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Fed's Dudley "US Dollar Wins"; Bitcoin "Not a Good Store Of Value"

Tyler Durden's picture


While the volatility of Bitcoin has been considerable, perhaps merely reflective of the early days of a revolution, the fact that the "value experts" at the Fed have pronounced:


..raised an eyebrow or two on our furrowed brows. We thought a look at the following two charts since the inception of Bitcoin and the inception of the Fed would help clarify "value" stability...


Bitcoin since inception...


And the USDollar since the Fed's inception...


You decide?


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Fri, 03/07/2014 - 16:31 | 4522648 NaiLib
NaiLib's picture

Please publish logarithmic scale

Fri, 03/07/2014 - 16:36 | 4522679 DoChenRollingBearing
DoChenRollingBearing's picture

Because Bearing Guy wishes to retain whatever goodwill he may still have here at ZH, I will attempt to make most of my Bitcoin remarks at  My handle there is "OROBTC".

The occasional BTC comment may still leak out onto Zero Hedge though...

In the meantime: Gold, fishez!

Fri, 03/07/2014 - 16:39 | 4522703 Soul Glow
Soul Glow's picture

Gold fishez - what happens after a boating accident.

Fri, 03/07/2014 - 16:47 | 4522738 DoChenRollingBearing
DoChenRollingBearing's picture

And the Pacific Ocean is even deeper than our nearby lake.  *Sigh*

Fri, 03/07/2014 - 16:51 | 4522760 tmosley
tmosley's picture

The ZH Comment section--standing alongside the Fed since 2013.

Fri, 03/07/2014 - 17:06 | 4522809 CH1
CH1's picture

Just about what I was going to say: All the Hedgie Haters, in lockstep with the Fed.

Here's the one tool to come along that could kill the Fed, and they hate it like cancer.

Fri, 03/07/2014 - 17:08 | 4522824 Herd Redirectio...
Herd Redirection Committee's picture

Centrally controlled all digital currency is part of the NWO/World Government plan.

Prevents those nasty cash tx and bank runs.

Fri, 03/07/2014 - 17:09 | 4522832 CH1
CH1's picture

And what centrally controlled currency might that be?

If you think that's Bitcoin, y'all are TRYING to be ignorant.

Fri, 03/07/2014 - 17:25 | 4522890 zaphod
zaphod's picture

To all the bitcoin doubters.

The fact that the US FED is now making statements regarding bitcoin vs. the dollar, demonstrates how wildly successful the experiment has been so far. 

Just 5 years ago Satoshi released a simple piece of code onto an IRC channel. It had no backing and no organization behind it. There was no reason anyone had to pay any attention to it.

Over the next 5 years more and more people adopted that code out of their own free will to the point that the world's reserve currency feels they need to make public statements on why their fiat currency is better. 

That is amazing, whether or not you support the concept.

Fri, 03/07/2014 - 17:28 | 4522920 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 for an interesting remark, bravo.

Fri, 03/07/2014 - 18:22 | 4523096 Scarlett
Scarlett's picture

Ron Paul: Bitcoin could destroy the dollar

Fri, 03/07/2014 - 17:40 | 4522970 Soul Glow
Soul Glow's picture

Like a magician they have your eyes fixed on the debate which is Bitcoin vs. the Dollar instead of Gold vs. the Dollar.

They fucking tricked you bitcoiners and stole the debate.

Fri, 03/07/2014 - 18:31 | 4523137 zaphod
zaphod's picture

Not exactly sure why you think bitcoiners have been tricked, the debate actually something else vs. the dollar.

Both goldbugs and bitcoiners have agreed on the "something else". To me that means many things, which include both bitcoin and gold. So I have a little of both, along with other investments generally viewed as necessary in a currency collapse situation. 

Fri, 03/07/2014 - 18:55 | 4523237 DoChenRollingBearing
DoChenRollingBearing's picture

Yep.  Both.

Sat, 03/08/2014 - 01:14 | 4524295 nanpanman
nanpanman's picture

I'm a Rhodiumbug and Bitcoin miner myself. Would not have it any other way.

Sat, 03/08/2014 - 20:12 | 4526224 MeelionDollerBogus
MeelionDollerBogus's picture

Not Sure, you say?

Let me lay it straight. Bitcoin has no value but a fiat price and gold has value from its atoms.

The more bitcoin you get the less gold you get. Period.

There is no way to efficiently get into both considering the giant rise in bitcoin's price then the rigged slam down. The fiat exchanges are rigged twice:

#1 you slam down price by selling what's held into other wallets from the same owner

#2 you slam down price on exchanges by using banking regulations to slam the doors shut

and that's not even looking at the MtGox tomfoolery of incompetence & possible fraud.

The security of gold is you can't regulate or hack its atoms: it is what it is. The energy requirement to screw with all gold ever held, atomically, would either a) take more energy than exploding suns or b) take enough energy to roughly ruin some of it but affect all other matter on the Earth's surface, killing us all, as in nuclear apocalypse.

Neither a) nor b) are happening for the purpose of manipulating gold's physical value and its fiat price doesn't matter.

Bitcoin has no value without a fiat price as we've seen. That was a Fail.

It's too late to turn back.

Bitcoin is the Fed's best most powerful friend: all the while you're pretending to hold a sharp knife to stab the Fed fuckers you're actually holding the blade - there is no handle, all blade.

Fucking idiots.

Sat, 03/08/2014 - 19:49 | 4526125 MeelionDollerBogus
MeelionDollerBogus's picture

The Fed supports its use through fiat exchanges since it can rob you all instantly of any value. That's all I need to know.

Fri, 03/07/2014 - 17:30 | 4522928 Atomizer
Atomizer's picture

Near Field Communication [NFC] tag.  If you don't know how to disable on phone, you deserve to be hacked.

How NFC phones can steal your credit card info

Fri, 03/07/2014 - 17:10 | 4522837 fonestar
fonestar's picture





Now where are those big dummies saying the Fed loves Bitcoin, blah, blah, blah?

Fri, 03/07/2014 - 17:22 | 4522882 DoChenRollingBearing
DoChenRollingBearing's picture

(They will tell you it is just Fed propaganda)

Fri, 03/07/2014 - 20:01 | 4523423 sleigher
sleigher's picture

Probably because it is.  But really isn't everything they say meant to serve them?

Sat, 03/08/2014 - 04:12 | 4524453 BlackChicken
BlackChicken's picture


That reality falls within overlapping spheres of influence; this is why it is so hard to detect at a rational level. When one sphere acts, the other spheres do not know what is going on. When the spheres interact, even a little, that is the foundation of the original goal; then there is plausible deniability, and the real OP gets to work.

Fri, 03/07/2014 - 20:35 | 4523521 dontknowcrapabo...
dontknowcrapabouteconomy's picture

Come mothers and fathers 
Throughout the land 
And don't criticize 
What you can't understand 
Your sons and your daughters 
Are beyond your command 
Your old road is 
Rapidly agin' 
Please get out of the new one 
If you can't lend your hand 
For the times they are a-changin'.

Fri, 03/07/2014 - 17:06 | 4522820 superflex
superflex's picture


If you dont support BTC, you support the FED.

Is that how your mind works?

Hash me a river, crybaby.


Fri, 03/07/2014 - 17:10 | 4522839 CH1
CH1's picture

No. Here it is:

If you try to hurt Bitcoin, you are protecting the Fed.

Simple enough?

Fri, 03/07/2014 - 18:08 | 4523055 XitSam
XitSam's picture

Nonsense. What utter bullshit.

Fri, 03/07/2014 - 18:12 | 4523065 CH1
CH1's picture

Ignorance always defends itself.

Fri, 03/07/2014 - 18:47 | 4523204 balanced
balanced's picture

Bitcoin haters are indeed ignorant. And those who think Bitcoin as a store of wealth is superior to gold are dreamers. The point is that "Gold vs Bitcoin" is a moronic debate, because it is too broad. Bitcoin is far superior to Gold as a currency. Gold is far superior to Bitcoin as a store of wealth.

Gold as a store of wealth.

Bitcoin for transactions.

Why do you morons still not get this simple and obvious solution?

Fri, 03/07/2014 - 22:10 | 4523744 Harlequin001
Harlequin001's picture

Because it's wrong. Gold stored in one place can be exchanged for gold stored in another in any two parts of the world. All that's needed is a note or receipt from one that can be sent to the other either physically or electronically and that's just as fast or faster than a bitcoin transaction, and depending on the type of note, considerably more secure. That governments are printing copious quantities of their own notes does not diminish gold as either and neither does it improve bitcoins' utility or value.

Bitcoin is nothing more than an encrypted number, and since you can have at least one of those for every Federal Reserve note in circulation it is nothing more than a valueless encrypted number and with bitcoin in particular, a speculative fad. Gold however still stays in the vault at a value considerably different to it's trading price in FRN's, waiting. Bitcoin is at best nothin more than a mechanism to transmit golds value.

Gold is nothing like bitcoin. They are entirely dissimilar. Bitcoin is for dreamers that want it to be something it's not, and outrageous rampers of course who want to sell it to idiots...

Fri, 03/07/2014 - 22:29 | 4523878 TheHound73
TheHound73's picture

 "All that's needed is a note or receipt from one that can be sent to the other either physically or electronically"

What ever happened to, "if you don't hold it you don't own it?"

Sat, 03/08/2014 - 00:52 | 4524264 Harlequin001
Harlequin001's picture

because it's always been bullshit. Most of the stuff on this planet is owned beneficially by someone else whether it be in a trust or an account or a company somewhere.

"if you don't hold it you don't own it?" whilst it sounds good is still for idiots waiting to have it taken from them by tax offices or muggers in whatever guise.

If you don't own it you can't be taxed on it can you?

Sun, 03/09/2014 - 13:10 | 4527763 XitSam
XitSam's picture

So there can only be business exchanges where there is an internet connection? That's retarded.

Fri, 03/07/2014 - 17:11 | 4522843 fonestar
fonestar's picture

No, that is how it is.  Bitcoin is the anti-dollar.

Fri, 03/07/2014 - 17:47 | 4523000 Atomizer
Atomizer's picture

My digital assets are bigger than yours nonsense has to come to a end. How about we just audit the Federal Reserve. Stop bickering on which system is better than the other. It reminds me of the yo-yo’s bitching over geopolitical policies in the jackass & elephant role. Same shit, different layer of the onion.

Sat, 03/08/2014 - 15:56 | 4525464 MeelionDollerBogus
MeelionDollerBogus's picture

Bitcoins are dollars now.

Bitcoins have no purpose but ponzi-bag-holder-passing for dolllars.

Gold is the anti-dollar. Gold is the thing no one can print, not even by collective opensource collaboration dictate the number of gold units. Ever.

Nature is intrisic value, carved into the laws of reality beyond the power of anyone to deny, everything else is an opinion.

Fri, 03/07/2014 - 17:11 | 4522840 Gringo Viejo
Gringo Viejo's picture

Dudley: I wipe my ass with your metrics.

Fri, 03/07/2014 - 17:05 | 4522812 El Oregonian
El Oregonian's picture

"Gold fishez - what happens after a boating accident."

Funny you should ask. Normally after a "horrible" accident the owner drops from the public's view and retires to their pre-selected country of choice.

Fri, 03/07/2014 - 16:41 | 4522715 wintermute
wintermute's picture

Dudley preaching to people like Buffett and Gross. Let them bleat like sheep following Dudley's advice.

Fri, 03/07/2014 - 16:31 | 4522650 surf0766
surf0766's picture

Use both sides when you wipe to get the full value.

Fri, 03/07/2014 - 16:39 | 4522706 johnQpublic
johnQpublic's picture

and thats why the dollar beats out bitcoin every time

you cant virtually wipe your ass with bitcoin, but you most assuredly can wipe your ass with a dollar

all hail the dudster

Fri, 03/07/2014 - 16:49 | 4522746 tmosley
tmosley's picture

Stand with the Fed!

The Fed is our friend!

It's evil, evil bitcoin that's the problem!  NOT THE DOLLAR.

Fri, 03/07/2014 - 19:11 | 4523280 fonestar
fonestar's picture

The devil they know...

Sat, 03/08/2014 - 01:38 | 4524325 nanpanman
nanpanman's picture

Burn the Bitcoins! Burn em!

Fri, 03/07/2014 - 16:31 | 4522652 walküre
walküre's picture

Funny he should say that. I was thinking this morning that what happened to Gox can also happen to other "exchanges". Good luck selling shares when the markets are locked up and then they say, they "lost" your certs.

Fri, 03/07/2014 - 16:35 | 4522676 optimator
optimator's picture

"They" won't say anthing as you won't be able to reach them when the balloon goes up.

Fri, 03/07/2014 - 16:49 | 4522747 Thought Processor
Thought Processor's picture



"Good luck selling shares when the markets are locked up and then they say, they "lost" your certs."


I think this is exactly what will happen.  


And then they'll say-  "For only this one window of time we are allowing you to transfer your funds, at pre-market halt valuation levels, to your MyRA account which we have already activated for you."

And they'll promis that the MyRA will not lose value (relative to the USD's that it's valued in).

It's your choice they'll say.   

Sat, 03/08/2014 - 15:49 | 4525456 MeelionDollerBogus
MeelionDollerBogus's picture

Excuse me! This move has already been pulled and trademarked.

This message brought to you by the Free Jon Corzine foundation.

Fri, 03/07/2014 - 20:25 | 4523483 PT
PT's picture

What exactly is a Bitcoin?  Is it simply a great big prime number?  Is it a group of special numbers?  Is it a bunch of numbers plus a bunch of instructions associated with those numbers?  What exactly is a Bitcoin?

The reason I ask, is this:  Bitcoin is called a "crypto-currency".  It sounds like each coin has something to do with encryption.  If Bitcoin is insecure, then what makes ANY other electronic transaction on the planet secure?  What does Bitcoin have that other electronic encryption doesn't have?  What does every other electronic encryption have that Bitcoin doesn't have?

Of all the "hacks" of the Bitcoin network, how many exploited a fundamental flaw of Bitcoin and how many exploited flaws somewhere else (eg. put a gun to someone's head and ask for their Bitcoin is not the same as Bitcoin suddenly disappearing into the ether during the course of a normal transaction)?

How is the security of a credit card transaction different from the security of Bitcoin?

Fri, 03/07/2014 - 23:09 | 4523655 TheHound73
TheHound73's picture

A Bitcoin is an account balance on the world-wide public ledger called the blockchain.  A private key to an account is needed to cryptographically sign a message "spending" bitcoins from one account to another.  This is one of the fundamental processes on which Bitcoin security depends and experts who have taken the time to examine it agree it works well. There has never been a documented case of this security breaking down after 5 years of trying. A private key is a very large number created randomly.  There can be 2^256 of them, or many times more than there are atoms in the universe.  Creating a private key is like going out to the forest and randomly digging a hole to stash your gold.  Except the bitcoin forest's area would cover the surface of every sun, moon and star in the universe many times over. Yes, people can go out to the bitcoin forest and start digging holes looking for stashed bitcoins, but even if they dig 1 trillion holes per second for a thousand years, they'd still be a trillion times more likely winning the Powerball 10 times in a row... another fundamental process on which Bitcoin security depends. They'd be better off using that computer power to mine bitcoins.  

If these concepts or security features are disagreeable to you; that's fine, use of Bitcoin is completely voluntary.

Sat, 03/08/2014 - 10:01 | 4524701 PT
PT's picture

Thanks for taking the time to reply.  I guess the real question I have is:  If people are so worried about Bitcoin insecurity then why are they not equally worried about insecurity of credit cards, online banking, or any other electronic money transfer?  If someone can hack one, can't they hack the other (or isn't each one equally difficult)?

Sat, 03/08/2014 - 15:48 | 4525452 MeelionDollerBogus
MeelionDollerBogus's picture

A credit card is immensely more secure than Bitcoin.

It provides the network security that's not on the public network & provides assurances with tracking spending patterns that fraudulent spending will be stopped, even automatically with errant patterns like spending in 2 physical parts of the world at once, or spending far away from where most of your spending normally is, usually a sign of theft.

With the reversal of charges.

Bitcoin is incredibly dangerous because not only does the value fluctuate as easily to $5 as to $1200 as seen here but all transactions with bitcoin are 100% irreversible. It's begging for fraud, hacking & mischief.

The 256-bit pattern is far, far inferior to the 8000+ bit lengths used for keys in PGP. When a digital currency is ready it will have no blockchain and it will be thousands to tens of thousands of bits per key. 256 can not sustain what an optical VLSI board could do to it.

A blockchain tracks every transaction. You have no privacy. If you spent any amount of bitcoins at any time the entire planet knows who you did that business with & for how much.

That's far, far from secure. Privacy is a part of security. Not dollars, gold nor sea shells ever had a block chain while acting as currency, there's no reason for bitcoin to have one either.

Fri, 03/07/2014 - 16:33 | 4522657 Bryan
Bryan's picture

I loved Dudley in "Arthur" - full of laughs, and drunk as a skunk most of the time.  Isn't he dead?

Fri, 03/07/2014 - 16:33 | 4522663 Cognitive Dissonance
Cognitive Dissonance's picture

Silly Tyler. Dudley was talking about 'value' for those closest to the Fed cash register. Bitcoin ain't a Fed toy so no value there for the Fed cronies.

Fri, 03/07/2014 - 16:37 | 4522688 Soul Glow
Soul Glow's picture

Bitcoin is diverting the prpoer debate about sound money - this is very useful for the Fed.

Fri, 03/07/2014 - 16:46 | 4522733 disabledvet
disabledvet's picture

arrrgh. "Putin is in the crosshairs and we have no diplomacy."

Propane prices have doubled and Tesla's heading to 400.

Have we been had again here?

Fri, 03/07/2014 - 16:51 | 4522753 greatbeard
greatbeard's picture

>> Propane prices have doubled

I've seen it go up a bit here but it certainly hasn't doubled.

Fri, 03/07/2014 - 16:51 | 4522752 tmosley
tmosley's picture

You sound like a jealous child with a new baby in the house.

Fri, 03/07/2014 - 16:35 | 4522672 ParkAveFlasher
ParkAveFlasher's picture


Fri, 03/07/2014 - 16:36 | 4522681 McMolotov
McMolotov's picture


Fri, 03/07/2014 - 16:35 | 4522673 RaceToTheBottom
RaceToTheBottom's picture

When does the head clown Yellen get control of all the minion clowns?

The Internet needs a clown channel or is that CSPAN?

Fri, 03/07/2014 - 16:42 | 4522719 johnQpublic
johnQpublic's picture

clown chanels plural

MSNBC and CNN come to mind

Fri, 03/07/2014 - 16:56 | 4522771 RaceToTheBottom
RaceToTheBottom's picture

I was trying to avoid the FAUX news debate.

Maybe all channels are all Clowns, All the time

Fri, 03/07/2014 - 16:36 | 4522678 Soul Glow
Soul Glow's picture

The debate between bitcoin and fiat currency is being waved around in the status quo's face while the real problem is that neither is backed by real money.

Real money is gold.

Fri, 03/07/2014 - 16:40 | 4522709 Missiondweller
Missiondweller's picture

Soon you can spend your gold like any other currency, in any country.

Fri, 03/07/2014 - 16:50 | 4522751 DoChenRollingBearing
DoChenRollingBearing's picture

Nice link, but no gracias!

I will spend $ and BTC.  And save my gold.

Fri, 03/07/2014 - 16:59 | 4522788 RaceToTheBottom
RaceToTheBottom's picture

It does solve the people who think that gold will go nowhere because you cannot buy a loaf of bread with gold.

At least it shuts them up so I don't have to listen to em.

Fri, 03/07/2014 - 17:41 | 4522973 Soul Glow
Soul Glow's picture


Fri, 03/07/2014 - 18:04 | 4523044 DoChenRollingBearing
DoChenRollingBearing's picture

I have a relative who has over 3000 oz of silver.  He needs his pickup just move it around.  Platinum covers many of the same bases as silver, and Pt would be easier to tote down here to Peru (if TSA did not steal it).

And note that I own silver too.  But far more in $-value is Au and Pt vs. Ag.

Too bad Peru does not produce Pt, so it is not well accepted other than the small amounts used in jewelry.

Fri, 03/07/2014 - 17:55 | 4523022 Missiondweller
Missiondweller's picture

When you can spend gold like cash you nolonger need dollars.

Imagine your paycheck going direct deposit to your gold account. The point is not to spend your savings but expand your use of gold replacing all dollars.

Furthermore you never have to convert money when travelling abroad. The local merchant is paid in their home currency while your gold is debited in milligrams from your account.



Fri, 03/07/2014 - 18:57 | 4523052 DoChenRollingBearing
DoChenRollingBearing's picture

Nobody will be debiting my milligrams of gold.  Pay me in CA$H or BTC, whatever of that I do not use will go to savings, much of that in gold.

My gold will be given away, not spent.

Fri, 03/07/2014 - 16:37 | 4522687 Space Animatoltipap
Space Animatoltipap's picture

So Dudley saw competetion in Bitcoin for the $. Hahaha, that's really weird. But gold of course is only some weird dull metal. Hahaha, these Kali Yuga technicians, how far from reality can they get?

Fri, 03/07/2014 - 16:37 | 4522692 astoriajoe
astoriajoe's picture

the dollar had a pretty good run from '21 to '33.

Fri, 03/07/2014 - 17:42 | 4522978 Soul Glow
Soul Glow's picture

Right before FDR tricked everyone to turn their gold in and devalued the dollar by 1/3.  Ouch.  Nobody was safe back then.

Fri, 03/07/2014 - 16:38 | 4522694 waterwitch
waterwitch's picture

Paging Fonestar..........

Fri, 03/07/2014 - 16:38 | 4522696 MeMongo
MeMongo's picture

Mongo don't like bitcoin!

Ponestar however, and don't call me tardo!

Fri, 03/07/2014 - 16:38 | 4522697 Missiondweller
Missiondweller's picture

I'll take Goldcoin over Bitcoin.

Fri, 03/07/2014 - 22:00 | 4523774 TheHound73
TheHound73's picture

This is a fine idea - we shouldn't care how individuals choose to exchange value, let the market work it out  

Some thoughts: The merchant settles in USD (probably through Visa).  If individuals buy gold and mail it in only to spend it on goods, the fees involved need to be competitve with Visa and (cough, cough) Bitcoin.  What is keeping goldbulliondebitcard from pulling a Mt.Gox with your gold or handing their books over directly to the IRS/NSA?

Sat, 03/08/2014 - 07:17 | 4524556 MeelionDollerBogus
MeelionDollerBogus's picture

Calculating all equipment & connection cost of Internet for each device you own, bitcoin cost is actually much higher than Visa or Interac.

Fri, 03/07/2014 - 16:39 | 4522708 fonzannoon
fonzannoon's picture

CNBC just did a segment on how Ukraine is a meaningless economy and it's always been a mess and the market is telling it that it can expect no help and may as well go fuck itself. Bye Ukraine. 

Fri, 03/07/2014 - 16:50 | 4522750 disabledvet
disabledvet's picture

bwhahahahaha. Again..."that's Great Britain's food supply."

"One Aegis Class Missile Destroyer should just about do it."


Fri, 03/07/2014 - 16:40 | 4522712 Dr. Engali
Dr. Engali's picture

Yeah like one of these fed bastards are going to say anything different or crazy like, gold is money.

Fri, 03/07/2014 - 16:59 | 4522789 disabledvet
disabledvet's picture

this war sucks already.
worse still "i think we won."

Fri, 03/07/2014 - 16:42 | 4522718 Quantum Nucleonics
Quantum Nucleonics's picture

What does it tell you that the Fed felt it necessary to defend the dollar relative to bitcoin?  

Fri, 03/07/2014 - 16:45 | 4522730 delivered
delivered's picture

Leave it to the Fed only to speak (i.e., put their foot in their mouth) only when it's at the opportune time. Did they say anything when BTC was dramatically increasing in value? Or better yet and even though BTC has decreased in value recently, did they focus on the longer-term picture of where BTC started (at well less than $50) and where it is now? Maybe they also need to include a comparison with gold. In any case, their thinking is so short-term and their tongues so forked that it's hard to believe anything that they say these days. Will these SFB's ever learn to think before they speak.

While I'm not a huge fan of BTC or virtual currencies just yet (as numerous risks need to be addressed), the base concept of a virtual currency to facilitate international trade is sound. You can down arrow me all you want on this next statement but to be quite honest, I think the IMF (or similar body) should have jumped all over the BTC/virtual currency environment to develop a freely exchangable global virtual currency backed by a basket of world currencies, PMs, an energy component, etc. This is clearly needed on a global scale to move away from a single reserve currency and to allow capital to move more freely. Of course, this statement is based on the assumption that the world's leading financial minds understand the importance of moving away from having the USD as the reserve currency. And as I'm often reminded, "assumption is the mother of all fuck-ups".

Fri, 03/07/2014 - 17:05 | 4522811 lasvegaspersona
lasvegaspersona's picture

Money does not need to be backed by anything. It just needs to function as a medium of exchange.

If savers had a stable store of value all this worry about currency would resolve. It is the combination of both functions (MoE and SoV) into the same unit that causes problems.

Fri, 03/07/2014 - 21:32 | 4523686 TheHound73
TheHound73's picture

Without the SoV function bitcoin would have 0 value, a hot potato nobody wants to hold for any amount of time.  In fact, the SoV function needs to play out in the market, reach some point of saturation and stability, before bitcoin can properly function as an MoE.

Sat, 03/08/2014 - 07:15 | 4524554 MeelionDollerBogus
MeelionDollerBogus's picture

That which isn't physical is a debt which can't be paid, won't be paid, until proven otherwise: a real medium of exchange has atoms I can use for a non-monetary purpose if I choose, as is the case for gold & silver.

Fri, 03/07/2014 - 16:45 | 4522731 TaperProof
TaperProof's picture

..and what would a Fed member say?  "Bitcoin! it's better than our currency bro!"

Fri, 03/07/2014 - 16:51 | 4522754 ZeroPoint
ZeroPoint's picture

What a fucking joke. But then again, Bernanke had to say gold is not money under oath.

Fri, 03/07/2014 - 16:54 | 4522766 JamesBond
JamesBond's picture

Definition of 'Velocity Of Money' The rate at which money is exchanged from one transaction to another, and how much a unit of currency is used in a given period of time. Velocity of money is usually measured as a ratio of GNP to a country's total supply of money.

What is the metric for the Velocity of Bitcoin?



Fri, 03/07/2014 - 16:55 | 4522772 f16hoser
f16hoser's picture

Dudley, you lying sack of Shit!

Fri, 03/07/2014 - 16:55 | 4522775 Bryan
Bryan's picture

I think Bitcoin should be adopted by all the countries in the world.  And then I think that old fashioned credit cards and such should be replaced by something that cannot be lost, like a tattoo or maybe a chip implant.  The right hand or, if that's not possible, the forehead would be a good place to implant it.  Then, once all the various world currencies are replaced and even outlawed, we should just require everyone to get the implant who wants to use the world currency.  No implant, no transaction.  Simple!

Fri, 03/07/2014 - 17:01 | 4522796 Calmyourself
Calmyourself's picture

Bryan, you may want to add a sarc next time that will go over the horizon for a few..

Fri, 03/07/2014 - 17:34 | 4522945 Bryan
Bryan's picture



maybe.  hopefully.

Fri, 03/07/2014 - 16:58 | 4522782 lasvegaspersona
lasvegaspersona's picture

While the dollar loses value it does so gradually. Only a fool would hold cash long term. The problem of dollar derivatives (bonds,...and just about every other 'investment') is another matter. It is the gradual and inevitable loss of value in all fiat currencies that forces us to seek yield. This is why precious metals have favor all over the world in countries that have experienced more recent and dramatic decreases in their fiat currency's value. The fact that gold prices are held at commodity value, near production costs is a decision by the CBs of the world. They have chosen to use US dollars as a reserve. This is being reconsidered. The advantage of this current system falls entirely to the USA. Using gold as a reserve, marked to market, would preserve value (as gold would rise in value as the various fiat currencies fell). This solution has been considered for years. The Euro was structured to take advantage of such a system as it holds gold marked to market already. The opponents of any change are the CBs of the world which hold large amounts of treasuries and of course the USA.

As the debt burden of the dollar system grows to unsustainable levels we will see a forced change to another system. A gold reserve system with gold marked to market would be advantageous to all peoples as it would allow savers to save in a medium that was stable over long periods.

A failure of the dollar or a failure to deliver physical gold to the right entities could also precipitate such a change.

Fri, 03/07/2014 - 17:27 | 4522834 RaceToTheBottom
RaceToTheBottom's picture

"The advantage of this current system falls entirely to the USA."

Sorry I don't see that.  It falls to ANY CB who wants to avoid fiscal discipline.  China could not have had the growth that it did unless it did both the loose tie to the dollar and the massive printing that it did.

Printing is a way for politicians to do more stuff than people want to pay for by offloading the bill on future generations....

Sat, 03/08/2014 - 07:11 | 4524550 MeelionDollerBogus
MeelionDollerBogus's picture

but none of that would have worked if not for the prior trade deals with China.

Sat, 03/08/2014 - 07:10 | 4524549 MeelionDollerBogus
MeelionDollerBogus's picture

Fuck yield. People just want to save a currency & spend it later at equal value. No one chases yield until they're told the magical wonders of it & then sees the horrific problems with real inflation.

There's one way to truly save: get tangibles. All food, all water, all materials for repairing your home for the next 20 years, all bags for travel & fuel for your vehicles, to the limit that you can carry the weight & to the limit of what food or fuel will expire.

The reason people go with cash is because that shit's all too heavy & food + fuel expire.

People want honest cash, not yield. Greedy people want to be richer than fuck but of course that's how you bring suckers into a ponzi. Offer them a pretty emblazoned bag & promise them it's got treasure inside. Bag-holders, step right up, step right up. That's all bitcoin ever was.

Fri, 03/07/2014 - 17:03 | 4522803 q99x2
q99x2's picture

Oh you got me laughing. That was funny and true.

But not only that the crypto-currencies are a blast to trade on mcxnow

Some truely funny shit happens there. Trading Maxcoin is hilarious. Its graph appears like the FEDS dollar. But, you can make tons because it is churning as it declines.

Arrest the Fed financial terrorists.

Lon live Bitcoin

Fri, 03/07/2014 - 17:12 | 4522845 Herd Redirectio...
Herd Redirection Committee's picture

Key word: trade.

I will do my investing and saving somewhere far far away from cryptocurrencies.

Fri, 03/07/2014 - 17:03 | 4522806 Johnny Cocknballs
Johnny Cocknballs's picture

The thing to bear in mind is Dudley is Ron Paul compared to Yellen and Fischer.

Fri, 03/07/2014 - 17:08 | 4522829 q99x2
q99x2's picture

Ok so here is how to quickly get up and trading cryptos:

1. connect a checking account to Coinbase.

2. Buy your bitcoins on Coinbase and send them to Mcxnow.

3. Begin trading the cryptos.

4. Transfer your profits or original money in Bitcoin form onto an offline memory stick (and keep a copy on another ofline memory stick).

Have fun.

Fri, 03/07/2014 - 19:58 | 4523413's picture

dont use mcxnow

Sat, 03/08/2014 - 07:00 | 4524543 MeelionDollerBogus
MeelionDollerBogus's picture

And... it's gone!

You were advising people to buy on MtGox for arbitrage too.

Anyone trying that got their funds vaporized.

You are just full of bad advice.

Fri, 03/07/2014 - 17:13 | 4522850 e_goldstein
Fri, 03/07/2014 - 17:25 | 4522898 RaceToTheBottom
RaceToTheBottom's picture

Dudley is powerful.  He got that article removed.

Fri, 03/07/2014 - 17:38 | 4522960 e_goldstein
e_goldstein's picture

Sorry about the link, was able to find it on Polis' website:

Fri, 03/07/2014 - 17:21 | 4522881 Oldballplayer
Oldballplayer's picture

The Fed is telling me that the dollar is better than bitcoin.

Wow.  Really?

I was talking trucks the other day with a Chevy dealer and he was telling me that the Silverado was a better truck than the F150.

Uncanny how these guys sound alike.

Fri, 03/07/2014 - 17:24 | 4522891 RaceToTheBottom
RaceToTheBottom's picture

"Yeah but, but, value over time is not "Store of value"...."

Fri, 03/07/2014 - 17:34 | 4522940 spdrdr
spdrdr's picture

Hypothetically, if I bought 1,000 BTC today:

(a) I would pay someone or several someones over half a million dollars;

(b) Do I get to see the blockchains of each BTC before I buy?;

(c) How do I establish whether or not these 1,000 BTC are part of the 850,000 or so BTC "vaporised" in the Mt Gox heist?

(d) What happens when I try to transact with one of these "vaporised" BTC, and someone says "That's mine, you fucker!"?

As far as I am aware, property (i.e. rights of ownership) does not pass in stolen goods innocently purchased, in any jurisdiction, and I'm going to be involved in up to 1,000 different legal disputes as to ownership.  

Quite obviously, the entire system is broken, yet the shills cannot admit to this yet, as they madly pump, but are unable to dump.

Sat, 03/08/2014 - 06:55 | 4524538 MeelionDollerBogus
MeelionDollerBogus's picture

Simply put, nothing differentiates stolen bitcoins from non-stolen so they are all equally legal to stolen. Also since the blockchain is replicated you won't find one for each unique bitcoin, only for each unique fork which likely is a hacking attempt and a big one will probably ruin bitcoin forever. It's much more fragile than its users are willing to admit.

This is the future of bitcoin:

Fri, 03/07/2014 - 17:35 | 4522947 1stepcloser
1stepcloser's picture

Sharmin is a better store of value.  That shit is gonna be real expensive soon enough

Fri, 03/07/2014 - 17:36 | 4522949 Smuckers
Smuckers's picture

Don't fone me bro.

Sat, 03/08/2014 - 06:53 | 4524537 MeelionDollerBogus
Fri, 03/07/2014 - 17:38 | 4522962 Pullmyfinger
Pullmyfinger's picture

Actually, the bitcoin chart appears to have the same profile as the dollar chart, but on an accelerated scale and relatively earlier. My guess is that the bitcoin chart --given that the aforesaid "value" of bitcoins is ultimately referenced to fiat currencies themselves-- will soon provide an identical profile as hyperinflation takes hold.

Fri, 03/07/2014 - 17:40 | 4522966 Rising Sun
Rising Sun's picture

shitcoin chart looks similar to a gold monthly chart

Fri, 03/07/2014 - 17:44 | 4522983 moneybots
moneybots's picture

The Bitcoin chart looks higher from left to right, opposite of the dollar.  Dudley needs remedial chart reading course.

Fri, 03/07/2014 - 20:32 | 4523512 fijisailor
fijisailor's picture

Yeah bitcoin looks better than the dollar but I still don't want to hold on to either one.

Fri, 03/07/2014 - 17:48 | 4522999 fiftybagger
fiftybagger's picture

Sometimes the world takes a Little time to accept the inevitable.


The Bitcoin Channel - Bye Bye Banksters
The Bitcoin Channel - Crypto-Currencies Will Destroy The Banksters' Monopoly On Money

Fri, 03/07/2014 - 17:48 | 4523001 Racer
Racer's picture

They lie so much they believe their own lies

Fri, 03/07/2014 - 17:54 | 4523019 Balanced Integer
Balanced Integer's picture

Breaking News Last Night!!: Newsweek "journalist" Leah McGrath Goodman has located the real Satoshi Nakamoto.

It wasn't a pseudonym. It was the BTC creator's real name after all:

Fri, 03/07/2014 - 20:30 | 4523508 fijisailor
fijisailor's picture

Uh the guy denies having anything to do with bitcoin.

Fri, 03/07/2014 - 21:38 | 4523709 TheHound73
TheHound73's picture

Somebody logged into Satoshi Nakamoto's forum account yesterday, after 4 years of silence, to say "I am not Dorian Nakamoto."  

Was it the real Satoshi?  The account password may have been hacked, I believe the real Satoshi would have PGP signed his message.

Fri, 03/07/2014 - 18:13 | 4523068 yogibear
yogibear's picture

LOL, William Dudley, Mr out of touch.  Mr Dud for short

Still remember his there isn;t inflation because IPod's are getting cheaper.

Let's see how happy the PhD Mr Dud is when the US dollar is under attack and crashes.

Mr Dud we know the Fed has many liabilities off the books just like your member banks. 

Fri, 03/07/2014 - 18:19 | 4523086 Housicker
Housicker's picture

Why is nobody at the Fed or the mainstream press talking about the islandic "experiment" of crypto currency ?

Looking forward how this will play out !  But anyway the important part of the Bitcoin is not the Bitcoin in itself but all the infrastructure around it. And I guess that their real fear.

Fri, 03/07/2014 - 18:44 | 4523188 honestann
honestann's picture

Most people definitely don't seem to understand the attitude adopted by the predators-that-be concerning bitcoin-like fiat currency.  In almost every way, they love it.  Why?  Because it is something they can easily regulate.

And most important...

bitcoin-like fiat currencies have no intrinsic value.

Yes, even those of us who decided to stay away from bitcoin understand that bitcoin and ilk have some positive features.  But fundamentally, bitcoin and ilk are fiat, pure fiat.

Some bitcoin advocates say "no, it takes energy to create a bitcoin, so bitcoin is just as real as gold".  They miss the most crucial, important and fundamental of points --- that it may require investment of resources (electricity and CPU cycles) to create bitcoin, but the result has no intrinsic value whatsoever.

I've gone on record saying the following.  If someone comes up with a way to create a new version of bitcoin that can be converted back into the electricity required to create it... then that bitcoin would arguably be better than gold, and certainly competitive with gold.

So... figure out how to do this, then come back and try us again.  Because then you'd have something incredibly valuable, given that electrical energy has endless applications, and is thus wonderful as a store of intrinsic value.  But it doesn't need to be electric power.  Maybe someone will have more success creating a chemical store of energy.  Some solid or liquid that can power an engine of some type to power an engine, generate electricity, or otherwise perform valued actions.

Whatever your plans, if your "currency" or "money" doesn't have intrinsic value, don't try to convince us.  Keep working.

Eventually you'll see what we see.  When we trade, we want the transaction completed.  When we trade, we want to give something of value, and receive something of value.  Given the level of corruption of mankind at this point in history, we're really not interested in trading the real, physical goods we invested so much time, effort and resources to create... for... what?  Promises?  Little pieces of paper with numbers on them?

No thanks.  As far as we're concerned, ANY real, physical valuable good is better "currency" and better "money" than ANY concoction without intrinsic value.  When we give you something valuable, we want something valuable in return.  Not promises, not paper, not something you'll do in the future, not obligations of who knows who or what or when.

I give you valuable goods.
You give me valuable goods.

Transaction complete.

Easy.  Just.  Ethical.  Simple.

No improvement on this method necessary.

No need or justification for anything more complex.

Fri, 03/07/2014 - 20:29 | 4523499 fijisailor
fijisailor's picture

And that applies to labor as well as goods.  

Fri, 03/07/2014 - 20:45 | 4523567 TheHound73
TheHound73's picture

What is "intrinsic value"?  A 5 thousand year track record of human history?  If that is what you mean, then say what you mean. Gold has intrinsic value is like saying beer has intrinsic deliciousness.

Physics doesn't pass value judgments on what atoms occupy a given volume of space.  It just does it's thing based on the intrinsic properties of those atoms under the conditions they find themselves. Humans bestow value and different humans value things differently.  Patterns emerge, no argument there.  But taking the leap to say value is "in the thing" is misleading.

Gold is one of the safest bets that it will be exchangeable at some future date.

Sat, 03/08/2014 - 02:56 | 4524399 honestann
honestann's picture

By "intrinsic value", I mean the material has intrinsic, inherent, natural properties that make the material valuable for some purposes.  While I personally think it is stupid to waste money on bling-bling, obviously some people value gold for this purpose - and the fact that their bling-bling stays shiney and bright for generations, not days or weeks, gives them a bit more basis to prefer gold as bling-bling.

Personally, gold is valuable to me because it is a great conductor and does not tarnish or corrode.  In other words, for electronics purposes.

But as I always say, silver, platinum, palladium, rhodium and dozens of other elements have very real, very easily identified value too.  If you don't like saying the "value is in the thing", then at least you must agree that the "properties are in the thing", and those "properties have value to humans for various purposes and applications".  So if you don't like the linguistic shorthand, expand it out to this full, clear, easily understood meaning.

As a final comment, note that gold and silver are excellent conductors, even if all sentient life in the universe perishes.  Other materials have excellent magnetic properties, insulation properties, strength vs volume or mass properties, and so forth.  That's just a fact of reality.  But yes, the value for a given application favors one over the other, because the application has certain requirements and tradeoffs, and one material satisfies one application well, another material satisfies another application well, and so forth.

Sat, 03/08/2014 - 04:41 | 4524476 TheHound73
TheHound73's picture

Have you ever read any Satoshi Nakamoto?

Aug. 27, 2010: As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties:
- boring grey in colour
- not a good conductor of electricity
- not particularly strong, but not ductile or easily malleable either
- not useful for any practical or ornamental purpose

and one special, magical property:
- can be transported over a communications channel

If it somehow acquired any value at all for whatever reason, then anyone wanting to transfer wealth over a long distance could buy some, transmit it, and have the recipient sell it.

Maybe it could get an initial value circularly as you’ve suggested, by people foreseeing its potential usefulness for exchange. (I would definitely want some) Maybe collectors, any random reason could spark it.

Sat, 03/08/2014 - 21:03 | 4526417 honestann
honestann's picture

This magical new material sounds a lot like poo --- something people pay to get rid of, not accumulate.  However, I suppose someone might value your poo material for fertilizer, and that's just fine.  In that case, you have a good, but not one with characteristics to make it a widely accepted "currency" or "money".

What you're trying to say is, just being able to transmit over a communications channel has value in and of itself.  That argument is obvious nonsense!  Try to get someone to pay you to transmit random numbers (bits) across a communications channel sometime.  Good luck with that!  Won't work, because random bits have essentially no value, or at least too little value to pay to ship across a communications network.  It is easier and cheaper to run a random number or noise generator on your local computer.

People will keep trying to pull this nonsense argument because they have no valid one.  But if you and other fools are willing to exchange real, physical goods for computer bits, well, you are welcome to do so.  I won't accept computer bits for goods or goodies I produce!  You want my stuff, you must give me something real that I value in exchange.

Sat, 03/08/2014 - 06:49 | 4524535 MeelionDollerBogus
MeelionDollerBogus's picture

Judgement is not value. Humans perceive & make adjustments to specific utilities of value; that value is imbued by physics & not subject to opinion, faith, perception, nothing else.

To say gold has intrinsic value is to avoid using a giant paragraph describing, every single time, its every electric, atomic & chemical uses but those uses are real & are the intrinsic value. Value is not a price, it is not a trade.

PRICE is a trade.

VALUE is all the current & future potential states & interactions of the atoms/molecules.

What you do what that value is not value. What you're willing to pay for those uses is not value.

That's price/cost management, min/max/gradient-solving problems.

Fri, 03/07/2014 - 19:35 | 4523348 Peter Pan
Peter Pan's picture

To me it's just a case of two dirty shirts arguing.

Whatever the merits of bitcoin, it can never hope to achieve long lasting stature when it is nothing more than a computer hologram.

It is a pity it did not attach itself to something real and uncorruptible so as to take advantage of its better traits.

Sat, 03/08/2014 - 00:36 | 4524234 jonjon831983
jonjon831983's picture

"Japan Says Bitcoin Not Currency Amid Calls for Regulation"

Sat, 03/08/2014 - 02:15 | 4524360 bcking
bcking's picture

Bitcoin gets me so hard.

Sat, 03/08/2014 - 06:39 | 4524530 MeelionDollerBogus
MeelionDollerBogus's picture

aArrr@@rrrrr b1tcoin doesn't need stabilitieez it haff da maffs!!

Yoo d3ni1rs R luddyteZ

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