Bitcoin is biggest bubble of them all, and it’s the Fed’s fault, says Ron Paul

This should NEVER be forgotten.


I personally think Bitcoin and company are lots of fun. I think cryptos are here to stay. I think the Blockchain (the virtual ledger that underpins cryptos) is going to change the worlds of banking, accounting, politics, you name it. I think it is very interesting that the technology has blindsided the world. This is a good thing. I also think however that for the most part Ron Paul is correct. We’ve been waiting for a bubble to blow up in the wake of all the Fed’s post 2008 meddling. Now we see it. (Even beyond the stock market run-up.)

But each bubble has its own flavor. It is very interesting to see the Fed partnered bankers at JPMorgan, UBS, and elsewhere railing against Bitcoin while the Austrian school economists (at least a significant part of the school, the Ron Paul wing) are also sending up warning flares. That dynamic intrigues me.

(From CNBC)

“I look at the problems we face. I think they’re gigantic and people are desperate and looking everywhere. Why would they buy bonds that pay negative interest rates? Why would they buy stocks, and say well this time it’s different? ” asked Paul. “Cryptocurrency is a reflection of the disaster of the monetary dollar system.”

Paul, who’s also a medical doctor and former Republican presidential candidate, argues that cryptocurrencies are in an “exponential bubble” where trying to calculate its real value is extremely difficult. Bitcoin, the largest of the cryptocurrencies, has been trading above $17,000.

He hasn’t been able to pinpoint when a plunge could happen in cryptocurrencies or the stock market. But Paul says the danger is real.

“They’re both big bubbles in the sense that it occurred because there was excessive credit. But if you look at the curves, I think that the cryptocurrency curve looks more threatening,” Paul said.

I agree with Paul on 2 important points here. 1, that people are going into cryptos to a large degree because they have diminishing faith in the dollar. 2, that the curve for Bitcoin is of concern.

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