Bitcoin Valuation Dilemma
November 2, 2017 Emailed to WSJ/NYT/DMN on 11/3/17
The following is an Op-Ed to “The Wall Street Journal”, “The New York Times” and “The Dallas Morning News” that explains how U.S. Government fiscal and accounting fraud is likely to cause the value of a bitcoin to skyrocket.
The “news media” has an ethical responsibility to inform the general public of how the U.S. Government is committing fiscal and accounting fraud to cheat the general public and the rest of the planet so they can “feather their own nests” and “dramatically feather the nests of their upper-class friends”!
Bitcoin Valuation Dilemma
November 2, 2017
noun: bitcoin; plural noun: bitcoins
a type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
“bitcoin has become a hot commodity among speculators”
“bitcoins can be used for online transactions between individuals”
While I do not claim to be an expert in the Bitcoin crypto-currency, I contend that the inventor(s) of Bitcoin are taking advantage of the fiscal and accounting fraud and corruption within the U.S. Government to create significant apparent dollar value for the owners of bitcoins. A fundamental tenet of Bitcoin is that there are a limited number of bitcoins in circulation. As of June 1, 2017 there were 16,366,275 BTC in circulation out of a total of 21 million that will ever to be created. The rate at which these bitcoins are being created is converging to zero with the total in circulation expected to be essentially at the target of 21 million by 2110.
However, that is not the case with dollars. The U.S. Government is creating more imaginary-counterfeit dollars every day with the Ponzi scheme that I call USAPonzi. Furthermore, the rate at which this Ponzi scheme is creating imaginary-counterfeit money is increasing exponentially. The U.S. Government has borrowed $108.8 Trillion of imaginary-counterfeit dollars as of November 2, 2017 from the future Americans and is borrowing $15.5 Billion more every day and giving it to the U.S. upper class. The current fiscal policy of the U.S. Government will produce an infinite amount of imaginary-counterfeit dollars while the bitcoin quantity is restricted to 21 million which will cause the dollar value of a bitcoin to trend toward infinity. So the fact that the value of a bitcoin has increased from $118 when Bitcoin was launched in 2009 to $6,761 on November 1, 2017 is not totally unreasonable, in fact, it is to be expected.
The total dollar value of these currently in circulation bitcoins is now $110.7 Billion.
16,366,275 bitcoins X $6,761 = $110,652,385,275 = $110.7 Billion
USAPonzi creates $15.5 Billion of imaginary-counterfeit money every day, with GAAP basis deficit spending, so the U.S. Government is creating the current value of all the bitcoins in circulation in just over a week ($110.7B/$15.5B = 7.14). This U.S. Government accounting fraud that I call USAPonzi is creating dramatic distortion in the global economy and in the global financial system.
With a fixed number of bitcoins and an exponentially increasing number of imaginary-counterfeit dollars the value of a bitcoin in dollar terms is destined to skyrocket. The U.S. Government is printing $15.5 Billion of imaginary-counterfeit money every day, with GAAP basis deficit spending, so the value of the bitcoin pool will increase quite rapidly because the global supply of bitcoins is bounded at 21 million bitcoins. The net worth of all Americans has increased from about $5 Trillion in 1969 when USAPonzi was launched to now an estimated $134.8 Trillion (Total National Assets) primarily because the U.S. Government has fraudulently borrowed $108.8 Trillion of imaginary-counterfeit money from the future Americans and given it to the U.S. upper class.
The net worth of all Americans is currently estimated to be $134.8 Trillion and Americans purportedly have about 45% of the global net worth so global net would be on the order of $300 Trillion ($134.8T/0.45 = $300T). This would imply that the value of a bitcoin would for now be bounded at about $14,285,714 ($300T/21m bitcoins = $14,285,714 = $14.3M) assuming that all U.S. dollars, both the real dollars and the imaginary-counterfeit dollars were converted into bitcoins.
Author's Note: Americans appear to own nearly half of the global net worth because the U.S. Government has fraudulently borrowed over 1/3rd of the global net worth ($108.8 Trillion) from the future Americans and given it to the U.S. upper class. America appears to be the richest and most prosperous country on the planet simply because the U.S. Government is committing fiscal and accounting fraud to borrow imaginary-counterfeit money, $108.8 Trillion so far, from the future Americans and give it to the U.S. upper class.
Bitcoin founder (Satoshi Nakamoto) allegedly owns 1 million bitcoins
Since the Bitcoin founder has allegedly reserved 1,000,000 bitcoins for himself, he would therefore have a theoretical net worth of about $14.3 Trillion or about 5 percent of global net worth (1/21 = 4.76). And his apparent net worth in dollars should go up every day as the U.S. Government borrows more imaginary-counterfeit dollars from the future Americans.
The conclusions that I draw from this analysis are
1) At a valuation of $14.3 Million, very few people can afford to own even a single bitcoin.
2) Not everyone will be willing to put even their imaginary-counterfeit dollars into bitcoins so the value of a bitcoin will be constrained by prudent investors and those investors that understand this U.S. Government fiscal and accounting fraud that I call USAPonzi.
3) The founder of Bitcoin, whoever that is, has come up with a very clever technique to acquire a significant portion of the global net worth.
4) The apparent value of a bitcoin is quite likely to skyrocket until USAPonzi implodes.
5) The value of a bitcoin will plummet when USAPonzi implodes.
The U.S. Government is committing a fiscal and accounting fraud that is creating money out of “thin air” by operating with Cash Accounting rather than the proper GAAP Accounting and giving this imaginary-counterfeit money to the U.S. upper class. This can appear to make the dollar value of a bitcoin increase dramatically but then the question becomes what will be the value of a bitcoin when USAPonzi implodes and these imaginary-counterfeit dollars evaporate?
|Cash Deficit in FY2018
|GAAP Deficit in FY2018
|US Unfunded Future Liabilities
|US Unfunded Liabilities (GAAP)
|Total National Assets
Source: www.usdebtclock.org Nov 2, 2017
To eliminate this fraud, the U.S. Government must adopt GAAP Accounting and commit to a balanced GAAP basis budget.
I have published a website www.usaponzi.net that explains how this fraud works to create a massive global wealth and income gap between the haves and the have-nots and to create false wealth and prosperity for the current Americans. The www.usaponzi.net website is an introduction to my more detailed website www.usaponzi.com and my books “USAPonzi” (Nov 22, 2015) and “USAPonzi2” (May 1, 2017) which are available on Amazon to better explain this fraud/Ponzi scheme.
This fraud/Ponzi scheme is also explained in “short story style” in my October 1, 2017 commentary USAPonzi CliffsNotes and in my October 8, 2017 commentary USAPonzi Elevator Speech.
This is the biggest ($108.8 Trillion) financial fraud ever perpetrated, I call it “USAPonzi: The Ultimate Government Fraud” and “The Biggest Ponzi Scheme on the Planet”.
John W. White