What Happened to Bitcoin in 2017

By all accounts, bitcoin's rise in 2017 was meteoric. What does this mean? Why did it happen?

One of the principle tenets of this blog is that fiat money has been abused through endless rounds of central bank debasement and this has created many problems. Those of us who hold fast to the ideas of Austrian Business Cycle Theory have very different ideas than do most economists as to what impact this debasement has on the economy. Austrians believe that printing money distorts interest rates and time preferences and these things will impact the very structure of the economy in a way that the market doesn't appreciate. That is, people do stupid things when the information (interest rates) they are given is distorted. The economic result is malinvestment.

In this sense, money is a subset of speech. Money, and the way we use it, tells the world what we like, what interests us and what our time preferences are. Money and its use contains extremely important information. To get at truth, speech needs to be free, and this is also true for money. It should never be distorted so that the information is skewed in a way that only benefits those in power or those who sit closest to the central banks. There will be no truth or justice there. Central banks have skewed the fiat money system in a way that truth, justice and free speech are denied to most. Bitcoin's dramatic rise in 2017 is a recognition of this.

Since the Great Financial Crisis of 2008, I think that people have had an underlying sense that the financial system has been skewed against them and in favor of the one percent. The individual has seen his free speech silenced by Ben Bernanke, Janet Yellen, Draghi and Kuroda with their distortion of money and interest rates. People are yearning to speak freely, to speak truthfully and to have their voices heard. That is what happened to bitcoin in 2017. People have found their voice again through the purchase of bitcoin and this time I pray that they won't let it be silenced.

Disclaimer: This does not constitute investment advice.