THE REAL BUBBLE IS (AND ALWAYS WAS) PRINTED FIAT MONEY

And it is about to burst, at once and for all, forever, and for the sake of everybody.

To those who say that blockchain technology is a bubble. The economic absurd called fiduciary money is causing a global scale imbalance.

It is at least admirable the self-denial with which we work hard, we produce goods and services, we build houses, machines and everything to deliver it all in exchange for old paper. Because that is what it is. That old paper is the illusion called money.

If we try to find out where its omnipresent value comes from, we will discover that it is only because it is printed with the face of an old celebrity and a number that tells you what the government believes indicates an exchange value.

Fiat money has existed for only 50 years on this earth. It's amazing, right? It happens that until the Bretton Woods agreement, paper money was backed by the gold reserves of each country. This has happened in the same way for the 5000 years old that our civilization is. For most of our history, the printed money was actually a certificate of deposit indicating the amount of gold to which the holder of that note was entitled to withdraw from the central bank.

It is possible that the gold standard was chosen for its easy casting, resistance to corrosion and for how quick it is to identify. In one way or another, almost every civilization that has ever existed has used gold as a store of value and a means of exchange. Impossible to falsify, the noble metal offered all the advantages that even today can be required to a currency for its use as such. The gold was obtained by people trough mining work, and the gold the governments obtained was by taxes. They need no more than that. Governments never created gold. They can’t. And if they could, they would do it exactly the way they do with printed money!

Observe the graph. The pay of a Roman centurion, equivalent to 38.58 ounces of gold, has undergone very little change until today (in 2000 years) if we compare it to the pay of a captain in the American army. However, if it is computed in dollars, the captain's pay has multiplied many times in just 200 years, and most of this inflation has occurred in the last 50 years!

Another example. In the year 562 BC, during the reign of Nebuchadnezzar of Babylon, an ounce of gold bought 350 loaves of bread. Today, that amount of gold buys approximately the same amount of bread. But if we calculate the value of bread in dollars or other currency, it has suffered an inordinate inflation.

Tell me if this is not a real bubble. Let's see where the problem comes from.

On August 15, 1971, the United States of America ended the convertibility of the dollar for gold. Nixon skilfully took advantage of a supposed overvaluation of the dollar and let every currency seek its own convertibility through free floating. As a result of this, the strongest currency, the dollar, became the monetary reference par excellence.

The economists justified this situation through a strange position by which a country backed its currency with its Gross Domestic Product and not by a reference metal. The talk about productivity and economics justified this system that theoretically worked. Miraculously in practice too.

The result was the establishment of the Dollar pattern. A currency against which all the others must have a convertibility value and which was sufficiently solid, supposedly proof of any devaluation or inflation. Some countries even adopted the US dollar as currency and the world became addicted to paper money. The bubble had begun to swell.

The dollar began its expansion process managing the only important energy asset by then. The oil. This masterful play whose somehow son was named Petrodollar had the effect of immediately placing the global oil market and therefore the energy, under the tutelage of the dollar. We will not stop to analyze the type of offer (that could not be rejected) that the United States did to OPEC so oil prices became denominated in dollars, but the result was as expected.

It was not coincidence. At that time, the United States was the undeniable power, and I suppose that oil producers understood philosophically that since they were going to alienate their reserves to an accounting system located in another country anyways, it is better that it be the strongest and most stable.

THE TERRIBLE WEAKNESS OF CURRENCY PAPER

The Dollar, Petrodollar, Euro, Yuan, Yen, and others, would not pose a problem if they did not have a weakness that may be the cause of their fall.

They are falsifiable.

Not only that they can be counterfeit, but that it is getting easier as time goes. The technology of printing money, previously only available to industrialized countries, is now available to corporations and even organized crime.

Step by step, the criminal mafias are diversifying their operations or even devoting themselves more assiduously to the falsification. It's obvious. Why waste time with arms or drug trafficking in expensive and uncertain operations if they can obtain the money directly by falsifying it? This trend has been accentuated to the point that it is already possible for them to produce bills with the same quality as the originals. These so-called "Supernotes" are impossible to differentiate from a genuine note.

In the country where I live, there was about 10 years ago a commotion produced by statements of the alleged representatives of the US government, which detected an influx of counterfeit notes infiltrated among the real ones. The infamous CB-B2 series, because that's how they started their serial numbers. Many people lost large amounts of money since they could not differentiate the counterfeit and genuine notes with that denomination. Nobody dared accept dollars with those serial numbers and those who did paid half their value or less. However, it was rumored that when these notes were taken to the United States, they circulated normally like any other note. Not even electronic bill validators could detect its falsity.

This should alarm us for the simple reason that governments that issue currencies are not fulfilling their duty to keep the medium of exchange safe. They have neither the technology nor the human capacity to prevent more and more counterfeit money from flooding the markets every day. And if counterfeiters can obtain Euros or Dollars of original quality, what can be expected from other currencies that do not have the resources to adopt security mechanisms such as expensive infrared impressions or metallic implants? Counterfeiting of any currency enters the global financial system, weakening the value of money and contributing to global inflation, as well as greatly strengthening organized crime.

SATOSHI NAKAMOTO = NATIONAL SECURITY?

The chance that those two sentences have the same initials go beyond the orthographic. In a scenario where the money created by force of printing without control, multiplies itself producing inflation and many other problems. It is not difficult to imagine what the finance ministers glimpsed in their infinite knowledge, to get out of the problem that they themselves originated.

An attempt to confront this situation was the creation of a currency with "intrinsic value", that is, a financial instrument whose manufacturing value was the same as its denomination. Made of gold, silver or another precious metal, it would be the effective remedy against any forgery effort for the simple reason that to produce it you would need to invest the same amount or more than what you denominate.

Here we can remember the rumor of the famous "Amero" that circulated profusely over the internet, and that would establish the common currency of Canada, the United States and Mexico. Regardless of the possibility of this implantation, the fact that it would be made of gold, silver and copper, indicated without a doubt, the intention, or at this point the desperate effort to fight against the bands of counterfeiters.

However, there is still no consensus for the establishment of a physical currency of intrinsic value. The logistical difficulty, and that without taking into account the political cost for the economic powers of the world to admit that their own currency went out of their control, keep the world in a dangerous status quo, in which, it is known that money is falsified but tolerated on the understanding that the effect on the market is not important.

The problem is that it is important and growing.

And it is logical. Mafias are entering the game because they can.

And the most effective remedy arises:

The Bitcoin.

Isn’t anyone surprised that even after 10 years no one has been able to locate the creator, whether Satoshi Nakamoto or not? It is necessary to consider that the amount of manpower that has been used in this blockchain for the conception, initial mining, validation, beta testing, put into circulation "anonymously" and other subsequent updates, are impossible factors to go unnoticed.

It is already difficult to hide the inventor from the general public, but ... what about the press? And not to mention CIA, FBI, Scotland Yard, Mossad, ...

The only way to maintain the anonymity of Nakamoto is through some level of complicity of the investigation agencies of developed countries.

Only in this way could the cryptocurrencies be implemented, in order to have a world-wide, real-time laboratory of beta tests of the new instruments of value that sooner or later will have to be implemented. We have already seen that its fundamental characteristic of being unfalsifiable is precisely what paper money does not have.

And so, we are in a global free market scenario of hundreds of cryptocurrencies, in which at least until now, the test has been satisfactory. It is true that it has been possible to steal cryptocurrencies by hacking. But at least I, I have not heard of any successful counterfeiting attempt. It does not make sense either. To falsify a cryptocoin they would need a computing power greater than what is needed to mine it. In this way, the world finally has the perfect currency. With value strictly dependent on the market. Unfalsifiable, and most importantly: Its production is in the hands of the people, who are the ones who patiently mine with hours and hours of floating point operations, exactly like the five thousand years before when it was the same people that was in charge of extracting the gold, with many hours of work.

This return to the root of money, which inevitably indicates that cryptocurrencies, o better said, blockchain technology, will continue to be used and possibly even to validate printed money, has important implications. First, never again should the control of money be given to governments. Suffice it to say that the worst inflations that have taken place have been precisely with the fiduciary printed money system. Then, the mining and storage of value should be in the hands of the people as always. And above all, understand that it is the right of every citizen to mine his own wealth.