A Long View

This sceptred isle has seen some changes that must have been bewildering at the time. But let’s digress before we even begin.

This royal throne of kings, this sceptred isle,
This earth of majesty, this seat of Mars,
This other Eden, demi-paradise,
This fortress built by Nature for herself
Against infection and the hand of war,
This happy breed of men, this little world,
This precious stone set in the silver sea,
Which serves it in the office of a wall
Or as a moat defensive to a house,
Against the envy of less happier lands,
This blessed plot, this earth, this realm, this England.
William Shakespeare, “King Richard II”, Act 2 scene 1

That’s a Christmas present for the Brexit brigade. Now let’s get back on topic.

In 1752 Britain adopted the Gregorian calendar, eleven days ahead of the Julian calendar. In 1844 the Bank of England adopted the Gold Standard and abandoned it in 1931. Having gold coins or paper money that can be exchanged for gold worked quite well but it shouldn’t have. If you owned a gold mine you could print money, surely?

I was sceptical about Bitcoins but I can see parallels with the Gold Standard. I have even read that people can “mine” for Bitcoins. As is the way with any innovation, there are thrills and spills in the early days. Trading Bitcoins seems to me a hazardous undertaking but if you must there is now a relatively easy and secure way to participate. The CME has a Bitcoin futures contract that trades in lots of five Bitcoins and has delivery months stretching six months ahead. This limited time suggests that the CME are sceptical too. Take a look at another relatively new currency that the CME lists. The Euro, trading in lots of 125,000 Euros, trades as far forward as December 2022.

Personally I have no intention of trading in Bitcoins or Euros for that matter. However, I have come to the conclusion that Bitcoins or similar crypto-currencies are here to stay and will become part of the international trade landscape. Furthermore they will develop into a useful economic tool for mainstream users not only money launderers and drug dealers. You will know this has happened when your true love gives to you five Bitcoins on the fifth day of Christmas.