streets have potholes and pavements go unmaintained.

Gradually that gap between wages and food prices starts narrowing. Energy costs are no longer cheap. Some train line is too expensive, because the government is borrowing way too much to keep current expenditure let alone new investments.

The Bitcoin Way

Bitcoin is the mirror opposite of the financial system. It puts savings at the heart of the system and punishes debt.

This is the opposite of the current orthodoxy, but it’s what was the orthodoxy during the enlightenment and the scientific revolution.

Savings appreciate in bitcoin because one bitcoin is always worth one bitcoin. A middle class running on this currency therefore becomes a home owning middle class in its own right, not from government handouts.

A worker paid $2,000 in bitcoin gets $2,010 next month because he directly shares in the gains of economic growth.

That’s through bitcoin itself being the direct measurer of such growth which no one can manipulate.

This is a very different system, where energy costs go down not up, just as during the early 2000s we all felt richer by the price of electronics constantly going down.

Nowadays electronics are very expensive as their price has stopped moving down because inflation forces an increase in all prices.

This is good we are told because it creates economic growth, but there hasn’t been much growth for a decade despite Americans pillaging savings and taking on mountains of debt.

That’s because the trick has run out. On the other hand at an individual level, appreciating savings is better than savings which fall in value.

A general fall in prices is obviously good for the individual. A rise in the value of that $2,000 paycheck is obviously good. A savings account that keeps up with house prices can’t be bad for that guy who was saving for his housing deposit.

Naturally for someone of the middle class, something like bitcoin therefore is an embodiment of the values they were instilled since childhood.

Save every month, don’t take on debt, resist temptation to spend, buy things with your own money.

It’s no wonder the middle class in particular has been championing bitcoin since at least 2013. Their parents and grandparents, including perhaps Yellen herself to her own children, have shown them the way.

And the way is bitcoin, whether the teachers now like it or not. Hayek does. The individual does. The middle class likes this new trick very very much because it does what they were always told money is meant to do: it makes you richer, not more poor.

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