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Topic: Economic Devastation - page 132. (Read 504776 times)

STT
legendary
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January 02, 2015, 10:30:47 PM
Quote
They keep printing, but it all goes to the cronies at the start of the pipeline.  These blessed few, this band of brothers, will hoard the $$ as long as they can gain a spread on them.  When they can no longer gain a spread, le deluge en suite.  All that cash reaching for spread means yields go down.  It gets so hard to find anything that hasn't been bid up to untenable risk/reward levels that investment is gradually grinding to a halt.

That money printed newly is largely going to governments.  If it was being distributed in a truly capitalist way the money would just be spent.   The biggest investment most ordinary people make is in their own family not crappy 1% bonds that wont even beat inflation in the end.
  We have a truly skewed economic system because it doesnt have cash apportioned to people as it should be, normal people just spend cash as they get it so all this low inflation is symptom of illness and their cure is to print more  Huh
 USA largest trading partner is a Communist undemocratic dictatorship.   You cant really have much faith in a system which will execute dissenters, today it benefits the west to have China storing this cash not allowing their own people to use it but at some point it will turn bad against us Im pretty sure.  I really cant see how China would be so benevolent towards us, they will treat us harshly as and when it appears best for them
newbie
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January 02, 2015, 10:10:02 PM
Armstrong has been predicting events precisely to the day. The below $57 closing price for oil on Dec. 31, he predicted long ago (I saw it). There are many, many examples I have observed.

The build up to the waterfall crash is a 51.6 or 31.459 year cycle, but the final waterfall is about 8.6 years with the largest portion of the transition over 4.3 years.

Events change but the pattern of time and human nature repeats.

You can't preserve stored capital. The western governments are going to confiscate it also. Sorry it is all going poof (highly devalued relatively speaking) in the Knowledge Age. Sorry knowledge age workers don't need your stored capital. The capital startup costs are near 0 now. Everybody has a computer. It is the intellectual capital that is extremely expensive.

We will permanently move to negative real interest rates. The coming crypto-currency of the Knowledge Age will be debased 5 - 10% per year. The Knowledge Age doesn't want to be enslaved by the power law distribution of stored capital. It wants to motivate knowledge capital instead.

The negative interest rates are a sign of what is changing. Most people see them as corruption, because they don't understand the paradigm that is occurring. I am not referring to Communism, because the knowledge capital will still be power law distributed and this will be a free market, not a command economy. And the debasement of a decentralized crypto-currency won't be captured by corruption, rather it will be expended in electricity to secure the system and secure the freedom of the Knowledge Age from the slavery of stored capital.

You might as well spend it now. Enjoy your life.

Remember the Bible verse, you will throw your (worthless) silver and gold into the streets...look again at the commodity price chart for the inexorable decline.
legendary
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January 02, 2015, 09:39:47 PM
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contagion

It looks like I still have plenty of reading to do.  Thank you!

Smiley

*  *  *

However, I do not think that even the Mighty Martin Armstrong can predict the future in the detail that he does (eg 2015.75).  I read much of his "prison work" (which was remarkable, probably better than the few-ish pieces I have carefully read since he got out).

Yes, you are correct about the amazing speed of the fall of the Berlin Wall and Soviet Communism.  I am an "ex-Cold Warrior" (from behind a desk), and NOBODY I knew predicted what would happen, not even close.

But, Armstrong's chart of Athens' fall is over some 50 years, and the Roman denarius lost its silver over a period of (hard to say from the graph) years.  OK, certainly things have sped up...

NOT trying to pick any fights (I just dropped out of Zero Hedge's Fight Club), and I think the various dialogues in this thread are of a very high caliber (pun intended).

*  *  *

Predicting the future is very hard, especially because it has not happened yet (thanks Yogi Berra).  Trends often get "Black Swanned" (thanks Nassim Taleb).

The physical economic realm is by no means dead -- being smart in Peru offers relatively few advantages.  Learning more and working smarter (here -- USA) is a great investment, but I would not bet serious money on any single imaginable scenario myself.  NOBODY knows what will happen.  The Banksters or .gov (ours or other .govs) could throw all kinds of monkey-wrenches that could change outcomes.  IMO, nothing is determined.  And that is why I diversify...


A Disclosure: I am now at the age where I want to preserve capital above all else, that in great part is the lens through which I view things.
newbie
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January 02, 2015, 09:07:04 PM
Waterfall collapse of the Industrial Age to usher in the Knowledge Age

Although I think the trend of your observations (Knowledge Economy, etc.) is correct, these evolutions typically take longer than we think.

Just like the fall of the Berlin wall, bankrupt paradigms waterfall collapse to usher in the new.

http://kwout.com/cutout/9/i4/cr/wdc_bor.jpghttp://kwout.com/cutout/f/5p/bg/yjb_bor.jpghttp://kwout.com/cutout/h/vj/mj/bqs_bor.jpg

The physical economy is bankrupt because the economies-of-scale are too great and the maximum division-of-labor can not advance. It may seem valuable to you because the ruler you are using to measure with is the illusion of a massive $200 trillion global debt bubble. Society is trying to prop up that bankrupt Industrial Age paradigm with debt and socialism.

Knowledge production generates several orders-of-magnitude more value per human than the Industrial Age. Heck in just a few months in 1998, I (all by myself) wrote some software that was generating up to $30,000 a month in today's dollar. The internet has 10 times more population now.

Sorry the USA has lost the advantage of the waterways. That paradigm is dead. This is another reason China and Asia will rise, because they have more human capital and their economies aren't burdened with the political dead weight of an aging population that is not able to make the waterfall transition and $trillions of promises to boomers.

Knowledge workers will move to cities (this is already underway with integrated BPO communities for example in the Philippines), no need to move goods to remote sparsely populated locations. Besides, the physical goods are a small fraction of the wealth generated from knowledge work. There is no reason that Silicon valley has to be in the USA, it could be any where that knowledge workers congregate. And the knowledge workers will run away from the USA when it turns draconian when the economy implodes after 2016 and the totalitarian expropriation of wealth goes into hyperdrive.

Another two charts supporting my position of the death of stored capital and fixed capital investment Industrial Age model shows that interest rates and commodity prices have been declining inexorably since the damn of human civilization:

http://kwout.com/cutout/x/ke/6d/c36_bor.jpghttp://bigpicture.typepad.com/comments/images/cfn396_1.gif



Michael Pettis is apparently a highly respected observer of China and their economy.  I wish I had more time to read him, as I think he has China pretty well figured out (and it ain't pretty in China).

Pettis expects a top-down restructuring of China to rebalance from an economy that is highly unbalanced in the fixed capital investment and Industrial Age paradigm, to a more balanced consumer share of the economy. In other words, China has been subsidizing global manufacturing at below cost, by massively expanding debt and stealing from the workers by suppressing interest rates and their import purchasing power with the Yuan peg.

I think Prof. Pettis is wrong and the Communist Party will lose control of China as the contagion of the global bankrupt paradigm domino collapses. This is why war between China and Japan is probably imminent, as the leaders of China try to invoke nationalism to retain their grip on power.

But I think by 2032 (perhaps as early as 2024), China and Asia will fracture away from control and emerge with bottom-up high performance in the Knowledge Age.

Understand the Chinese people are just going with the flow of the Communist Party system but every step since the 1980s has been greater and greater freedoms and more autonomous governance and business. Now I read that Christmas is sweeping China a popular fad and the leaders are trying to outlaw it (haha the people ignore the leaders). Asia has been bottled up in cronyism since the mid 1900s, and now suddenly the cronyism is falling away because it is not viable economically, and the youth have woken up given the internet.

Even the youth in Japan want to get rid of the xenophobia.
legendary
Activity: 2912
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January 02, 2015, 01:39:36 PM
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@ contagion

I have not read enough of your comments to readily reply in a proper manner, but the "real economy" (production and transportation) is still extremely important not only in the USA but in the rest of the world (very much so in Peru, "my other beat").  WATER transportation (our internal river networks and how CHEAP such transport of bulk materials are) was and is a tremendous "capital investment" that we never even had to make!  And so we did not have to use up scarce capital like Germany (for example) did when they built their railroads in the late 1800s as their rough-equivalent of our riverine transport systems.  

The Stratfor guys have written columns and books (especially The Revenge of Geography (Robert Kaplan, 2014)) on this topic of capital and the "Real World" of MOVING stuff.

I closely watch economic developments, including and especially topics like "Economic Devastation".  Although I think the trend of your observations (Knowledge Economy, etc.) is correct, these evolutions typically take longer than we think.  

Michael Pettis is apparently a highly respected observer of China and their economy.  I wish I had more time to read him, as I think he has China pretty well figured out (and it ain't pretty in China).

I have not read Piketty's book (um, who has?), but presuming he is like 99% of all other Socialists, he is likely to be almost completely WRONG in his prescriptions.  Exhibit One: France.  And he thinks France is not Socialist enough... 

@ CoinCube

The "My Messages" tab above is so small that it is hard to notice, but you have a message.
newbie
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January 02, 2015, 06:50:42 AM
http://blog.mpettis.com/2014/12/how-might-a-china-slowdown-affect-the-world/#comment-108021

Quote from: contagion
Quote from: Suvy
Currently, China is economically centralized and politically decentralized. If Prof. Pettis is correct, China will become more economically decentralized and more politically centralized.

That is a thought provoking point. You are I assume pointing out that local governments are given a lot of autonomy (to borrow and build) which is one of the primary causes of that the fixed capital investment dominates the share of the GDP in Pettis' model of China's dilemma. You are also implicitly pointing out for example that the central government will need to assume all of the bad debt.

Quote from: Suvy
...By the way, do you know how much cheaper transport costs by water are vs transport costs by land? When you add in the costs of the road and rail networks, we’re talking about a 70 fold increase in costs when you’re talking about transport costs by land...most of the navigable waterway lies in the south of the country ... protect everyone’s [physical not virtual Knowledge] trade, the free trade order we’ve had since World War II will be gone.

IMO irrelevant.

Again I find my disagreement with your analysis hinges on my theory of a fledgling Knowledge Age which will render the physical economy irrelevant. You are egregiously overvaluing the importance of physical trade in the future economy. I believe your model is wrong.

The top-down central government is entirely incapable of being in tune with this bottom-up global paradigm shift of economics. Even I assert Thomas Piketty got the facts wrong in his bestseller Capital in the Twenty-First Century.

The currency wars and China's subsidy of global manufacturing are a beggar-thy-neighbor competition into the deflationary abyss, because the Industrial Age is dying. Factories can produce more than humans can consume in a non-debt saturated economy and only require a small number of humans to do so. Even Oxford U. predicted that 47% of existing jobs would be replaced by automation before 2032. The world's population has to move into the higher valued Knowledge Age, but the governments are subsidizing the old Industrial Age statism model to prevent the masses from being motivated to make the transition. Thus the governments are pushing us to the precipice of a discontinuous, waterfall collapse adjustment and overshoot with a bifurcation of the global economy into a (potentially megadeath) dying statism cancer and a fledgling autonomous Knowledge Age.

I expect China to collapse into this deflationary abyss and fledgling Knowledge Age chaos along with the rest of the globe, but Asia will bottom first because it has much lower levels of constituent liabilities and taxes. It is as simple as that. Your model of the future of the USA is wrong. The future is about how much the State gets out of the way and allows the Knowledge Age to prosper. In the USA, Obama wants to use executive power to take totalitarian control of the internet regulating it as a public utility via the FCC and taxing it 16%. Ditto France. Spain taxes sunlight. The West is done, stick a fork in it. Asia is the future. Sorry Suvy your physical trade model is archaic.

{satire}Prof. Pettis is wise to be moonlighting as an economist while (to fund) his serious career is in his Chinese music label, because creative knowledge production is where the future value is.{/satire}

P.S. Also trade is a very small component of international capital flows, so trade has nearly no relevance on the imminent tectonic contagion of global finance.
newbie
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January 01, 2015, 05:53:21 PM
member
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December 31, 2014, 01:47:30 PM
When the disconnect finally snaps, the crash will be nasty.  Already we are starting to grind down in commodity deflation.  The threads connecting finance and material economy are too weak to bind them.  They are stretching.  It is a really good time to be in cash (and crypto).  Poor time to be in equities, bonds, commodities (including monetary metals for the time being, although that will change when the fan starts to make the sloppy noise).

Such pretty prose, and your end time imagery - fantastic!  Crashing, grinding, strained threads stretching, sloppy fans flopping.  Write bitcoin fanfics, would totally read for sure.
legendary
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legendary
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December 30, 2014, 11:02:43 PM
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NO ONE can predict the future (and I have tried).  Explaining the present is difficult enough (as many of you have written and I also have tried in other fora).  While the comments and back-and-forth on this thread have been most excellent and informative, most people (80%, 90%?) are not aware of the profound problems of QE and the corrupt TPTB/TBTF/TBTJ playas.  I follow all of this closely, have for decades, and yet I cannot explain the weird state of our financial system.

Other than to say we should be on Red Alert.

"Something wicked this way comes."

"Corruptisima republica, plurimae leges"

There is too much debt and too much malinvestment in the world.  China and Brazil have just been shown to be in deep excremento...  That is fairly clear as well here in the USA (most of the blame goes to .gov and the banksters), but who elected our leaders?  Hmm?  We all share some blame...

*  *  *

I further believe that everyone should hold a reasonable amount of gold (and/or some silver and/or platinum) as well as plain old FRNs (CA$H) along with whatever more conventional investments (stocks, bonds, real estate or even fine art).

And BTC is without doubt a "core holding", even if only 1% or less of one's net wealth is in crypto...  Although I am certainly no expert (many experts here can attest to that), my belief is that for at least sometime Bitcoin is (will be) far superior to the other cryptos, certainly to the amateur (people like me).  More adept crypto enthusiasts can probably work the alt-coins mining/trading to get more, but that approaches professional level knowledge.

And despite the fact that debt might be attractive in a hyper-inflationary scenario, again NO ONE can predict squat, avoid debt as you are able.

*  *  *

In my year or so of membership here, I have been most pleased with the quality of the threads I follow.  The excellence I see in just this thread matches or exceeds most of what I read at Zero Hedge (possibly ZH has gone downhill).

2015 promises to be "an interesting year" (perhaps interesting in a bad way fairly soon).  Preparation for a hard-landing is just smart!

Best Wishes for a Happy New Year to all.  But, in case my wishes to you are all for naught, best be prepared as you can...

legendary
Activity: 1202
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December 30, 2014, 08:55:11 PM
Look at it this way:  They keep printing, but it all goes to the cronies at the start of the pipeline.  These blessed few, this band of brothers, will hoard the $$ as long as they can gain a spread on them.  When they can no longer gain a spread, le deluge en suite.  All that cash reaching for spread means yields go down.  It gets so hard to find anything that hasn't been bid up to untenable risk/reward levels that investment is gradually grinding to a halt.  CapEx is way down.  R&D is way down.  It's all dividends and buybacks, debt on top of debt.  The real economy grinds slower and slower even as the financial bubble is expanding.  When the disconnect finally snaps, the crash will be nasty.  Already we are starting to grind down in commodity deflation.  The threads connecting finance and material economy are too weak to bind them.  They are stretching.  It is a really good time to be in cash (and crypto).  Poor time to be in equities, bonds, commodities (including monetary metals for the time being, although that will change when the fan starts to make the sloppy noise).

imagine the size of warehouses these folk need to stuff with paper dollar to be able to dump it onto public fast enough for them not to realise what just happened. the rush through the door could be most chaotic period human society have ever experienced. i believe that as soon as we notice chaotic panic buy in property, precious metals or even crypto all at once - will mean that the fourth turning is days away.
legendary
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Sine secretum non libertas
December 30, 2014, 07:20:28 PM
Look at it this way:  They keep printing, but it all goes to the cronies at the start of the pipeline.  These blessed few, this band of brothers, will hoard the $$ as long as they can gain a spread on them.  When they can no longer gain a spread, le deluge en suite.  All that cash reaching for spread means yields go down.  It gets so hard to find anything that hasn't been bid up to untenable risk/reward levels that investment is gradually grinding to a halt.  CapEx is way down.  R&D is way down.  It's all dividends and buybacks, debt on top of debt.  The real economy grinds slower and slower even as the financial bubble is expanding.  When the disconnect finally snaps, the crash will be nasty.  Already we are starting to grind down in commodity deflation.  The threads connecting finance and material economy are too weak to bind them.  They are stretching.  It is a really good time to be in cash (and crypto).  Poor time to be in equities, bonds, commodities (including monetary metals for the time being, although that will change when the fan starts to make the sloppy noise).
STT
legendary
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December 29, 2014, 11:48:50 PM
The main factor for circulation of currency rather then just storage of debt by countries supporting the trade deficit of USA will be interest rates and deprecation of the cash. [also the failing budgets of those countries, Japan has $1tn etc] It will make more sense to sell that debt and realise it as dollars or bid up the prices of tradable assets.  Thats why many expect a commodity boom though we seem to be seeing the opposite and world gdp has fallen in expectation for some time now (while remaining positive year to year overall)
legendary
Activity: 1202
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December 29, 2014, 10:58:56 PM
as far as im aware all those qe money go to those close to the printing press. so them dow and s&p are now booming as well as other currency markets. it will take time but those fund will absolutely have to return into the circulation soon or later. i wonder whether fed will be able to hold the sudden influx in fiat as soon as there is a run on any of them markets.
hero member
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December 29, 2014, 08:21:55 PM
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Unlike fiat of yore backed by gold or promises of State order, the knowledge age ...

Bro, fiat is not backed by gold.  By definition.
Welcome to the age of knowledge!

Idiot of course not 100% backed yet still backed at some ratio of leverage and from the public's perspective fully backed; it was a discussion of fractional reserves. Up until 1971, it was indeed "backed" by gold in the USA but when France began demanding the gold, Nixon ended the gold window. During the 1800s, the private banks were issuing fractional reserve promises to pay in gold. Even the dollar was backed by silver, and up until 1965, you could bring your silver certificate paper dollar to the bank and exchange it for a silver dollar coin.

Yeah welcome to the knowledge age dimwit.

Backed to some extent is really not backed at all. Countries do not accept an independent audit of their gold reserves. So nobody can be really confident of the total gold reserves that a country has.

You also have the money supply exploding. If we look at what various QEs have done to the money supply, the ratio of gold reserves to total fiat in circulation would not appear comfortable at all.

Money supply on balance sheets. Get worried when this actually starts to be lent out, then we will see inflation- otherwise only expect grinding marginal inflation such as has been seen lately, barring of course black swans or exogenous events. Many people might be shocked to know that the Euro actually has the most 'paper' currency (including coins) actually in physical circulation but you do not hear goldbug gurus going on about this. Does that in fact make the dollar better to hold?

If you are interested in the complex relationship between gold, currency and oil. Check out a youtuber called Belangp very interesting take.

The increased money supply will have to show up somewhere. Right now, the US has not seen increased inflation because the increased money supply has gone to emerging markets. This has resulted in asset bubbles in these markets. Once these markets crash, the money will return to domestic markets causing inflation.
A lot of the excess liquidity has flowed towards emerging markets as people are generally taking on more risks and emerging markets represent greater risk. However even more of the excess money that the fed has 'created' has stayed on deposit at the federal reserve by the banks as there has not been sufficient demand for high enough quality loans
legendary
Activity: 1246
Merit: 1000
December 29, 2014, 08:04:20 PM
...
Unlike fiat of yore backed by gold or promises of State order, the knowledge age ...

Bro, fiat is not backed by gold.  By definition.
Welcome to the age of knowledge!

Idiot of course not 100% backed yet still backed at some ratio of leverage and from the public's perspective fully backed; it was a discussion of fractional reserves. Up until 1971, it was indeed "backed" by gold in the USA but when France began demanding the gold, Nixon ended the gold window. During the 1800s, the private banks were issuing fractional reserve promises to pay in gold. Even the dollar was backed by silver, and up until 1965, you could bring your silver certificate paper dollar to the bank and exchange it for a silver dollar coin.

Yeah welcome to the knowledge age dimwit.

Backed to some extent is really not backed at all. Countries do not accept an independent audit of their gold reserves. So nobody can be really confident of the total gold reserves that a country has.

You also have the money supply exploding. If we look at what various QEs have done to the money supply, the ratio of gold reserves to total fiat in circulation would not appear comfortable at all.

Money supply on balance sheets. Get worried when this actually starts to be lent out, then we will see inflation- otherwise only expect grinding marginal inflation such as has been seen lately, barring of course black swans or exogenous events. Many people might be shocked to know that the Euro actually has the most 'paper' currency (including coins) actually in physical circulation but you do not hear goldbug gurus going on about this. Does that in fact make the dollar better to hold?

If you are interested in the complex relationship between gold, currency and oil. Check out a youtuber called Belangp very interesting take.

The increased money supply will have to show up somewhere. Right now, the US has not seen increased inflation because the increased money supply has gone to emerging markets. This has resulted in asset bubbles in these markets. Once these markets crash, the money will return to domestic markets causing inflation.
newbie
Activity: 28
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December 29, 2014, 12:06:03 AM
Is Anonymity undesirable for society or unrealistic?

Contracts shouldn't be designed to require the courts for restitution. This drives collectivism as you duly noted.

There will always be a need for dispute resolution and mediation in contracts. It is impossible to fully remove this need. Although it is certainly possible to mitigates the state’s role via private judges/arbitrators the best that can be achieved here is minimization.

In the part of my prior post which you did not quote, I explained that certain contracts can be indisputable because they are algorithmically settled. With the Knowledge Age, I expect these type of indisputable contracts to become a preponderance of the GDP[1]. My hypothesis is the Knowledge Age changes the fundamental basis of society.

For example, I expect the monetization of open source to foster granularity of project modules. So this means instead of contributing to for example Firefox or Linux source code, an open source developer could instead contribute to a module of source code with a much more general but limited scope of functionality (e.g. a HTML rendering engine or an image format rendering engine, i.e. the latter is a sub-module of the former module). These modules would then be funded by a license fee paid by the users of the software. The key here is micropayments, because each module would self-register itself on installation and request a micropayment from the user. The user would be shown  an aggregation dialog box of all the micropayments for the all the modules in the software they want to install and use, and click to approve the payments. A huge advantage is then we can upgrade specific modules of a software, so we can customize software to our liking. For example, Mozilla assholes would no longer have the power to do what I warned them would be egregiously unpopular with website developers. You thus see from that Mozilla fiasco that even in open source, the IRON LAW of Political Economics applies. The way open source funding works now is that the key developers of large projects are funded by large corporations. Thus only the core developers receive remuneration. And the synergies and network-effects are highly muted as compared to the new paradigm I describe above.

[1]Iron was a precious metal 342 B.C.. Commodity prices inexorably trend downwards.
https://bitcointalksearch.org/topic/m.6065144
https://bitcointalksearch.org/topic/m.6082580
http://unheresy.com/Information%20Is%20Alive.html#2nd_Law_of_Thermo
 
Pedophilia, rape, murder, assassination have been going on since Mesopotamia. Communications were always anonymous in the past. You want a 666 control system to try to stop what has always existed and you will get instead your nirvana of megadeath.

Anonymous internet communication doesn't make it more difficult to hunt down individuals as compared to the way it was done before the internet. There was always anonymous money and transactions in the past. Whereas, if we give the State the power to make all transactions trackable in the imminent switch over to digital currency, we will surely all die in megadeath 666.

Two separate issues here. 1) It there a social cost to adding unbreakable anonymity in monetary transactions 2) Is the cost worth the benefits.

It is true that such crimes are ancient ones. However, it is also true that the creation of a marketplace where such activities can be financed in absolute anonymity will lead to an increase in said activity.

Firstly, I philosophically do not agree that which is natural is a cost for society. I believe the antithesis is the truth, which is that statism attempts to enforce unnatural outcomes[2], which is huge cost on society because nature always wins in the end.

But more saliently, as usual is appears you don't view the issue holistically and only look at one of the vectors that the new paradigm changes. For example, parents have a responsibility to protect their children from paedophilia and the Knowledge Age will economically empower individuals so they can have more influence over their kids, i.e. not be dependent on sending their kids to public schools where they lose some of their individuality and morals. The current statism is destroying the family unit which destroys children and makes them more vulnerable to paedophilia. Statist funded feminism[2] is causing more rape than anonymity could ever hope to. Murder rates are 26 times higher amongst blacks who have lower IQs and knowledge age skills — fact is that Knowledge Age workers do not murder. Increase in the risk of collectively funded assassination would be a great incentive to be anonymous and to not be a public figure, thus another restraint on corrupt governance and overpaid actors and sports stars which are a moral turpentine on society ("let them eat cake" or "feed them bread and circus" to keep their minds preoccupied).

Note I believe IRON LAW of Political Economics can't coexist with the Knowledge Age, because remember my thesis is that knowledge isn't fungible and can't be financed, thus it really can't be centralized and controlled and thus the government must eradicate the Knowledge Age if the government is to survive. In short, there is war ahead and only one side can survive. If the government wins, humanity loses.

[2]http://armstrongeconomics.com/2013/10/13/defeating-the-business-cycle-a-goal-for-thousands-of-years/
http://armstrongeconomics.com/2013/10/01/what-socialism-destroyed-govt-shutdown/
http://armstrongeconomics.com/2014/04/11/socialism-at-its-best-how-to-destroy-the-wealth-of-a-nation/
https://bitcointalksearch.org/topic/m.9910747 (Western civilization destroyed by trying to enforce gender equality)
http://esr.ibiblio.org/?p=4934 (The true meaning of moral panics)
http://www.usnews.com/news/blogs/washington-whispers/2011/03/04/5-ways-feminism-has-ruined-america
http://esr.ibiblio.org/?p=3567 (What ‘privilege’ means to me)
https://bitcointalksearch.org/topic/m.5916097 (Banning both breathing and death)
 
Ask yourself this question. If everyone in the world was suddenly gifted with your current understanding of fiat, cryptocurrency, socialism and its dangers would you want anonymity in a world currency? The answer in my opinion is no.

I entirely disagree. I would still want anonymity because it provides the correct incentives for the game theory of society, as I enumerated above. Never should the game theory be based around personalities, but rather based on actual deeds which has nothing to do with identity. I view this very mathematically. Thanks for calling me out to explain my philosophy so it is available in the public record.

In such a admittedly very unrealistic scenario there would be no need for anonymity as the populace would vote to dismantle the foundations of fiat based socialism. There would be no justification for facilitating the aberrant social behavior that unbreakable anonymity helps hide.

Now obviously that is a completely unrealistic scenario. However, I believe it demonstrates why the long term solution to this problem is education and where that fails natural selection. Anonymity is a useful means to protect individuals until society progresses to the point where it can be safely set aside.

Not only unrealistic, but uniformed about the real game theory of society. Also society can't vote anonymity out of existence. Nothing can stop anonymity unless it is technologically possible for a central authority to squelch it. See below...

Internet anonymity is nothing like burying gold coins. It doesn't have to be cumbersome nor cost more (but there is a lot of programming work that needs to be done to make it so). It doesn't have to decline the velocity of money and can in fact increase the velocity which has been collapsing, by providing an outlet for the private sector to grow and interrupt without the oppression of the State.

Perhaps but this has yet to be proven. Certainly nothing that exists today meets this criteria. The state is likely to come down hard on an anonymous cryptocurrency if it starts to gain traction. That alone will increase the cost of using it.

This is the big open question. Even I am not sure how this will play out, but I will say do not entirely underestimate the power of the Knowledge Age. It is possible we can render the government's power quite impotent. For example, if the government wants to pay footsy with internet kill switches and packet filtering, we can switch to P2P mesh networks of WiFi routers and stenography. Also if the Knowledge Age is more profitable for people than the collapsing socialism which becomes draconian, then the majority of people walk away from the government (withdraw their support for its authority) and walk to anonymity and the Knowledge Age. It could be like the fall of the Berlin Wall, one day the government realizes they've lost and it falls peacefully in tidal wave action.

That is my grand hope.
STT
legendary
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December 28, 2014, 09:39:02 PM
Quote
Many people might be shocked to know that the Euro actually has the most 'paper' currency (including coins) actually in physical circulation

Ive read that before a few times as criminal gangs with large amounts of money like the Euro for its high denominations and liquidity.   I think dollar is still most favoured globally as its used as the actual main currency unofficially many places.    China is another place Ive heard of very large amounts of cash being hoarded like this related to corruption, enough cash to fill a warehouse so perhaps they lack the appreciation and high value euro has come to have
legendary
Activity: 1946
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December 28, 2014, 09:20:37 PM
The problem is the progressive growth of socialism...
What is needed is a negative feedback mechanism to check this growth. Perhaps a combination of sound money, elimination of fractional reserve, and outlawing government debt would be sufficient? In such a system the government would actually have to tax for every new program creating the potential for true opposition from those opposed to taxes.
Quote from: contagion
Money is a language for exchanging value. In open source we are saving in acquired (personal and collective) knowledge and reputation, thus a language of value exchange.
Proof-of-work solved the Byzantine Generals Problem so in theory inverted the location of power in a monetary system moving it from the collective center to the individuals at the ends of the network, leaving only dumb protocol agents in the center — the end-to-end principle.

The individuals unleashed from that horrific Iron Law, are now free to vote with their value to walk away from initiatives (e.g. Paypal or Coinbase loaning in Bitcoin fractional reserves offchain) that debase the knowledge value in a decentralized cryptocurrency.

This is why I am so interested in cryptocurrency. In theory cryptocurrency has the potential to restore sound money. It also makes fractional reserve more difficult and obvious.

US history provides a living example that the forces that drive socialism are not easily checked. In the 1830s we had sound money (gold), no government debt, no taxes (except tariffs on foreign imports), and after no central bank. Compared to the government of today it was a libertarian dream. Yet despite these advantages and despite a constitution specifically written to limit government we morphed into what we are today.

Quote from: Andrew Jackson veto of the Maysville Road Bill 1830
Through the favor of an overruling and indulgent Providence our country is blessed with a general prosperity and our citizens exempted from the pressure of taxation, which other less favored portions of the human family are obliged to bear.... How gratifying the effect of presenting to the world the sublime spectacle of a Republic of more than 12,000,000 happy people, in the fifty-fourth year of her existence, after having passed through two protracted wars — one for the acquisition and the other for the maintenance of liberty — free from debt and all her immense resources unfettered!

There will always be forces that seek to debase sound money, initiate fractional reserve, and encourage government debt. These actions are all highly profitable to individuals and special interests while their cost is distributed over society as a whole.  This is the Iron Law as mentioned above and essentially a tragedy of the commons scenario with the commons being sustainable government.         
legendary
Activity: 1652
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bigtimespaghetti.com
December 27, 2014, 05:53:38 PM
...
Unlike fiat of yore backed by gold or promises of State order, the knowledge age ...

Bro, fiat is not backed by gold.  By definition.
Welcome to the age of knowledge!

Idiot of course not 100% backed yet still backed at some ratio of leverage and from the public's perspective fully backed; it was a discussion of fractional reserves. Up until 1971, it was indeed "backed" by gold in the USA but when France began demanding the gold, Nixon ended the gold window. During the 1800s, the private banks were issuing fractional reserve promises to pay in gold. Even the dollar was backed by silver, and up until 1965, you could bring your silver certificate paper dollar to the bank and exchange it for a silver dollar coin.

Yeah welcome to the knowledge age dimwit.

Backed to some extent is really not backed at all. Countries do not accept an independent audit of their gold reserves. So nobody can be really confident of the total gold reserves that a country has.

You also have the money supply exploding. If we look at what various QEs have done to the money supply, the ratio of gold reserves to total fiat in circulation would not appear comfortable at all.

Money supply on balance sheets. Get worried when this actually starts to be lent out, then we will see inflation- otherwise only expect grinding marginal inflation such as has been seen lately, barring of course black swans or exogenous events. Many people might be shocked to know that the Euro actually has the most 'paper' currency (including coins) actually in physical circulation but you do not hear goldbug gurus going on about this. Does that in fact make the dollar better to hold?

If you are interested in the complex relationship between gold, currency and oil. Check out a youtuber called Belangp very interesting take.
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