(NaturalNews) I've been rethinking Bitcoin a lot lately and I've decided I need to go public with some changes in my own thinking on this peer-to-peer crypto currency. As background, I first came out in favor of Bitcoin and its structure during its early growth years. I became alarmed at the sudden "bubble" of Bitcoin valuations a couple of years ago and warned people about price volatility. Famously, I warned people about the looming "Bitcoin crash" just 24 hours before its value crashed 50%. Since then, I've continued to warn people about price volatility and risk.
But based on current events which appear to be unfolding in the global banking cartels, what needs to be stated right now is that there is massive unacknowledged volatility risk in all government currencies.
Heck, even Charles Plosser, President of a Federal Reserve bank, now says the Fed's unlimited money creation scheme is "a ticking time bomb." (1) In fact he openly acknowledges that once all this money which has been created by the Fed is pushed into circulation through bank loans, it's going to nullify the Fed's traditional tools used to control inflation.
In essence, the Fed is backed into a corner: It must keep creating money to prevent the global debt collapse of the banking cartels, yet it realizes that by creating more money, it is creating a ticking time bomb that will sooner or later blow up and destroy the currency. The only way to save the currency in the short term, in other words, is to guarantee its destruction in the long term.
As he discusses in his interview, there exists a very real risk of "bail-ins" during which banks confiscate the accounts of their own customers in order to save their necks.
Acknowledged risk vs. unacknowledged risk
What does all this have to do with Bitcoin? Well now, as the Bitcoin market has matured and holders of Bitcoin have more experience, they acknowledge there is inherent valuation risk in holding Bitcoins.
Wild fluctuations in Bitcoin prices are no longer a shock, in other words, and people going into Bitcoin are now taking these volatility risks into account.
Simultaneously, holders of U.S. dollars suffer under the false illusion that the U.S. government's currency comes with essentially ZERO risk. After all, it's backed by the "full faith and credit of the United States government." What could possibly go wrong in a nation where the national debt is only -- gulp -- $17.5 trillion? (USdebtclock.org)
This false assumption of zero risk is now, in my opinion, far more dangerous than the price volatility of Bitcoin. The scale has been tipped, in other words, where both currencies have price risk, but the price risk is hidden and even denied in only one of the currencies: the U.S. dollar.
Someone who holds any currency at risk of rapid erosion or collapse without having any knowledge of that risk is, by definition, miscalculating their current position. People who hold U.S. dollars are, by definition, invested in U.S. dollars. Yet aside from currency day traders, nearly all people are largely oblivious to the risk of currency devaluation or sudden currency collapse.
Thus, for the first time in a long time, I'm once again recommending an equity diversification strategy that include a portion of your savings in Bitcoin -- but only with the understanding that Bitcoin most definitely comes with extreme volatility and price risk, and that this "currency" can simply vanish in many scenarios such as an EMP attack, power grid failure or even theft of your storage devices.
"Winners" are those who simply avoid losses from here forward
I am of the belief that our world stands on the verge of global debt collapse which by definition causes a ripple effect of "wealth" destruction. Defenses against financial losses in these situations consist largely of diversification into reliable stores of wealth.
The most obvious (and effective) stores of wealth include:
* Physical gold and silver * Farmland with access to clean irrigation water * Real estate (homes, buildings, land) * Emergency supplies (antiseptics, stored food, self defense items, etc.) * Stock in viable companies which will increase in value after a currency collapse
With this list in mind, I believe that a wise person will diversify their savings into all these areas, taking on whatever degree of risk is appropriate for their own personal circumstances. Bitcoin can definitely be one of these stores of wealth, as it has the advantage of being extremely portable and easy to hide.
Although I can't say what's right for you, I've long thought that most people should consider holding about 10% of their wealth in precious metals and 20% in farm land. I think putting 5% or so into Bitcoin is a reasonable strategy at this point, as long as you understand the high volatility and price risk associated with such a move. It's also important to recognize the additional accounting burden the IRS recently placed on Bitcoin by declaring it a share-like asset rather than a currency.
In addition to his lab work, Adams is also the (non-paid) executive director of the non-profit Consumer Wellness Center (CWC), an organization that redirects 100% of its donations receipts to grant programs that teach children and women how to grow their own food or vastly improve their nutrition. Click here to see some of the CWC success stories.
With a background in science and software technology, Adams is the original founder of the email newsletter technology company known as Arial Software. Using his technical experience combined with his love for natural health, Adams developed and deployed the content management system currently driving NaturalNews.com. He also engineered the high-level statistical algorithms that power SCIENCE.naturalnews.com, a massive research resource now featuring over 10 million scientific studies.