Really critical time for Bitcoin

Even though I come from a very technical background, I'm not a huge fan of Bitcoins.  It has less to do with the concept than it does with the reality.  Bitcoin transactions are not anonymous as everyone thinks.  In fact, for highly technical folks like those working at the NSA, Bitcoins are easy to track.  That makes them a bit of a Trojan horse to me.  Of course, I don't buy things that I have to worry about.  Or do I?  If I buy a lot of ammo for my guns, could this be used as probable cause for some kind of anti-terrorism raid?

I think that SovereignInvestor.com captures my view of things in their recent article entitled "Uncle Sam Loves Bitcoins: Run Away!".  It basically say that government is all about control of you to protect their interests and so anything they say or do should be treated with great suspicion or simply avoided.  Let's face it, anyone who trusts the government after Obama's IRS got caught targeting conservative groups is not playing with a full deck.  You simply cannot forgive that level of government tyranny if you are a thinking individual because if you catch them once then how many times did they get away with other related things?   I don't know about you but if I got caught once as a child doing something wrong then at least 20 to 50 other times I got away with it.  Government is a child with power.  A child with a badge and a gun.  Don't underrate what it will try to get away with.  Keep in mind that the government is now the largest owner of bitcoins after having easily confiscated $92 million worth of them from Silk Road.  In other words government can very easily and with the stroke of a pen hit anyone holding a electronic currency with a massive tax (bail in if you will) without even spending money on the collection of it.  This is not a position I want to be in with my own wealth.

In any case, whether or not I care to use Bitcoin or to store my retirement funds in it or make transactions in it is not that important.  I'm looking at the recent chart action and to be honest it is currently leaning toward the bullish side.  The chart had a massive rise followed by a textbook a-b-c retracement to just about the 50% fib.  I can see how people might try to use Bitcoins as an escape from the dollar should the fed prove to have lost control of interest rates.  If our rates go up, we will not be able to afford to service the debt as it rolls over into the higher rates.  That leaves the government with no choice but to print money.  As that happens, some might like the ease at which they can step into and out of Bitcoins in order to sidestep "turbulence" in the dollar or even to profit from a declining greenback.

This is gambling at its very finest but let me warn anyone who makes a profit on these trades into and out of Bitcoin: REPORT ALL EARNINGS ON YOUR TAXES.  Be hyper accurate here because the government will know every move you make and if you make any mistakes in reporting then they will make you pay triple with fines, jail and generally the ruination of life as you know it.  This is not a joke.  The government is going to become increasingly strapped for cash because much of its income is from the trade of debt based payments and when debt collapses, the government revenue will collapse.  They will be looking for spare change under every couch cushion before this is over.

Don't be a victim of government tyranny!  Be hyper careful in the reporting of ALL your Bitcoin transactions where such transaction could be claimed to have generated you a profit.  Expect the worst from our corrupt government.  Unfortunately, I expect government to make up new rules in order to screw people using Bitcoins.  Example: you bought Bitcoins for $800.  Then they went up in value to $1600 in value because of a falling dollar at which time you used them to purchase something.  The government is very likely going to want you to pay capital gains on this delta even though the price of the item you bought might also have doubled due to dollar weakness.  You see how it works?  Any interpretation in their favor is the one they will prosecute you for at gun point.  The government is greedy, evil and corrupt.  That is why I don't want them knowing my business.  Deal in Bitcoins at your own peril.