The Whales of the World’s Biggest Shitcoin? Examining BIS vs. Crypto
Agustin Carstens, the vanguard example of a central banker, recently reignited the long standing debate surrounding the validity of crypto by imploring young people to “stop trying to create money,” as such cryptocurrencies, per him, are “ponzi scheme[s]” that will “fail dramatically.”
Subscribe to the Bitsonline YouTube channel for great videos featuring industry insiders & experts
BIS Bustin’ Bitcoin
As expected, the comments from the Bank of International Settlements head have elicited highly emotional responses from both the cryptocurrency community and a raft of nocoiners.
I doubt the typical crypto-coder has ever heard of Agustin Carstens. Here's a primer: He's one of the three most powerful international monetary elites along with @Lagarde & Mark Carney. When he says cryptos will "fail dramatically" you should believe it. https://t.co/Ias8b6oT81 pic.twitter.com/DMY2OV8DOZ
— Jim Rickards (@JamesGRickards) July 5, 2018
NYT best-selling author Jim Rickards argued that when the head of the BIS (the central bank of central banks) talks bitcoin, his words are but a harbinger of the direction crypto will head in the future. However, Rickards is also a long-term bitcoin troll that has regularly gloated about the 2018 crypto bear market, even as his almost decade old predictions about the price of gold continually fail to materialize.
Despite the authority of Carstens’ position, most bitcoiners remain dismissive of his comments and the the oft repeated “death of Bitcoin” narrative. Such proponents are confident that the economic properties of bitcoin and the continued improvements implemented by the crypto’s developers will keep control out of the hands of bureaucrats like Carstens.
But is this confidence just misplaced bravado? Should crypto be worried about the opinions of the head of “the central bank for central banks,” the man referred to as The Final Boss?
Forget bankers, economists, politicians, journalists, or altcoins.
Bitcoin is up against the BIS, and THIS is The Final Boss it has to defeat: pic.twitter.com/1ahLtfZwdC
— Saifedean Ammous (@saifedean) February 7, 2018
Carstens is a former politician from Mexico, a country well known for its corruption and ineffective economic management. He gained his economic chops from the infamous Chicago School of Economics, the faculty which, inspired by the free market ideology of Milton Friedman, wreaked havoc in South America during the second half of the 20th century as devastatingly detailed by Naomi Klein in The Shock Doctrine.
After Chicago, during 2003-2006 he worked for another controversial organisation, the International Monetary Fund, where he served as Deputy Managing Director. As part of the IMF, Carstens and his superiors did not see the economic crisis coming, as they later admitted:
“The IMF’s ability to correctly identify the mounting risks was hindered by a high degree of groupthink, intellectual capture, a general mindset that a major financial crisis in large advanced economies was unlikely, and incomplete analytical approaches.”
After leaving the IMF, Carstens returned to Mexico as finance minister during the financial crisis, where he oversaw “one of the feeblest stimulus packages and most uneven recoveries from the crisis in the western hemisphere.” After then becoming Mexico’s central bank head in 2010, he campaigned for the IMF head position vacated by Dominique Strauss-Kahn. As an organisation with a poor track record and controversial history, some, like journalist Kevin Gallagher noted that Carstens’ Chicago school background and economic track record “epitomizes what is wrong with global finance and would send the organisation back to its darkest days.”
Subsequently, it can be argued that Carstens would have been ineffective to the point of being dangerous — yet he is now the head of the BIS.
Playing Devilish Advocate
But what if Carstens’ position isn’t wrong, but right? Most believe that central bankers are part of a group that “wrecked everything,” but what if it is the rest of us that have it wrong because we are looking at it through the wrong lens?
Young people, stop trying to take charge of your economic future. Let the people who wrecked everything continue to be in charge. K thanks! https://t.co/52hvy4vPoA
— Charles Hoskinson (@IOHK_Charles) July 6, 2018
A commonly held belief among the crypto community, formed by observing the long-term devaluation of the dollar, the bailing out of “systemically important,” insolvent financial institutions, and the implementation of near-zero interest rates, is that central bankers immediately qualify as evil elitists intent on saving themselves at the expense of everybody else.
But while this is an easy conclusion to jump to, the possibility of it being misguided must be taken into consideration; perhaps laying blame at the feet of central bankers only serves to redirect focus away from our own limited or flawed understanding of their model?
There is no doubt that learning about fractional reserve banking, quantitative easing, or the effect interest rates have on the yield curve can be overwhelming, so it may be better to frame the point with a simplified analogy we can understand: central bankers are simply the whales of the world’s biggest shitcoin.
Forget sound money, forget Zerohedge, forget the warnings you see in the media. The powers-that-be and the whales in the central banking world play the same games as your average shitcoin whales: collect supply, create hype, run the price up, and then dump on all the participants, wash, rinse, and repeat.
They don’t work to make you money, but they do maintain control over their field; the only difference between them and regular pump and dumpers is that while a crypto cycle plays out over a month or two, the world’s biggest shitcoin whales do it over a lifetime.
What’s your take? Do you think the BIS is scared of cryptocurrencies? Sound off in the comments below.
Images via Pixabay