Since the advent of fiat currency, the mighty US dollar (USD) reigned as the world’s reserve currency. When Richard Nixon was US President, the USD reserve currency status was further enhanced as not only a reserve currency, but also the de facto currency for petrol transactions. That was the birth of the petrol dollar. That deal was craftily done in 1973 when the then-Secretary of State Henry Kissinger hatched a brilliant idea and negotiated a deal with Saudi Arabia that in exchange for arms and protection they would denominate all future oil sales in U.S. dollars. But that is about to change.
America has been accumulating massive debt through its QE programme. QE is nothing more than printing money out of thin air by the stroke of the pen of the Federal Reserve. Currency manipulation became rampant and America now lives on the largesse of the rest of the world through its manipulative money printing programme and the pervasive banking system controlled largely by US banksters.
Since 2009, the virtual world saw another major change as Bitcoin takes on the stranglehold of the bansksters as another form of currency that is free from the banks’ monopoly. Bitcoin is a crypto-currency that transcends political and geographical boundaries. The phenomenal rise of Bitcoin took the virtual world by surprise. The value of Bitcoin spiked. More crypto-currencies followed suit. Banksters saw the imminent threat of crypto-currencies as these slipped past their mighty system of control.
Bitcoin is not without its woes and scandals. Bitcoin’s biggest and most important exchange, known as Mt Gox, suddenly just disappeared, taking along with it 774,000 bitcoins – worth $409m (Guardian). Skeptics took this event to run down crypto-currencies stating that the currency is not only unstable, but also has no tangible asset backing. Not ignoring such criticisms, crypto-currencies are morphing into a more potent form – gold backing.
The Daily Sheeple carries this report:
The most legitimate argument against Bitcoin, is the fact that it isn’t backed by anything tangible. While it does use math and cryptography to create scarcity, at the end of the day bitcoins are still just digits on a screen. In that regard, they’re aren’t that different from fiat currencies. Their value is dictated by confidence and belief, rather than real world value.
But that may be about to change. Not for bitcoin, but for digital currencies in general. The gold storage company known as Anthem Vault has decided to release a new cryptocurrency that is backed by precious metals. Each “coin” will be valued at 1 gram of gold, and will be called the “Hayek,” after Austrian Economist Friedrich Hayek. It’s slated to be released on May 25th.
Basically, this will be an alternative to the volatility and vulnerability of central bank issued currencies. It has the added advantage of making precious metals more versatile on the global marketplace, since physical delivery is not required.
But that brings up a troubling issue. It’s nice not having to take a delivery for every transaction, but it would also be comforting to know that you could take a delivery for physical gold if you wanted to. After all, is a currency truly backed by gold if you can’t have the gold?
Will a new currency rise from the ashes of collapsing world currencies should that event finally materialise? Will tangible gold triumph over mere faith in fiat currencies?
There is gold, and a multitude of rubies: but the lips of knowledge are a precious jewel.