Well I respect the guy after watching some of his doco's, but his opinion on Bitcoin is obviously completely invalid because he appears to know nothing about how it works. Anyone who doesn't understand it is obviously going to be skeptical of the claims made. And also the concept of bitcoin undermines his basic premise that we "have two choices" for who controls the money; private banks or the Government.
Bitcoin relieves us of choices and makes the process entirely decentralized. Clearly this is more desirable than allowing the Government to control money. His trust in the Government is obviously naive, but I would still prefer a
debt free currency issued by the state over a
debt based currency controlled by central banks; and that's where he has a point.
I mean the Greenback was a good currency. It wasn't debt based (like bitcoin) so it removed power from the banks, and the Government back then was fairly trustworthy. Of course it was still a fiat currency, but in reality bitcoin is a fiat currency with nothing of intrinsic value backing it, although obviously it's quite different from any other fiat currency.
The reality of the situation today, is that even if we wanted a gold standard currency it simply cannot happen because the Government cannot afford the gold required. When it comes to official national currencies, the best option for our Governments is to use state issued fiat money which isn't created as debt. That's realistically the best option for the people.
However I wouldn't agree with him that fiat money is preferable over "sound" money. His dislike of gold is a bit misguided imo, in fact he states that any commodity would make a bad currency. We must also remember that bitcoin is a limited digital commodity. His reasoning seems to be that commodities are horded by the rich and useless as currencies because they are too scarce.
The problem with this logic is that gold is only stored away because we don't use it as a currency. If we dropped the dollar and started using a gold based currency then we would see gold circulating around everywhere. Furthermore, gold is interchangeable with fiat currency. Having a fiat currency isn't the huge disadvantage to the elite that he imagines it to be.
Think about bitcoin, some rich person could come in and buy up a huge portion of the market. Wealth will flow where wealth flows, regardless of the currency you use. Having paper as money doesn't magically make people richer compared to using precious metals as money. The only thing we can do is make the currency harder to manipulate.
But under even a state owned fiat paper money system, it's easy for the people who control the money supply to manipulate the currency and direct the flow of wealth via artificial means. Now in reality this is simply a ploy to offset the "natural" flow of wealth to the rich. And when I say "natural" I mean the wealth flows their way via their huge corporations and banks.
Now of course banks and huge corporations don't exactly play a fair game, they pay their employees slave wages and funnel most of the profits up to their major shareholders. But this is really a business issue concerning the nature of "capitalism" that we now operate under, it isn't a money issue and shouldn't be fixed with money via inflation.
If you don't understand what I'm saying yet, let me put it simply: with a state owned currency the government can create money out of thin air at no cost (right now they trade debt instruments to receive new money). By doing this they cause inflation and the value of the currency in question decreases, thus making the fortunes of the super rich worth less.
And at the same time the new money they create is generally spent on public services such as the building and repair of infrastructure, healthcare and social security spending, and so on. So the general populace, which is mostly the middle class, actually gains wealth overall because the money gets spent on these types of things.
Now of course this new money might often get funneled through to large companies directly (through lucrative gov contracts) or indirectly (via consumer spending etc), and what happens is that the wealth continues to flow to where it "naturally" wants to flow under this current version of capitalism we have. So then the Government rinses and repeats the process.
They keep creating more money regardless of demand and economic growth, it keeps getting sucked up to the super rich, and eventually the amount of money in active circulation is tiny compared to the amount of money which has been horded away by the super rich through this continual funneling process. And now they have extreme power over the market.
They could dump huge amounts of currency onto the market and cause all sorts of other problems. And of course this problem also occurs even when private banks control the issuance of currency, all the new money the central bank creates will undergo the same funneling process. But the point is you can't create a currency which magically makes people wealthy.
All we can do is make it harder to manipulate, as I already mentioned. We can make it more in our favor, by making it non-debt based and thus taking the advantage away from the banks. We can even make it limited in quantity and impossible to create from thin air at no cost, such as the case with bitcoin. But we will never create a currency incapable of flowing to the rich.
That's essentially attempting to build a currency with some sort of inherent self-regulating equality mechanism. It's completely absurd. We will only stop a disproportionate amount of wealth flowing into the hands of a few it we actually look at the system responsible for deciding how wealth is distributed, which is the business framework we use.
So it's not a bad thing to use a commodity as currency (as long as it has sufficient divisibility). We must remember that all our common mediums of exchange, whether a commodity or not, are interchangeable stores of value. The most important thing is making sure our currency is secure, predictable, and decentralized; since trying to centrally manage the distribution of wealth is redundant.
EDIT: also this article I wrote is extremely relevant to this discussion:
Fiat Money
