Bitcoin and Cryptocurrency

Ultimate Demise of Bitcoin and Cryptocurrency - What Investors Need To Know
Welcome to another edition of Ringside Politics with Jeff Crouere!

WGSO Radio Interview with Dr. Stephen Leeb and Jeff Crouere @WGSO990AM

Jeff Crouere- WGSO 990AM Host

It’s been very interesting to hear about Bitcoin and Cryptocurrency and the influence of China and how Stephen believes that it could really be the way that cryptocurrencies are brought down in value. China controls more than 51% of all Bitcoin mining- which gives them the ability to create what is known as a ‘double spend’. The rest of the digital currency can be spent twice, creating a potential problem because digital information can be reproduced easily by people who know the blockchain network and how to manipulate it. Which is equivalent to being able to counterfeit Bitcoin. So, another phrase here we want to get Stephen’s expertise on… tell us about Blockchain- if you can define that for us. 

Dr. Stephen Leeb, Ph.D.

Blockchain is an entirely different animal than Bitcoin. Although Bitcoin uses blockchain and that part of Bitcoin is great. It’s a distributed ledger- which means it’s like accountants which keep books that keep track of the different transactions. Well, this is like passing books around to a whole bunch of people that keep track of all the back transactions. Except, the difference is this set of books can’t be stolen. It can’t be accessed by anybody, it remains in the hands of the computer. Once the transaction is set in stone- it stays in stone. So, that’s a good aspect of any type of financial or contractual operation that uses blockchain- it’s doing something very, very smart. However, blockchain records the past and that past cannot be rewritten, that’s true. But we are talking about the future. In the future, anytime China really wants- I’m not saying on a minute’s notice- but they can gather 51% of Bitcoin miners. Because they have over 51% just in that country and that’s not talking about Iran and Russia which are also not the best friends of the United States. They can gather easily, in my opinion 51% of miners, to create the so-called double spend. And that’s the end of Bitcoin. 

Peter Thiel, yesterday was saying that Bitcoin could be used as a major financial weapon against the dollar. Now, I didn’t quite agree with his reasoning but I certainly agree with the conclusion. It could be and this is serious stuff! And if it happens we have only ourselves to blame. As well as our financial institutions to blame because they’re encouraging this trading in the US. While at the same time, they’re saying ‘let’s clean up the environment’ but it’s okay to trade Bitcoin which makes the environment filthy. 

Jeff Crouere- WGSO 990AM Host

How does Bitcoin make the environment filthy?

Dr. Stephen Leeb, Ph.D.

The mining of Bitcoin and Cryptocurrency uses so much energy that we could otherwise be devoting or substituting for solar energy, for wind energy and things like that. Basically, whether you believe in climate change or not…I’m saying that all the financial institutions are on board as far as climate change goes except if there’s something like Bitcoin that comes along. This is my own pet peeve, okay. You just have to point out the hypocrisy of these financial institutions which say; ‘we’ve got to do everything in the world for climate change…we’ve got to reward companies that are reducing energy consumption.’ Then all of the sudden they start trading Bitcoin and encourage it. 

Jeff Crouere- WGSO 990AM Host

So, the reason it uses so much energy- because it involves such heavy computer calculations, right? To verify the transactions… 

Dr. Stephen Leeb, Ph.D.

Yes, this is exactly the case, Jeff, there is nothing in this world that is free. And Bitcoin is one of the least free things- and I haven’t even touched the other bad parts of it. 

Jeff Crouere- WGSO 990AM Host

As the price of Bitcoin increases, Stephen, I would assume the energy consumption would increase as well.

Dr. Stephen Leeb, Ph.D.

Every indication should suggest that. Once you are at the level where you are using as much energy as a country the size of Switzerland, you’re using as much energy as the solar energy industry created in 2019. So, it’s like the year 2019 did not even exist in terms of the creation of solar energy because all that energy is being consumed by Bitcoin and Cryptocurrency. It’s nuts- it’s crazy. This country has to wake up to what it’s doing. Why not just hand the keys to China? The one good thing we have in this country right now is that we have the world’s reserve currency. And we might be giving up that- to buy more Bitcoin!

Jeff Crouere- WGSO 990AM Host

The more Bitcoin gains popularity- the worse it is for the dollar?

Dr. Stephen Leeb, Ph.D.

Potentially, yes. And all the more likely that China- if they wanted to really create a massive catastrophe, they could. The entire Bitcoin and Cryptocurrency market has a valuation greater than Apple. If it were to go up to $150k and I’m not saying it won’t. What I’m talking about now, Jeff, is China’s ability to manipulate Bitcoin or other cryptocurrencies anytime they want. China could sit back and say ‘let Bitcoin go to a million dollars.’ I mean, if they have the power to destroy it…do you know how much money is at stake? Trillions and trillions of dollars. 

Ultimate Demise of Bitcoin and Cryptocurrency - What Investors Need To Know

Jeff Crouere- WGSO 990AM Host

If China pursues their own digital currency, will that be backed by something like gold?

Dr. Stephen Leeb, Ph.D.

Eventually, I believe it will. Yes, but I believe China is moline and you’re certainly not going to ever get me to say anything good about the Communist Party. But they’re not stupid, they do not want control of the world’s currency. They want enough control so they can make China a great country. Basically for their people and that’s what they’re out for. If you want to follow China and learn about China- it’s best to read about Singapore. China has followed Singapore almost step-by-step. This is what I started writing about China 10 years ago, I realize that. The Chinese people in Singapore, the Chinese people in Taiwan are not any different than the Chinese people in China. 

Jeff Crouere- WGSO 990AM Host

But Singapore and Taiwan are not communist nations, am I right?

Dr. Stephen Leeb, Ph.D.

No, they are not. And China did not necessarily have to become a communist nation either. If you ask me to forecast that- I’m forecasting probably beyond my lifetime. My strong guess is China might become a democratic nation. Singapore and Taiwan are small. China is a country right now of 1.4 billion people. I think the argument they were making to themselves, especially looking at what happened in 2008 and 2009 in this country- there was a lot of talk when Xi Jinping took power that China might consider a path to democracy. But they were doing pretty well with what they were doing- and we looked like we were faltering. 

Right now, when you see things like Bitcoin, we’ve got to wake up. Someone has to throw cold water on President Biden and say ‘hey wake up, look at what’s going on!’ Look at Larry Fink, the guy who’s running BlackRock. The people running Vanguard, etc. They are going to try and make more and more money on Bitcoin. It’s like more and more control.

Jeff Crouere- WGSO 990AM Host

To sum things up, rather than Bitcoin, you recommend that investors focus on gold, correct?

Dr. Stephen Leeb, Ph.D.

In the first 40 years of the 21st century, owning gold (burying it in your backyard or buying an ETF) outperformed the S&P 500 – with dividends reinvested it outperformed the S&P 500 fivefold. The S&P 500 went up threefold. Case Closed!

I mean, the conditions that characterized the first 20 years of this century I believe are going to characterize the next 20 years in spades- on steroids! Gold outperformed everything else in the last 20 years, although, there were setbacks. Right now, gold has done nothing but go down over the past 12 months, referred to as a correction. This is the time to be buying it…certainly over Bitcoin and Cryptocurrency. Let’s face it, Bitcoin is nothing more than a ticket to disaster. Gold will always be a good investment. And I think that over the next 20 years, it will be much, much better than just good.

Jeff Crouere- WGSO 990AM Host

Stephen, you made your case! Very well…and we appreciate you being with us and would love to have you back on the program. Thanks so much, fascinating discussion.


Real Talk Revolution with Jeff Crouere @WGSO990AM

The interview starts after the 2:02:00 mark