Over the Holidays my son and I were watching a television show entitled Scorpion. The show put engineers, hackers, mathematicians, and a little boy at the center of the action.
The plot was the Federal Reserve Banking system was being held hostage by an entity which had hacked into the Fed’s internet system, threatening to shut down the world’s economy should they not receive $2 trillion of Bitcoins.
This is comical.
History’s largest banking fraud being held hostage, demanding bitcoins as ransom.
I know. You don’t believe me.
Several decades ago Germany sent their gold reserves to the Federal Reserve bank of New York for safe-keeping. The reason is Germany was concerned their gold reserves may fall into Soviet hands (this was during the Cold War).
In January 2013, Germany asked for the 3000+ metric tons of gold be returned to Germany. In response, the Fed stated it would take 7 years to return 5% of the gold.
Why, with the technology, the equipment, the logistics and modern know-how, does it take 7 years to transport this rather small amount of cargo. While I understand the concern regarding theft and loss, a lake freighter can carry 78,850 long tons of cargo, so approximately 5% of one shipment would complete the job in one voyage.
But the Fed wasn’t returning the 3300 metric tons. They were returning 165 metric tons over a period of seven years. (It is my understanding the markings on the returned gold did not match what was put on deposit several decades ago).
And Bitcoin? What’s a bitcoin worth? It has no tangible value. Things which have tangible value do not wildly swing in value on a month-to-month basis. I asked a family friend and they told me bitcoin’s value is based on data.
Data?
I was speaking to a former business associate this past weekend. He told me he took all the data, articles, recordings and information as well as his work records over the past 40 years and poole the data into one 8-T external hard drive. Quite a bit of the data he stored could not be opened with today’s technology as the older programs have been passed by.
It’s useless data.
I’m sorry, but I want something I can depend on for today, tomorrow, and next week. I may even want it to be of value in 6-months.
Consider other assets. Would you put purchase a house or a building whose value fluctuated as much as bitcoin?
Would you invest in a business the same way? Only if you believed you could play the market timing…
Getting back to the television show, as I said,
Holding intangible (and a questionable monetary value) hostage and asking to be paid with a coin that is as volatile as my ex-wife. I don’t know about you, but I found the entire episode lost as I found the premise so laughable.
Then again, the only ones who are laughing in this world’s economy are the owners of the Federal Reserve.
