Money

Ron Paul: US Sanctions on Russia May Sink the Dollar

Ron Paul on sanctions against Russia hurting the dollar.
Authored by Ron Paul. Originally appearing at the Ron Paul Institute.

The US government’s decision to apply more sanctions on Russia is a grave mistake and will only escalate an already tense situation, ultimately harming the US economy itself. While the effect of sanctions on the dollar may not be appreciated in the short term, in the long run these sanctions are just another step toward the dollar’s eventual demise as the world’s reserve currency.

Government Strangles Perfect Money Potential

Following on my article from last week, I want to take some time to describe the perfect monetary system. Money, like any other economic good, is subject to the laws of supply and demand. Like any other good, if government begins to interfere with the supply of or demand for money it introduces disruptions that…

No Bank Account For You!

An ATM with bars over it.

Via Coindesk comes news of a Bitcoin ATM operator forced to close their business because they were unable to find a bank that would provide them with an account. This is a real danger to the mainstream viability of Bitcoin. Without access to the banking system, Bitcoin is unable to be converted into other currencies, something which will hamper more widespread acceptance of the currency among the general population. In order for Bitcoin to be converted into and out of fiat currency, banks will either have to offer accounts to Bitcoin businesses or Bitcoin businesses themselves will have to become banks and offer banking services. Obviously the former is easier than the latter.

Here’s the Mobile Payment

Smartphone being used to make a mobile payment at point of sale.

The Atlanta Fed wants to know: “Where’s the Mobile Payment?” Well, as anyone who has ever used Bitcoin can tell you, mobile payment is one of Bitcoin’s strengths. Take, for example, the case of Mission Market, an upscale convenience store in Fullerton, CA, which accepts Bitcoin as payment at point of sale (POS). Ring up your items, tell them that you want to pay with Bitcoin, and the POS tablet displays a QR code. Swipe it with your smartphone and Bitcoin will be debited from your account and credited to Mission Market’s account. Quick, easy, painless. No cash to change hands, no credit card bill to pay at the end of the month.

New York Fed Warns of Dangers of Paper Money

French 400 livres assignat from 1792, issued by the government of the First Republic.

The New York Fed’s “Liberty Street Economics” blog recently posted an interesting short history of the French assignat, a paper currency issued by the French Revolutionary government that quickly became worthless. That the New York Fed, which actively engages in unbacked money creation, published a cautionary tale of the dangers of paper currency is quite humorous. Nonetheless, it is still an interesting tale and well worth reading. As with most hyperinflationary crises, you see the normal cycle of over-issuance of currency, mandatory price controls, and the threat of death for those who defy the government’s monetary edicts.

The Importance of Sound Money

John Maynard Keynes, in his book The Economic Consequences of the Peace, cites Vladimir Lenin as saying that “the best way to destroy the Capitalist System [is] to debauch the currency.” Keynes went on to state that: “There is no subtler, no surer means of overturning the existing basis of society than to debauch the…

The Greatest Danger to Bitcoin

The greatest danger to Bitcoin may come from its early adopters and advocates.

While the U.S. government and other governments around the world certainly have Bitcoin in their sights, one of the greatest dangers to the success of that digital currency will be from some of its early adopters and advocates.

Bitcoin news website CoinDesk recently posted an article discussing a video created by the Dutch bank ING, in which one of their economists proposed an “improvement” to the Bitcoin protocol consisting of an algorithm to match money supply with money demand.

July 4th – A History

Declaration of Independence

While millions of Americans will spend today celebrating Independence Day, very few will realize how close this country came to losing the Revolutionary War. Nor will they realize that it was paper money that nearly caused that loss.