Category Archives: Bitcoins

It is Winter, do you know what and where your Bitcoins are?

12/3/2013 Portland, Oregon – Pop in your mints…

“It is winter, a time to pause, the driveway is half shoveled out, but I lay down the shovel, and I pause to enjoy this moment, after all, this is my first heart attack.”

A Poem recited by Red Green during The Winter of our Discount Tent show segment

For those who were fortunate enough to see Red Green in his prime, circa 1991, the words “it is winter” immediately bring a sense of comic anticipation to mind.  Really, the mere sound of the man’s voice will bring a smile to your face if not cause one to break out in laughter.

Red Green, a Canadian, brought a unique brand of humor to the late night airwaves.  While there is really nothing to compare it to, if one were to imagine a cross between Al Bundy (Married with Children) and Crocodile Dundee in Canada doing a variety show against the backdrop of an ongoing storyline in his men’s lodge, you would be in the ballpark.

Yet as the poem above hints at, you never quite knew what would come out of Red’s mouth, but his dry delivery and lighthearted machismo made nearly anything the man said pass for hilarious. (see the poem read live by Red below and see for yourself).

It is winter, and while any number of narratives continue to fill the financial landscape, they all have one thing in common:  Inflation is here to stay and the Federal Reserve and it cohorts around the world are not about to do anything stupid, like raise rates or end bond buying programs, at this stage of the game.  From their standpoint, risks are on the side of deflation, no matter what your grocery bill is.

In the context of this stance by the caretakers of the world’s currencies, a developer known as Satoshi Nakamoto launched the Bitcoin Genesis block back in 2009, like a self replicating message in a bottle to the world that reads “try using this as money.”

Today, as we near the end of 2013, it is becoming clear that the message is reaching quite a few individuals, and that they are taking action.  The message came to us in March of 2012, when the Bitcoin/USD ratio hovered around $5-$16, and it took us until March of 2013, when the ratio was near $150 to act upon it.  The ratio now sits at around $1,100 and has garnered so much attention that a US Senate committee called a hearing in a feeble attempt to understand what it is and why it is valuable.

As anyone who has followed such hearings can attest, they rarely, if ever, shed light on the subject being discussed, and it was clear in watching that the Senators who attended as well as their expert witnesses have no idea what Bitcoins truly are.

Misinformation regarding Bitcoins abounds, indeed, a discussion we have been following in one of our Treasury groups has drug on for weeks with the participants vacillating from the stance that Bitcoins are a good idea and viable fiat alternative to them being a Ponzi scheme.  Our take is that those who are obviously confused are not hindered in their understanding of what Bitcoins are as much as they are hindered by their failure to understand what money is in the first place {Editor’s Note:  If you count yourself among the confused, stay with us for a spell or pick up a copy of one of the following publications:  What is Money, Of Money and Metals, or Bitcoins: What they are and how to use them}

Our take here at The Mint is twofold.  First, Bitcoins are clearly a Ponzi scheme, however, they are a self-limiting Ponzi scheme with no clear beneficiary, and in these respects are superior to other widely accepted Ponzi schemes such as equities and fiat currencies, which share similar characteristics to that of Bitcoin in terms of representing and indirect claim on wealth.

Second, and more importantly at the moment, Bitcoins are the gold standard with regards to digital currencies by virtue of being the first and most widely accepted.  All other digital currencies to come are practically forced to use the Bitcoin market as a point of reference in the same way the gold market looks to comex prices.

During the past few days, a Welshman named James Howells has been in the news because he tossed out a hard drive containing approximately 7,500 Bitcoins.  The same article mentions a man named Stefan Thomas who allegedly lost 7,000 Bitcoins according to Der Spiegel.  Indeed, we have a friend who told us he had wiped “thousands” of Bitcoins off of his hard drive.

While these types of stories may seem to offer a reason not to dabble in Bitcoins, we see them as yet another reason that the Bitcoin/USD ratio will continue to go vertical for the foreseeable future, as there will only be 21 million Bitcoins ever created, and, if the system is as tight as it appears to be, neither Mr. Howells’, Mr. Thomas’, nor our friend’s lost Bitcoins will ever be circulated again, making the remaining Bitcoins that are tradable all the more scarce and, at the moment, valuable.

A bit of free advice from The Mint.  While it seems counterintuitive, we encourage you to store your wallet online at a service such as blockchain.info to avoid the fate of the above mentioned individuals.  This goes without saying, but choose an extremely complex password.

Finally, if you are convinced that Bitcoins are a Ponzi scheme, remember that so are equities and fiat currencies, the only difference is that Bitcoins are still in an extremely early stage.  Think of it as buying Apple or Microsoft in the 80s, only better, as Bitcoins represent a confluence of technology and commerce that has just begun the search for its value.

It is winter, do you know where your Bitcoins are?

Until next time, keep your stick on the ice!

Stay tuned and Trust Jesus!

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for December 3, 2013

Copper Price per Lb: $3.16
Oil Price per Barrel:  $97.19
Corn Price per Bushel:  $4.22
10 Yr US Treasury Bond:  2.78%
Mt Gox Bitcoin price in US:  $1,158
FED Target Rate:  0.09%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,224
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.3%
Inflation Rate (CPI):  -0.1%
Dow Jones Industrial Average:  15,915
M1 Monetary Base:  $2,563,700,000,000
M2 Monetary Base:  $10,942,300,000,000

Bitcoin Stars in a Senate Hearing

11/19/2013 Portland, Oregon – Pop in your mints…

Bitcoins: What they are and how to use them
Bitcoins: What they are and how to use them

The virtual currency known as the Bitcoin has achieved what has become a badge of honor in the finance industry, it has become the subject of a Senate hearing.

Senate hearings have, in the past, starred noble characters such as MF Global and its lead actor, John Corzine, who still roams free after punting roughly $1.6 Billion USD to another Wall Street leading man, Jamie Dimon, who remains the head of JP Morgan, who added a $13 Billion fine to its list of greatest hits related to its dealings with other entities during what has become known as the Financial Crisis of 2008.

And who can forget the Gorilla, Lehman’s Richard Fuld, who starred in one of the earliest versions of such hearings and gave us the phrase, echoed by insolvent bankers throughout the world, “why us?”

As the Bitcoin has no central authority to speak of, the Senate Committee on Homeland Security and Government Affairs called Jennifer Calvary, head of the Financial Crimes Enforcement Network, Edward Lowery of the Secret Service, and Mythili Raman of the Justice Department to testify on its behalf.

As may be expected by three persons who are cast in the role of antagonist to anything offering anonymity to private citizens, a privilege that the government refuses to recognizes, they expressed concern about “what could happen” and “who may be using” virtual currencies such as Bitcoin.

However, the antagonists did show a measure of empathy for their crypto-foe, the same way viewers feel empathy for characters like John Q or Walter White.  While taking the government line that what people may do with Bitcoins may be bad, the Bitcoins themselves are generally harmless and, in fact, may provide a great benefit to society.

As pageantry that generally accompanies a finance related Senate hearing unfolded, the Bitcoin market went ballistic, touching $900USD before the elevator moves inherent in the Bitcoin/USD (or any other debt based currency) market took hold and thrust it back to $600, it is now climbing past $700 as we write.

While it is interesting for Senators to listen to how various branches of government propose to regulate Bitcoins, it is clear that, while they may have a glimmer of a chance of understanding the technological framework of Bitcoins, they have no clue what it means in the monetary realm, for they do not understand money.

Alas, much of humanity is in the dark as to monetary theory.  It is for this reason that we started The Mint, to explore this deep “mystery” that lies in the wallet of each and every one of us.

Along the way, we have found gems for those who would pause and listen, such as the key to reversing the effects of climate change, and why Bitcoins are the gold standard of digital currencies.

To be sure, Bitcoins have an Achilles heel, but it is not what many people think, want to know what it is and when to get out of Bitcoins?  Someday we will give them away, for now, it will cost you $0.99 USD, or 0.00141 BTC to find out.  Please pick up our hastily written guide to Bitcoins, which, to our knowledge, is the only one that has examined Bitcoins through the lens of monetary theory with clarity and coherence.

Bitcoins:  What they are and how to use them

All we can say for the moment is that Bitcoin is a buy, you can sort out the details later.

As for the government’s concerns regarding Bitcoin’s inherent anonymity in the monetary realm, we propose the following Quid pro quo.  Rather than the public being obligated to respond to the straw man argument of “If you have nothing to hide, what are you worried about?” what if the public’s retort to the government became a universal, “if you have nothing to fear, what are you worried about?”

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for November 19, 2013

Copper Price per Lb: $3.16
Oil Price per Barrel:  $93.43

Corn Price per Bushel:  $4.17
10 Yr US Treasury Bond:  2.71%
Mt Gox Bitcoin price in US:  $772.00
FED Target Rate:  0.09%
Gold Price Per Ounce:  $1,274

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.3%
Inflation Rate (CPI):  0.2%
Dow Jones Industrial Average:  15,967
M1 Monetary Base:  $2,515,000,000,000

M2 Monetary Base:  $10,867,000,000,000

 

Bitcoin going Viral as The Mint Receives the Gift of Time

11/9/2013 Portland, Oregon – Pop in your mints…

For those who have not yet taken notice, the USD/Bitcoin ratio now sits at $322, after touching a high of $395 today.  For those who are unfamiliar with what a Bitcoin is, we strongly encourage you to read our brief primer on Bitcoins entitled “Bitcoins:  What they are and how to use them.”

Bitcoins: What they are and how to use them
Bitcoins: What they are and how to use them

While the title itself is cryptic by design, the book is a straightforward analysis of not only what Bitcoins are, but also what their design and function as money means.  Now that we have a bit more time on our hands (more on that below), we hope to return to edit and update this volume.  While the Bitcoin itself is unlikely to change, there are now many more applications for it than there were when we penned it back in April of this year.

The combination of they monetary premium and technology has made the Bitcoin industry run on jet fuel, and it won’t slow down anytime soon.   The simple reason is that Bitcoins are a bizarre yet perfect form of equity that, like Twitter, is more of a public service.

In the case of Twitter, the need to randomly comment or blow off steam at someone else’s running digital commentary may only be marginally, if at all, profitable, but the value of it as a tool that people will rarely pay to use is priceless.

In the case of Bitcoin, the need for a means of exchange which can both hold a large portion of the monetary premium and be completely portable and ethereal is self evident and, while the Bitcoin itself generates no revenues, its value as a tool that people will use but not necessarily pay for is priceless.

Contrary to most of financial theory, discounted cash flows cannot capture the concept of value, as much of what people value in this world cannot be neatly summed up in financial models.  The Bitcoin falls squarely into this lofty realm where finance fails and dreamers soar.

{Editor’s Note:  If you would like assistance investing in Bitcoins or Bitcoin related ventures, please write us an email with the word BITCOIN in the subject.  There is much to be done and, consequently, much money to be made in this nascent industry that is moving like a wave across the earth}

Time on our hands

We have recently been notified that we are soon to be relieved of the burden of what is best described as our day job.  Over the last year, we set out to work ourselves out of a job through a series of process improvements in the Treasury Department.  Shockingly, it worked.

While on one hand the prospect of quickly ramping up our other activities (The Mint being one of many) is daunting, it is also exhilarating as we are of the peculiar breed that lie awake at night and early in the morn and watch a light show of ideas cross our mind.  Some we are able to capture and quickly act on.  Others we take note of and treasure them in our heart as we await the time that they come around again in and present themselves ever more brilliantly to our mind’s eye.

As we have one other time in our life, on September 10th, 2001, we are faced with the choice to either carry on in the 9 to 5 world or to pause and chase these ideas to their conclusion, watching where they lead and enjoying the ride as we chase them there.

These types of choices, frankly, are too much for us to bear, which is why we leave them in God’s hands.  It is He who opens and shuts doors.  Our job is to pursue the ones that are open until He shouts “enough!”

What we do have on the horizon, along with a number of projects that are providently moving towards fruition, are the preparation of a class on Deuteronomy, a 20 page biology article to edit, and any number of tasks that, while each one on its own would appear to be from different fields, when taken together make up the colorful tapestry of our life, as we blindly chase through the open doors with only one clear mandate:

Help people.

If you care to join us on this adventure, feel free to drop us a line.  You never know what we might accomplish together!

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for November 9, 2013

Copper Price per Lb: $3.25
Oil Price per Barrel:  $94.60
Corn Price per Bushel:  $4.27
10 Yr US Treasury Bond:  1.75%
Mt Gox Bitcoin price in US:  $322.90
FED Target Rate:  0.08%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,289

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.3%
Inflation Rate (CPI):  -0.2%
Dow Jones Industrial Average:  15,761
M1 Monetary Base:  $2,515,000,000,000

M2 Monetary Base:  $10,867,000,000,000