[Bitcoin is] not a store of wealth. If it's a store of wealth, it doesn't rise and fall. You can lose 40% on it very quickly, okay. That's not a store of wealth. It's not going to replace the dollar as a reserve currency; that's another propaganda thing. A currency cannot be fixed. That's what took Brenton Woods down. --Martin Armstrong
105:19. The majority always has to be wrong, because they are the fuel that makes it happen. Everybody is long, and they panic. They investigated the 1987 crash. They called up the fund managers. "Why did you sell?"
Basically the overwhelming reason was . . . They called the floor, "What's going on?"
"I don't know." That was the worst response possible.
The DOW is down a thousand points, and you don't know why it went down?
The rumors started flying, "Russia just invaded Europe and communications are down so we don't know yet." Rumors got really wild. So they sold, and that's really prudent. If you don't know what's going on you get out. If you read the Brady Commission Report at the bottom, I got them to at least not do anything against the private sector. But at the end of the report, they said "Well, we think that foreign exchange had something to do with it." I warned them. I went to President Reagan, I said, "You just lowered the dollar after the G5 meeting formation at fosa court. You lowered the dollar by 40%. You just sold 1/3 of of the national debt to the Japanese. They're going to sell."
"Oh, why would they?"
"Because they're going to lose money in the Japanese Yen. Don't you understand that?"
These people have no clue how the world economy works. Every body responds based on their own net view of the world. We take the dollar down 40%, and all the foreigners are going to be selling. Just look at why the dollar goes up during war. World War I, all the money came here. Europe was blowing itself up. World War II, same thing. That's what made the dollar the reserve currency. In 1896, we were broke. JP Morgan had to lend a $100 million. So from 1896 to 1945, we became the largest economy in the world. All capital flows. Europe thinks the third time is the charm where you can defeat Russia. Very nice. You're going to blow up everything. So effectively what do you got? Capital is flowing to the US again.
BITCOIN
108:20. You talked about the tremendous growth in Bitcoin. Where do you see all that going?
It's a trading vehicle. It got started, if you dig a little bit, the bulk of the transactions were coming out of China. The Chinese government called in all the Bitcoin people. Why?Because they figured it out, "Gee, I can buy Bitcoin here and I can sell it over there." They were using it to get money out of the country. It was a money laundering scheme and then the government finally figured it out and called in all the same Bitcoin guys you're looking at the same thing it's an internet like gold. So it's the same thing if it's traded in Europe the same thing as traded in China or here. So you're not talking about different quality. It's not like Brent crude versus Texas Crude. It's the same thing. It's basically digitized gold in a way. It's the same commodity. So it lends itself basically to money laundering. It's been doing well because largely a lot of Europeans had been using it to get money out of Europe the same way that the Chinese did to get it out of China. Eventually the government will figure it out it's a trading vehicle. It's not a store of wealth. If it's a store of wealth, it doesn't rise and fall. You can lose 40% on it very quickly, okay. That's not a store of wealth. It's not going to replace the dollar as a reserve currency; that's another propaganda thing. A currency cannot be fixed. That's what took Brenton Woods down. They fixed gold at 35 dollars but you continued to print the amount of dollars. Eventually the system's gotta . . . I think a 3 year old with a pocket calculator could have figured out that was going to go bust,all right. The money supply must expand and contract with the economy; otherwise, . . . The problem with people who got behind Bitcoin is that they were saying, "Oh, it's going to replace the dollar." You don't even understand the economy. If you had $10 and 10 people, we all can have $1. If there are 20 people and still $10, what happens? Now we're down to 50 cents. It's deflationary, not inflationary. You're creating the exact opposite. You're creating a global depression. Money has to be able to expand with the population and economic growth. It's the politicians that . . . it's their spending. It's the political system that's the problem. Vote for me, and I'll steal it from this guy and give it to you. That's what's wrong. It's prohibited by one of the Ten Commandments. It's been going on for thousands of years .Assyria, Babylon, all these legal codes. Hammurabi's code is wages and price controls, fixing how much you can charge interest. Obviously there were economic problems or you wouldn't come up with laws that dealt with it. This is human nature. It has not changed in 6,000 years.
