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michael pento

Why Michael Pento Should Just Keep His Mouth Shut

by Trace Mayer, J.D. on April 2, 2013 · 20 comments

Reading time: 5 – 8 minutes

One aspect of technology is that it takes intellectual capacity along with consistent and diligent effort to become competent.

Michael Pento, a fairly prominent gold bug, recently appeared on CNBC for a discussion on Bitcoin. Based on his performance the only thing I could think of was, ‘This has to be an April Fools joke. Then my mind shifted to the phrase that it is better to remain quiet and be thought a fool than to open one’s mouth and remove all doubt.’

Mr. Pento really should have read Murray Rothbard who, in The Death Wish of Anarcho-Communists, wrote:

It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.


Whenever I hear someone who is negative towards Bitcoin it makes me wonder if they have even made a single transaction.

Based on the sheer numbers of mistakes, logical fallacies and other foolish things in this interview I have to conclude it was an April Fools joke. Surely Michael Pento is smarter than that.

Really, appealing to the authority of his IT department? That is too funny. After all, if his IT department had any monetary sense then they would have been involved in Bitcoin a lot sooner and have plenty of resources where they would not need to be working for Mr. Pento.

Cyprus has been a wake-up call for people about their money, currency and banking relationships.


In 1994 I had already been using the Internet for several years so I was ahead of the curve. One aspect of technology is that it takes intellectual capacity along with consistent and diligent effort to become competent. Those who have failed to engage in technological preparation are at a severe disadvantage to those who have.

Mastering Information Age tools, like Bitcoin, gives one a huge advantage over those merely using Industrial Age tools just like the Steel and Bronze Ages. And the longer one procrastinates adopting the new technology the further and further they fall behind those who do. Bitcoin merely monetizes the individual’s success or failure with adopting a new technology.

This morning I received an email from a friend who wrote:

Well, I kinda wish I had not gotten discouraged with the computer problem I had when we were looking at Bitcoin a few short months ago [NOTE: November 2012] when it was $10 [Current price around $108].  Where do you think this thing is going from here?

I responded:

Yes, it does have some learning curve to it. But I suppose that is why luck is when preparation meets opportunity.

As far as a pullback, you should just read all the bitcoin articles I have written on both RunToGold and HowToVanish. The wealth transfer is really starting to pick up steam and it is getting fun. And check out this inforgraphic:
potential bitcoin prices
I suppose that there are many in this person’s position who have heard about Bitcoins but have failed to prepare themselves by (1) understanding the technology and how to safely secure their bitcoins, (2) establishing the relationships where they can buy bitcoins such as having accounts at the exchanges, etc. and (3) having put in the hard work of experimenting with this new currency by actually using it in transactions.


Do not laugh too hard at Bryant Gumbel and Katie Couric. It is easy to forget how relatively recent a phenomenon the Internet is for most persons who use it today!

Just like the @ symbol in email, based on the Simple Mail Transfer Protocol, SMTP, so likewise Bitcoin is a new phenomenon on the Internet and understanding what a bitcoin address is in the Money Over Internet Protocol, MOIP, as implemented in Bitcoin is going to become common knowledge.

After all, BitPay added 1,300 merchants in March and processed over $5.2m in transactions which is up significantly from their previously highest month of about $700k. Over 243,000 copies of the Bitcoin client were downloaded in March. And that does not count easier to use options like Blockchain.info.

Cyprus has been a wake-up call for people about their money, currency and banking relationships. With the Bank of Canada and Bank of England floating similar ‘bail-in’ schemes, which poses a grave threat to businesses, depositors should get increasingly cautious about where they keep their capital.


This new technology of Money Over Internet Protocol is going to continue getting easier to use and more widely spread. This is going to greatly increase transactional demand. And that means higher prices. So the wealth transfer continues from people like Michael Pento and his clients to holders of bitcoins. If you plan on protecting, preserving and growing your wealth then you need to get with the times and not listen to ignorant fools. So get a copy of the Free Bitcoin Guide to learn how to get started.

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ABOUT THE AUTHOR: Trace Mayer, J.D., author of The Great Credit Contraction holds a degree in Accounting, a law degree and studies the Austrian school of economics. He works as an entrepreneur, investor, journalist and monetary scientist. Follow him on Twitter. This is merely one article of 242 by .
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{ 19 comments… read them below or add one }

1 RadekS April 2, 2013 at 2:06 pm


Selling your own Guide using ad persona arguments, calling Michael Pento a fool? I am surprised that you can resort to such tactics. I am not saying his not a fool in this regard but why to resort to such tactics?

I work in IT my whole adult life. I looked at bitcoin. I will not trust my computer to store my money. No computer is safe and Bitcoins will become a target once it is beneficial to target Bitcoin users. Phishing for bank accounts credentials is common. Attacks on Bitcoin will be common too. Thus, working with IT I do not trust a computer to store my money. Period. I have no means to protect my bitcoin wallet from the virus infection of my own personal computer.

Please prove me wrong that Bitcoin wallet is safe means of storing money if you have malicious software hidden in your computer watching your every step of using Bitcoin. If I can have access to your computer and see everything you do on your computer is your Bitcoin wealth safe?

Anybody using Bitcoin should read the following link
If you read, if you understand this simple sentence “though it cannot protect against keylogging hardware or software” then you will stay away from this method of storing your wealth.

Someday, people will come up with some nice way to protect your bitcoin wallet so keylogging can not hurt you. It is only then when I will reconsider using Bitcoin to store my wealth.

People are free to choose what they want. Only time will tell who is the fool. I prefer to use the item that has a long history of being money than Bitcoin that requires you to keep your computer safe.

My advice to you, dear Trace Mayer, be extra vigilant and find a method that is resilient against keylogging attacks to avoid your wealth to be stolen from you.

best regards,

P.S. I need to find unsubscribe button. I am very disappointed to see such posts, even if you are 100% right in your perception of the future for Bitcoin. It is sad to see you to resort to such tactics of calling people names.

2 John S April 2, 2013 at 7:53 pm

The old “silk road strawman” drives me nuts. I’m trying to remember what most drug dealers used before bitcoin. Oh yeah! GOVERNMENT ISSUED FIAT CURRENCY! I almost forgot before getting back to the shelter of the monastery. My only regret is that I didn’t drink the Trace Koolaid sooner, like when you made the call at less that $5. I’m slowly getting in now. Keep up the great work buddy.

3 John S April 2, 2013 at 7:53 pm

I forgot to ask your take on Litecoin?

4 Trace Mayer, J.D. April 2, 2013 at 11:22 pm

John S,

I think LTC is a viable for of insurance in case there are issues with the BTC because there are a few differences in the protocol. I do not really like it as much fundamentally for a few reasons. Nevertheless, I have dabbled with trading LTC on BTC-e. From Jan to today it is up about 6,200%. I recently closed out at around .038 LTC:BTC a small portion of my position, but enough to represent a complete return of capital and 40% return, and withdrew it to an address. I will let the rest of the position ride along with all the NMCs I am hoarding. Fun times!

5 Trace Mayer, J.D. April 2, 2013 at 11:33 pm


I am not sure what you think an ad persona argument is but in this case it is clearly not the case.

Mr. Pento alleges he adheres to the Austrian school of economics where Rothbard is a leading intellectual luminary. Rothbard stated it is ‘totally irresponsible to have a loud and vociferous opinion’. Fools are generally regarded as those who are irresponsible. Mr. Pento’s commentary on CNBC reveals complete ignorance of even the most basic fundamentals of Bitcoin. Then he talks over, very loudly, the one person who has the knowledge to answer the questions Mr. Pento raises. Thus, Mr. Pento is a textbook example of the type of fool Rothbard was referring to and is not an ad hominem attack but instead a statement of fact that Mr. Pento has a vociferous opinion about a topic he is ignorant of.

Regarding ‘a method that is resilient against keylogging attacks’ I would recommend the Brain Wallet or ‘cold storage’ wallet. And I give step-by-step examples of how people can implement both strategies in the Free Bitcoin Guide. And notice it is a FREE guide; it is not being sold.

But the other concerns you raise are substantive about Bitcoin security and people who want to hold bitcoins should be cognizant of them and take adequate precautions to secure their bitcoins. Additionally, I recommend keeping large amounts of bitcoins in secure ‘cold storage’ and de minimas amounts for daily spending in the main wallets one logs into on a regular basis or uses on the client or app. That should help minimize any potential loss from compromised security.

6 Dookie April 3, 2013 at 12:44 am

If you use new wallet private key for every transaction which is generated offline, you’re safe… Today, most of the money supply is digital and it is wrong to think that IMF or Visa is safer than BTC, they’re all in a same basket now…

Now, a treat… Major debunk of ‘bubble’ gibberish , for the ones who get it… :)

7 Steve Merrill April 3, 2013 at 9:41 am

Thanks Trace, I agree with you 100% on Pento’s attitude — do some homework please! Below is my recent bullion4bitcoin arbitrage update to Bill Murphy’s community at LeMetroPole Cafe’, from yesterday morning:

From: Midasnh@aol.com [mailto:Midasnh@aol.com]
Sent: March-20-13 10:21 AM
To: steve@trade-up.ca
Subject: Re: Bullion for Bitcoin Update

Hello Bill, I thought I would check-in with some good news on this MOST ridiculous day. As of this morning our Bullion for Bitcoin arbitrage is now up a huge 340%! The 112 BTC we earned for one-hundred ounces of 999 fine on February 15th is now worth $12,880 (at $115 BTC/Cad), which will purchase approximately 440 ounces of Silver at $29 per ounce (0.2512 BTC/oz). As I write to you the Bitcoin is trading on Mt Gox at $108, and the global market cap is $1.14 Billion, approximately the size of Mr. Sprotts net worth ($1.22B according to Wiki, but likely much less today). If the Bitcoin’s growth should slow to 25% monthly for the balance of the year, from 100% plus, the Bitcoin exchange-rate would be somewhere north of $550 and the market cap around $6.5 Billion, or roughly ½ the size of Silver Wheaton. Sounds crazy I know, but for this to happen the Bitcoin needs only to absorb 1% of the Fed’s monthly pump and dump operation. I have now helped at least two dozen Canadian metal-heads slide ‘some’ of their bullion into the Bitcoin … this trade makes too much sense for those of us already short fiat money. And for the first time in our lives we may all be witness to an actual fair and free market play-out in the Bitcoin as the currency wars escalate. What timing! I am off to Calgary this weekend for The Cambridge Show and happy to meet with any Albertans interested in learning more. Cheers!

Steve Merrill
Tel 778.835.7667

8 RadekS April 3, 2013 at 10:52 am

Dear Tracy,

Clearly for me (as a foreigner) a word fool has much stronger meaning and it is perceived as a general statement about the person. Maybe, I associate strong meaning to this adjective. Anyway, I see no reason to call him a fool, it is always better to say he made a foolish statement.


9 John S April 5, 2013 at 10:09 am

Radek, Trace needs no defense beyond his own capable response. A fool is one who knows the truth and yet does not act accordingly. Trace lays out all the fundamentals and is well versed in the Austrian school, so he weighs his words accordingly. I too am aghast at the ignorance of some Austrians that are so anti-bitcoin. Another one is Chris Duane who seems to have some basics but is on a mission to dissuade people from a great new medium. The appropriate response to a fool is to answer him according to his folly lest he become wise in his own eyes. I see no social faux pas associated but rather reffering to Trace as ‘Tracy’, not that demands removal of the perverbial glove.

10 Trace Mayer, J.D. April 5, 2013 at 10:36 am

John S, If one wants to step into the kitchen of public opinion then they have to be willing to take the heat. If Michael Pento can point out any errors in my analysis then he can bring it on. Additionally, since many Austrian school economists are also liberty proponents therefore I have already written about Why Bitcoin Acceptance Should Be A Litmus Test Of Liberty Proponents.

11 RadekS April 5, 2013 at 12:01 pm

Dear Trace,

My apology for using “Tracy” instead of Trace. It was simply a mistake.


P.S. John S. , Thank you for pointing out my mistake.

12 Trace Mayer, J.D. April 5, 2013 at 5:58 pm

RadekS, No problem. Thanks for contributing to the discussion.

13 John S April 5, 2013 at 6:21 pm

I agree. No problem Radek.
It would seem to me though that the bottom line is that people ‘trust’ computers the world over. The basic code has not been compromised as Trace has documented well. The incessant hacking attempts on the exchanges seem to just strengthen and reaffirm the bitcoin validity.
The Achilles heal to me seems to be the necessity to even engage with the banks (transfer of funds, deposits from sales etc). I’m still a newbie so maybe its just here in the great white north or maybe I’m yet to discover more – which is a foregone conclusion really. Trace is my main feed and I try to keep current on any and all bitcoin links and information I can. I’d like to think I’m a logical person and that I have a sense about things and while I see some of the inherent weaknesses I also see the huge upside. The biggest to me is the anarcho currency aspect while governments tighten their grips on the debt slaves.

14 Commodities News April 7, 2013 at 11:18 am

This article is very useful to us. Thanks

15 Chris April 7, 2013 at 8:44 pm

RadekS wrote:
> I will not trust my computer to store my money. No computer is safe

Indeed. That’s why I store my money in the bank, where they never use computers.

16 agsilverbear April 10, 2013 at 6:16 pm

Thanks for all you do, Trace. Keep fighting. :-)

17 Dave Keller April 13, 2013 at 9:35 am

Hi Trace,

I knew the minute that you attacked Mike Pento, that was a mistake. A published apology is in order. Man up my friend and restore your creditability.

18 Trace Mayer, J.D. April 13, 2013 at 10:54 pm


Where is the error in my analysis that would require any apology?

19 Tony May 8, 2013 at 11:12 am

Bitcom BUST! Looks like Mr. Pento was right after all. Who the hell really wants a bitcoin anyway? Psstttt….here’s a little secret….Bitcoins are NOT real….it’s make believe. Hence the reason it crashed hard. This is a gold site. Stick to gold and silver and you’ll be fine. Stop defending phony make believe currencies. Mr Pento should be listened to by all serious investors.

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