Notes before The Bomb
In 1973, the international monetary system was completely backed by fiat currency for the first time. “The Nixon Shock” was intended to be temporary, but became permanent. A series of events that led up to this were:
The mishandling of the Federal Reserve during “The Great Contraction” between 1929 - 1933 afforded FDR the public opinion to completely gut the monetary system. In crypto, us degens call this a rug pull.
FDR rugged “gold bugs” with Executive Order 6102, explicitly outlawing the public from owning gold, except some jewelry and collectables.
Similar to today, with those that now hate crypto for a variety of reasons. My experience in the space suspects new entrants lost tons of money on shitcoins, sold too soon, didn’t sell at all, missed out, or were not interested or aware of the libertarian cypherpunk ideology behind Bitcoin’s creation. Simply, they wanted to make money and they didn’t. Of course, there are many who were never involved enough to understand and due to the nature of anything new, it became easier to hate out of ignorance. Likewise, many voters were upset the country fell apart in The Crash of 1929 due to bad actors on Wall Street, among a list of similar reasons.
Most investors in the Roaring Twenties or in the decade prior acted on their own risk appetite and had the will to accept responsibility for their actions. Some of the public weren’t involved, some were living under a rock hoarding gold, but with the result of economic depression, most didn’t care about long term consequences and wanted Big Brother to burp them, especially after Hoover was inept at this task. FDR had the power of public opinion to enact his New Deal, and the public largely welcomed it.
A Supreme Court decision in the Gold Clause Cases narrowly allowed FDRs actions on the gold standard to continue, ominously revisited in 2008 with the conclusion that its eventual suspension in 1974 was only temporary and could be enacted again in the future.
FDR passed the Gold Reserve Act in 1934, which gave the President power to set the price of gold, suspended the role of the Federal Reserve, handed monetary policy to the US Treasury Department, and facilitated the process of building up US gold reserves.
Gold became an international form of settlement and the International Monetary Fund was established to facilitate these transactions. If you’re happy about globalism gaining power, you’re probably a fan of Mr. Carstens:
Today we have a choke operation on digital assets, but it’s not one that is being carried out by explicit Executive Order, at least not yet. How well it could work out is probably worth a future article's focus, but the nature of a private key makes confiscation more difficult than gold hiding under a mattress.
The gold rug pull of FDR was far from the draft constitutional right of owning property (later changed to “the pursuit of happiness”), but with the public convinced it was in their best interest, combined with the hated consequences of fraudulent Wall Street speculation, they willingly jumped off the cliff. Jobs were more important than the right to own property. If the public can be stressed into capitulating their rights once, why not try that playbook again in a new crisis?
All too similar to digital assets, but with the added resistance of those that want to guard the US Dollar’s status, the military industrial complex, and the status quo, we have a majority of the public working against their own interest in the right to own sovereign wealth. The “Anti-crypto Army” is led by Senator Elizabeth Warren, who the left leaning Washington Post has documented as a hypocrite for receiving money from lobbyists. She’s also taken paid speeches from Fidelity. What lemming would be shocked?
WWII helped end the Great Depression with the effects of the military industrial complex, now responsible for boosting production in two separate World Wars. Each time, the US was able to pull out of an economic downturn and come out on top. The addictive nature set in when we used emerging technology to our advantage and had to defend ourselves from any enemy that would inevitably use it against us, a process playing out before our eyes in the form of digital assets. Would any lemming be shocked if banning digital assets came down to a matter of national security? Could the beehive be kicked so hard as it was in 2001 that the public would give up the right to financial privacy as well?
Absolutely. Let’s talk about the bomb.