It is easy to understand how the increase in value of cryptocurrencies in the early days, which created an increase in wealth for many, has encouraged the incredible growth of interest in them that we are experiencing. Investment in today’s day and age seems to embrace momentum trading in every investment vehicle. Nothing ever seems to trade at it’s real current value. Perhaps no one ever actually really understands or cares what that real value should be. I will submit an example from my own experience. When ROKU stock traded down to $70 a couple of years ago, I bought some shares thinking that this company has a good future and the stock is substantially underpriced. When it got hot and was increasing in price, I sold shares at $160 and $200 thinking that it is now overpriced. The stock did not stop going up until it was at $470 a share. Today it is around $90. This kind of momentum trading is accentuated by computerized algorithm trading that is taught in college master programs today. If you do not pay attention or care about what is happening inside your investment today, you can still make tons of money on the way up, but your portfolio will be devastated when it goes down. Even if you do study and understand your investments, the market will rarely price them at true current value. Unfortunately, about 90% of trades today are made by a relatively few investors who control the funds that contain the investments of most Americans. Prices of things will be what they think it should be whether correct or not. Today, they think that the market should be going down due to economic and geopolitical considerations, so that is where it is headed and almost everything is already underpriced. Dumbness pervades. 

But the dumbest of all investors are those who believe in and encourage investment in cryptocurrencies. And they are becoming more and more accepted by major investors and even some bankers. Think about it. Buying a crypto coin is trading your actual real money for an entry on someone’s computer. It is likely that you do not even know whose computer it is. No one guarantees the value of your computer entry or your coin or that it will be there if you decide to cash out. The manager of the largest crypto fund in Canada transferred a couple of hundred million dollars out of the fund into his own accounts, faked his own death and disappeared. A lot of investors lost their life savings. But the gigantic volatility and the inherent risk of crypto investments is not the primary reason we should not be making such investments. They represent a dramatic risk to the very democracy and capitalist system in which we live and which has provided the greatest society ever created on Planet Earth. 

Kathy Wood of Ark Investments recently was interviewed and was quoted as saying that we are experiencing in this country the greatest misappropriation of investment capital that has ever occurred here. I believe that she was referring to the fact that, in these bad economic times possibly upcoming, investors who control most of our capital run to hide in companies for reasons of safety that are not growth companies and sell investments in companies that likely have great futures and will grow well into the future. I say she is correct, but for a very different reason. Our great democracy and the capitalist system upon which our economy runs depends on the employment of capital for the production of the goods and services needed by consumers. We are talking about employing trillions of dollars of capital to invest in crypto coins which, not only have no intrinsic value, but also will not produce a single acre of tomatoes or a single washing machine to be used or eaten. This same theory applies to the trillions of dollars of capital which is planned to be used for creation of a metaverse. If we use all of our future capital to create computer entries of imaginary coins and images we see that are not real, where will future roads, bridges, tunnels, cars, groceries, appliances, buildings, homes and everything else we need to live come from? We have made and are making two major mistakes which have been and are going to continue to destroy the entire supply side of our economy In addition to misemploying capital, we have exported the manufacture of everything we use in this country today to foreign manufacturers. Surely, it is obvious to everyone already that we have not been adequately able to rely on foreign countries to provide us with reliable supply of goods and services. When will we wake up and relearn to make everything we need right here at home. Imagine the inflation that this has already caused. Now we want to not use our available capital to produce goods and services here in the future to an even larger extent. Other countries will follow our example. Where will goods and services and modernization come from? Imagine the inflation, devastation of our economy and starvation that could be the result of these misappropriations of assets.

 Cryptocurrencies also have other dangerous effects. Even if the government guaranteed the crypto and substituted crypto for currency, the danger would exist that the government would have too much control over our lives and how we use our money. In fact, it would provide the government the capability to raise taxes and take the money right out of our accounts without our knowledge or approval.  No government should have that capability. 

 It is essential that Congress enact legislation to make cryptocurrency illegal as soon as possible and discourage the creation of the metaverse. All other countries should be encouraged to do the same. These are ideas that are potentially very damaging to capitalism and our democratic way of life.