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Raches on Money

In another thread, discussion diverged into a tangent on money, monetary policy, central banking, the history thereof in various countries, and the application thereof in present-day American politics.  As I thereby observed, my own views “are rather nuanced:  As an admirer of Hitler’s régime (and of Schacht’s work at the Reichsbank), I obviously do not have an absolutist principle against fiat money—and as a Bitcoiner (and a bit of a goldbug), I obviously have no great love for the U.S. Federal Reserve scam.”

Fiat money and central banking are powerful tools.  Although some tools are more susceptible to abuse than others, categorically praising or condemning tools in absolutist terms is usually a mark of simplemindedness.

The tools at hand can be used to help revive an economy that is in such dire straits, the gold standard is not even a practical option for want of gold reserves; that was the case in Hitler’s Germany.  Or they can be abused to skim the cream off the top of an economy for the delectation of bankers and corrupt governments; that is the case of the U.S. Federal Reserve, a system that was substantially born into American law together with its twin, the Marxist progressive income tax.

The American implementations of central banking, fiat money, and the income tax work in tandem, as an integrated extractive system, to reduce the American livestock to slavery-by-another-name.  Indeed, the typical American now has far more real value extracted from him than a Roman household slave—and unlike the latter, the American can never hope to buy his emancipation, as some Roman slaves did after saving up their own money.  That the American people accept this is conclusive proof that they are natural born slaves—most likely with that tendency bred into their genetics.  —This is an observation of reality.  It is obviously not much of a libertarian argument, if I find Hitler’s central banking and taxation perfectly acceptable.

Gold is generally sound money; and moreover, the American government’s policy towards gold much reveals the nature of its tyranny.  When Roosevelt seized the American people’s gold bullion in 1934, the result should have been immediate armed revolution—if the American people were not natural born slaves, as aforesaid.  For the American government to forbid its people from owning gold for the next four decades shows the hollowness of America’s pretense at being a “free country”.  Oh, “the Land of the Free”—where the government can treat gold coins and bars as “contraband”!  And in substantial effect, the Nixon Shock did to other (ostensibly) sovereign governments what Roosevelt had done domestically.[1]It also showed, yet again, that an American promise can never be trusted—a principle already well-known to anyone who had been paying attention.

Bitcoin is sound money.  Its nature is frequently misunderstood; that is unsurprising, for it is the invention of a totally new form of money.  Its implementation is free speech:  The unrestricted, permissionless communication of financial information—which I argue must perforce be protected by the First Amendment of the U.S. Constitution, thus subjecting any American regulation thereof to “strict scrutiny”.[2]To my knowledge, this argument is original to me.  I hope to see others take it up.  Its fundamental value derives from the financial consensus by which, as a new form of money, it facilitates economic activity which would otherwise be inconvenient, expensive, or totally impractical.  This is no mere theory:  I have seen productivity happen, which would not have happened but for Bitcoin and Bitcoin’s monetary characteristics.  And with a supply cap as a part of its consensus, Bitcoin is an excellent store of value.  In future Proems, I will elaborate on my theory of Bitcoin’s nature, its characteristics, and its value fundamentals, in addition to technical discussion.

But I do not idealize these forms of money as the best in all conceivable circumstances.  Indeed, I wish for something better.  Gold markets are susceptible to manipulation—much to the profit of Jewish bankers, as seen in history.  The scarcity which helps to make gold valuable can itself cause economic problems—which can be manipulated to feed into wars and revolutions, as also seen in history.  And Bitcoin suffers some of gold’s problems—in addition to the obvious problem that it depends on the existence of a technological, industrial society to support the Internet.  I do not idealize deflation; I actually dislike deflation, although I prefer it to the inflation which punishes savers.

Upon analyzing these problems, I have tried every which way I can imagine to design a Bitcoin-like new money with better economic characteristics.  I ultimately conclude that the ideal money requires a trustworthy government.  In the absence thereof, I much prefer goldbug economics and anarchic cypherpunk money.

By analogy, consider censorship.  Censorship, like central banking and fiat money, is a powerful tool.  I would willingly accept, and even prefer to live under the censorship régime of Reichsminister Dr. Goebbels.  If I did, then I may need to abstain from saying some things I want to say—for the greater good; that would be acceptable to me, if Dr. Goebbels shuts down the liars, mass-manipulators, and culture-distorters.  By the same light, I would accept fiat currency issued by a government which genuinely cares about the economic well-being of the people.  The same considerations apply to taxation, and to numerous other aspects of government.

Liberty and Authority

On a related note, I think that intelligent libertarians are closer to authoritarians than seen by those who see only the surface.  In America, much of what is now called “libertarianism” would have been called “conservatism”[3]I did specify:  In America.  In Europe, “conservatism” has always had a different meaning, often related to monarchism. eighty or a hundred years ago; that political heritage has been corrupted and distorted by pot-smoking hippies and raving lunatics, but it is still there beneath the surface.  And the deeper tendencies of a conservative may turn to what Professor Oliver called a “rational authoritarianism”; he himself was a liberty-oriented conservative, an admirer of Albert Jay Nock, before he turned to praise Adolf Hitler.  Adjusting some of his own terminology, I call the Oliverian political trajectory the “Cicero to Caesar Pipeline”—a much more refined, aristocratic version of the so-called “libertarian to alt-right pipeline”.

I myself am an authoritarian with some libertarian sympathies.[4]I do detest the stupider breed of libertarians, who tend to rant and rave and spout lists of quotes instead of presenting logical arguments; but that is a problem with many ideologies, not only libertarianism.  It is especially bad anywhere at the political fringes.  I do not see any contradiction in that:  Just as my extreme long-term individual selfishness leads me to a worldview centered around connections to others, so do I realize that my deep desire for personal liberty can be manifested and defended only through a hierarchical, authoritarian group.  Amongst one’s own,—together with others, there is a freedom that can never be had by individual atoms floating in an anthropoid sea, each alone in the crowd—each a slave of the ochlocratic mass, in the universal slavery of each to all.  I diagonally cut the “libertarian-authoritarian spectrum” to shreds.

Although libertarianism, and also U.S. electoral politics, are not the primary topics hereof, these subjects will inevitably arise in a discussion of money and monetary policy.  I will therefore permit such discussion in the comments, as long as it more or less relates to money.

Whereupon I invite Unz Review commentators to talk about money. ®


Notes

[1] It also showed, yet again, that an American promise can never be trusted—a principle already well-known to anyone who had been paying attention.

[2] To my knowledge, this argument is original to me.  I hope to see others take it up.

[3] I did specify:  In America.  In Europe, “conservatism” has always had a different meaning, often related to monarchism.

[4] I do detest the stupider breed of libertarians, who tend to rant and rave and spout lists of quotes instead of presenting logical arguments; but that is a problem with many ideologies, not only libertarianism.  It is especially bad anywhere at the political fringes.

 
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  1. Raches says: • Website

    As I just said in the other thread:

    [Discussion of Trump] it is not quite on-topic [here], unless you are pointing out that Trump has absolutely nothing against the Federal Reserve system, etc. […]

    I note that since several banks and financial services deplatformed him and his campaign in January of 2021, Trump should really do Bitcoin.

    He should, indeed. ®

  2. niceland says:

    All around the planet, politicians are trying to get re-elected by creating economic growth. Well, historically economic growth is good. But it’s exponential phenomenon and the question is – for how long should we expect it to last? In countries with low or zero population growth – is economic growth [e.g] desirable, good, or sustainable?

    Sustainable is difficult concept.

    In my country, 3% e.g. is considered good, healthy, normal and generally very positive. When someone points out 3% annual e.g. amounts to 1000 fold increase in approx 330 years it doesn’t make much different. It’s still considered good. If our economy (Iceland) does this for just over three centuries the Icelandic economy will be approximately the size of the current U.S. economy. That’s fine until one notices the U.S. has ~330 million people and sizable chunk of the american continent with enormous natural resources – and currently has the world economy by it’s balls. So to speak. How likely is it that Iceland can do this in three centuries? And if Iceland can do this how will the rest of the world look like? Not going to happen and not sustainable! Not even remotely.

    This brings me to money. Our current system creates money out of thin air as debt. And since debt carries interests – we need ever more debt to pay back the principal + interest. The only way to do this is via economic growth. Absent it – we have the financial system causing enormous pain in our societies. This is the reason all politicians around the planet try to create economic growth. And it follows some kind of future society that can’t or won’t create economic growth needs different monetary system or else be stuck in crisis. Our current system doesn’t work in steady state economy. That’s a huge problem.

    Another problem with our current system is the central banks in cohort with private banks create money out of thin air. Most people blame the central banks. Not accurate. State owned central banks are not the problem here so to speak. But this gives private banks enormous privilege unless they are regulated to hell and back, and this is rarely the case. Banks are no ordinary companies. This is why I own stocks in our banks, just to get some share of the loot. Not fair system!

    Not sure what the ideal monetary system for civilized nation is. But money is utility, gold money and such (bitcoin) will only benefit the rich and create shortages for the public and small business. The current problem with debt always rising faster than e.g. could be solved by governments spending money into existence. This wouldn’t be debt money and could bridge the gap created by interests on debt creating comfortable situation absent e.g. Under democracy this might be possible, but to create and worse yet to maintain democracy?

    I believe nations need to create their own money, but they also need control over their tax base. With the big multinational companies not paying taxes anywhere and getting free ride — welcome to world oligarchy. Where billionaires are that, not because they created something magnificent but because they played the system. And in doing so enslaved hordes of people to work for them, building their yachts and palaces and serving them while they didn’t contribute anything to society or civilization – except by corrupting it. Fair or not I see no reason to accept it on behalf of the masses.

    Well, but sustainability. That’s the problem. Hardly anything we are doing today is sustainable. Most of the what we are discussing will be irrelevant in few decades when the resource wars get really hot. It seems the lines are being drawn with the new cold war, U.S. versus China. It won’t be pretty.

    • Agree: Tony massey
    • Replies: @Raches
  3. https://www.goodreads.com/book/show/17465551-financial-vipers-of-venice

    Regardless of what gets used for money, people who have a lot of it boss around people who don’t.

  4. “Bitcoin is sound money.”

    Only as long as the following conditions continue to hold:
    1) You have electricity.
    2) A reliable internet is running, and you can access it.
    3) Governments don’t block IP packets transacting cryptocurrency.
    4) Hackers have not yet discovered how to vandalize, spoof, or pilfer from blockchain tech.
    5) Currency exchanges exist that transact crypto.

    • Replies: @George Kovachev
    , @Decoy
  5. EH says: • Website

    I first read the term “cipherpunk” in MONDO2000 in late ’92, when it was mostly a joke. I spotted the potential of quantum computation to break public-key cryptography in in late ’94 or early ’95. In ’95 I had the basic idea for ransomware, but realized that it wouldn’t work without digital currency, and though I had read about David Chaum’s DigiCash, a few months earlier, it didn’t seem to be taking off and had regulatory hurdles — besides which, writing software to covertly encrypt other people’s stuff would have required quite a bit more programming ability than I ever had. I was a fan of Gessel’s stampscript (negative-interest currency) and the Worgl experiment from way back, but also sympathetic to Austrian economics back then (now I doubt all economists), and I had myself used “Ithaca Hours”, one of the the few successful alternative local currencies.

    Nevertheless, I have never understood the appeal of Bitcoin or blockchain, except for grifters and intelligence agencies. Every transaction is on the permanent record. It isn’t anonymous. The profligacy of everyone having to keep a copy of the ‘chain (or trust someone who does) is only exceeded by the waste of its computational requirements. It’s got enough obfuscation in the standard that anyone should have smelled a rat. That’s even without the trust risk of crypto exchanges, which are a practical necessity that completely negates what security cryptocurrencies theoretically might have.

    If it had a stable market value, or if it could be used for ordinary transactions, I would look closer to see if somehow I had missed something, but it’s ridiculously volatile and has huge transaction costs. DigiCash had solved most of these issues, at least in theory, long before Bitcoin. But most basically, it isn’t backed by anything, not even government fiat. Some of the other cryptocurrencies show promise, but none of them that I am aware of is without some flaw.

    I would go on about how silly it is to be hung up on the Federal Reserve’s chicanery while ignoring what goes on in behind the scenes at every market-maker, let alone the DTCC / Cede & Co., but enough ranting.

    One thing I should note, though, that is long-known but ignored almost everywhere is the fact that the utility to a given entity of even a perfect currency is proportional to the logarithm of the amount of money, not to the amount itself. (there are technicalities, but not important ones – see the St. Petersburg Paradox)

    • Replies: @Kratoklastes
  6. Chester says:

    Bitcoin was created by the CIA. It’s a pilot program for the digital dollar. Tech geeks, who are not as smart as they think they are, are volunteering their time and effort to develop the ultimate financial slavery apparatus. Tomorrow, the Feds could declare bitcoin a rival currency and shut it down. Not to mention the block-chain grows so big and so fast that its maintenance requires the resources that only corporations and governments can bring to bear.

    Much like flu shots were the pilot program for the vax, bitcoin will disappear the day the e-dollar is released.

    Also worth mentioning that the technology is part of Bill Gates’ 666 patent. Bitcoin is a tool of satanic evil. Have a nice day!

    • Replies: @George Kovachev
  7. Raches says: • Website
    @niceland

    All around the planet, politicians are trying to get re-elected by creating economic growth.  Well, historically economic growth is good.  But it’s exponential phenomenon and the question is – for how long should we expect it to last?  In countries with low or zero population growth – is economic growth [e.g] desirable, good, or sustainable?

    Good point.  The produce-and-consume cycle of modern capitalism is predicated on the assumption of infinite growth.  That is not the theory; but it is the culture, and so deeply ingrained in the modern system that the assumption cannot be fought without tearing the system down.  Raw materials are turned into goods, which must be sold to consumers so that more raw materials can be purchased—and the cycle must always expand:  The GDP being flat is as bad as it shrinking, insofar as the market is concerned.

    People do not even realize that economies did not always work this way, and do not need to work this way.

    Infinite growth is obviously impossible, so this cannot continue forever.  Chatter about “sustainable growth” is only a way to cover up for this and many other problems with the system, with buzzwords and political platitudes. ®

    • Agree: niceland
  8. @gutta percha

    Or 6) Infiltrate and take over the development of the software, which is the back-bone of the network.

    • Troll: Raches
    • Replies: @Raches
  9. @Chester

    Research on anonymous electronic cash was going as early as 1982 (http://www.hit.bme.hu/~buttyan/courses/BMEVIHIM219/2009/Chaum.BlindSigForPayment.1982.PDF).

    And there is this article, written by NSA mathematicians in 1996 (https://groups.csail.mit.edu/mac/classes/6.805/articles/money/nsamint/nsamint.htm), which explores ideas, remarkably similar to those used 12 years later for Bitcoin.

    • Troll: Raches
    • Replies: @Raches
  10. Raches says: • Website
    @George Kovachev

    Or 6) Infiltrate and take over the development of the software, which is the back-bone of the network.

    A straight question that deserves a straight answer:  Are you an advocate for BCH, BSV, or any of the other forks that are practically altogether based on spreading misinformation about Core?

    It is a reasonable question.  In one of my other threads, you lied through your teeth about Bitcoin.  (I specifically accuse you of lying, not of being mistaken as I had allowed, because you claim expert knowledge; and only someone who is totally ignorant of Bitcoin development could say what you did, unless maliciously lying.)  After I shot you down hard—repeatedly, over and again—you ran away, with your very best argument being empty insults tossed in my general direction.

    My reaction here will surprise those who are unfamiliar with the world of Bitcoin development politics.  But I have seen this a thousand times; and those who make this type of attack are a dime a dozen.  With money and power as motives, it is no surprise that scammers try to infiltrate and subvert Bitcoin development, fail, and then accuse the Bitcoin Core developers of doing exactly what they maliciously attempted.

    Putting this together with your subsequent comment, in which you seem to want to feed conspiracy theories about Bitcoin being a covert spy-agency operation, I should note that Core successfully excluded both Gavin Andresen, whom I believe was very likely compromised by the CIA, and Mike Hearn, who early on became an overt advocate for turning Bitcoin into what would be essentially a tool for total mass-surveillance and financial censorship.  They are both long gone; I think that speaks well to the Core development process and its resistance to subversion. ®

    • Replies: @George Kovachev
  11. Raches says: • Website
    @George Kovachev

    Your cherry-picking may impress people who know nothing about Bitcoin.  It won’t fly here.

    Of course, the use of cryptography for money had been an area of research for decades since Chaum first put forward some ideas on the subject (IIRC as early as the late 1970s, though I would need to look back and double-check).  To cherry-pick research from 1996 by a spy agency that does a huge amount of cryptology research, and present that to people who know nothing about the field in the context of a conspiracy theory about Bitcoin, is worse than a half-truth:  It is a lie by extreme amounts of omission.

    Bitcoin did not materialize out of thin air.  Besides Chaum’s Digicash, and the well-known relevant work by Wei Dei (Reference 1 in Satoshi’s whitepaper) and Nick Szabo, Bitcoin drew on a wide range of academic research.  Satoshi’s originality was not so much in inventing new ideas, but integrating a seemingly disparate set of ideas in a unique, original way.

    For a broader view of this from a different angle, see “Bitcoin’s Academic Pedigree”, ACM Queue, August 29, 2017:
    https://queue.acm.org/detail.cfm?id=3136559

    As for the conspiracy theory about Bitcoin being some kind of a government operation, I will note that as I mentioned in my comment immediately prior to this one, the Bitcoin development process early on essentially kicked out two developers about whom there reasonably are such types of suspicions.  I think it’s ironic that those who are most paranoid about spy agencies seem also to have the most tendency to traduce the people who are most effective at resisting that kind of influence. ®

    • Replies: @Curmudgeon
  12. @Raches

    Unless they’ve moved it, the Bitcoin Core development is hosted on GitHub. GitHub Inc. was bought by Microsoft in 2018 (the deal was concluded October 2018, if I’m not mistaken). Yep, the same M\$, which is quite cozy with the Govt.

    I don’t think that it would require too much effort by the Govt to infitrate the dev, if they choose to do so. The only reason they haven’t done it already (as far as we know), is because they don’t consider it a threat. And the reason why they’re not considering it a threat (the non-sense in the MSMs notwithstanding), the Govts, being the biggest racketeering gang in their respective country, can enforce what currency to be used on their territory. And, except small countries like El Salvador (which didn’t have a currency of its own to being with), I don’t see any of the big govts accepting it – even if they adopt some of the ideas behind the crypros, they’ll issue their own CBDCs.

    And once those CBDCs are rolled out, you can take for granted that most of the populace will adopt them – unfortunately, when it comes to a choice 9 out of 10 people choose convenience over privacy – it’s the human nature. And in long term, there’s is a very good probability that the only people HODLing and dealing with BTC and the rest would be the crypto-zealots. But ask this question: what value the BTC would have, if no one, but the crypto-zealots, use them? How you could even measure its value in a such scenario? These are not rhetorical questions – most of the crypto-advocates, whom I’ve asked these questions tend either to ignore them, or to start flaming. My guess – such questions are too inconvenient for them to even think about the subject.

    And, no – I’m not an advocate of BCH, BSV, or the rest of the letter soup – I’m not a fan of anything that’s essentially digits in a database.

    • Replies: @Raches
  13. Raches says: • Website
    @George Kovachev

    Unless they’ve moved it, the Bitcoin Core development is hosted on GitHub.  GitHub Inc. was bought by Microsoft in 2018 (the deal was concluded October 2018, if I’m not mistaken).  Yep, the same M\$, which is quite cozy with the Govt.

    Due to the way that Git works, Microsoft could not secretly corrupt the development process just because the repo is hosted there.  Bitcoin devs use their own “Tree-SHA512” script for extra verification of the source tree, plus of course GPG signatures; thus, I am not worried about SHA-1 weakness in Git.

    The practical dependency on Github is a problem, subject to not infrequent complaints by the Core developers; see, e.g., Wladimir van der Laan’s blog post of January 21, 2021, which discusses several different aspects of further “decentralizing” the development process:

    Decentralize the development hub.

    It’s not clear whether github can be trusted to act in our interest in the long run.  Although issues and PRs are backed up through the API, having to move somewhere else could give significant interruption in development. And hopping from provider to provider would be awfulideally the whole thing would not rely on a central server at all.  For this I’ve been watching the radicle project, a P2P distributed code collaboration platform. It’s not quite there yet, but seems promising.

    Bitcoin is quite different in some of the requirements here from other FOSS projects, so we’ll have to develop some tools as we go.  We could also, definitely, use some help here.

    ——————————

    Mr. Kovachev:

    And once those CBDCs are rolled out, you can take for granted that most of the populace will adopt them – unfortunately, when it comes to a choice 9 out of 10 people choose convenience over privacy – it’s the human nature.

    Open government coöption of the “cryptocurrency” idea is one of my own concerns; and in practice, the “convenience over privacy” problem one of my biggest criticisms of Bitcoin, plus one of my big criticisms of human nature.  I myself endure significant inconvenience for privacy; I practice what I preach.

    I don’t overly idealize Bitcoin, as some maximalists do.  I think that is clear in my article—where I criticize some aspects of Bitcoin’s baked-in monetary policy, which some Bitcoiners treat as sacred cows (deflation, etc.).  I see Bitcoin as what we have, and the best we have.  Attacking the best, most credible alternative to government-issued money (CBDCs and otherwise) seems quite counterproductive to me, if your goal is to have some form of practical, online mass-usable (i.e., not metal coins or bars), secure, and censorship-resistant form of money.

    Bitcoin does have the absolute highest censorship-resistance of any cryptocurrency, because it is so much more widely adopted than any of the others.  There are Bitcoiners in every country, of every race and nationality, of every religion, of every ideology except for those which are opposed in principle to cryptocurrency.  So many people, with such widely divergent and conflicting interests, are so deeply invested in Bitcoin—and none of them can attack it without hurting themselves where it hurts most:  In the wallet.  Therefore, “it’s the biggest and most popular” is a positive feature.  I say this as someone who usually hates arguments from popularity—because I have studied this problem very carefully.

    (@Ron Unz, in your terms, Bitcoin is the world’s biggest diagonal attack!)

    And, no – I’m not an advocate of BCH, BSV, or the rest of the letter soup – I’m not a fan of anything that’s essentially digits in a database.

    Thanks duly for clarifying.  If you are really as familiar with Bitcoin development as you have claimed, then you know how it looks when someone pops up with “Core is infiltrated” type of talk and the types of arguments that you raised in the other thread, which essentially implied that miners control the network.  It is very close to the playbook of Jihan Wu, Roger Ver, and Craig Wright, from various angles. ®

    • Replies: @George Kovachev
  14. @Raches

    Due to the way that Git works, Microsoft could not secretly corrupt the development process just because the repo is hosted there.

    They don’t have to. They own it, so they could do whatever they wish with it. Including shutting down the server farms and selling them for spare parts, if they decide to do so.

    if your goal is to have some form of practical, online mass-usable (i.e., not metal coins or bars), secure, and censorship-resistant form of money

    Do you really believe that the goal of TPTB is to have around sound money with these qualities? I don’t. Every govt out there would like to have as much control over its populace as possible, so, from their perspective attacking the “best, most credible alternative to government-issued money” and replacing it with something of their making and over which they have complete control, is quite feasible and desirable. Are they going to succeed? In long term – probably yes, for the very same reason I’ve mentioned in my comment to which you responded – when it comes to a choice 9 out of 10 people choose convenience over privacy.

    It’s interesting thou – like all other crypto-advocates out there (I won’t call you a crypto-zealot – you’re claiming that you aren’t and I’m willing to give you the benefit of doubt) you choose to ignore the two most important questions in my comment:

    What value the BTC would have, if no one, but the crypto-zealots, use them?
    How you could even measure its value in a such scenario?

    • Replies: @Pericles
  15. Decoy says:
    @gutta percha

    ” Bitcoin is sound money”. From the first day I heard of Bitcoin I questioned how it could remain a viable “currency”. Why would any Federal government that owns its own fiat money printing press permit competition from someone/something not under their control? China is certainly not going to permit it and I’d be very surprised if Russia did. Eventually the United States will take a position against cryptos. They will be forced into that in order to defend the value of the dollar. As it stands, Bitcoin is like the proverbial Money Tree. We’ve created wealth out of nothing. Didn’t have to manufacture a product or plow ground to grow food. Just, poof, here we have billions (trillions?) of assets that people will accept as money. If it sounds too good to be true it usually is. Only the Federal government has a license to create something out of nothing and the denizens of Washington D.C. are not going to give away that very precious monopoly.

    • Agree: Tony massey
    • Replies: @Tony massey
  16. @Raches

    Bitcoin is a method. The idea of a “cashless society” was being floated by Canadian Prime Minister and technocrat Pierre Trudeau in the early 70s. Don’t kid yourself, the security apparatus of the (((Western liberal democracies ))) are way out front on anything digital. They know more about you, than you do.

    • Replies: @Tony massey
  17. For the American government to forbid its people from owning gold for the next four decades shows the hollowness of America’s pretense at being a “free country”. Oh, “the Land of the Free”—where the government can treat gold coins and bars as “contraband”!

    It gets worse (as you probably already know). In 1942, the Supreme Council of Blackrobes ruled that the zeks cannot grow food on their own land to feed their own animals (Wickard v. Filburn) because ‘Interstate Commerce’. Now that Gates, et al are buying up many thousands of acres of farmland with fake-money, we can expect this brilliant interpretation of ‘muh constitution’ to be expanded upon.

  18. I wish people would focus on land more than money

    • Agree: Adam Smith
  19. @Curmudgeon

    You know, perhaps this isn’t fully OT but Paul LeRoux is an interesting story.
    He developed e4m(gosh i think that was what it was called) and al-qaeda and cartels and well anyone else that wanted to i suppose was using that to communicate up until about maybe 2017 perhaps. Yes, i really should have my facts more together but…

    [MORE]

    Leroux got his named tossed into the could be satoshi lottery. I don’t know. I would never dare make any claim to nakamoto other than to say i don’t think it was but one person. 3 at least. Maybe more?

    And leroux was about as paranoid over secure communications as anyone could be and, not due to a lapse in his private security he sits in Federal stir for a 25 where he then gets extradited to the Philippines where he’ll be shot soon after landing.
    It’s not just insecure digital privacy that gets you.
    It’s about ohhhh all those other things that made such a misery as trying to stay dark vs the 5eyes a necessity in that boorish ignoble pursuit of species whatever ya call it.
    I would much prefer to simply inherit my money thank you, Raches.
    I’m sorry if that offends but I’ve longed held a fantasy of being landed gentry, a Southern gentleman if you will, and that i owned many slaves and that i also inherited much fabulous wealth the only thing that mattered to me was my current favorite concubine.
    Life…i get you got to pump alot into it to get anything big back but…i don’t know.
    Good luck.
    The 5 eyes are watching my dear artful janus-faced Cervantes(don’t really know any Germans) so…
    And thank you for allowing me to comment on your wonderful discussion. Started following bitchcoin when it was less .10.
    No i never invested. Wise ol me.

  20. Bitcoin is sound money. Its nature is frequently misunderstood; that is unsurprising,

    The nature is misunderstood and more often completely ignored because it is being bought and sold like any other commodity.

    People are buying the upward curve of Bitcoin as they would with some other stock or commodity that they don’t understand. All they understand is that other people have made money by buying it. There is nothing wrong with that, I am just pointing out that its success is not from its use as money. It’s the hot commodity and traded no different than pig hides or wheat bundles and if history is any guide it will eventually crash to some other hot commodity.

    It is obviously not much of a libertarian argument, if I find Hitler’s central banking and taxation perfectly acceptable.

    Everything that Hitler did in his pre-War economy goes against what libertarians currently teach. In fact they don’t like the subject since his policies were a resounding success and praised by economists around the world.

    Libertarians and their filth have convinced the world that every country needs to put its currency on the market and let the bankers of NYC and London do as they please. If some amoral player like Soros trashes your currency to make a buck then AH SHUCKS that’s just capitalism.

    China did not follow the international rules that libertarians are certain everyone must follow and they have done better than “free market” African countries that followed the rules.

    Libertarians are a group of liars that are seeped in race denial and that is really the source of their problems. The currency of DNA will always matter more than gold but libertarians tell us that everyone is the same and we can bring in millions of Haitians and everything will be fine. All we have to do is float our currency and keep capital gains taxes low.

  21. I heard somewhere that some of the economic theories of Schacht were influenced by those of Social Credit economic theorist Major C.H. Douglas. It’s a very interesting economic system that needs to be dusted off and examined by economists today, in light of many people calling for a Universal Basic Income or UBI.

  22. Thrallman says:

    J.K. Galbraith said that monetary policy was unimportant compared to fiscal policy.
    Given an expansive monetary policy, who gets the money?

    The middle class buys houses. The working class remains poor.
    A flood of money to the banks makes borrowers rich compared to savers. This effects what kind of businesses will be financed. Loan officers will favor conservative proposals. Real innovation will languish.

    For example, consider the patent explosion. Novelty is meager. Rent-seeking behavior is obvious.

  23. @Decoy

    You know, decoy, the moar i allow it to be so in my mind I’m beginning to think the only monopoly that has ever truly mattered is the monopoly on violence a monopoly of state violence.
    All the rest may be just show.
    A real s—show in a soon to be s—hole.
    But step right up and get knocked the f— out.
    Frankly, anyone with any sense knows damn good well it’s moar than possible your gov’t can hook a set of jumper cables to your testicles for s— alot less than stirring up the fevered imaginations of slaves.
    I, for one, i may be the only one, pray to whatever gawds their may be that the economies of man goto zero in my lifetime. By Halloween i hope. This one coming up.
    We’ll see who is hungry then.
    What delicious fun that does sound like.
    BYOB tho
    The nomad capitalist says go where you’re treated best and have bitchcoin(or crpto) but those places are getting fewer and moar expensive.
    Only thing I’m willing to HODL long term are deze nuts. Life is transitory enough until the real threat of a set of jumper cables with your name on them is produced. Gets long them.
    I really do hope i get to see how it goes down and crypto is no doubt gonna be a part of it.

    [Some words have been elided by Raches.  No attempt is made to translate this to English.  —I don’t dislike you, and I am not super-strict about this; but I do want to raise the quality of discussion.  To that end, there is a method to my madness.  And… (Remarks to be continued more properly in my own comment.) ®]

    • Replies: @Raches
  24. Raches says: • Website
    @Tony massey

    Moderation Note (Off-topic meta-remarks, not intended for further discussion here.)

    The way you talk does affect the way you think; and the quality of what people read also affects them.  Indeed, there is a method to my madness.

    You have expressed some decent insights in some of your comments.  I am not trying to drive you away, as I actually do to some.  Therefore, I would appreciate it if you would use proper English, and omit the type of trash talk that is most suitable for bustin’ rhymes.

    Don’t take this the wrong way:  It would be an error to mistake me for an uptight prude who gasps at the sight of some naughty slang.  I look forward someday to engaging my Doppelgänger, Camille Paglia, in a refined intellectual intercourse on my critique of doi:10.1007/s10612-019-09460-w, an academic paper which, no doubt inadvertently, brought to my attention something that I will probably someday remark upon in these pages.

    ——————————

    P.S.:  “Bitchcoin”.  I like it. ®

  25. onebornfree says: • Website

    Oh my, a self described “authoritarian libertarian” pontificating about money.

    Talk about messed up! Messed up doesn’t even begin to do it justice.😆

    And so it goes….😭

    “Regards” onebornfree

    • Replies: @onebornfree
  26. onebornfree says: • Website
    @onebornfree

    “Oh my, a self described “authoritarian libertarian” pontificating about money.”

    Seems to me that you are far closer to Rand’s objectivism than you are to any libertarian ideas/ideals.

    “Regards” onebornfree

  27. Schuetze says:

    “Bitcoin is sound money.”

    Steve St. Angelo: The World is Heading for an Energy Cliff

    Steve St. Angelo, and many others, have been discussing the unsustainability of global energy markets and consumption for decades. Many technophiles have been discrediting peak oil theories for just as long.

    In this podcast St. Angelo gets into how fragile our high-tech supply chains are, and how dependent they are on cheap energy. At the end he goes off on an interesting tangent concerning how ridiculous and fragile LPG as an energy source is.

    Around the middle of the podcast St. Angelo gets into how gold and silver are actually stores of energy whereas Bitcoin is completely dependent on low priced energy, not only in terms of the fulfilment of its transactions, but also in the massive consumption of technology, infrastructure and constant renewal of the mining infrastructure. If there is a collapse in world wide energy production, this will have no effect on the quantity of gold and silver already produced and not consumed, but it will crush the crypto currencies and possibly render all digital currencies, CB or not, unusable.

    So although bitcoin may be “sound money” in this current fleeting instance in history, whether that remains true longer term is certainly open to debate.

    • Agree: Bert
  28. Raches: If you are not familiar with C.H. Douglas and his Social Credit economic theories, I think you might find them interesting. Here is a link: https://alor.org/Storage/Library/Douglas%20CH%20-%20Brief%20for%20the%20Prosecution.htm

  29. Raches: Here is a link to the Australian League of Rights who have all the books by C.H. Douglas and others related to economic theory. https://alor.org/Storage/navigation/Library1.htm

  30. @EH

    Just on the St Petersburg ‘Paradox’: in 1960, Paul Samuelson cut through it with such stunning clarity, that Bernoulli looks retarded for not having made the same point ~250 years earlier. (The rest of the people circle-jerking around the issue in the intervening ~250 years likewise look like halfwits).

    As Samuelson points out: an infinite expected-value gain to the punter, means an infinite expected-value loss to the bookie… so such a bet would never be offered.

    So the only ‘paradox’: Bernoulli was a super-clever chappie, but completely screwed the pooch by not identifying the super-obvious fault… viz., that it makes no sense to set up an example where nobody would ever put themselves on the other side of the bet.

    This is the problem when people start circle-jerking about contrived ‘problems’ (e.g., data-faker Ariely and his ilk): there’s always a stupidity in the contrived example that sticks out like dog’s nuts.

    • Replies: @EH
  31. Pericles says:
    @George Kovachev

    Due to the way that Git works, Microsoft could not secretly corrupt the development process just because the repo is hosted there.

    They don’t have to. They own it, so they could do whatever they wish with it. Including shutting down the server farms and selling them for spare parts, if they decide to do so.

    That doesn’t really matter, though it’s a temporary inconvenience.

    • Agree: Raches
  32. EH says: • Website
    @Kratoklastes

    Yes the example of the S.P.P. is contrived, but it’s also been the go-to example for the non-linear (something similar in form to logarithmic) utility of wealth for over 300 years. An argument against the example shouldn’t be confused with in any way contradicting the existence of the principle of which it is an example. Claiming a linear utility of wealth will inevitably result in non-optimal or even disastrous policies. (Other utility functions besides logarithmic may make sense depending on the situation, but except in pathologically contrived situations, they will all be convex upward, that is, there will be diminishing marginal utility to greater amounts of wealth.)

    One practical consequence of the logarithmic utility of wealth is that one should optimize the long-term (exponentially compounding) rate of return. This is related, under conditions of uncertainty, to the Kelly Criterion, which in its generalized form, is behind all possible rational investment strategies.

    A less-discussed implication of the decreasing marginal utility of wealth (or consumption, even more so) is that maximum aggregate utility for many entities will be very close to an equal distribution; in contrast, to provide equivalent incentive to entities with varying wealth requires equal percentage increases in wealth: “to him who has will more be given” (the “Matthew effect”), and to give greater rewards to those with a history of increasing their own wealth requires exponentially compounding rewards, creating runaway inequality and a grossly sub-optimal aggregate utility.

    Investing / gambling legendEd Thorp has some good discussions on the Kelly Criterion and related topics in his papers. (Invented counting cards at blackjack, the true (market-neutral) hedge fund, built a shoe-computer with Claude Shannon (inventor of information theory) in the early ’60s to beat roulette, discovered the Black-Scholes option pricing formula first etc.)

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