Two Not So Bold Predictions for 2020 And Beyond – Ugly Old Goat
Those of you who follow me regularly know I do not make Bitcoin market predictions as far as price. I haven’t a clue. And neither does anyone else.
Knowing I don’t know, I trade accordingly.
That said I started publishing all my trades to subscribers when I started the Ugly Old Goat newsletter on February 4, 2019.
I attribute my consistent trading success solely to disciplined Money Management. My emphasis is to trade equity based on fundamentals. A distant third is technical analysis, known as TA.
I find most traders have these priorities in reverse.
While Bitcoin is a revolutionary innovation, the underlying bullish fundamentals are not Bitcoin at all. Bitcoin emerged organically due to a recognized need.
The underlying fundamental case is that we live in a world with over 100 years in a turbulent ocean of fiat money enabled by sound money developed in the marketplace in the late 19th Century under relatively free markets.
Essentially sound money was developed in a relatively unfettered marketplace that developed non-inflationary self-liquidating commercial paper based on gold. The commodity gold, long valued as cash and store of value, emerged as The Standard. The development of commercial banking, first by merchants and later through banking, regulated the money supply much like The Invisible Hand regulates prices and supply and demand in a free market economy.
As gold emerged as The Standard through free-market merchant banking, it ceased being used as cash and became the yardstick (or meterstick) that measured the value of goods and services offered in the marketplace. Gold rarely circulated as cash. Gold substitutes circulated as cash.
The static commodity gold, a feature that imputed gold as a store of value, emerged into a dynamic and useful Standard without borders useful in trade.
And while anyone, rich or poor, banked or unbanked, could own gold as a practical matter gold ownership was limited to the wealthy, banks, and governments as the stewarts of honest trade.
In the late 19th Century there was no such thing as Keynesianism, Monetarism, QE1 or QE2. It was only after the organic emergence of gold as The Standard in the late 19th Century that governments hijacked The Standard for its own purposes. Ironically, it was only by the emergence of sound money that governments could inflate currencies to the tsunami proportions we know today to fiance wars, entitlements, and other special interest obligations.
Understanding these sound money fundamentals brings me to two not so bold predictions.
Just as The Gold Standard was the only real innovation in money since the foundation of civilization, so Bitcoin with the emergence of The Bitcoin Standard is the only real innovation in money since the late 19th Century.
The fact that Bitcoin is static is a feature, not a bug. The fact that Bitcoin is the longest blockchain with proof of work and a fixed supply, makes it the only candidate for the emergence of F. A. Hayek’s Standard.
Peer-to-peer cash for the unbanked, privacy, an inflation rate may all be worthy goals, but these things and much more can and will be accomplished through the emergence of a dynamic Bitcoin Standard.
The emergence of sound commercial banking under The Gold Standard with the creation and withdrawal of non-inflationary purchasing media regulated the money supply in time of expansion and contraction. Money creation and contraction reacted to market conditions, rather than imposing market conditions.
This follows as a necessary consequence of my first not so bold prediction.
This may leave some of my audience aghast. But not so, for those rare and truly talented developers who understand Bitcoin, The Bitcoin Standard, and sound money.
The emerging Bitcoin Standard does not depend on creating new standards, but rather competition within the accepted standard.
The foundation has already been laid. Just as the primary task of a refiner is to maintain the integrity of gold, the primary job of Bitcoin developers is to maintain the integrity of the accomplished innovation.
This is by no means an easy task. It is highly unappreciated development, taken for granted by Bitcoin users and degraded by The Crypto World unhappy with The Bitcoin Standard.
The new innovations in sound money on The Bitcoin Standard will develop in much the same way Henry Ford developed the automobile or Steve Jobs developed the personal computer.
Sound money will develop from largely unexpected places and from unknown visionaries.
It is unlikely such innovation will come from The Crypto World at all which has no vision other than the hopes of creating a new standard “Better than Bitcoin.” Their own terminology belies their lack of vision.
The hodlers of today are the bankers of tomorrow. If we are our own banks, it is time to envision just what this means and work towards what we see.
UGLY OLD GOAT
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Published at Wed, 29 Jan 2020 05:45:11 +0000
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