On the front page of both The Wall Street Journal and the Financial Times today: bitcoin. It was just the other week that we reported that bitcoin was about to hit the $8,000 mark.
Now it has passed $11,000…
‘This is just the beginning,’ says our in-house expert, who is currently attending a crypto conference in New York.
‘There is so much brain power here…and so much energy. This might be a bubble. But it is not just a bubble. There is something going on that is real and unstoppable.’
‘It is not just a bubble,’ adds hedge fund manager and bitcoin investor Mike Novogratz. ‘It’s going to be the biggest bubble of our lifetimes.’
Angels with firearms
This Fin de Bubble Epoch has taken on a magic, unreal character.
With so many impossible things happening before breakfast…we’re ready for anything by dinner.
US stocks reached new highs yesterday as the GOP tax bill boosted animal spirits and excited ox-like brains.
Apparently, Donald J Trump helped to get a couple more senators on board; the bill may actually become law of the land.
What connects these items is that they are both on our beat — money. And both are either fraudulent…or inscrutable.
Bitcoin pretends to be nothing; perhaps it is something. The tax bill, on the other hand, pretends to be something…and is mostly nothing at all.
Neither is what it appears to be — one is more, one is less.
But most of the modern world — its money included — is based on false pretences. And black magic. Our angels wear side arms…our saints swear in public…and our bankers and computer whizzes invent new ‘money’.
That’s our beat, money. And that is where we look for the frauds, fantasies, and natural phenomena that keep us laughing. Can you really create ‘money’ on a computer keyboard?
We don’t know. But we are quite sure that the central authorities can’t pluck it out of the air…and send it wafting through the population like the odour of lilies at a funeral…to make people happier.
Exotic port of call
Yesterday, we set sail for a look at a rarely-visited isle. It is home to the contrary hypothesis — a place where people rarely go…where those that do live well without much money.
Of course, we could be describing any one of dozens of real islands. In the many islands of the Aegean, for example, people live well — with little money.
They drink good wine. They eat fresh fruits and vegetables. They get a lot of sun and — if they are up to it — enjoy a swim in the warm sea.
Out in the Atlantic, too, São Miguel Island in the Azores is said to be a paradise, with a perfect climate, no mosquitoes, and low prices. There are the many islands of the Pacific, too — such as the Cook Islands, where you can rent a bungalow for as little as $150 a month.
But no…those destinations are too obvious; those seas are too crowded with cruise ships, tourists, and retirees for us. Instead, our port of call is more exotic.
Our guide on this journey is Clive Bell.
Mr Bell has been dead for more than half a century. But he left us his thoughts in his classic essay: Civilization.
His father was a successful coal mine operator in Wales. Clive found that coal dust did not look good under his fingernails. An art critic, he spent his time thinking about what made things beautiful…or at least interesting to the eye and satisfying to the spirit.
To bring the object of our attention into closer focus, we’re wondering if the rise in bitcoin will do its beneficiaries much good.
Is money gained so easily — almost as readily as the Fed’s fake money — a source of joy…or misery?
And how about the old-fashioned kind — the kind you make by sweat and toil. Does that make you happy?
And finally, supposing the GOP tax bill were more than just bluff and gimmicks, would the extra money really help those who get it?
Civilisation’s great hope
If the point of life is merely to accumulate wealth, the question answers itself.
Had you bought bitcoin at the beginning of the year, you would have multiplied your dollar wealth by a factor of 10. And the year’s not over; at this rate, bitcoin will hit $12,000 or $13,000 by Christmas. Next year, it will hit $120,000. Or not.
But if the point of life is to learn, what have we learned?
Not much. Bitcoin goes up. No one knows why.
Or suppose the point of life is to do good…by adding to the world’s wealth. What does bitcoin add? Not a penny.
But what if the point is to live well? To savour a grandson’s smile…a glass of whiskey in front of an open fire…a story well told…sunlight on a wizened hand…a tax collector with a flat tire.
In other words, what if the real purpose is ‘thought and feeling’, as Mr Bell put it, rather than stuff?
Ah, that’s where an art critic might be useful. Yesterday, we noted that the rich man might be too busy to think or feel. His money might get in his way.
His imagination dulled by a life devoted to lucre…his spirit gulled by substitutes for real taste and judgement…what can he do?
He might have no higher aspirations than to play golf with Donald Trump or visit Disney World with Donald Duck.
But it’s not the money that interferes with a good life, says Bell. It’s time. Bell:
‘Unluckily, material security, leisure, and liberty all cost money; and ultimately, money is to be obtained only by productive labor. Now almost all kinds of moneymaking are detrimental to the subtler and more intense states of mind, because almost all tire the body and blunt the intellect…
‘How many thousands of [lawyers], civil servants, and men of business who left Oxford and Cambridge to relish the best have become, after 30 years of steady success, incapable of enjoying anything better than a little tipsy lust, a sentimental friendship, cheap novels, cheaper pictures, vulgar music, the movies, golf, smoking-room stories, and laying down the law?
‘Generally speaking, only those who never had to earn money know how to spend it.’
By Mr Bell’s reckoning — not ours — the young bitcoin millionaire may be civilisation’s great hope. With all his unearned scratch — he might be the only one to live well.
For Markets & Money