Topic: Economic Devastation - page 66. (Read 504776 times)

You nailed it in the first paragraph. Gold is sound because governments cannot control or debase it. Fixed volume is not the number one selling point of bitcoin. The number one selling point of bitcoin is that it is sound money and that it can be easily transmitted around the world and cannot be easily siezed.

Cryptocurrency can certainly adapt to world population changes and advances in technology. To have it do so in a manner that allows it to remain sound is simply a technological challenge to overcome.

Fixed volume is an effective short term marketing technique. Long term it is a significant problem.

I am aware of that. Gold volume is not static, it increases, and the gold mine investments are also dependent on gold price. It is called sound, not because it is of static volume, but because governments can not manage the volume more than others.

Bitcoin is a bit different, because money volume will decrease as mining reward diminishes and coins are lost.

An increasing supply, as you suggest, will not take away the soundness as long as the increase is not managed at the whim of a dominator, and the new coins are distributed fairly, for example as a mining reward. So that is ok.

But it is not necessary, as it would make no difference, the future value of the money will be exactly as predictable as it will be with the bitcoin style money volume. It can never adapt to world population change, or advances in technology. It will only complicate matters (a small bit), but mostly, it will take away the absolute number one selling point of bitcoin: the fixed volume.

You are arguing against our current fiat system. I am not defending our current system. I agree with your critique of centralized suppression of interest rates and government force. Our current system is massively fraudulent and essentially a clever mechanism to allow large scale theft to occur without detection.

Where you are mistaken is your logical error that sound money requires a currency that has no debasement. A currency system with no debasement is also a theft mechanism for the reasons I described above. Gold is sound money and gold is debased at a rate of about 1-2% per year.

http://www.zerohedge.com/news/2014-04-03/infographic-unearthing-worlds-gold-supply

Edit: The one scenario where a currency with no debasement would not be a theft paradigm would be a society with a stable population that had reached a technological plateau and was no longer advancing. In this scenario completly sound money with no debasement would be the optimal choice.

The point is that with sound money, state force is out of the formulas. The market will balance money value and money volume through lending. The interest rate will balance saving and investment to consumption. The demand to have reserves, will balance with the money value. More people means  more money in reserve, but also more people to produce and spend, and more need for investments. Balances everywhere.

You can't see the elephant in the room: The zero interest rate policy, coupled with money volume expansion (necessary to push the interest rate down), has distorted the production structure by prioritizing projects with a long timespan from investment to consumer product AND at the same time fooled the consumer to consume too early. When products (that is not even in line with consumer wants) arrive, the consumers are exhausted. It happens now. The long time investments made the last three decennia, are really a keynesian waste.

I believe the optimal rate of debasement is a one that equals or approximates the underlying growth rate of the economy it services. Any other debasement turns into an ultimatly unjustifiable redistributive mechanism.

Bitcoin represents an extreme essentially a currency with no ultimate debasement. If bitcoin ever gains traction as a world currency it would be massively redistributive. In the hypothetical where it became the dominant currency simply holding bitcoin would guarantee a return equal to the aggregate growth of the economy. As no work is needed to achieve this return bitcoin would essentially act as a tax on growth and idea generators siphoning off a portion of their work to benefit those hording bitcoin. This scenario would create profound disincentive against risk suppress overall investment and thus suppress growth. Idea and wealth generators would have a natural incentive to jump ship a move to a more equitable currency alternative.

Similarly, an excessive debasement rate (one exceeding the overall growth rate in the economy) is redistributive in the opposite direction. In this scenario saved money does not maintain purchasing power. Wealth is siphoned from savers to those who are generating growth right this second. The scenario is one that encourages excess risk and a sort of desperate use it now or lose it mentality. If long term debasement exceeds the rate of economic growth it will introduce inefficiencies into economic decision making. Claims on real capital that optimally should have been delayed will instead be invested/spent. Society as a whole suffers. Savers and retirees would see their wealth and purchasing power continuously eroded giving them a profound incentive to move to an alternative currency that maintains their purchasing power.

The only scenario that is not redistributive is one where the currency is debased at a rate equal to the aggregate economic growth in the economy. This is the point of equilibrium where idle savings maintain purchasing power but do not grow or decline.

Monetary Education 101

1. The Quantity Theory of Money roughly posits that the GDP (price × quantity) is roughly proportional to the money supply (M) times the velocity of money (V). Any increase in GDP due to increase in M (such as fractional reserve debt), is illusory non-growth in the form monetary inflation. Any increase in GDP due to increase in V that is not a derivative effect of monetary inflation, is real growth. Real growth translates to an appreciation of buying power, thus protecting store-of-value. Thus we can conclude that friction on unit-of-exchange is undesirable.

2. A reasonably stable store-of-value is a requirement of an efficient unit-of-exchange. A currency that depreciates noticeably in a week or month is countervailing to unit-of-exchange. Per #1 in a correctly functioning monetary system, purchasing power will always be rising (as measured averaged through natural fluctuations on the free market business cycle, assuming the guber-mint is not mucking it up making it worse) despite some annual debasement perhaps in the range of a few percent. In addition the general rise in purchasing power because everyone's investments are outperforming the debasement rate, your investments should be too thus you get squared effect which far dominates the debasement (rise_in_purchasing_power × rise_in_investments ÷ debasement rate). This squared mathematical effect is why decentralized monetary systems kick exponential a$$ on the centralized ones rife with guber-mint backstopped usury, socialism, etc. We'd already be in the golden Knowledge Age if not for the bastards holding us back.

3. Due to that squared law explained in #2 and coupled with the fact that small things and investments grow faster, the upcoming wealthy gain more from debasement than the egregiously wealthy. Thus debasement is a very natural, efficient allocator of wealth to the maximum production. The super wealthy can't focus their investments to the most productive because their wealth is too large to allocate efficiently. They are more concerned about safety, economies-of-scale, and return of capital, which retards production in the economy.

4. Due to the power-law nature of wealth aggregation (hey some people are just more motivated, skilled, driven, disciplined than the masses), if you don't pump money from the wealth aggregators back out to sea with the masses, then the entire economy stops and falls into a Dark Age. Then everyone suffers, including the wealthy (first the millionaires, but later the trillionaires also destroy themselves but they don't care because they are psychopaths who crave power and destruction , they even masturbate to videos of the rape, pillage, and beheadings of entire African villages). If it isn't done decentralized, then centralized institutional structures rise up to do it, because the economy will die without redistribution of wealth from the power-law back to the sea of masses.

5. You buy gold yet it has only been going down in exchange value. You can't expect any asset to have only a rising value, for this would mean that asset has special unnatural status enshrined by some power who can make it so. In short, you'd be wishing for a NWO world. The desire for creditors (holders of an asset) to be always insured is what is driving the NWO. Watch this video:

Quote from: minor-transgression on July 18, 2015, 09:05:00 PM

https://www.youtube.com/watch?feature=player_detailpage&v=xu5sTyAXyAo#t=526

It is interesting that Ireland will pay billions for decades in a modern form of
Danegeld and only a select few insiders aware of the flow.

P.S. If you are thinking about an altcoin launch and its store-of-value function, any miniscule debasement rate is going to pale against the ingress and egress of speculators.

Well, I haven't tried barbecued rats either...    Cui (guinea pigs in Peru), yes

Ah, the Old South, I remember her well.  When I was a very young kid (+/- 4), we moved to rural SC.  My father's family in Chicago must have wondered just WHAT my father was thinking...

Railroad facilities, old buildings, slow & simple life.  Yep.

I do NOT miss the Black Widow spiders though, one of them ruined a couple of days for me.

/OT


EDIT: Back on topic, I will have to think about TPTB's ideas on a new currency, one that depreciates if you hold it.  That just goes so against my natural instincts.  If a currency depreciates so, then that implies you have to BUY some, then spend it quickly.  You would lose if you just hang on to it.  The US$ at least can be held for a week or a month, and you still get (approximately, and at least for now) the same amount of goods.

Looking forward to that movie, I hope to be attending the premiere...  

Let me see if I can bring this thread back on topic.

The above quote was an OT post to an OT discussion in the Economic Totalitarianism thread. I wish we attempt to discuss monetary theory in an appropriate thread, so readers can follow threads.

The entire point of my (AnonyMint's) seminal essay linked from the opening post of this thread, is that production in the Industrial Age and prior epochs required great economies-of-scale in fixed capital, e.g. factories, mechanized farming, Egyptian slaves for pyramid building, etc..

Production in the Knowledge Age is the creation of new knowledge (not just the consumption of existing, although learning is a form of knowledge creation), e.g. software, 3D printing/CNC mill design patterns, marketing, writing, etc.. This notion (genre) of production can not be financed with interest bearing capital (read my seminal article!), and the capital resides with the individual and not with economies-of-scale (e.g. The Mythical Man Month).

Thus the generative essence of the problem has been not money nor free market capitalism itself, but the power that the technological state of mankind imparted to money.

The Knowledge Age is solving this problem.

Money will return to its roots (as an improvement over non-fungible barter) of being a unit-of-exchange, and less of a store-of-value.

This is the why Industrial Age and socialism are going totalitarian into a NWO, one-world reserve and governance outcome (go big or die is their necessary mantra). Because the paradigm is dying.

So we don't want an anti-money (whom can free-for-all coinbase nilly-willy debase faster race into the abyss) shitcoin that is designed to perniciously, self-destruct into a mutual chaos. Instead you want a money that is designed to primarily to be the best unit-of-exchange and which has extensive ability to resist totalitarianism. Money must debase and the best way is when it debases the most for those who do not transact so as to encourage the greatest unit-of-exchange. The power-law distribution of wealth is a pump that must be constantly reprimed, i.e. the concentrated wealth must be pumped back out to the masses to spend it again so it can return to those who concentrate wealth via their greater skill, fortitude, effort, etc..

Stay tuned...that money (with extensive mathematical innovations over any existing altcoin and potentially a Bitcoin killer) is coming soon to a cinema near you...

Sweet potato and bananas are high in potassium (remember I am in a tropic country):

http://nutritiondata.self.com/facts/vegetables-and-vegetable-products/2667/2
http://nutritiondata.self.com/facts/fruits-and-fruit-juices/1846/2

Past weeks eating nearly the diet the native tribe filipinos ate before the introduction of modern life (which some still do, but most of them apparently don't like it any more). It is reasonably easy to accomplish here in the Philippines, because for example I can easily buy uncleaned, freshly caught, wild fish; ditto native chicken that feasted on bugs instead of corn. Haven't tried the barbecued rats yet though.

I don't miss the carbs at all. Absolutely no cravings. I grew up in Louisana on creole food, so sweet potatos are like "coming home" or my (1/16th Cherokee) grandma's kitchen.

I miss the Old South-- the one before commercialization. The one with the old buildings, wooden shacks, old railroad facilities, and prevalence of simple life (poverty). However, I don't miss the extreme poverty and squalor.

Low carb does work. It lowers blood sugars. The vicious circle of carbs and sugars triggering burst of insulin causing them to turn to fat has deadly consequences. However, please watch your potassium levels. You should supplement with 50 mg of potassium daily to prevent problems with your kidneys. In rare cases it could cause your kidneys to shut down.

I took the thread OT on health but hope it won't veer too far on that topic. I guess because this was the most read thread that was identified with me (AnonyMint), perhaps also considering CoinCube (thread originator) is a medical (research?) doctor and applied mathematician. Also because the Knowledge Age solution to the Economic Devastation theme is about decentralized knowledge cultivation, of which health is a principle candidate. Also I guess because some know I am potentially playing a notable (significant?) development role in cryptocurrency behind the curtain, so my suffering from M.S. had been a major drag on my productivity thereof. Also this thread had sort of died lately, as my antagonist (or collaborator) CoinCube is very preoccupied on maximizing his income to pay off egregious student loans before the late 2017 collapse hits.

I agree on the ketonic and high fat and high protein. I am pretty much not eating carbs at all now. Only sweet potato (which is not a potato) in very small morsels. Mostly very high fat meats, e.g. pork, chicken, salmon, and mackerel. Wild (not corn and soy fed) when I can get it. And uncooked green leafy vegetables with every meal. Sometimes boiled cabbage with chicken (drink the broth too).

I've been taking a "B Healthy" brand whole food, co-enzymated[1] B complex (also Milk Thistle) with every meal past several days and if you've noticed I haven't been posting on the forum, because this has enabled me to code, code, code. This seemed to drive some significant changes w.r.t. to my head and gut (and sensations even in the pelvic area). Still experimenting...

No caffeine and no fluids other than distilled water.

Thanks for the ideas.


[1] Chemically produced Folic acid is an insidious, carcinogen and toxin for many people.

 
^ Nice diet.

Also, how did this thread came to talk about diet and guts ?

My most recent diet is ketogenic, basically all-you-can-eat as long as you stay ketogenic 

So 80%+ of the calories should come from fat, and the 20% from carbs, protein and alcohol. Ditching carbs is easy, I have practiced it for a long time, but getting rid of protein as well is important and difficult, as it often comes as a side order with fat.

During ketosis, I don't feel hunger, it is somewhat like fasting but the feeling is not light and fickle, rather solid and steady. I drink a lot of coffee because up to 1/2 liter of cream can be added per day, increasing the percentage of fat and enabling occasional "low-fat treats" like cheeses and salami.

Getting to the state takes 24+ hours, and when I switch back to eating carbs and sugar, it feels really bad. Staying continuously in ketosis is challenging for health, getting all the important nutrients does not happen from just cream (although it is basically the condensed mother's milk for a calf but still...)

Apologies for OT: You mentioned fasting helps your symptoms. I've experimented with fasting for gut health (though my gut problems don't come close to your level of severity). One thing to consider if you haven't already is the use of BCAA supplements during a fast.

Essentially the idea is to eat all your daily calories in one big meal (or in a limited time frame if that's too difficult... such as a 5 hour window), and supplement with BCAA capsules while you fast to provide nutrition and prevent catabolism.  And obviously when you do eat it would ideally be a high fat/protein anti-inflammatory paleo diet. This way, by fasting for 18+ hours every day your gut will have more opportunity to heal between meals.

That is an idea. I did add Turmeric to my fermented salsa sometimes, but don't like the taste that much. I have also some Turmeric extract capsules on order.

https://www.jackkruse.com/the-quilthow-to-beat-agin/

The whole world is flipping around