Something I find unbelievable has just happened to me.
I had bought some shares in a mutual fund about a year ago, that invests in gold mining companies. I’m bullish on gold in the long run, and so it stood to reason that, if gold rises, the shares of the companies that produce the stuff should rise even more so. I only bought a small amount, the resources sector is known for high volatility and risk. I just wanted a bit of exposure to it and needed a good fund manager to pick the stock for me.
The bank has recently informed me that I must comply with US tax regulations, commonly known as FACTA. I am not a US citizen, I have never been there as an adult, and have no connection to that particular country. The bank is not based in the US, or a dependency of the US, it’s based in an independent sovereign state. But despite neither me nor the bank having any connection to the US, the US government is able to withhold my funds or close the account, should they wish. I am required to ‘self-certify’ that I am not a US citizen by completing some paperwork, revealing my details to the US tax department.
That a completely foreign government has control over my money is just incredible, and shows how broken the current financial system is. It is not the fault of the bank, they too are being forced to comply with these onus regulations. Of course, I will not submit to these demands. I am in the process of selling my shares of the fund, and I will transfer the currency back to my domestic bank account. There is no way I am relieving personal details about myself, to be stored in some US government database.
The arrogance of governments is astounding. For far too long they have held a monopoly on money, and the system of finance, and they still believe they do. However, they do not, as we have an alternative now in the form of crypto-currencies. Admittedly, blockchain assets are still somewhat clunky and not quite user friendly enough for the common person, but the rate of innovation is breath taking, and so rapid it is hard to keep up with. As cryptos improve and offer new and better features, the legacy financial system just gets worse and worse. Some key features being, devaluation of the currency assets are measured in, no privacy at all, slow and expensive transfers, and as I have recently discovered, arbitrary confiscation by foreign governments.
It seems to me that once the crypto revolution really picks up steam, it’s going to be unstoppable. Governments have shot themselves in the foot, hubristically pushing their draconian measures onto the population, thinking that the people are just going to sit there and take it. Competition in money has long been needed, but aggressively prevented by the state. Because crypto-currencies are just internet protocols, they are unstoppable. Like all digital information, it is like water through your fingers. The music and film industry was unable to stop people using the bittorrent protocol, despite having the backing of the state, and government and the banking industry will be just as impotent in blocking cryptos.
The economist Friedrich Hayek, in “The Denationalization of Money” suggested a marketplace of currencies, primarily as a method for combating inflation. He also wrote about how dangerous it is to allow the state to have a monopoly on the issuance of currency.
“I fear that since ‘Keynesian’ propaganda has filtered through to the masses, has made inflation respectable and provided agitators with arguments which the professional politicians are unable to refute, the only way to avoid being driven by continuing inflation into a controlled and directed economy, and therefore ultimately in order to save civilisation, will be to deprive governments of their power over the supply of money.” - F.A. Hayek
Until the advent of crytpos the notion of a system of competing currencies seemed like a pipe dream, but today it is becoming a reality very quickly. Government’s monopoly of money is about to be shattered into a thousand pieces, and I enthusiastically welcome this development.
Bayon.