Bitcoin Crashes Again…??

What’s the major attraction of crypto? To Wall Street and the Fed the attraction is a place to stash trillions in inflationary (near) bog roll $ Federal Reserve Notes. Next attraction to crypto is the difficulty in taxing profits made .

Many outside the crypto world have wondered about the whole crazy idea: something that is not there worth something that does not exist except by fiat decree. Yes, apparently the electric grid + internet metaverse is considered “existence”* to the extent that puerile slack-jaws Max Keiser and Michael Saylor can go on and on about the death of dollar, how bitcoin is superior to all that, etc etc, while basking in millions made in crypto via the very same derisory $.

Anyway, Fed-Treasury knows how to run their inflationary crypto stash via a raft of metaverse hodlers and associated primary dealers, but can still harass the same to keep a lid on any faint challenge to the primacy of King $. Three things: (1) Fed needs crypto to sterilize trillions in flash-trash. (2) Fed needs to keep the toilet reserve dominant with the world licking at the bowl. And (3) Fed-Treasury must also prepare for Fedcoin’s introduction. But how to balance all three?

Recently crypto appeared to pop by November 9th, but those new highs are increasingly uncomfortable to the Fed, because the Fed hopes to ease an unsuspecting public into adoption of the Fed’s Central Bank Digital Currency (CBDC) eventually. Nothing must challenge that, especially not an efficient means of sterilizing inflationary $ like crypto. Even though crypto provides a prototype assurance for Fedcoin (based on a blockchain model that is not limited in issuance**) the Fed-Treasury-OCC of course must not allow any form of crypto to usurp the dollar as reserve currency of the first order.

So… when crypto’s appeared to breakout – as bitcoin nearly did on November 9th (it reached $68K per unit) something had to be done to halt the rise. With the Fed tapering and scope of federal spending predicted to decline (even with two badly conceived infrastructure bills passed) the use of crypto as a Fed $ hodler stash must not eclipse the dollar use argument. Fact is, the infrastructure bills may not have any impact anyway, even after the current US regime has long since passed. And at the current time its passage seems quite eminent. Wall Street’s reaction to the bills has been lackluster + the possibility that either bill might contain anything that will be useful, or truly assist in rebuilding America’s rotten/financialized core, is just about nil. Exit stage left: infrastructure bill nonsense.

Second, there is an increase in spending by American consumers. They continue to play fast and loose with the inflation threat, where inflation is not enforced to the extent inflationists warn about. For inflationists, there is an embarrassing caveat that this credit-driven populace will find creative ways to avoid spending on the one hand, while spending lavishly on another. For example the property market has slowed while consumer discretionary spending has increased. It’s a game US consumers have played for many years via the boom-bust malaise typical of a global dollar reserve system, where the rest of the world lends and America still lavishly spends.

But the important point…? Well, perhaps some influential lackey of the Fed-governmental cartel has perhaps been reading Novus Confidential: Taxing Bitcoin? Virtually Unenforceable Okay, not really. But check out the infrastructure bill (section 6050II) which makes avoidance of tax on crypto a criminal offense. Link: https://cointelegraph.com/news/8-word-crypto-amendment-in-infrastructure-bill-an-affront-to-the-rule-of-law As Novus Confidential reported, bitcoin messiahs are primarily attracted to crypto because those profits are so hard to track and tax. 1099? Despite many billions in crypto market transactions in 2020 the US IRS processed only four hundred and seventy-five 1099 reports. Who in the crypto world even remotely touches on that subject? Certainly not Max, Mike, Raoul Pal, or the Winlevoss twins.

Now… in section 6050II of the infrastructure bill the central government says evasion of tax on crypto profits will be considered a criminal offense. But there is zero in the bill about how to detect such, or how to enforce that measure. Pretty typical. It means the current decline in crypto will be temporary because the crypto community will soon twig that 6050II is just more meaningless bullshit from a meaningless bullshit federal government.

*Based on our present reality, only the fantasy may be considered ‘real’ regarding a globe stricken by mass hysteria/ mass psychosis..

** That crypto is not truly of limited subscription is a matter for endless debate, that the crypto community seems loathe to address.

Steve Brown

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