By Bill Bonner, Bonner & Partners
RANCHO SANTANA, NICARAGUA – Over the weekend, bitcoin rose to more than $7,500 – a 200% gain from when we bought in June.
“Is that all?” replies a colleague. “I got into a bitcoin miner at 2 cents a share. It’s now trading at $7.
“I’ll do the math for you. If you had put in $1,000, you’d have $350,000 today.”
What to make of it?
Better Money?
“Nothing like this has ever happened before,” says another colleague.
He’s right.
Bitcoin offers neither products nor services. It makes neither profits nor losses. It is neither animal, vegetable, nor mineral… quick nor dead… ridiculous nor sublime… Laurel nor Hardy.
Is bitcoin better money? A bubble?
Perhaps it is both.
We repeat our caution to readers. Bitcoin is not an investment; there’s no way to analyze or estimate the likely return. It’s not a speculation or even a gamble; there’s no way to compute the odds.
But it’s hard to resist an asset that doubles every 90 days.
Our advice: Treat it like entertainment. Put in a little money. If you get rich, lucky you. If you lose your money, don’t worry about it; enjoy the show.
Do not count on bitcoin for your retirement.
Flying Pigs
Bitcoin is based on new technology. And new technology is our subject recently.
Most people believe that progress and time are the same thing. If it is newer, it must be better!
Think of all the progress we’ve made since we lived in caves and ate raw bats.
It’s easy to believe that time will inevitably bring more progress. Sometime in the future, we will discover cures for cancer and foot rot. Women will be treated like men. Energy will be free and clean. No one will have to work (thanks to obliging robots).
And everyone will get a check from the government.
Cars will finally fly, too. Or maybe pigs?
But new technology doesn’t always make us richer or better off. (What did the nuclear bomb do for us?)
And some new technologies seem to destroy GDP rather than add to it.
Innocent and Charming
Today, we introduce a more shocking and thoroughly disagreeable idea: Maybe the future won’t be all it’s cracked up to be. Maybe the past was actually better.
Imagine that you lived in a comfortable, nice house from the 1950s… in a cute little town like Mayberry, North Carolina.
You had a small TV set in the living room, where you watched Amos ‘n’ Andy and I Love Lucy… a 1956 Chevy in the garage… and – instead of the iPhone X – you had an old-fashioned telephone on a party line.
“Mabel…” you’d say to the operator… “would you put me through to Eleanor?”
“Oh, I’d like to, Doris. But she’s at the beauty parlor.”
Sounds delightfully innocent and charming, doesn’t it?
Of course, you would have none of the tech breakthroughs and refinements of the last 50 years: No opioids paid for by the government. No cruise control. No GPS. No remote control. No cellphone. No laptop. No microwave oven.
Would that be so bad?
Sleep-Deprived
It is estimated, for example, that the average person now spends 8.4 hours a day on some form of electronic communications device.
Surely, that marks “progress.”
Or does it?
Experts warn that people now spend so much time on their iPads, iPhones, and other gadgets that they aren’t getting enough sleep.
One doctor, quoted in the Daily Mail newspaper, guessed that two-thirds of the British population suffer from sleep deprivation.
People are spending more than half their waking hours in communion with an electronic device. What did they do with those hours in the 1950s?
Talk? Read? Think?
We know what has been gained: hours of distraction and idle amusement on Facebook, Instagram, WhatsApp, and email.
But what has been lost?
We don’t really know.
A pleasant greeting on the street… a fresh tomato on your plate… a free parking place… a wink from the bookie… a cold beer with the undertaker… a kind word at a funeral… a good book by an open fire… a pile of leaves in the front yard…
…a moonlit night… a conversation on the front porch…
Isn’t it possible that by barging blindly into the future, like a toddler changing his own diaper, we make a mess of things?
More to come…
Courtesy of Bill Bonner, Bonner & Partners
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.
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