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General News    H1'ed 9/20/15

The Bank of England's Digital Currency proposal is part of the War on Cash

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bitcoin accepted here
bitcoin accepted here
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The digital blockchain behind the digital Bitcoin this proposal: Bank of England Economist Proposes National Digital Currency is based upon, prevents new Bitcions from being issued unless an increasingly difficult set of mathematical queries based on previous transaction are answered quickly enough. Already, only wealthy players with custom made computers can afford to become Bitcoin "miners." Now who does that sound like? If you answered JP Morgan, Goldman Sachs and the like, you're right, as this related article points out: JPMorgan CEO Issues Cautious Remarks on Blockchain Tech (Hint: Jamie Dimon is not THAT cautious).

Bitcoin has had as much volatility in value as the stock market and and like stocks, it is primarily a speculative vehicle at this point, since it can be directly spent in very few places (most of the stories you here about it being accepted are really about it being converted to dollars just prior to a purchase, either by the buyer or the seller, not Bitcoin being used directly and unconverted). Sellers are not yet willing to take a chance on Bitcoin's future value to transact business in Bitcoins. And since there are such few spending outlets, large holders of Bitcoin cannot readily convert their holdings without moving the Bitcoin markets themselves.

Now, why would the Bank Of England be willing to gamble on such an unstable thing? Maybe they think having the Central Bank somehow behind a digital currency would stabilize it by making it legal tender, but more likely it is part of the escalating war on cash implied in the article first cited. Central banks can't go below Zero Interest Rate Policy (ZIRP) effectively as long as there is a cash alternative that is effectively at ZIRP already - or less only if that form of cash ceases to be printed, much like United States Notes have been, which now sell for 3 to 5 times face value on eBay (it used to be just 2X a few years ago; U.S. Notes are a good investment!).

U.S. Notes Facts and History
U.S. Notes Facts and History
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A digital currency then, is yet another way for the rentiers to extract wealth from the rest of us, by effectively imposing a tax on unspent money and forcing us to consume with it instead and then "buy" more digital money with our labor. It is a way around ZIRP and a way for the rich banks to make yet more money.

Although Bitcoin and similar digital currencies were born of anarchist rebellion against the bank-issued currency monopoly, this is now beginning to backfire, as these experienced elites figure out how to monopolize such a currency for their own ends.

This will end very badly for the 99% if the 1% elites get their way on this.

The only true alternative for the 99% is money not issued by banks, including the Central Bank - e.g. United States Notes.

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Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a former blogger for Huffington Post, Daily Kos, and Global Economic Intersection.

His anthology of updated Opednews articles "America is Not Broke" was published by Tayen Lane Publishing (March, 2015) and may be found here:

Scott is a former and current President of Common Ground-NY (, a Geoist/Georgist activist group. He has written dozens of (more...)

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