“Why do you keep robbing banks?”
“Because that’s where the money is.”
— Attributed to Willie Sutton
We’ve briefly discussed some key issues around and with cryptocurrencies focusing on issues of faith. As in how people choose to believe in the legitimacy of systems.
In regards to money there has always been a mysterious merging of faith and practicality. American currency says In God We Trust. And we assume the unofficial motto of The Treasury Department is: All Others Must Present Two Forms of I.D.
We were thinking about all of this and related issues when America’s political crypt keeper, Steve Bannon slithered out from under a rotten log and back into the news.
Announcing his support for cryptocurrencies because they are populist tools for destabilizing the “administrative state” Gruppenfuhrer Bannon declared he’s made a lot of money off of them and is looking to start his own currency.
Whoever controls the currency, he announced with all the fervor of a village idiot who thinks he’s discovered gravity because he fell off a ledge, controls everything.
“Cryptocurrency is “disruptive populism, it takes control back from central authorities”, said Bannon. “It was pretty obvious to me that unless you got somehow control over your currency, all these political movements were going to be beholden to who controlled the currency … control of the currency, is control of everything.”
Putting aside the fact that comments like that tend to make The Treasury Department, The IRS and the Secret Service get a hard on, Bannon is not wrong.
What he seems to be missing is that it’s not a discovery that control of the currency is control of the system. It’s no accident that 11 Downing street is right next door to 10 and that the Chancellor of the Exchequer is housed at number 11 anymore than it’s an accident that The Treasury is right next door to The White House.
All of which points to a increasingly likely showdown over federal regulation of cryptocurrencies. While Trump may have a cadre of oligarchas and assorted morons running key departments the fact remains that the career bureaucrats who were there before Trump and will be there after Trump owe their allegiance to the system and not to any one individual.
The government, by which we mean both the elected officials and the loose affiliation of millionaires and billionaires and lawyers and the vast army of administrators and secretaries, have no use for a currency that in any way rivals the dollar.
The idea that Bannon or anyone else could sart “minting” or “mining” their own currency is the sort of thing that makes financial barrons queasy. And when Wall Street gets a stomach ache the government starts buying drum size containers of pepto.
Steve Bannon has a lot of enemies and the dollar has a lot of friends. Count on Trump to either directly or indirectly support Bannon but don’t assume Trump also won’t support his own interests in Wall Street. And don’t think for a second that the Federal Reserve and The Treasury will not keep an eye on Bannon.
Our guess is that Regulation and the big steel boot of the fed are coming to a server farm near you.
Read about Bannon here: