Bitcoin newbie Bill Bonner isn't bullish. He's buggish on the cyber currency...

The DOW hit new highs, gold prices fell again, and Tim Geithner found a job, writes Bill Bonner in his hit new highs, gold prices fell again, and Tim Geithner found a job, writes Bill Bonner in his Daily Reckoning

Now Geithner can give up the food stamps...and get off the unemployment rolls. The cronies are taking back one of their own. He's back on Wall Street – at private equity firm Warburg Pincus.

"When they approached me, they clearly wanted me to play a substantial role in running the company," Geithner told the Wall Street Journal.

What does Geithner know about private equity?

Nothing. But sometimes WHO you know is more important than WHAT you know.

It won't hurt Warburg Pincus that its new managing director knows his way around Washington. And it didn't hurt the suits on Wall Street, when the bad debt hit the fan in 2008, that they had their man Tim in the Department of the Treasury.

The record shows that Goldman Sachs boss Lloyd Blankfein got on the phone with Geithner no fewer than 18 times in one 24-hour period.

Apparently, those were calls worth making. Geithner came to the Street's aid almost overnight – with $700 billion in TARP funds plus federal guarantees worth, according to the former Inspector General of the TARP, $21 trillion.

Where does a government that is already running deeply in the red...and whose elected representatives are dead set against raising taxes...get that kind of money?

Ah, dear reader, where have you been?

We live in new era of experimental money. The supply of cash and credit can be expanded easily and almost infinitely – making it possible for the feds to do this kind of thing.

But here's the really remarkable story: The experimental money of the 1971-2013 period is now threatened by another monetary experiment.

We explained it to our 94-year-old mother:

'What is bitcoin?' she asked.

'It's a new virtual currency. You know, it was created by some computer whiz. You can use it to buy things.'

'Who was this whiz?'

'Nobody knows. He is said to have been a Japanese programmer...or group of programmers.'

'Do you have a bitcoin? Could I see it?'

'No, it only exists in cyberspace.'

'Where does it come from?'

'You have to find it in cyberspace, using computers plugged into the internet.'

'Oh. Well, I guess everyone with a computer is looking for them. How much is the new money worth?'

'It depends. It trades freely in cyberspace.'

'But what makes it valuable?'

'Nothing...except that people are using it. And its supply is limited. We're going to begin using it in our business.'

'But why would a merchant trade his valuable merchandise for something that has no value?'

'Well...that's what we do with the Dollar.'

'But the government guarantees the value of the Dollar. They may not always do a good job of it. But at least they stand behind it. Who's guaranteeing the value of the bitcoin?'

'Nobody. It's just the way the system has been set up. But remember, the supply of bitcoins is limited, unlike the supply of Dollars or Euro or Yen.'

'You mean...nobody knows where it came from. Nobody has ever seen it. Nobody knows what it is worth. Nobody knows where to find it. And nobody stands behind it. Seems crazy to me.'

Yes, dear reader, amazing things are beginning to happen.

When bitcoin first came along we didn't know what to make of it. We dismissed it as a silly fantasy perpetrated by techie dreamers.

Money you can't see? Money you can't hold in your hand or put in your safe? Money with no precious metal backing...that no one stands behind? It sounded crazy.

At least the paper US Dollar has the full faith and credit of the United States of America backing it – for whatever that's worth.

The Euro has the ECB, Brussels and Berlin (more or less) behind it. Sterling has the Bank of England, the British parliament and the crown.

What has bitcoin got? Nothing.

And yet, what currency has outperformed all others?

Bitcoin!

Hmmm...what to make of it?

We don't know. Our friend Max Keiser tweets: "Bill Bonner is bullish on bitcoin."

But we're not bullish on the new money...we're buggish. We like bitcoin like we like gold. Only less.

Will it go up in price? We don't know.

But what we like about bitcoin is the same thing the feds don't like about it. They can't control it. So, they can't use it to steal from people. And they can't use it to bail out their friends...support zombies...or finance pointless wars.

Nor can they use bitcoin to cover their deficits or to manipulate the economy.

But wait...

Why can't the feds put their enormous computing power to work mining for bitcoin? That way, if bitcoin becomes the coin of the realm, they could still control it...with a huge reserve of their own.

Are they too busy spying on people?

Are they too thick to see the potential?

Are we missing something?