Bitcoin has made a lot of people a lot of money. That’s a fact.
But that’s not why bitcoin was created.
Bitcoin was created to fight against Section 402 and things like it.
Now, it should be explained at the outset that bitcoin’s mysterious creator, Satoshi Nakamoto, didn’t know what Section 402 was.
But he did know a couple of things.
He understood that it was a fool’s game to trust fiat currency or the big banks that leverage and manipulate said currency… or to trust the biggest manipulator, protector and benefactor of money: governments.
I have no way of knowing for sure, but I suspect Nakamoto’s disinclination to trust big government, big banks, and misused and abused fiat money predated 2008.
And when the financial crisis of 2008 came perilously close to becoming an “extinction event” for U.S. and overseas banks, it probably confirmed his worst fears.
If excessive debt was the disease, then he created bitcoin as the cure.
Too Late?
I’ve heard some argue that while bitcoin was borne of good intentions, its danger to our banking system has passed with the enactment of various rules around the world.
In the U.S., we had the signing of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. It supposedly plugged many of the regulatory holes that allowed banks to engage in wildly risky behavior.
Following this line of reasoning, Satoshi Nakamoto was the equivalent of a five-star general fighting yesterday’s war…
And bitcoin was his unnecessary weapon of choice.
Section 402 shows what nonsense this thinking is…
If implemented, Section 402 could plunge us right back into another dangerous financial crisis.
It would loosen the capital requirements of banks precisely at a time when big banks need to build up their capital buffers ahead of mounting public and private debt that is reaching crisis levels.
So what is Section 402?
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