Greenspan Baffled Over Bitcoin 'Bubble': "To Be Worth Something, It Must Be Backed By Something"

Tyler Durden's picture

"In order for currencies to be 'exchangeable' they have to be backed by something," is the remarkably ironic initial comment from none other than debaser-of-the-entirely-fiat-dollar Alan Greenspan when asked about the "bubble in bitcoin," by Bloomberg TV's Trish Regan. Unable to "identify the intrinsic" backing of Bitcoin (or see bubbles in equity, credit, real estate, or greater fools) Greenspan is, apparently, capable of identifying Bitcoin "as a bubble," because "there is no fundamental means of "repaying' it by any means that is universally accepted." The farcical double-speak continues as the Maestro does a great job of making Bitcoin (which Ron Paul earlier noted could be the "destroyer of the dollar") look even better than the readily-printed fiat we meddle with every day.

Greenspan explains...

"when we were on the gold standard, [currencies] had intrinisc value which made people willing to exchange their goods and services with no question."

"Alternatively, when we went into "currencies", it was the "backing" of the issuer of the currencies... whose "great credit-standing meant his checks could circulate as money.""

So either its backed by real physical metal with intrinsic value - or the promise of someone...(increasingly politicians of course) with good credit (or a big army)?

"I do not understand where the backing of Bitcoin is coming from. There is no fundamental means of "repaying' it by any means that is universally accepted."

Like fiat currencies (just ask the Venezuelans)...

"Individuals with very high net worth and great reputations could create their own currency... because people would be willing to exchange their checks with each other at par."

So coming soon the BuffettCoin or MuskCoin (oh wait reputation), or the GatesCoin?

But, Greenspan sums it all up...

"I haven't been able to identfy the intrinsic value of Bitcoin - maybe someone else can...

but if you ask me if this is a bubble in bitcoin... yeah it's a bubble.

Which ironically (perfectly circular) is exactly what Bernanke said about gold...

  • BERNANKE SAYS `NOBODY REALLY UNDERSTANDS GOLD PRICES'

 

So - after that - go buy his book!?

 

And some more color from Ron Paul on Bitcoin as "destroyer of the US Dollar":

Via Mike Krieger's Liberty Blitzkrieg blog,

While we believe it is the Federal Reserve that is systematically destroying the US dollar, Bitcoin could merely be the preferred conduit through which fed up citizens decide to express their displeasure with the incredibly corrupt corporatist-facist state being shoved down our throats by a handful of insane and greedy oligarchs. Interesting comments nonetheless. From CNN Money:

Imagine a world in which you can buy anything in secret. No banks. No fees. No worries inflation will make today’s money worth less tomorrow.

 

The digital currency Bitcoin promises all these things. And while it’s far from achieving any of them — its value is unstable and it’s rarely used — some have high hopes.

 

“There will be alternatives to the dollar, and this might be one of them,” said former U.S. congressman Ron Paul. If people start using bitcoins en masse, “it’ll go down in history as the destroyer of the dollar,” Paul added.

 

It’s unlikely that Bitcoin would replace the dollar or other government-controlled currencies. But it could serve as a kind of universal alternative currency that is accepted everywhere around the globe. Concerned about the dollar’s inflation? Just move your cash to bitcoins and use them to pay your bills instead. Tired of hefty credit card fees? Bitcoin allows transactions that bypass banks.

 

“That’s the holy grail for people who believe in freer markets and currency,” said Adam Gurri, a libertarian economics writer in New York.

 

There are no middlemen charging fees to move money between users. You can transfer bitcoins — even infinitesimally small fractions of one — directly to others’ digital wallets.

 

But don’t expect governments and banks to let Bitcoin take over so easily. Financial institutions will lose business if people stop using their payment systems, and central banks like the U.S. Federal Reserve would lose their ability to help slow and speed up economic activity. Paul expects banks to lobby and authorities to crack down.

 

“Governments absolutely demand a monopoly on money and credit. They’re not going to give it up easily,” Paul warned. “They will come down hard.”

Interesting times…

Full article here.

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Xibalba's picture

The USA backs it's shit paper with 'Faith & Debt'.  

*edit* Which reminds me, ... If the USA can print it's own 'currency', why does it need to collect taxes?  

Leonardo Fibonacci2's picture

Greenspan should lay off the Viagra cause he is not of sound mind!!!! His wife is 40 years younger than him!!!

SWRichmond's picture

USD is backed by the taxing power of DC.  Period.  This is Greedscam's "means of paying it back".

knukles's picture

BitCoin is backed by the Non-Full Faith and Credit of the US Government, dumbfuck

zaphod's picture

"there is no fundamental means of "repaying' it by any means that is universally accepted."

Does this idiot not understand that you could make the exact same arguement for the US dollar? What is the dollar backed by? It is backed by dollar bonds which means that a dollar is backed by the promise of future dollars. This is circular and so the dollar has nothing backing it either.

The only reason the dollar has value is because people have mutually decided so. Similarly people can mutually decided anything else has value instead, and also decide the dollar has zero value (a growing percentage of the world)

Xibalba's picture

"The only reason the dollar has value is because people have mutually decided so" ... at the end of a hellfire missile, jailtime, or somewhere unpleasant between the two

Clycntct's picture

The only reason the dollar has value is because people have mutually decided To belive in Fraud

Occident Mortal's picture

Satoshi Nakamoto is a pseudonym of the NSA cryptologist Tatsuaki Okamoto who wrote about a dozen papers on digital crypto currencies from 1991 to 1995.

e.g.

1. Tony Eng and Tatsuaki Okamoto, Single-Term Divisible Electronic Coins, Advances in Cryptology EUROCRYPT '94, Springer-Verlag, pp. 311-323.

2. Tatsuaki Okamoto, An Efficient Divisible Electronic Cash Scheme, Advances in Cryptology - CRYPTO '95, Springer-Verlag, pp. 438-451.

3. Tatsuaki Okamoto and Kazuo Ohta, Universal Electronic Cash, Advances in Cryptology - CRYPTO '91, Springer-Verlag, pp. 324-337.

Following this work he began filing patents, Okamoto owns a string of patents which cover Bitcoin and are still valid for another 3-5 years, so he has every right to sue you.

Electronic cash implementing method using an anonymous public key license (1996)

https://www.google.co.uk/patents/EP0772165B1?cl=en&dq=ininventor:%22Tats...

Electronic cash implementing method with a surveillance institution, and user apparatus and surveillance institution apparatus for implementing the same (1997)

https://www.google.co.uk/patents/EP0807910B1?cl=en&dq=ininventor:%22Tats...

Method and apparatus for implementing hierarchical electronic cash (1997)

https://www.google.co.uk/patents/EP0810563A3?cl=en&dq=ininventor:%22Tats...

Electronic cash implementing method for issuer having electronic cash balance counters, corresponding issuer equipment and recording medium having recorded thereon a program for execution of the method (1998)

https://www.google.co.uk/patents/EP0926637B1?cl=en&dq=ininventor:%22Tats...

Wondering what he looks like??

http://www.ntt.co.jp/RD/OFIS/organization/fellow_1_en.html

Dear Infinity's picture

Whoever he may be, he certainly solved the age old problem of Alchemy...

Bitcoin:Gold ratio now sitting very very close to parity...

TheHound73's picture

Hold, Spartans!

Nice of that NSA dude to release Bitcoin into the Public Domain as free and open source.

derek_vineyard's picture

greenspan is larry, benny is moe and yellen is curly

Colonel Klink's picture

Greedscam is just pissed he didn't invent Judencoin.

jbvtme's picture

which astute and perceptive zh'er compared this guy's kisser to a rotting pumkin?

markmotive's picture

If bitcoin isn't a speculative bubble, what is? How on earth is bitcoin fundamentally valued?

Peter Schiff vs. Stefan Molyneux on bitcoin:

http://www.planbeconomics.com/2013/11/bitcoin-vs-gold-future-of-money-pe...

Never One Roach's picture

"If you want to keep your 'Full Faith & Credit', you can keep your 'Full Faith & Credit.'"

MontgomeryScott's picture

THIS JUST IN:

Greinshpahn 'baffled' over the fact that he is still breathing: Thinks he is still alive (although he THINKS he should have died decades ago)...

His glasses are getting thicker as his penis shrinks...

REVEALED: Mr. Keynes has spoken to him through a 'medium', tells him to 'keep fucking the public'...

     Inside this exclusive news story, Greinshpahn reveals the song that he heard through the 'medium':

     http://www.youtube.com/watch?v=VH_DkBI9Qsk

 

OOH! 'BITCOIN'!

Greinshpahn mentions it, and the investment world goes WILD!

 

 

PP's picture

before Aug.15,1971, 35 US dollar was backed by 1 once of Gold.

after Aug.15.1971, 35 US dollar is backed by 1 once of politican.

GetZeeGold's picture

 

 

 

 

His wife is 40 years younger than him!!!

 

Every good man is backed by a blithering idiot MSM shill.

 

Not sure what she's getting out of the deal...but I'm assuming it must be substantial.

 

There were rumors Alan was being compensated in gold....considering the price at the time that would have been one hell of a deal.

PP's picture

Tyler is sleeping... Bitshitcoin Already cracked down by PBOC

TheHound73's picture

Breaking News: Largest most authoritarian government in the world manages to slightly inconvenience Bitcoin, retracing to prices last seen 1 week ago. [PBOC statement]

Oracle of Kypseli's picture

<<<< Satoshi Nakamoto is a pseudonym of the NSA cryptologist Tatsuaki Okamoto who wrote about a dozen papers on digital crypto currencies from 1991 to 1995. >>>>

So then what OCCIDENTAL MORTAL is saying is that NSA actually allows China to buy all the gold she wants and at the same time is also selling Chinese people bitcoins at almost the same price as one oz of gold.

Brilliant!

The Navigator's picture

You guys (in above comments) are all great minds and I greened you all.

Thanks for the erudite and worth-reading comments - the ZH University is ever-rendering of knowledge.

MeMadMax's picture

Mr. Greenspan, China and the dumbtruck loads of money that is being shoveled into BC would disagree with you wholeheartedly...

 

Have a nice day, AHole.

N2OJoe's picture

The only female child that wasn't drowned at birth

The Big Ching-aso's picture

If you can't baffle them with bullshit baffle them with bitcoin.

LetThemEatRand's picture

And then co-write with Ayn Rand.  

GetZeeGold's picture

 

 

 

The name is Galt.......John Galt.

 

John does not buy overpriced health insurance.....cause he just doesn't.

 

John, much like Chuck Norris doesn't buy bitcoins.....cause he just doesn't.

Ignatius's picture

You can do better than that. 

I've seen you do better.

Let it rip.

akak's picture

You know, I'm a litte confused after watching this video --- none of the other zombies in all the movies and TV series are able to talk like this one. Which is particularly surprising given his obviously advanced state of decay.

I just really wish he would stop biting and infecting all the economists and academics already.

ebworthen's picture

Thanks, was trying not to hog space but...

Greedspun the diabolical prune admits that Gold and Silver have intrinsic value while at the same time pulling aside the curtain on the dollar being backed by nothing but debt and debt serfdom while simultaneously contradicting himself by asserting that Bitcoin is backed by nothing even though a great many individuals are converting their fiat into it.

He is either a disingenuous prick of epic proportions or an ignominious fool stuffed with economic theorems of straw, frass, and camel spit.

wee-weed up's picture

 

 

So, GreenSpam is indicting his own tenure at the Fed...

And now Bernanke and Yellen?

I'd be really surprised...

If this foot-in-mouth old fuddy-duddy...

Can still wipe his own ass!

He belongs in a 100% care old-folks home...

Where someone can change his dirty Depends for him.

fonestar's picture

"Nice of that NSA dude to release Bitcoin into the Public Domain as free and open source."

 

A good point Hound.  And I'm still waiting for the resident idiots to explain to me why exactly CIA/NSA would threaten their own existence by releasing a floating currency that competes with the dollar?  Not that I doubt their ability to pull yet another baseless conspiracy out of their asses which will in turn be supported by another baseless conspiracy.

akak's picture

You annoy me.

Mommas, don't let your (basement) babies grow up to be Bitcoiners.

fonestar's picture

I don't annoy you.  FACTS annoy you.

erg's picture

Why are you so fervent to defend bitcoin? Why should you give a shit in the end if you got yours? The daily tete a tetes.

Red flags are starting to pop over you. After awhile it seems out of scale.

Maybe you're unique.

For good or ill you've become the ZH bitcoin point-man.

fonestar's picture

Because Bitcoin represents the pinnacle of anarcho-capitalist philosophy and I really like being right.

silverserfer's picture

right like when you mutter to yourself after your mother shouts at you from the top of the stairs? that kind of right pftonestar?

fonestar's picture

You fake libertarians are really nervous aren't you?  One figure BTC, two figure BTC, three figure BTC, four figure BTC.....  I know your fake "end the fed" BS.  You just wanted to co-opt the Fed and start the cycle over again so you could stay fat, ignorant and stupid.  Now you see another contender on the horizon and you know that is not going to work out for you.  Your blood sweat and tears are worth no more than any other Bitcoiner in Timbuktu.

American exceptionalism..... SEE YA!!

ThirdWorldDude's picture

Listen dipshit, this libertarian comes from a culture that's been around for a couple thousand years. I've personally gone through a state collapse, a hyperinflation and two civil wars and out of experience I know that if it looks like a turd and smells like a turd then it definitely is a turd.

Your "another contender on the horizon" is the MacGuyver du jour, luring profit-chasers into a get-rich quick scheme in the present ZIRP world. In my vocabulary this game's called Ponzi. It's good while it lasts and those who've gone in first usually skim fat profits, but at the end it always ends in tears for a vast majority of bagholders (approx. 95%).

I have no idea of your agenda here on ZH; the burden of proof lies on you to show that you are not just another of CIA/NSAs sock puppets pushing for cashless (and fully traceable) society and distracting people from the only real anarcho-capitalist currencies out there - gold and silver.

The Navigator's picture

@Fonestar

Although BTC, or an alternative, may have the possibility of replacing the FRN, it is too much like the FRN in that it is based on nothing but CONfidence; nothing backs it.

Whereas most ZHer's who have invested/stored weath in PM's have also invested time in researching HISTORY and Fiat Currencies and learned that "money" and "currency" are different.

Money backed by/or is Au/Ag is real - Currency printed out of nothing but CONfidence lasts not long. Please refer to Mike Maloneys 1st video at

http://hiddensecretsofmoney.com/videos/episode-1

Truly, the greatest investment you can make is in your own knowledge.

Please also see http://hiddensecretsofmoney.com/videos/episode-4

for one of the best of Mike Maloneys lessons on money.

Best to you.

Crawdaddy's picture

What if the NSA did have a hand in it? What if they are pulling a grand switch to trick everyone into thinking BTC is beyond their control but it really isn't? The ultimate kill switch?

fonestar's picture

You know, when the dollar collapses all bets are off.  It is very hard for a government to maintain control of its own self let alone all the people and random variables in that chaotic situation.  Now consider Iraq, Afghanistan and all the moves to maintain dollar hegemony.  Then ask yourself why they would voluntarily sacrifice that?

GetZeeGold's picture

 

 

 

You know, when the dollar collapses all bets are off.

 

Should be able to buy the entire farmers market with a single bitcoin if that happens....unless someone gets there first with an ounce of gold.

 

Dirt farmers might be stupid....but they don't take air as payment...they need CO2 for their plants to grow.

Bring Al Gore and maybe you can work out a deal.

fiftybagger's picture

Silver and Bitcoin.  Did our message ever change?

Silver For The People

The Bitcoin Channel

GetZeeGold's picture

 

 

So if I just hold silver.....I'm assuming you're going to be fine with that?

 

 

Confused's picture

Lets suppose for a minute that the end game is global control of the populace. Sounds very Orwellian, right? But when one considers the State reaction across the globe to peoples protesting, surveilance programs that (while not in and of itself a surprise) seem to have the cooperation of ALL states, it would appear that it IS in fact possible that this is an underhanded opportunity to CONTROL a revolution. Give the people a "government free" currency. Which in turn would allow for further tracking and control. If something like the EU (as well as EU bonds linking various "free" states) and other similar proposals are something akin to a one world government, wouldn't a one world currency be needed as well? And what better way to introduce it as a peoples revolution?

 

I'm certain that those "in the know" do not give a shit about the dollar as it exists. Only as it will exist going forward. And I'm fairly sure the same could have been said for all the people of power, in all countries throughout history, whose currencies have collapsed. They undoubtedly came out unharmed. 

 

I do not proclaim to know one way or another. But I know to remain skeptical of everything. 

fiftybagger's picture

Crypto-currencies are an idea.  Bitcoin is just one iteration.  100 others already exist.  Get it?

Silver For The People

The Bitcoin Channel

Frickenkrap's picture

...because the govt men want to steal your money more effectively.