Gold and Cryptocurrency: Financial Denial of Service
When FDR became president, one of his administration’s first acts was to stop a shipload of gold from leaving the USA. It was, literally, a denial of service attack on an already deflationary economy. At that time, the US economy was in such a poor state that the very wealthy thought the best thing to do was to protect their wealth by converting their banknotes to gold and removing the gold from the USA, thereby making any economic improvement impossible – a denial of service attack on the US economy. Metallic currencies have the failing of being inflexible in supply. In a financial system based on gold or silver – “specie” – the wealthy can simply cash in their chips and take them home, and the economy freezes because, literally, it is out of money. In that situation it is not that there is less labor, fewer farms, stores, or factories, or less demand – there is a shortage of money and barter becomes the only way to do business. Cryptocoins combine the problems of metallic and fiat