Cryptocurrencies

With Pierre Poilievre hocking cryptocurrencies as part of his campaign for the leadership of the Conservative Party of Canada people have increasingly been trashing them. They have largely described them as some kind of scam and they are mistaken.

Cryptocurrencies are a logical extension of the the current technical revolution that we are going through. Remember before the Industrial Revolution and the resulting need for more and more energy to make it work petroleum was a useless substance. Hell, even coal, which has been used since antiquity, was not that big of a deal. For centuries, the only coal that was mined was the stuff that was near the surface. If you had to put in any more effort than that to get to it the cost was too prohibitive. It was only after the invention of the steam engine that coal and petroleum products became the important commodities that they have become.

Since the current technical revolution is essentially a virtual revolution, as its main commodity is data, it stands to reason that some of the commodities that would feed that revolution would also be virtual and cryptocurrencies are exactly that, a virtual commodity.

A market for commodities always develop when they become important and one forming for cryptocurrencies should surprise no one. As with all commodity markets the prices fluctuate according to market forces, leading to volatility. 

Incidentally, it should be noted that most national currencies have become virtual as well. There was a time when we used to exchange actual specie, bills and coins, for goods and services. Now we use bank cards. With a few key strokes some electrons move between computers and servers and money magically moves from one account to another but no real money is actually exchanged. It is a virtual transaction. So the difference between say Bitcoin and the Canadian Dollar is much less than people think and those differences are being reduced quickly.

So the problem with Mr. Poilievre's proposal is not cryptocurrencies it is his gross misunderstanding of them.

Although there are a few exceptions most commodities are not suitable to be used for facilitating the exchange of goods and services, which is the function of money. No one would suggest that I buy my next car using wheat, coal, or pork bellies. There was a time when gold or silver might have been appropriate but those times ended when we invented paper money.

The same is true of cryptocurrencies. Since they are a currency they can be likened to gold and silver but like those two commodities they are not practical for the everyday use of buying and selling goods and services and it will remain that way as long as there are national currencies. If countries ever get out of the business of "printing" their own currency, cryptocurrencies could fill the gap. But since that is not going to happen cryptocurrencies will just remain another commodity, to be bought and sold in a commodities market.

Mr. Poilievre is an idiot for suggesting otherwise but the problem lies with him not the cryptocurrencies.

Big Crowds for the Conservative Front Runner

So the media in our country is all a flutter about the crowds that Pierre Poilievre is attracting during this run for the Conservative leadership. They breathlessly assert that this could be a sign that the Conservatives could win the next election. Hell, even some Progressive media commentators, who I find usually have level heads, are giving dire warnings about their significance.

While it is always wise never to underestimate your political opponents and it is also true that if the current Federal government lasts until 2025 (it probably won't) the Liberals will have been in power for a decade, which could lead to a strong desire for change, one should not read too much of what happens during a party leadership campaign into politics in general.

Then there are the specific arguments that we have been seeing that shows that the political class, which includes all of these "journalists" never look more than a few days out.

Mr. Poilievre is indeed drawing big crowds but he is doing it in the West, specifically BC, which always splits its votes three ways in a general election. So one-third of the BC electorate will vote for the Conservatives regardless of who leads them so it should surprise no one that large crowds come out to see him. As well, it should also be noted that many of these people who do come to see him are being bussed in from various parts of the province which would indicate that he does have support in the province but not more than his two predecessors. Finally, it will be interesting if he can attract similar crowds in the East, particularly in the suburbs. 

Then there is the notion of whether having huge support of members of the Conservative Party can be translated into sufficient support amongst the electorate to win an election. More than a few commentators, who do not work for the MSM, have stated that such a feat would be an uphill climb. The simple fact is being successful at winning the leadership of a political party often does not translate into winning a general election. Just ask Erin O'Toole, Andrew Scheer, Michael Ignatieff, Stephane Dion and every leader of the NDP during its history about that. I am certain they would have some really good insight on that topic.

Some of the commentators who are stating that Mr. Poilievre could be a real threat are pointing to the red hot housing market and the fact that young people cannot afford homes anymore so that could be a real problem. Such assertions are silly on so many levels.

First, the younger generations are the most educated generations in our history. They are also the most forward looking and progressive generations. It is no coincidence that those who support right wing populism tend to be older and less educated, while more educated voters tend not to vote for them. So while they may be upset about housing prices they are also very keen on addressing climate change, before they and their children are really left holding the bag in a couple of decades. As well, most of them will not go for rolling back gay and abortion rights as many in the CPC would want. So, Mr. Poilievre's housing plans, such as they are, may appeal to the younger generations but his lack of a viable and effective plan to fight climate change and his party's turn towards hard social conservatism will turn them off completely.

Second, old people vote and young people do not. There are more young voters than old but the last three elections were decided by the 50+ voting blocks. And they are quite happy with the rise in housing prices because most of them are mortgage free, so the rise in their housing prices is pure equity for them to take advantage of as they head towards retirement.

Third, during the 2019 election I made the joke that Royal Lepage was going to win my riding because of all their signs on the front lawns in my neighbouhood. In short, three short years ago it was a buyers market and the current torrid pace in the rise of the price of houses is unsustainable in the medium to long-term. If anybody believes that housing prices will still be a hot issue during the next election they are probably wrong.

Fourth, predicting what will be the important issues during an election, months or years before said election, is impossible and anybody who says differently is full of crap. Remember folks the important issues of the 2019 election were Mr. Scheer's citizenship and whether he was completely truthful in stating he had a real estate licence and blackface. And in 2021 the big issues were the Conservatives' plans for gun control and whether protesters threw rocks or pebbles at the PM. In neither case no one predicted that those would be the issues the elections hinged on and in neither case were real issues discussed during the election so anybody who states that the next election will be about inflation or the price of houses is wrong. 

Pierre Poilievre is probably going to be the next leader of the CPC. He may be able to parley that success into an election win but that is not guaranteed regardless of the crowds he is currently attracting. People who assert or suggest otherwise are out to lunch.