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This Insubstantial Pageant Faded...
Friday, 16 June 2017
Hugo Salinas Price

We are living in a dream-world.

All so-called money in the world is dream-money that consists of digits issued by Central Banks; the so-called "Reserves" of these Central Banks consist of digits issued by a small group of official digit-issuers, the Central Banks of the US, the Euro area, England, Japan, Switzerland and now recently, of China.

Now a select group of digit-issuers, which are not Central Banks, have come into the dream-money world: the principal one is the group of so-called "miners" that produce the Bitcoin by solving very complex mathematical problems. One day, this feature will be the object of derision at the immense folly of mankind.

The Bitcoin is being promoted by somewhat deceptive advertising: there are pictures of a Bitcoin on the Internet, and the pictures show a coin that looks like a gold coin. But the Bitcoin is only a digit in computers; a physical Bitcoin does not exist. McDonald's sells hamburgers illustrated in mouth-watering pictures of "Big Mac". But what if their hamburgers really had no meat at all?

When the creator of the Bitcoin - and who it was remains a mystery - presented the world with his creation, he (or she) claimed it was "money". Sooner or later, many were saying the same thing. One dog barks, and all dogs bark with it.

Actually, Bitcoin is just as much money as all the other digit-monies in the world: it has no relation to an underlying reality.

The great benefit claimed for this new participant in the dream-money scam is that its movement and ownership are beyond the scope of government control.

The world has grown so tired, so exhausted by the never-ending problem of safeguarding savings in the official dream-money and keeping them out of the grasp of government, that the idea of Bitcoin has captured the imagination of the great international public.

Suddenly, the value of the Bitcoin digital dream-money has risen spectacularly with regard to the official digital dream-monies of the world.

Those who bought the Bitcoin digital dream-money when it first was offered to the public, have made fortunes - for the time being.

All the world's official dream-money will vanish eventually. When that will be, nobody knows. But the day will come, because all dreams vanish sooner or later.

However, the Bitcoin dream-money will have an unhappy end for many people, because its end will come before the official dream-money has vanished.

Why will this happen?

Because all the official dream-monies - the Dollar, the Euro, the Yuan, etc - have nanny shepherds. The shepherds are the issuing Central Banks, who do not want their dream-money digits to rise strongly in value, nor to fall strongly in value. Rising dream-money digits means that the economies of the related Central Banks will see falling exports, rising imports and sluggish economies. Falling dream-money digits means that the related economies will have inflationary problems and social unrest. The Central Banks issuing their dream-monies want stability for their digits, not sudden changes.

The Bitcoin and other new dream-money digital "currencies" have no shepherds to look after them. The Bitcoin rose from a few pennies when it was born not long ago, to $2500/$2400 US Dollars a digit, as of this writing.

The Bitcoin price depends on the dreams of the world public. While it has been going up, due to its novelty, the rise in price has been spectacular, because buyers have outnumbered sellers. But there is no shepherd in charge. When the public changes its mind - and it will, sooner or later - then, just as there was no resistance to its rise in value, there will be no resistance to its fall in value. People will rush to sell their Bitcoins, and find that their value is falling by the minute. Very few buyers will want to "catch a falling knife". "Once burnt, twice shy": the Bitcoin and its imitators will have become a fable regarding the folly of mankind.

The world's public is notoriously fickle. When the public gets tired of this dream, sales will begin, and just as fast as it went up - or faster - the Bitcoin price will collapse, leaving nothing but sorrow for the holders of this dream-money, when they wake up.