First-principle thinking on Bitcoin and Banks

Drawing from the video below, consider this:

If you parked your car at a fancy restaurant, gave your keys to the valet, went in for dinner and the restaurant went bankrupt while you finished your Tiramisu, you could still legally step outside, grab your car keys and drive home. The vehicle was your property the whole time you were eating, even though you gave the keys to the valet. Common sense prevails in this situation because elites don’t enrich themselves by complicating it. But…

The opposite is true at your bank and in your brokerage account. Your property rights in these arenas are NOT respected because slick predators have greased the wheels of Congress for a long time and have gained the legal right to take your money, your stocks and your bonds and use them as if they owned them. They can lend them out, leverage them, create derivatives from them and use them for collateral in their own investing and horse trading. When they go bankrupt, you can’t legally grab your car keys and drive off with what you thought was your property (your money, stocks and bonds). Heck no. You gave them ownership. They robbed you with a fountain pen as Bob Dylan called it years ago when he left New York.

Common sense and fairness mean nothing to corporate and institutional thieves because they “own” Congress through huge campaign donations and their revolving-door job policy for retired lawmakers on both sides of the political aisle, senators and congresspersons who created laws for them during their DC “public-service” careers.

The unfair, illogical practice of legal hypothetical ownership ought to have a name that people can remember, but no, it’s called hypothecation. The term seems to derive from the notion that an institution that borrows an asset (i.e. “holds” your money or your stocks for you) actually takes “hypothetical” (imaginary but legal) ownership of the thing they borrowed from you. If they go belly up, they don’t owe you a thing. All that stuff they lost was legally their own property. Your assets became legally theirs to lose when you signed below the fine print.

And you probably had no idea you were making a loan at all, let alone a stupid loan that gave them legal ownership of your property.

Truth is stranger than fiction, again and again. Red pills all around.

It’s as if you gave your keys to the valet and signed a document you didn’t have time to read or the vocabulary to understand and BOOM, the valet owned your car in hypothetical but legally binding terms. And that young kid can now go out and drive your Bentley, trade it, sell it, lend it to someone, or smash it into a brick wall and it’s all cool in court because you signed your name to the IOU below the strange word hypothecation.

Let’s forget the word hypothecation, then. It’s too much like the term UAP (unidentified aerial phenomenon), it was created to hide the truth.

Instead, let’s call it “H” (like heroin, close to pure evil).

As the video below explains, H happens like this: I borrow a candy bar from you and give you an IOU, then I loan the candy bar out to someone else who loans it out to someone else…. This goes on until your candy bar has been loaned out many times, creating the false impression that there are dozens of new candy bars in existence now, not just the one. This false impression of many new candy bars tends to lower the value (or price) of real candy bars via the market forces of supply and demand. (Banks do this with the dollars you “loan” them, reducing the buying power of real dollars, i.e. causing inflation.) At some point in the candy bar borrowing market, someone eats the candy bar and it’s gone forever. All the IOU’s are suddenly worthless. Everybody in the trail of debt (multiple IOU’s) has just experienced the legalized theft of their candy bar, made possible by the evil and absurd legality of H (hypothetical ownership).

Incidentally, the “person” who finally ate the stale candy bar will probably be the only one who gets bailed out by us tax payers because he/she/it will be considered “too big to fail” by DC lawmakers who are too busy raising campaign funds to sit down, read a book and educate themselves on money and macroeconomics. These people are not dumb, they’re just busy, dishonest materialists and variably “owned” by the heartless money machines we call giant corporations. And as you know, we’re talking about the “ownership” of all DC Democrats and Republicans, including your favorite, the cute ones and the ugly, tough, no-nonsense ones alike. Statistics might argue that there must be a good politician somewhere in DC. Fine, but it’s not apt to be the ones you and I keep voting back into office decade after decade as both sides continue to spend our grandchildren into poverty and lethal debt.

We should vote them ALL out at once. Both sides and soon. Then work together across the aisle with loving respect for all political ideas and opponents on both sides.

Here’s a video interview of a brilliant woman, Caitlin Long, the Founder & CEO of Custodia Bank, a next-generation Bank designed for a different world in which Bitcoin and it’s rapidly maturing Lightning Network will hopefully save us from our tradition of legalized theft through H (hypothetical ownership). Caitlin Long, by the way, predicted the fall of FTX way back in 2018, but she’s not a prophet, she an objective thinker who understands money better than the rest of us. Ya really gotta hear this woman explain things! Wow.

There are many people who just naturally tend to see the foundational causes of humanity’s big problems. They’re first-principal thinkers. They understand both the forest and the trees. This gives them an enviable talent for true objectivity in evaluating problems and pinpointing root causes.

Just as Elon Musk does this with technology and Ivor Cummins with Type 2 Diabetes and atherosclerotic heart disease, Caitlin Long is doing it now with Bitcoin, Banking and the problems created by fiat currencies.

She’s a new person on my radar, so check her out for yourself. Maybe I’m overly impressed or star-struck, but I doubt it after listening to her interview above.

Common Sense Love,

Morrill Talmage Moorehead, MD

3 thoughts on “First-principle thinking on Bitcoin and Banks

  1. Pingback: First-principle thinking on Bitcoin and Banks – muggettedonroyal

  2. The way our banking system operates is indeed not in our favor. I’m not sure how bitcom can change all that but our money is definitely at risk. I have to agree that the people in Washington, D.C. should all be replaced. If they weren’t corrupt when they got there, they are now no matter the party.

    • Hi Gypsy Bev,
      Bitcoin is quite a complicated digital invention. I had to do a bit of reading before I finally understood how it works and why it can’t be artificially devalued (created) by anyone, not even by the unknown person who created the code for it in the first place. Like gold, it could become the basis for a stable currency. A stable reserve currency that couldn’t be inflated (i.e. created at will by the FED) would protect the poor and middle class from the theft that is inflation. More would be needed to save Western society, free speech, democracy, and truly free markets. Ridding ourselves of “scientific materialism” is the bigger problem humanity faces.
      Much love,
      Talmage

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