You asked “Who will protect your money?” It won’t be the Bitcoin miners. It won’t be MP Pierre Poilievre. In fact, Poilievre is using the Bitcoin confusion to try to add to his votes in the conservative leadership race. He might add some miss-led support to his campaign but in the long-run, the Bitcoin believers are the ones who will lose.
The simple reason to be a skeptic of Poilievre’s Bitcoin BS is that no responsible conservative MP would support Bitcoin over the Bank of Canada. The Bank of Canada controls the Canadian dollar. Nobody other than the collectors control Bitcoin or other cryptocurrencies.
And, critically important, is the simple question, “How does Bitcoin protect anyone from inflation?” The answer that Bitcoin is finite is capricious. Why should this supposed limitation on Bitcoin prevent it from inflationary influences? Inflation can impact Bitcoin in exactly the same way as a Loonie that sits in your dresser drawer. It is as simple as the price of a loaf of bread.
A loaf of bread starts on a potentially inflationary spiral when the farmer procures his seed and operates his cultivator. The cost of the seed is followed by the price of fuel for the cultivator and the other farm equipment. The price of the wheat is determined by the size of the year’s crop, along with world prices, storage costs and shipping costs. Then there are milling costs, bakery equipment, shipping to stores and employee wages. And finally, a loaf of bread appears on the grocery shelf and you wonder why the grocer has to charge so much for one lonely loaf.
It is not the Bank of Canada’s fault that the price of that loaf of bread went up, again. Bitcoin could hardly have any influence. The difference is that the Bank of Canada has oversight on the world economy. It can influence our domestic economy through the manipulation of bank interest rates, and yes, by the judicious borrowing and printing of money.
Since the Great Depression of the 1930s, the Bank of Canada has worked to assist Canadians in alleviating pressures on our Canadian money. Bitcoin is not included. As noted above, the fool and his Bitcoin are soon parted.
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Copyright 2022 © Peter Lowry
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