When the government pumps trillions of dollars into the economy, they’re not actually printing the money. It enters as digital entries in banks across the country. It’s made the system fast, responsive, and, unfortunately, vulnerable. Now our money is no longer something we hold in our hands, but something that exists on a very susceptible network.
When’s the best time to invest in something? When everyone else is trying to get their money out of it. It might go against conventional thinking, but following the crowd usually makes you miss the real opportunities. At one monetary metal conference recently, the smartest guys in the industry sat down to discuss where these real hidden gems lay.
Say goodbye to your boring morning commute. New technologies are changing the way people drive their cars. It’s making them safer, more fuel efficient, and could reshape the way America builds its roads and cities. The only thing that could stand in the way...
In a 2009 article, the Huffington Post went into considerable detail about the number of people with PhD degrees in economics employed by the Board of Governors of the Federal Reserve System. This is the government’s branch of the Federal Reserve. It is not one of the 12 regional Federal Reserve banks, all of which […]
When the NSA surveillance news broke last year it sent shockwaves through CERN, the particle physics laboratory in Switzerland. Andy Yen, a PhD student, took to the Young at CERN Facebook group with a simple message: “I am very concerned about the privacy issue, and I was wondering what I could do about it.”There was […]
Remember that correction we’ve been quietly talking about over the past couple of months?Well, it might be right around the corner. Stocks waited until the last day of the month to nose-dive. The S&P 500 posted its first 2% down day since April — and the Dow wasn’t far behind. Early this morning, futures continue […]
I was talking with one of my colleagues the other day, and he raised a very interesting question, one that deserves consideration by anyone worried about their digital privacy. He read an article that championed the idea that the more steps one took to protect their privacy by using anonymous Web-browsing tools like Tor, the […]
Health care costs in the U.S. have been rising so steadily for so long that containment barely seems possible. Even optimists don’t dream of cutting the price tag. As its official name — the Patient Protection and Affordable Care Act — suggests, Obamacare aims for affordability, not radical reduction.But at a time when we’re all […]
When you type a website address into a browser, you might have noticed that the letters “http” appear at the front. “HTTP” stands for Hypertext Transfer Protocol. In typing a Web address, you are actually sending an HTTP command to transmit that website to you. Hypertext Transfer Protocol is the means by which information is […]
Picture the scene. It’s 2020. You’re at the checkout in a convenience store with a carton of milk. But you’ve got no cash and you’ve left your cards at home. No problem. You scan your right index finger; the green light flashes. Purchase approved and you leave. Easy.Is this a realistic vision of the future, […]
After a week of reckoning about the American oil and gas boom… I’ve got to get something off my chest.I can’t stand it when a coworker takes credit for something I did.Whether it’s a special report I wrote or just a little investing trick I found on my own — if someone takes it and […]
Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]
I want to share some insight and give you a front-row seat to America’s next big shale play.Let’s get to it…Over the past 10 years, the U.S. has turned the ship around, quite literally.We’ve gone from a country that was expecting to import massive amounts of oil and gas — to a country that’s sitting […]
Whatever your views on the role of government, one thing is clear: There will be no way to pay for it if the economy doesn’t grow. And I’m not talking by a measly percentage point or two. If we can’t find our way back to 5% annual economic growth or above soon, America’s accumulated federal […]
What if I told you that the march of human progress could be traced in a direct line from the Epicureans of Ancient Greece… through the 18th Century’s cure for smallpox… to where Steve Jobs and Bill Gates found inspiration as scrappy teenagers… to the flying car of tomorrow?Stay with me and I’ll show you […]
Real progress happens through real people, ideas, and innovations. Not by legislation argued and debated in Congress. Right now, one of the most influential technologies is changing the way people do business. And reinventing the future in the process.
Innovation can change the world… if the world lets it. Unfortunately, society’s gatekeepers make it a point to constrain, regulate, and control these ideas. But their power is limited, and the power of innovation is too great. Unfortunately for regulators, there are some technologies they can’t control.
What’s the #1 reason a start-up fails?It runs out of money!And why would it run out of money?Because nobody wants the product it’s selling!For early-stage investors, this presents a bit of a conundrum:If a product doesn’t exist yet, how do you figure out if there’s demand for it?And how do you figure it out before […]
A cushy job in Hawaii that pays six figures. A beautiful girlfriend/boyfriend. Job security and professional experience that gives you plenty of future opportunities. Would you throw that all away to do what you think is right? Last year, one government contractor did just that. And now you see the world the government tried to hide from you.
Every time Bitcoin crashes, it winds up at a price greater than it’s previous high. Yet the experts still call it a currency fad that will fade away. But a little over a year since it really took up, the digital currency is still going strong, and is once again seeing its price rise. But is there another reason why people are buying Bitcoins.
According to some estimates, one man - whose name you're probably not familiar with - has saved over a billion lives. Who is he? And how has he influenced the current crop of innovators? Josh Grasmick explains...
Edward Snowden’s one year visa in Russia expires at the end of next month. With only a few weeks left before he finds himself without a safe country to live in, he sat down to give an exclusive interview. Here are the most important things he wants you to remember from his recent sacrifice.
Biotech breakthroughs and other transformative innovations are a few of the brightly shining spots in the U.S. economy. In fact, Paul Mampilly believes this is the golden age of biotech investing, and that you can earn massive returns while investing in companies with drugs that benefit all of humanity. Read on for his latest example...
Harold Hamm isn’t your typical entrepreneur. His life’s story shows you success in America doesn’t always depend on a fat checkbook
Obama recently claimed this was the “Decade of the Brain”. But it not the first time the government made that promise. The last time they did it, they wasted millions of your tax dollars. Now they’re back for round two. But this time, their failure could mean more than squandered money. It could mean making Alzheimer’s even worse for those who suffer from it.
Does owning a gun mean you’re guilty until proven innocent? Considering what happened to one man from Florida, that might be the case. But there’s more to this story than just a case of police overreach. Police departments across the nation could be implementing a new technology that puts the burden of innocence squarely on your shoulders.
American ingenuity. It’s the stuff of lore and legend, and it’s what drives the global economy. We literally bank on the next disruptive entrepreneur — and innovative new technology — to completely redefine or create new industries. It’s what America does really well, our goose that continues to lay golden eggs.And yet, maybe not.The truth […]
The market has selected different things as money throughout history. Some of these items have served as money in isolated places for specific periods of time — for instance, cigarettes in prisoner-of-war camps. Cigarettes continue to be a currency in prisons if allowed, but if not, according to Wikipedia, “postage stamps have become a more common currency item, along with any inexpensive, popular item that has a round number price, such as 25 or 50 cents. Mylar foil packets of mackerel fish, or ‘macks,’ are one such item.”
Cigs, stamps, macks? Doesn’t seem very cool, like, say, a gold doubloon, but the market decides what’s cool, despite what Matthew O’Brien at The Atlantic thinks. Apparently, he’s not a big fan of the cybercurrency Bitcoin.
He writes that only techno-libertarians will transact business in Bitcoin, and compares the cybercoin of the virtual realm to Segways. O’Brien reminds us these stand-up motorized vehicles were at one time thought to become a big deal. I only see cops whiz by on them at the Hartsfield-Jackson airport in Atlanta.
O’Brien describes Bitcoin as “inherently ridiculous.” The price swings alone make the cybercurrency look more like a dot-com stock than money. What The Atlantic senior associate editor can’t explain is why the price of Bitcoin has exploded recently. He writes something about demand from China and the Fed’s seizure of Silk Road’s considerable Bitcoin stash.
But he’s not paying attention. “Senior U.S. law enforcement and regulatory officials said they see benefits in digital forms of money and are making progress in tackling its risks,” Ryan Tracy reports for The Wall Street Journal. “The price of Bitcoin, the most common virtual currency, soared to a record following the comments.”
That won’t sway The Atlantic writer’s mind. O’Brien believes “Bitcoin… has deeper problems. Its product doesn’t work.” However, Washington has had a dog in the Bitcoin fight ,since it seized 26,000 of them from Silk Road. At around $18 million, it’s enough to keep the Department of Justice interested. So count DOJ attorneys along with the libertarian nerds rooting for the cybercurrency.
In a testimony before the Senate Homeland Security and Governmental Affairs Committee, Mythili Raman stated, “The Department of Justice recognizes that many virtual currency systems offer legitimate financial services and have the potential to promote more efficient global commerce.” Raman is the current acting assistant attorney general for the department’s criminal division.
Bitcoin and virtual currencies are a direct attack on central bank monetary management. Yet even Ben Bernanke, in a letter to senators, said virtual currencies “may hold long-term promise, particularly if the innovations promote a faster, more secure, and more efficient payment system.”
Senators, being senators, worry about things like whether the cybercurrency is financing terrorism or whether Bitcoins can be used to evade taxes. Neither is likely.
What Bitcoin can do is be moved instantaneously around the world. With something as simple as cellphones thousands of miles and many time zones apart, the cybercurrency can be transported via Skype.
Try moving dollars through your bank. You have to fill out forms, show ID, and have a human being input data. Then more of the same happens on the other end — when the bank opens, that is. Bitcoin has shown the Federal Reserve how it’s done. In a report called Payment System Improvement — Public Consultation Paper, the Fed calls for banks to speed up payment systems. The central bank wants to see “a ubiquitous system for near-real-time payments.”
End-users, the Fed points out, want real-time validation of payment and posting, assurance the payment will not be returned, timely notification, and “masked account details, eliminating the need for end-users to disclose bank account information to each other.”
This sounds familiar to anyone who uses Bitcoin. Validation of transactions is nearly instantaneous in the blockchain. Bitcoin transfer is not a credit transaction, but a transfer of assets. There is no third party in the middle to return a payment. And of course, payments are done anonymously. No financial disclosures are required.
So while end-users tell the Fed they want assurances against returned payments, O’Brien writes that a weakness of Bitcoin is there is no third party making sure everyone is satisfied. Financial intermediaries “make sure buyers and sellers are both trustworthy, and handle any disputes,” writes O’Brien, who wants to make sure people can get their money back if things go awry.
He actually doesn’t believe people will use the cybercurrency to pay for things at all. Thus his quip, “Bitcoin is a Ponzi scheme libertarians use to make money off each other — because gold wasn’t enough of one for them.”
Maybe he doesn’t realize more and more merchants are accepting the alternative currency. O’Brien doesn’t know that two Bitcoin advocates, Austin and Beccy Craig, lived and traveled for several months paying for everything with Bitcoin. He hasn’t heard the highly connected Winklevoss twins are seeking approval for a Bitcoin fund. O’Brien doesn’t read The Wall Street Journal, which recently listed six Bitcoin-related venture capital deals funded just between mid-August and mid-November of this year.
The deflationary bias, O’Brien says, means the price will be volatile. The limited supply of Bitcoin will mean it will rise in value against the dollar, but early speculators will then sell, driving the price down “quite violently.” From there, he voices his incorrect analogy to Mr. Ponzi.
Because of Satoshi Nakamoto, we have the rare opportunity in history to watch the birth of a currency. It’s not always a smooth process. In his book, Principles of Economics, Carl Menger, the father of Austrian economics, wrote about how any commodity can be traded as money because of its greater marketability:
“This knowledge will never be attained by all members of a people at the same time. On the contrary, only a small number of economizing individuals will at first recognize the advantage accruing to them from the acceptance of other, more saleable, commodities in exchange for their own whenever a direct exchange of their commodities for the goods they wish to consume is impossible or highly uncertain.”
As people become successful trading any good or commodity as money, more people will in turn trade fewer marketable goods for that more marketable one. “Since there is no better way in which men can become enlightened about their economic interests than by observation of the economic success of those who employ the correct means of achieving their ends,” writes Menger.
The Bitcoin market is tiny compared with government currencies, especially the dollar. As the new cybercurrency gains acceptance, its price in dollars can reasonably be expected to be volatile. But as futures markets develop and ways to sell Bitcoin short are created, the price action for the cybercurrency will smooth out.
The question isn’t whether Bitcoin is a Segway, but whether it’s a prison cigarette or a gold doubloon. Either way, Bitcoin is money.