Today we have a thought provoking article from one of our favorite gold dealers, the Hard Assets Alliance. The fact that we’re members obviously is one reason that it’s one of our favorites. But we seriously investigated what this organization stands for, what it does and what it offers the customer before putting in our application to become a charter member.

Just because we are on board with a company, doesn’t mean we’re on board with everything their writers put out. In fact, we sometimes write for the Hard Assets Alliance. Today we offer this article to our readers to help promote awareness and challenge perspective. Having said that, we cannot agree with the assessment of bigcoin.

One of the arguments presented here is that it holds no intrinsic value. This is true, but also incomplete. The monetary choices we have in today’s financial climate consist of precious metals and fiat currency. There is no in-between. Thus, the investor has two basic choices – own the one true money or the country of your choice’s empty promises.

But bitcoin is different. Unlike the currency of every nation on the planet, bitcoin cannot be printed at the whim of central bankers. Instead, the ability to increase the total number of bitcoins is based on a formula that continues to become more difficult, with a cap set to expire at a set amount. And it’s this specific characteristic that puts bitcoin in a place somewhere between central bank fiat currency and precious metals.

Make no mistake, bitcoin is a fiat currency. It is speculative. It is volatile. But as long as people accept it as a medium of exchange, it’s a great alternative to central bank issued currencies. However, it’s not a great alternative to precious metals, simply because of the point Justin makes in the following article. It carries no real intrinsic value.

With this caveat, we encourage you to read Justin’s thoughts and develop your own perspective. In the end Hard Assets Alliance offers what we consider to be the most amazing opportunity to control your precious metals investments from the comfort of your own home.

Kind regards,
J. Keith Johnson

By Justin Spittler, Hard Assets Alliance Analyst

In the weeks since Cyprus President Nicos Anastasiades threatened to plunder the bank deposits of private citizens in order to quell the nation’s banking crisis, both the stock and gold markets seem to have shrugged off the news. Interestingly, the unprecedented announcement appears to have provided the initial impetus behind the recent explosion in the price of bitcoins.

Two days after the Cyprus story broke, the price of a bitcoin jumped from $45 to $55. The digital currency continued to rise parabolically before reaching an all-time high of $266 on April 10. Like other euphoria-driven bubbles, this meteoric rise was followed by a violent correction that dragged the price down to $105 in a matter of hours. Subsequent price gyrations led to a suspension of trading on bitcoin’s largest exchange, Tokyo-based Mt. Gox. The nausea-inducing ride was the latest chapter in the digital currency’s brief yet fascinating history.

via Money of the Future or Fool’s Gold? | Worldwide Precious Metals Exchange.

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