Bitcoin Forum

No Money Exists Without the Majority

At the conclusion, I will offer a solution.

Society requires money to be maximally fungible, as this maximizes the division-of-labor which increases efficiency, productivity and prosperity.

Every possible form of fungible money is backed by the trust that it will maintain a healthy balance between the desirable qualities of wide acceptance (medium-of-exchange), liquid, and a store-of-value.

During a financial crisis, neither fiat nor gold maintains all of these qualities. For example, gold is a better store-of-value as fiat is destroyed by sovereign debt collapse, but the majority can't widely accept gold's value because it entails fiat collapse and pestilence. During the collapse to the destitution (often including wars and megadeath) at the bottom, the majority will steal gold's value via the (currently escalating (https://bitcointalk.org/index.php?topic=160612.msg2377291#msg2377291)) threat of confiscation of wealth which can force gold into hiding, thus killing liquidity and wide acceptance.

Only agreement of the majority for a shared partial default of the value of all money and bonds as Julius Caesar did (http://armstrongeconomics.com/693-2/2012-2/anatomy-of-a-debt-crisis/), will restore trust in money, entice gold out of hiding, and usher in a new period of growth and prosperity. For as long as there is a standoff between the insistence of monetary capital (regardless of the type of money or investment it is stored in, including gold) to not allow even partial losses and the insistence of the masses for socialism funded with debt to avoid temporary reduction in their standard-of-living, then the financial system will further self-destruct towards a Mad Max Dark Age.

Side note, Martin Armstrong's 78 year (i.e. 3 x 26 year human maturity generations) real estate cycle predicts that bottom in 2033. I wrote that the 26 year downhill portion of this cycle appears to repeatably correspond (https://bitcointalk.org/index.php?topic=160612.msg2133534#msg2133534) with massive unemployment (and a major war) due to a new technological paradigm, e.g. the early 1900s destruction of cottage industry by mass production and now the destruction of menial labor by the personal computer automation and robotics. In the 1700s, it was agricultural technology disruption of employment. The masses delay their adjustment to the new skills with debt and socialism, which thus causes the resultant financial crisis to drag on longer and be more severe.

We technologists have looked deeply for an alternative to Bitcoin, that would eliminate its 51% attack vulnerability, and have concluded with the 51% Rule of Decentralized Agreement (https://bitcointalk.org/index.php?topic=189239.msg2365101#msg2365101), which implies that no decentralized digital currency will ever be able to (sustain an) escape from the desires of the majority of society.

There will never exist a form of highly fungible money (not gold, fiat, nor digital currencies) that will escape from the desires of the majority of society.

The desires of the majority of society will always migrate towards boom and bust socialism.

We elect leaders because we can't agree on everything we individually want (including controlling what others individually do and want), because these leaders are able to employ the top-down power of the majority to give all of us something we want by funding with debt and then take it away from us again at the resultant financial collapse. The leader who promises the most wins, because we don't agree on the tradeoffs between wants and available resources. Thus leaders are forced to promise nearly everything. The only way to fund everything is widespread debt and unfunded future promises, i.e. funding by obfuscating mutual self-destruction in debt and misallocation (causing destruction) of human capital.

This insoluble political power vacuum exists in all facets of individual freedom where technology does not exist to empower the individuals to route around top-down control.

The insoluble socialism would destroy all production if it were not for technology to escape from top-down control. Thus all increased prosperity and standard-of-living throughout human history is due to personal empowerment technology, e.g. portable energy-dense compact carbon fuels, the automobile, telephone, personal computer, internet, the open source software model, and coming 3D printers.

Even mass production (i.e. automation) empowered individual freedom away from top-down control by eliminating human menial labor, because a (e.g. prison ward) manager can measure in real-time if one is producing menial labor and thus force one to work productively because nearly every human can do the task, but it is not possible that every human can do every knowledge task thus the individual can feign inability or otherwise only produce when he/she chooses to do so. Humans are fungible w.r.t. to menial labor but not w.r.t. knowledge production

Thus what gold standard proponents don't understand is that the insoluble political power vacuum that gives rise to booms and busts does not exist nor derive from the form of money used, but rather exists naturally in every society as explained above. The malfeasance of the leaders is not the source of the problem either, rather exist as a manifestation of the insoluble political power vacuum described above. So changing the form of money used or regulating or removing the corrupt leaders won't fix the fundamental driver of the phenomenon, and the insoluble outcome will occur again as exhibited over and over again throughout human history. The power elite are not even in control (https://bitcointalk.org/index.php?topic=160612.msg2355498#msg2355498).

It must be the case that savings in fungible money can not be a perfect perpetual claim on future human productivity, because otherwise past innovation eventually owns all future innovation. Because new knowledge is not fungibly created by any human, and thus can't be financed (http://www.coolpage.com/commentary/economic/shelby/Demise%20of%20Finance,%20Rise%20of%20Knowledge.html#FinanceabilityofKnowledge) by savers (the material needs of a knowledge producer are growing ever smaller relative to value of knowledge produced). That fungible money is dependent on the majority is a feature which allows old money to be destroyed in favor of future growth and innovation. A strict gold standard is equivalent to Marxism (http://armstrongeconomics.com/2013/03/27/marxism-gold-standard-are-same/) as both require innovation to stop (Byzantine and the USA were never on strict gold standards, due to private banks fractional reserve debt (http://armstrongeconomics.com/2013/04/10/making-gold-silver-legal-tender/) and proxy debasement via international immigration of capital). Martin Armstrong explained this (http://armstrongeconomics.com/2013/06/04/1984-is-here-2014/) as a relative value issue as follows.


Money and socialism are intertwined and this will never change. To survive the near total wipeout of fungible money in a Mad Max Dark Age, store production in non-fungible knowledge or technologies that continue to generate revenue during or at least after the crisis.

I am proposing a more modular paradigm (http://esr.ibiblio.org/?p=4946&cpage=1#comment-401496) for open source software to enable storing knowledge value in revenue producing long-lived modules.

Cool story bro.

TL;DR?

This.

you had me at hello  ;)

I wrote that article in a rush so there are some lapses...


Society requires that money be maximally fungible...


Caesar was able to overpower the vested interests (who later assassinated him), that was a key point of the link above. The Euro + unions + social systems are bankrupting Europe (http://www.mpettis.com/2013/05/21/excess-german-savings-not-thrift-caused-the-european-crisis/#comment-23546) and probably also being defended by vested interests. For sure Europeans don't vote to leave the Euro, even though that is what is killing their economy (see my all comments spread over the page at the link above), because it would mean near-term reduction in their social systems, etc.. They are still dreaming that getting all that for free was reality.

a very interesting read and plays on a lot of the ideas and concepts I've read on and taken to heart.   

the problem i that technology will surpass us and the human story will end with the beginning of an artificially intelligence presence.  like frogs slowly cooking in a pot we are unaware that it is happening.  technology is disrupting and rebuilding all the facets of our social and economic lives and in our mindset it is always happening to someone else.

20 years from now we will have artificially intelligence super computers, 10 years after that the same computers will be had for $1000 in hardware.  I've long accepted this concept that they will replace us and I know I am doing my part to accelerate it.  No point in fighting it as it can't be stopped without the total destruction of the human race.

So have fun while it lasts.

jackjack that is a hilarious (love the humor thanks), and in the rare case that you were making a serious criticism then perhaps your inability to distill any useful info is the vacuous space may be your cranium, lol. Just saying.

anderl, the sentient advance of knowledge will always be done by humans, never by computers. Kurzweil's Singularity is sensational nonsense (Luddites were making similar dire predictions, global warming and global cooling propaganda scares have repeated in history, etc). Computers and robots are just tools that will make us more productive at that task of creating knowledge. The unemployment is both due to destruction of private markets by the failing socialism and because most people haven't been training to be computer programmers, nanotech and biotech researchers, robotic engineers, etc..

These 78 year cyclical collisions between technological shift and socialism failure often do result in a Mad Max outcome, but more often on local scale (e.g. local strife and massacres) whereas the multiple-century Dark Ages have only occurred apparently 3 times in human history, which I documented in the following linked comment:

http://esr.ibiblio.org/?p=4946&cpage=1#comment-402880

read parts of...

so is it pro crypto-coins or against crypto-coins?

It is not against crypto-coins in terms of advancing digital money for society. That will probably happen and efficiencies can probably be gained.

It is against the concept that crypto-coins will subvert the power elite and socialism and provide some lasting individual freedom in the way that is gained from truly "personal empowerment technology, e.g. portable energy-dense compact carbon fuels, the automobile, telephone, personal computer, internet, the open source software model, and coming 3D printers.".

The reason being that no currency will ever exist that isn't subject to control by the majority, as explained in the OP. There is even a technical justification in the OP.

Whereas, true personal empowerment technologies (such as the examples provided above) enable routing around facets of control of the majority.

http://www.tgdaily.com/general-sciences-features/67819-artificial-brain-spaun-passes-iq-tests

your entire argument is invalid.
We are at the advent of producing artifical intelligence based off our own brain blueprints, it doesn't take a genius to figure out that once the basics work, a slight alteration to capacity will make a "spaun" brain more powerful than a human brain, which can then quickly be put to use in creating innovation and technological advances.

My entire argument in the OP was not about whether technological disruption is insurmountable this time, unlike in the past. The thesis of my article had nothing do with this issue and it was only a "Sidenote" in the OP.



Bwahahaha  ::)

Another naive Mathusian bites the dust.

I guess you missed the word "model" in your quoted article. And I guess you missed the phrase "new knowledge" in my post, implying dynamic creation of new models. Only humans innovate!

When you have a computer that innovates itself then call home again.

The fundamental reason a model can never innovate, is because knowledge creation isn't fungible-- one size does not fit all.

Each human brain is entirely unique. This diversity is the only way we get innovation. Evolution is about diverse fitness.

Sorry models won't do. The dynamic development of each individual human has diverse entropy that begins 1000+s of years ago...

the entirety of human civilization can be modelled, every single gene that has ever been passed on can be modelled and simulated using a computer, something of this nature would be called a genetic algorithim.

its a single brain, and its far from perfect, were not yet at the stage where we can tell it to go do something and it will think on its own and decide how to tackle a problem, however we are moving in that direction.


Think of this as a thought exercise; this simulated human brain running on a computer is hooked up to a 3d printer, a 3d scanner, and has the ability to use human like senses (sight, sound, touch, taste, smell, etc). This machine is able to move and interact with its environment, it drops an apple from a table onto the floor, it records its acceleration, velocity change, and so on and empirically determines newton's law of gravity.
Does that sound farfetched? I think were really really close.

You really made five posts in a row?

Technologists? ...

why do you think I'm speaking of a dire outcome.  I"m all for it.  I think it will be a net benefit overall.  nothing dire about my speculation.  we are not thee same human beings that walked the earth a hundred thousand years ago.  heck from a social stand point we are much different than people 2-3 generations earlier.  2 to 3 hundred years from now we will still call ourselves humans but will be completely alien to what we consider being human now.  again its the slowly boiling frog.

Good read on some of Ceasars domestic policies, though your blog tends to ramble at times.

You should really look into Silvio Gesell's theories, he explains much the society wide chronic effects that lead to economic crisis (it's not the fault of bad actors but a result of the system) but devises a simple yet effective escape in making money lose face-value over time.  This allows us to do away with both capitalism (the loaning of money at interest) and Marxist counter-reactions while preserving the free-market.

No because we can't reverse time and go back and encode (load into the model) the infinite entropy from the past and because due the Heisenberg (uncertainty) principle reality is a moving target that has changed as soon as any entity does anything including observe it.

Thus there can never be any top-down model that catches up to evolution. We actually have to be born from all the genetic history to take part in the diversity of the reality. As smart as computers become, humans will leverage them to be even more innovative, because we have the entropy (diversity of thought/ideas/genetic history) to input into that tool. Notice in my OP, I made a big point about the difference being fungible sharing in society and the non-fungibility of knowledge production.

This is also why we can digitally sign with a newspaper clipping to prove the signing occurred after a point in time (as Satoshi did to prove that he did not pre-mine), but we can't use any absolute reference point for proving something happened before a point in time, rather different observers will have a different recollection of reality.

This is also why fungible money (can't be private) and can only be the will of the majority.

Thanks for raising the issue and enabling me to clarify the importance of the non-fungible diversity of knowledge production.

Hey pray wake me up when they can model what is at the edge of the universe (or model that there is no edge)...where the entropy of the universe trends to maximum (2nd law of thermodynamics)

From email:


Hope you don't mind, I will share my reply publicly but I won't attribute you by name. Some important points are raised below.

You didn't realize Armstrong was referring to a government enforced fixed price for gold within the reality that society will always use debt and thus require fractional reserves.

I don't hate gold. It is a form of money that individual capitalists can hold to opt-out of socialism, but if too many do then it is a war against socialism. If such a widespread standoff is taken to the extreme of 100% backing, it can result in a Mad Max Dark Ages (because of the power vacuum I described in my article). See my one paragraph rebuttal on why Western Rome collapsed:

http://esr.ibiblio.org/?p=4946&cpage=1#comment-402900

A rebuttal on 0% interest rates signaling trust & creditworthiness:

http://esr.ibiblio.org/?p=4946&cpage=1#comment-402880

Armstrong's point is precisely the same as yours, which is that if the price (value) of gold is fixed in a strict government enforced legal tender gold standard, then it is the same as Marxism. Armstrong is not against 1oz = 1oz, and he is saying the value will fluctuate which agrees with your conclusion. He is also saying (see other links in my article) that society will always use debt and thus fractional reserves will always be required, and thus 100% gold backing will never exist (any attempt to force it will plummet society into the Dark Ages). Note how I expounded on what Julius Caesar did:

https://bitcointalk.org/index.php?topic=226033.msg2380965#msg2380965

And that is what I am saying with this article.

Also I I finally succinctly articulated why Kurzweil's Singularity (remember Dash's robots) is impossible:

http://esr.ibiblio.org/?p=4946&cpage=1#comment-402889
https://bitcointalk.org/index.php?topic=226033.msg2382656#msg2382656

That was my point  ;)

The creation of the uniqueness is done by the scientists, not by the computer model creating unique variants of itself.

The key point is to understand difference between a deterministic and random function. A model generator can only create random variants if it has random input entropy.

Nature is the only source of that random entropy, i.e. we humans.

The reason we can't model the edge of the universe is that it is disorder (but then we must get into my theory of the universe and the Entropic Force):

http://goldwetrust.up-with.com/t124-theory-of-everthing



Faster in computation speed has nothing to do with duration in fitness during diversity over time. We actually have to move through all the infinite time since the beginning of the universe in order to aggregate the same entropy that is in nature now.

P.S. For the Christians who are offended by evolution and an infinitely distant past for the starting point of the universe, note this is congruent with the bible if one notes that time is non-linear in the bible, i.e. the ancients had 1000 year life spans (if measured in today's years), thus movig backwards in time in units expressed relative to the duration of any year in the current time, would be exponentially approaching infinite time in the past, because note that the units of current time is always moving and getting slower (i.e. knowledge production via communication is accelerating), so there is no statement of fixed # of years in the past that can be made (even a picosecond later it has moved). In other words, history never has an absolute reference point. See the point in my next post.

Something scary
But it started, Google X Lab

http://esr.ibiblio.org/?p=4946&cpage=1#comment-402910


http://esr.ibiblio.org/?p=4946&cpage=1#comment-402911

^

oh the internet.

: D

ok now i'm actually going to read it - later.....

thats exactly what I was hypothesising, a genetic algorithim that continuously evolves not only to better design itself, but to specifically tackle individual problems that are given to it, say you ask it to innovate a new kind of quantum tunneling protocol.

Initially the brain you use is the simplest building block possible, however as the brains mutate, a pattern emerges, and the most prolific and constructive "brains" become the parents of the latest generation of brains, this can continue until an optimal value is reached.

The problem with this approach is it does require something of the author, a series metrics that can be used to compare capabilities, however this approach is as close to optimal in solving almost any problem that I cannot forsee it not working just as well for innovating AI

Problem is that the input entropy doesn't increase faster than evolution. We can't accelerate the process of the reproducing pre-existing diversity from the infinite history of adaption. Just the same as we can't go backwards in time. See my prior post on some math model about that.

http://esr.ibiblio.org/?p=4946&cpage=1#comment-402987

Long read.  I took from it that I should put all my wealth in Apple stock.  Done!

Thanks

wtf http://printin3d.com/

http://www.random.org/
uses atmospheric noise to produce random numbers use this to insert randomness

Not a good idea:

http://esr.ibiblio.org/?p=4946&cpage=1#comment-401478

It seems to me as if you are agreeing with my point about currency clones and how if they are incentivized with a pyramid-like distribution, they can only be the norm rather than the exception. Even with perpetual debasement, no algorithm or fixed measure can determine the needs of the "51%".


I disagree with this point. Booming and busting is a factor that I believe is heavily exacerbated by a manipulated economy. While the technology cycle may be at the heart of the matter, it is the bankers and/or governments that extract a vast amount of the new wealth and freedom derived from technological/knowledge advancement primarily for themselves. Then they redistribute it in ways that centralize power within the government and wealthy.


I have at a few different times mentioned how I believe a currency that disincentivizes creating debt or accepting debt-notes would allow for new types of power structures to emerge. For example, an Open Business where new knowledge acquisition is funded by the people who want the knowledge. The easiest example is Open Pharmaceuticals--where people pay to have research done for targeted diseases. Then the Open Business recoups its costs and repays investors, perhaps saving some for new directions of research (or to help pay for failures), and then releases the knowledge for all. No scientists have been made billionaires by contributing to pharmaceutical research and development, so their effect on this equation would remain relatively unchanged. The knowledge-producers are rarely the ones that see the benefit. You seem to have proposed a similar idea but in regards to software.


You conflate government-mandated co-opted production with monetary systems that are controlled by the same people. What significant monetary systems have been controlled by the people instead of the wealthy or the government? There aren't any of note. Gold provided it some times, temporarily throughout history, but it always eventually lost its "decentralization" due to the properties of FRB and the several mass confiscations.


This is a very apt statement.


We have to get to a Star Trekkian utopia at some point, don't we? ;) In the mean time, a system must be devised to separate the control and creation of money from the elected or unelected leaders. Any system that does not allow for the "51% attack" on the money supply is simply going to get replaced now that the cryptocurrency paradigm exists. It seems as if again you are agreeing with me here, though we clashed on this point in the decrits thread. Co-opted production (government socialism) is not the same as co-opted money creation. I do believe my design has the blueprint to make much smoother transitions through the bust periods, and perhaps slow the boom periods simply because money is not created from nothing. Once money is no longer tied to debt-notes or to strictly limited supplies controlled by a few, how different could the cycles be? There is only one way to find out.

plastics are nothing for manufacturing, metal/ceramics combinations with existing manufacturing lines is where the future is going.

3D printing does metal with sintering. The material strength and smoothness is roughly as good as cast, but not yet as smooth or strong as forged or machined (although the 3D printed cars proves that better geometry obtainable with 3D printing can compensate for material strength).

Also I think there may be advances on the granularity of the sintering. At nanoscale, it might surpass forged and machined.


That doesn't logically follow. Early adopters and greater fools is inherent in all investing, but that doesn't mean that one digital currency won't gain sufficient installed mass, to make competition impossible.

Regardless, it has logically nothing to do with the political power of the 51%.


Booms and busts are caused by the fact that humans love (or feel they need) debt. I doubt this will ever change. See below...


Ah yes we've been talking about the impacts of crowdfunding:

http://esr.ibiblio.org/?p=4867 (my pseudonym is JustSaying there)

However, the reason demand for debt will always be around is because not all the humans can compete and participate in the new technologies perfectly well. They use debt to compensate. And the majority is always behind the technological curve.

Thus you won't be able to prevent debt with a currency design, because debt is desired by the 51%. The political power will route around your attempts.



Please re-read the OP more carefully.


Money can't be controlled by the majority because of the power vacuum described in the OP. Money is not the root of the power structure, so money can't displace the power vacuum.


If it is different, I personally don't believe society will adopt it, because the money we get is what is desired by the outcome of the power vacuum.

In short, the majority will always demand that the government can fund itself out of debt and debasement (thus future taxes, confiscation, and pestilence).

Bullshit. Switching to a digital currency requires dramatically changing the status quo in regards to money. Don't sit here and tell me that after that status quo is changed it could never be affected again. There is also *nothing* that precludes ongoing currency competition.


And who does debt make humans beholden to? Can we just completely eliminate that from the equation and lay the blame "on the numbers" rather than "on the system"? Seems awfully short-sighted to not even consider the latter.


Arguments that are completely rooted in the idea of debt-based currencies. "The only option to maintain participation in the economy is debt, therefore people like debt." That is a non sequitur. Such simple logical fallacies cast doubt on any further conclusions.

I started studying the economics of the world intensely in 2005, when I read a book by Harry Dent that led me down the rabbit hole. I finally ended up realizing that one man understands it all better than all others:

http://armstrongeconomics.com/armstrong_economics_blog/

He and I think almost identically, except I probably disagree on the (at least uninterrupted) rise of China (http://www.martinarmstrong.org/files/Passing%20the%20Torch%20to%20Asia%2004-28-2011.pdf). If  the Yuan will rise significantly in value (http://armstrongeconomics.com/wp-content/uploads/2011/02/armstrongeconomics-the-assent-of-china-the-new-face-of-china-1-25-2011.pdf#page=6), then China would move from an exporter to an importer and consumer which could coincide with the collapse of Communist Party system, then China would continue rising after such turmoil. See my comments at http://mpettis.com under my real name Shelby.

I started programming commercially in 1986 when I created one of the world's first WYSIWYG word processors with full functionality (e.g. multi-columns) for a PC (specially the Atari ST which was a contender to the Mac and Windows 3.1 at the time).


I understand marketing. Apparently you don't. I have done it in real life. If digital currencies become widely adopted, it will be because there is some need that is addressed. Once that need is addressed, people will want to use that branded solution, unless there is some other need that could be better addressed.

Unfortunately I think you will find that the needs that are important enough to get people to radically alter the way they conduct their lives is are few and far between.

You get basically one shot at being THE digital currency. That window is rapidly closing, except to the extent that Bitcoin has a fatal flaw that it requires 10 min delay before surety that a transaction won't be doubly-spent. That provides a window of opportunity for the moment. That window of opportunity will closed (taken) by the first currency to fix that. We will discuss that over in your Decrits thread.


You entirely missed the point in the OP about the source of the power vacuum. The system you speak of is actually embedded in the power vacuum. You have to address that power vacuum if you want to alter the system.


There was no circular logic. You missed the point that the demand for debt is not due to the existence or non-existence of debt-based money systems. It is exists because it is exists. You can't eliminate it unless you can make all humans equal all the time.

http://esr.ibiblio.org/?p=4955&cpage=1#comment-403134


http://esr.ibiblio.org/?p=4946&cpage=1#comment-403070


http://esr.ibiblio.org/?p=4946&cpage=1#comment-403066


http://esr.ibiblio.org/?p=4946&cpage=1#comment-402900


http://esr.ibiblio.org/?p=4946&cpage=1#comment-402880

Hey dolt, I was talking about mass market needs, not flaws that don't matter to the masses.

Just sent this out for publishing on the internet. You should find it by searching the title "Asia Rising, West Declining" with Google within a day or so.

Asia Rising, West Declining

Asia will lead out of the coming global economic collapse because the Heritage Foundation data states the government spending as a percentage of the economy is significantly lower than in the West.

http://www.heritage.org/index/explore

Latin America's low government spending population is (sans Argentina, Bolivia, Brazil, and Venezuela) only 320 million-- much smaller than Asia's.

Thus despite rampant oligarchy collusion with government (e.g. Chinese SOEs, Korean Chaebols), the Asian population is not addicted to government spending. This is critical because we have to consider the different ways societies can adjust to a debt and misallocation crisis.

Societies which have nearing retirement age bulges in their population pyramids and thus high levels of social spending, are not able to write-down the capital stock and reallocate it to more efficient users. Instead of quickly defaulting on the political owners (the lenders) and the synergistic political majority boomer parasites, such decaying societies must do austerity on the youth (see high youth unemployment in southern Europe) and confiscate (ZIRP and "bail-ins") from the savers. At the bottom, this failed direction rations the retirements. Armstrong's (and my) 78 year cycle model says the West bottoms 2033 which is 26 years after the decline began in 2007, i.e. a lost generation. Japan is the perennial example, with Europe and the U.S.A. following on cue. These vested interests (lenders and boomers) throw support to all draconian measures which can maintain this stasis. Some examples include the G20 starting to call for hunting down wealth globally, France imposing wealth taxes and capital controls, and the NSA saving all communications so as to know where all wealth is being hidden (terrorists know how to use encryption and Tor, most savers don't). Note Japan's lost generation is almost complete and is nearing the final capitulation and bottoming phase.

Whereas, societies which are not burdened by this vested interest addicted to government spending, can "throw the bums out" and default on the lenders, to get capital flowing again to the efficient private sector.

The developing world (sans China) is becoming short the dollar with dollar bond issues and loans flooding fixed capital speculation and misallocation, thus will have a liquidity crisis when the dollar strengthens as the wheels fall off of Europe first and export (goods and services) income caters. China also has huge debts and imbalances as documented by Michael Pettis et al. Yet what remains after this coming chaos, is Asia a place of relative freedom and the West burdened by politics of wealth redistribution and the police states with breakdown of rule of law that accompany such. Private capital and innovation will leave for where it won't be attacked. China censors the internet, yet the NSA saves everything. The former is transparent to the people and readily subverted by them, the latter is hidden from the people and implicitly supported by the politics of wealth redistribution.

I was challenged, and I rebutted as follows.

http://www.mpettis.com/2013/06/10/how-much-investment-is-optimal/#comment-23978

I am writing from the perspective of social capital & trajectory, since I am projecting the future.

When the rule of law is itself corrupted by the demands of boomers to maintain what can't be maintained, thus handing control of the government to the bankers who will never write-down the capital stock, then the rule of law is an illusion that is already rotten inside and waiting for the Minsky moment.

Whereas, China's people are becoming increasingly vocal about corruption and their actions are increasingly capitalistic. I was told by a Chinese recently that it is perfectly okay to criticize the government, just don't organize into groups when doing so. The only practical limit is to not challenge the actual authority by organizing. Whereas in the West, it is becoming increasingly politically incorrect to criticize the government. In the USA, there are even laws and Homeland security policies that characterize a person as a terrorist if they belong to certain ideologies.

China is liberalizing their financial door slowly, while the West is closing it, now with capital controls increasing.

Absolutely not, the Chinese criticize socialism and praise capitalism. Whereas, Westerners criticize capitalism (Obama!, ZIRP, bailins, etc) and embrace socialism.

I can't imagine how you could be so blind. Oh wait, yes I can. You are Westerner, so you believe this propaganda you've been fed about your social capital being superior to China.

No you've gotten it backwards. Not having welfare in place, means the free market and private capital is more free to invest and innovate. Two more phenomenal decades of this private enterprise will provide the funding for the social programs China needs 20 years from now.

Chinese readily subvert the censorship on the internet, using varied techniques such as misusing words so their meaning is obscured. A few VPNs of input, can be spread out by forum posts and word-of-mouth.

I didn't say China has better respect for privacy NOW, I said that their control is not opaque and the citizens are not living in a fantasy world believing they have privacy. Thus they've been having a dialogue about it, and are well along the way towards being ready to dismantled it when the Minsky moment comes. Whereas the West is in denial thinking they are good, but actually rotten to the core of their social capital needs. And when the Minsky moment comes, the West is going devolve into what it really is behind the curtain.

How much you want to bet that the USA public eventually forgets the recent NSA infocalypse, and the behind-the-curtain abuses increase? Whereas, the Chinese are not going to forget until they obtain the freedom to capitalize freely.

I was challenged again and rebutted again. See link in prior post for link to discussion.

============

Andao, did you ignore that I specifically said I am looking for evidence not comparing what is NOW, but the trajectory of where we are going in the FUTURE?

My main point of evidence is that in the West we can act as if we are free and most believe they are, but we are being secretly recorded, as proved by the recent infocalypse revealed by Edward Snowden (with numerous others providing similar leaks since 2001).

Whereas in China, the people know very well they are not entirely free, and they know they are being blocked and recorded.

The other evidence I offered is the fact that the West can not have unsocialized debts defaultss without destroying the retirement of the majority of the voters. Whereas, China can. Thus the West can not move away from socialism, China can. Thus the West is lying to itself about moving towards socialism, and China is not lying about moving away from socialism.

The opposing trajectories over the past 3 decades are clear and accelerating. China has opened from 100% totalitarianism to 50+% capitalism. The West has slid from capitalism to socialism and fascism underneath, and only capitalism on the face. Does ZIRP, bail-ins, significant proportion on the population on government support, union control of Europe, etc. not sufficient evidence for you?

I am rushed now, if you want to rebut, I can try to compose a stronger counter argument next time.

Andao,

I have a moment to compose a hopefully more cogent rebuttal. This will continue on from the rebuttal I submitted a couple of hours ago.

I am wondering if you don't read carefully, or if I don't write coherently. For example, I wrote previously that Chinese are allowed to speak against the government, e.g. making a comment in a social network (if it is not censored) or at home, but they are not allowed to organize or become activists. Let me make it more clear. Chinese are allowed to express their personal opinion, but not allowed to form movements that threaten the power of the Communist Party (which I stated already in my prior comment to which you are replying).

In the West we are allowed to talk and organize politically, but this is pointless as the politics is already determined by the fact that the majority of voters are boomers and they will not tolerate a quick and sharp economic collapse the accompanies the defaults from write-down of the debt. But as Michael explained in an upthread comment about Japan, not writing-down the debt (i.e. not defaulting on the lenders) means a long-drawn out period of economic stagnation and decline (23 years thus far in Japan). Without a write-down, the capital stays locked up in interest payments and centralized amongst those who have proven they don't know how to allocate capital. Thus capital does not move to the most efficient, and thus the economy stagnates and declines.

I hope you understand that ZIRP (zero interest rate policy) causes capital to accumulate in the least risky sovereign bonds (e.g. USA, Germany) for safety, as well to speculation and emerging markets to seek yield. Thus ZIRP drives capital away from productive investment to bubbles. Precisely now we have huge dollar bond issues in developing countries funding a bubble in condos and fixed capital infrastructure. This means the developing world is short the dollar, as a Michael's past blog on globalization predicts, this capital inflow will reverse when the Minsky moment hits the West. In fact, you will see a huge rise in the dollar soon through 2016, as capital flees Europe (since Europe is moving rapidly towards capital controls and bail-in form of confiscation). Armstrong had predicted this and this is why we all (following Armstrong) had the knowledge to sell gold before the recent crash of gold.

This is a dead-cat bounce for the dollar and US real estate, being driven by capital in flows some of which is seeking a safe haven and then speculators seeing the trend and following it to chase yield.

Also potential home buyers in the USA are rushing to buy as interest rates rise (California house prices up +25% in past months), because the Fed sees the bubble forming and is talking about tapering down on QE. Armstrong predicted this too, so I was expecting it.

...this will be continued in the next comment...

...continuing from  prior comment...

Indeed the western media appeases the rage of the citizens with talk, but the action is all increasingly socialism. In my prior reply, I forgot to mention France already imposing capital controls and chasing away business with severe taxes and "do not fire" labor laws & regulations, and in the USA we have Obamacare which is destroying business. I already mention ZIRP which is a socialization of debt instead of a write-down of the lenders.

Whereas, China doesn't allow organization of dissent, and the reason is because the real economy is moving more and more capitalist and so there is no political vested interest that can hold up the Communist Party once the wildfire is lit. Thus they must prevent the spark, but the Minsky moment will provide that spark and then it will be dismantled rapidly. Whereas the West politically and economically can't reform because of the demographics can not allow it. Thus the West will devolve into a horrific outcome of wealth confiscation when the Minsky moment occurs (roughly circa 2016).

The privatization and discovery of information will spread very quickly in China after the Minsky moment because there is nothing stopping it other than the Chinese military. The people are young and will adapt quickly because in reality they are moving more to capitalism and back to their core values of Confucianism every day.

Andao, finally got back to my desktop computer where I can type properly.

You cited the arrest of some activists in China and made the conclusion that this is not a "big improvement". How can you ignore the progress China has made on moving away from the totalitarianism of the cultural revolution, Great Leap forward, and the Tiananmen Square, to the widespread capitalism and freedom today? Of course, there are still some serious obstacles, but to argue there has been no big improvement is absurd.

Also that there exists activists who were emboldened by hope generated by the Premiere's policy statements, and that they were not immediately shot, is another indicator of how far China has come. China appears to be in the mode now of increasing tolerance, while maintaining suppression of a political spark that could send the whole thing spiraling out-of-control. I don't expect the leadership to succeed in a gradual transition from the remnants of communism to more free markets, because this last step (towards greater consumer share of the economy and foreign exchange freedom-of-capital for the middle class) requires removing the power of the 200 families that rule China. So unless there can be found a way for these 200 to continue to concentrate wealth and power, and open the economy more, then eventually there will be a Minsky moment, and another step forward in change similar to Tiananmen Square. Transitions occur in stages, as the economics and demographics overpower the stasis.

I think we need to consider the Asian culture of "face" when separating what the people on the street say when quoted, and what they actually do. Sure they play the "who you know" political favors game, because for now that is one of the primary means to do capitalism and succeed within the system which is still held back by the power of the Communist Party. But underlying this, the thoughts of the people are more Confucianist than Communist, and they want capitalism in their business activities. My perception is they want socialism to the extent that it creates a level playing field for eliminating evils of society. Since socialism does exactly the opposite due to the Olsen effect, then as the next economic crisis hits, they will grow more and more aware of their closer attachment to Confuscianism over a failed communist ideology which serves no purpose in their daily business lives as they strive to maximize wealth and security within their Confucianist core value system.

Their result will be different than the Europe or the USA to the extent their core culture is different (from Christianity, and the western culture of always moving forward man can improve upon nature versus Asian culture of cycles and repeating wisdom with nature in control).

The key point is that when the Minsky moment comes China won't have a majority of the population over 60 and unable to do anything but demand the government sequester wealth to sustain them. China will have a majority of the population in the 20 and 40 age brackets, thus able to roll up their sleeves and refocus energies on new markets after the fixed capital investment bubble has burst. And the rest of Asia is in proximity with the majority of the population in the working age 20s bracket.

Whereas the west is now burdened by the result of massive use of birth control and the bulge in births due to returning soldiers from World War 2, thus now not having sufficient youth to vote out the stasis of sequesting wealth from savers and transferring it to maintaining the increasing debt.

The freedom that westerners have is very fragile, because it only exists to the extent is does not conflict with the need of the boomers to sequester wealth to maintain their quality of life. In southern Europe, we see the youth unemployment is double the adults, as the boomers vote to sustain the debts and minimize effects on themselves.

http://www.mpettis.com/2013/06/10/how-much-investment-is-optimal/#comment-24051

illumined,

It is very difficult to make the depositors whole, because this is a highly leveraged fractional reserve system (e.g. I've read the Spanish banks are leveraged 26-to-1), and worse yet there are all these up to a $quadrillion of sovereign bond interest rate derivatives gambling bets effectively used as reserves (since Tier 1 capital are sovereign bonds), thus leveraging the western financial system into the stratosphere.

We have to hit the reset button on the entire western financial system. There are two ways to do this. The slow way which allows increasing the debt and continuing to misallocate capital. Or the fast way of declaring everything 0, and recapitalizing a new system.

So far, Japan and the west have chosen the slow way of continuing interest payments and ZIRP to keep the derivatives whole, with Japan in a 23 year decline.  If the West continues down the slow way, it will be a global contagion. The west must continue down the slow way, because the boomers are too old to gain from a quick reset, they would not be competitive with Asia given a lack of youth in the west.

Asia will break away and do its own quicker reset once this global contagion takes down global exports. Japan is 3 years from the 26 year downturn bottom expected by the repeating 78 year cycle.

http://www.mpettis.com/2013/06/10/how-much-investment-is-optimal/#comment-23978

Andao,


Ditto the western banking system in reality, and especially once all the derivatives and liabilities in the system are factored in and the system has reset to (as I postulated in reply to illumined downthread). Fractional reserve banking systems are inherently socialist over time until the financial system resets with write-downs.

Leasing property is not necessarily socialist. Private property rights in the west are somewhat of an illusion due to the false high valuations by pulling demand forward 30 years with debt, high insurance payments, rising property taxes as states are bankrupt. The western real estate has not bottomed. I expect the gold-to-house ratio to increase another order-of-magnitude (http://www.marketoracle.co.uk/Article31926.html)!


You cherry picked foreign exchange. Yet if we compare controls on exporters, I bet the USA is much more socialist with labor laws, export restrictions, and higher taxes.


China may be trying to keep the national cost on health care low, so it has a more competitive economy for exporting. As it shifts to a consumer economy, the priority will shift to the advantage that allowing more spending on health care, enables greater security and consumer spending of savings.

What I am saying is that when global exports crater circa 2016, China will undergo a radical and rapid transformation. The pent up demand and capacity for this change is ready. Whereas, the west doesn't have any capacity to adapt after 2016.

You overemphasize lack of interest of the Chinese to research some obscure facts about history. The main priority of Chinese today is to earn money, so they can buy a house, car, and get married. On that front, they know they are not [entirely] free and are eager to gain more capitalism.

As far as I know, economists widely have failed to emphasize the critical role derivatives are playing in keeping the west locked into ZIRP and bail-ins versus write-down of the lenders. Thus instead of a quick collapse and reset with ensuing quick recovery, as what occurred in Iceland or the USA after 1919, these derivatives have conflated the sovereign bonds with the lenders to real-estate, thus insuring any write-down would be apocalyptically spread on to retirement plans. The derivatives along with nearly retired boomer demographic bulge, are the main factors of social capital looking forward for the west.

Btw, bail-ins are socialist because the savers pay for the mistakes of the lenders and borrowers (and derivative gamblers), but this is inherent in fractional reserve banking.

Michael raised a very important concept by introducing social capital. Now let's get real about it. I wish I could read some prominent economists face the reality that the West can't escape with write-downs, and thus there won't be any break from Euro either (which I published a prediction on nearly 2 years ago). This will be a 26 year catastrophe. And it happens every 78 years in recorded history, at least since we emerged from the Roman Dark Age. Because demographics drives economics. Twenty-six years is how long it takes a human to become mature and ready to take over responsibility and become a major factor in the work force and start a family.

The west has to wait 26 years from 2007, when the boomers were 52, for them to die off at age 78. And for the generation born in 2007 to mature and be ready to compete with Asia in the robotic and automation revolution which will becoming a significant sector of the global economy by then (2033).

I think one of the most important features for a better bitcoin alternative is the ability to realistically mine from general purpose computers. Two main reasons:

• help protect against a 51% attack by enabling humanity to leverage its preexisting idle computing power
• anonymity (not subject to id checks at money exchanges) since western governments must hunt down all wealth over time and confiscate it. Paul Rosenberg, the CEO of virtual private network provider Cryptohippie seems to agree (http://www.nestmann.com/government-against-the-people-it-gets-worse-in-the-late-stages/). First they will do "bail-ins" for deposits over 100,000 (http://www.nestmann.com/fractional-reserve-banking/) probably with clawback against those who moved funds in anticipation, c.f. clawbacks in the MG Global default (https://www.google.com/search?q=MF+Global+clawback).

In addition to such a better alternative bitcoin perhaps coming on the horizon (perhaps created by myself), in the near-term until at least roughly 2015, US citizens may be able to keep under $10,000 in cash off the radar in a foreign account with a country that as of yet still has some bank secrecy. A GAO report explains (http://www.nestmann.com/irs-idenitying-offshore-tax-cheating/) why in 2015 the pressure from the US government will increase (http://www.gao.gov/assets/660/653369.pdf#page=9) to force foreign banks (even those with bank secrecy laws) to report your account(s), although perhaps this has been delayed to 2017 (http://www.nestmann.com/feds-delay-30-withholding-on-outbound-capital-transfers-again/). Already for example, the US can obtain information on a specific account in most countries with bank secrecy, if they have a specific name or account number and a justified suspicion of tax avoidance.

I just learned today that the total amount of foreign accounts must not reach nor exceed $10,000 on any given statement period as follows.

http://www.nestmann.com/appeals-court-weakens-willfulness-defense-in-failure-to-file-foreign-account-reporting-forms/


http://www.onlinepokerfaq.com/guide/tax-fbar-90221.html


The penalties for not filing (http://www.nestmann.com/finally-definitive-guidance-from-the-irs-on-offshore-account-reporting/) the above are extreme, including possibly up to a $500,000 fine and 5 years in jail (http://www.irs.gov/Businesses/Comparison-of-Form-8938-and-FBAR-Requirements).

As for Europeans, France and the G8 are also getting organized to come after your wealth hiding overseas:

http://armstrongeconomics.com/2013/06/26/us-iron-curtain-is-coming-in-new-immigration-bill-for-all-americans/
http://www.nestmann.com/homelanders-to-u-s-expatriates-dont-come-back-ever/
http://armstrongeconomics.com/2013/06/18/g8-going-to-hunt-down-all-capital/
http://armstrongeconomics.com/2013/06/18/icij-has-done-far-more-damage-to-the-world-economy-that-anyone-realized/
http://armstrongeconomics.com/2013/06/15/united-stasi-of-america/
http://armstrongeconomics.com/2013/06/15/precious-metals-remain-under-attack-by-governments/
http://armstrongeconomics.com/2013/06/14/the-collapse-in-liquidity-rising-volatility/
http://armstrongeconomics.com/2013/06/13/german-high-court-introducing-more-euro-chaos/
http://armstrongeconomics.com/2013/06/12/city-dwellers-at-greatest-risk/
http://armstrongeconomics.com/2013/06/12/snowdens-rude-awakening-usa-does-control-most-of-the-world/
http://armstrongeconomics.com/2013/06/12/greesce-shuts-down-tv-new/
http://armstrongeconomics.com/2013/06/11/capitalism-or-marxism-that-is-the-question/
http://armstrongeconomics.com/2013/06/11/mailing-cash-is-prohibited-in-usa-france-bars-even-gold/
http://armstrongeconomics.com/2013/06/11/congress-wants-snowdens-head-not-the-nsa/
http://armstrongeconomics.com/2013/06/11/the-future-of-the-world-economy-les-miserables/
http://armstrongeconomics.com/2013/06/11/paranoid-or-conservative/
http://armstrongeconomics.com/2013/06/10/capitol-hill/
http://armstrongeconomics.com/2013/06/10/france-declares-victory-over-entire-eurozone-crisis/
http://armstrongeconomics.com/2013/06/09/nsa-surveillance/
http://armstrongeconomics.com/2013/06/08/why-the-survelience-is-very-dangerous/
http://armstrongeconomics.com/2013/06/08/political-trivia-test-can-you-pass-it/ (Hillary Clinton's plans for confiscation)
http://armstrongeconomics.com/2013/06/07/unemployment-benefits-cut-part-of-deflation/ (the official rate will go to 25-30%, real rate much higher perhaps)
http://armstrongeconomics.com/2013/06/06/imf-admits-it-made-a-mistake-with-greece/ (Only Julius Caesar understood how to fix a debt crisis)
http://armstrongeconomics.com/2013/06/06/nsa-tapping-into-internet-directly/
http://armstrongeconomics.com/2013/06/06/is-paranoid-becoming-normal/
http://armstrongeconomics.com/2013/06/05/this-no-time-to-quit-a-job-us-youth-unemployment-hits-16-2/
http://armstrongeconomics.com/2013/06/04/search-warrants-not-necessary-to-take-you-dna/
http://armstrongeconomics.com/2013/06/04/the-growing-shadow-economy-politicians-just-dont-get-it/
http://armstrongeconomics.com/2013/06/04/1984-is-here-2014/
http://armstrongeconomics.com/2013/06/03/seniors-are-the-greediest-generation/
http://armstrongeconomics.com/2013/06/02/rising-tide-of-civil-unrest/
http://armstrongeconomics.com/2013/06/02/the-real-conspiracy/
http://armstrongeconomics.com/2013/06/01/11999/ (Primary Dealers – the Truth About Their Iron Grip)
http://armstrongeconomics.com/2013/05/31/freedom-to-travel-in-europe-shutting-down/
http://www.nestmann.com/cell-tracking/
http://armstrongeconomics.com/2013/05/15/europe-plans-the-confiscation-of-depositor-assets/
http://armstrongeconomics.com/2013/04/19/germany-wants-global-taxation-cooperation/
http://armstrongeconomics.com/2013/04/19/the-pension-crisis-interest-rate-nightmare/
http://armstrongeconomics.com/2013/04/19/inflation-v-deflation/
http://armstrongeconomics.com/2013/04/18/europe-considering-mandatory-15-of-wages-to-be-taken-for-pensions/
http://armstrongeconomics.com/2013/04/17/the-next-seizure-coming-u-s-consumer-financial-protection-bureau/
http://armstrongeconomics.com/2013/04/17/will-pension-funds-be-the-target-after-2016-to-seize-for-our-protection/
http://armstrongeconomics.com/2013/04/16/europe-to-begin-capital-controls-soon/
http://armstrongeconomics.com/2013/04/13/france-is-pushing-for-tax-evasion-to-be-top-eu-priority-hitler-returns/
http://armstrongeconomics.com/2013/04/12/government-pensions-will-cost-2500-per-household-climbing/
http://armstrongeconomics.com/2013/03/29/cyprus-confiscation-of-assets-is-global-plan/
http://armstrongeconomics.com/2013/03/28/electronic-money/
http://armstrongeconomics.com/2013/03/27/are-we-head-to-a-mad-max-scenario/
http://armstrongeconomics.com/2013/03/25/sovereign-debt-crisis-conference-2/
http://armstrongeconomics.com/2013/02/26/visit-italy-they-seize-your-jewelry/ ("Diego Maradona, the Argentine soccer star...")
http://www.nestmann.com/yes-you-are-a-criminalyou-just-dont-know-it-yet-2/
http://en.wikipedia.org/wiki/List_of_countries_by_incarceration_rate (USA an order-of-magnitude higher)
http://esr.ibiblio.org/?p=4934&cpage=1#comment-400351 (suburbs as peaceful as Switzerland, Americans are culturally less law abiding & some violent big cities)
http://en.wikipedia.org/wiki/Conviction_rate (with 93% conviction rate from US Dept or Justice, 99%  in NY Fed courts according to Armstrong)
http://esr.ibiblio.org/?p=4927&cpage=1#comment-399831 (Why should it happen to Denmark?)
http://www.nestmann.com/passport-denials-long-a-feature-of-u-s-foreign-policy/
http://www.nestmann.com/hungary-now-imposes-tax-on-non-resident-citizens/


So what should one do after 2015 (or 2017 perhaps) and with more than $10,000 in savings?A better bitcoin? I warned about this situation 3 years ago and that gold will not be a solution (http://www.marketoracle.co.uk/Article20327.html) (note I no longer think a stampede into gold will cause hyper-inflation, because the world's wealth will never make it into gold, rather we are headed for deflation with confiscations yet gold will go very high due to being a place where wealthy attempt to store wealth from confiscation).

Disclaimer: I am not giving tax nor financial advice in any my posts. I am merely relaying some thoughts I have had, thus readers should consult their own professional advisers and attorneys.

http://www.mpettis.com/2013/05/21/excess-german-savings-not-thrift-caused-the-european-crisis/#comment-23486

================
The global sovereign debt crisis will ultimately be resolved with a stable global (or first several regional, e.g. NAU dollar, Euro, Yuan as the Asia Union and/or BRIC currency) currency (ies) against which all other national currencies float. This will enable nation-states the flexibility to exist with differences, while providing a stable fulcrum for reserves, international store-of-value, and international trade and FX.

Europeans want the advantages of integration (e.g. travel freedom, market economies-of-scale, control of conflicts between states, etc) without the costs (e.g. uniform debt-to-GDP ratios, uniform productivity, uniform culture, etc), thus they tried to create a Euro which had the advantages without the costs, and it has failed miserably as predicted by Margaret Thatcher (http://armstrongeconomics.com/2013/06/28/thatcher-was-right/) and others..

Now the politics is shifting towards disillusionment, and this is likely to explode to the forefront with the German elections in the fall, especially now that the Germany economy is shrinking (http://armstrongeconomics.com/2013/06/27/german-unemployment-hits-12/).

http://armstrongeconomics.com/2013/06/27/merkel-becoming-euro-skeptic/
(summary which links to spiegel.de story that also contains the following comment)

Click the link to read it in context of a discussion.

THIS WILL BE THE MOST IMPORTANT EMAIL YOU READ.

http://blog.jim.com/culture/radish-explains-what-racism-means.html/comment-page-1#comment-343342

You have provided no counter example. No empire has ever collapsed with hyperinflation (http://armstrongeconomics.com/2013/01/10/hyperinflation-v-inflation/). As you admit, Rome survived the inflationary crisis and only collapsed with deflation when the people abandoned the currency and the city too. Hyperinflation is where a country can't sell its bonds and pays its bills by printing money. The key difference is that in hyperinflation you can get more fiat for your gold. In deflation, you get less fiat, or you don't want the fiat because no one will accept it anymore at any valuation. Deflation is the state vs. the people madmax scenario, hyperinflation is running on a treadmill where people lose confidence but the government is not attacking the people, rather just printing money to fund its operations in an exponential spiral. You will pray for hyperinflation, when you see what is coming to us. You don't understand that Rome had a two-tier money system (http://armstrongeconomics.com/2013/01/28/here-we-go-again-hypreinflation/), and the people abandoned their land and the currency, because of the onerous taxes that had to be paid in the first tier currency that wasn't debased!! The G20 is going to hunt everyone down and tax them to death. You can't argue with Martin Armstrong, he has spent $millions on researching the history of world. He spent $10 million just to create a chart of the silver price during the Roman era (http://armstrongeconomics.com/2013/06/24/forget-the-fiat-its-confidence/), by collecting every silver coin from the era. He had researchers compile information from the media archives in London and else where. Read How Empires Die (http://armstrongeconomics.com/693-2/2012-2/where-do-empires-go-to-die-and-when-they-do-die-how-do-empires-die/).

Note the empire rotates around the world (http://armstrongeconomics.com/2012/07/04/hyperinflation/) from Europe to America to Asia. USA is peaking and Asia is next up. Britian handed it to USA, but we had our 1929 at the handoff, and China will have its 1929 in 2016 (http://armstrongeconomics.com/wp-content/uploads/2010/05/armstrongeconomics-sometimes-the-lunatic-fringe-do-get-it-right-5-1-10.pdf).

China wasn't an empire when they hyperinflated, they were an isolated Yuan Dynasty in middle ages or the socialist failure of the Republic of China in the 1940s.

"Money and socialism are intertwined and this will never change. To survive the near total wipeout of fungible money in a Mad Max Dark Age, store production in non-fungible knowledge or technologies that continue to generate revenue during or at least after the crisis."


Markets and "money" and "socialism" are intertwined.

I expect you mean, Markets are the most social natural human aspect , as humans are social naturally, all "money" is , is the shiney little tokens in which we can base "faith".

I designed a transnational  E-democracy pyramid structure policy , its very very simple .

it simply works like protocols:

At the "Top" of the pyramid you may say Government owns essential hardware and infrastructure, you can guess as to which types.

then they let the market "compete" on top of these essential structures this can be called the "Transitional directed free market"

then on each level down there is less and less government ,requiring less and less tax,  until you get the small and micro business , which are/should be essentially the freest markets.

now picture , lines or many fibers holding the pyramid together if you like , these lines run from bottom to top and every which way in-between, these lines are the essential feedback mechanisms to and from the "top" and "bottom" and all levels in-between of the Pyramid .

A feed back mechanism is simply something like, this forum.  <there are many detail I'm not going to bore you with<

but the key is to connect the essential parts of each platform of the Pyramid , so in that example , for example say.. regional governments and local and business centers Police of course, these are all feedback connected, the key is to the base.

The Russian Federation is a Key nation that has taken on a similar concept {all-be it coincidental} , although you would never hear about it , revolutionary things are happening, because they have no stake in a pure top down system., its almost like the revolution was a blessing and a victory , although it wouldn't be seen as such.

in a structure like this censorship is a kind of attack and unneeded censorship is an outright attack on the system and should be viewed seriously and as such.

You hide my very important post with a gibberish post. Readers please see my immediately prior post.

This.
Stopped reading at the word "No".  :D

I guess it's only "gibberish" because you simply can't understand it yes?

you write a long simplistic diatribe full of "common economic" and "socialism" then point at "actual social economics" as gibberish ?

my advice,  stop getting excited about the fact that you think you understand the difference between deflation and inflation .

you have a very dim view of the future - its a future of "no price" , this is not revolutionary , many people see a deflationary spiral typically when this occurs people are dying and the military are on the street .

my own view is that long before it gets exactly that bad , most "western" nations that have direct exchange swaps, will simply walk away from the principal system without too much of a drama.

i'm sure there will some and/or many localized disruptions, but guess what? the market will still be there , and it will still be working.  



** my suggestion for you , invest hard into "Cap currency" "although they seem to keep "forking it" literally.

If you have a photo in front of the twin tower, It should be dated before 2001/09/11 ...

Walls of text, so much fun.. not  :D

Not true. Photoshop lies.

More pointedly why we sink into deflation, not hyperinflation.

AGAIN THIS IS THE MOST IMPORTANT THING YOU NEED TO KNOW NOW.

SEE ARMSTRONG's 100s OF CORRECT PREDICTIONS NEAR BOTTOM OF THIS THREAD.

Click this first link below to read the following in context of larger discussion about hyperinflation vs. deflation as how fiat dies when empires die.

http://blog.jim.com/culture/radish-explains-what-racism-means.html/comment-page-1#comment-344394

My prior explanation didn't pointedly clarify what is recognizably distinct (different) between hyperinflation and the deflation where people discard the fiat (for anything they can until no one will accept it). In both cases, there is deflation relative to the value of hard assets (e.g. gold and land that wasn't fiat financed overvalued, e.g. undeveloped rural land that banks won't provide loans for).

The pointed distinction is that in the hyperinflationary case the government prints 10,000, 100,000, 1 million notes (or physically debased the physical coin to the same effect). Thus you see the value of gold go to 10,000, 100,000, etc. You will not see $100,000 dollar notes during this crisis.

The debasement of storing QE generated reserves at the Fed by the banks, caused massive dollar loans (leveraged on those reserves) in the developing world (not in the USA). Now those (fractional reserve created) dollars are returning home causing this bounce in the USA that will end 2015.75 because of the feedback loop effect I described upthread (http://blog.jim.com/culture/radish-explains-what-racism-means.html/comment-page-1#comment-343141). That feedback loop is causing rest of world to collapse in deflation.

At the death of the empire, the powers that be maintain control by squeezing the middle class between inflation and deflation simultaneously. The currency is debased (but not exponential spiral unless they create a two-tier currency where the monetary unit for paying taxes isn't debased (http://armstrongeconomics.com/2013/01/28/here-we-go-again-hypreinflation/), note even 500 A.D. Roman coin was only debased 1/50, not 1/100,000) while increasing taxes. The middle class eventually disappears and flees the cities where the powers are extracting unlivable taxes, to places where they can produce without interference of the pathological end-game of statism.

The key difference is there is no state to run to with the collapse of the global empire, you can only run away to the mountains (the Madmax outcome depending on how the handoff from one empire to the next transpires, hopefully we won't get a Dark Ages this time, probably not because Asia is so rich in billions of educated youth with good family values that the western empire hasn't destroyed yet). Whereas, with hyperinflation, you can run to another state and its currency and continue functioning normally.

The global empire collapses in deflation and then the center of the empire transfers to where there isn't this huge statism taxing the economy, i.e. as Heritage Foundation data (http://www.heritage.org/index/explore) shows Asia (including China) has much lower government share of GDP than the West (with the exception of Switzerland). I explained why (http://relativisticobserver.blogspot.com/2013/06/weaponized-computation.html?showComment=1374814976618#c8289808112023957283) China and Asia are the future.

Anarcho-capitalism is the technological mountains this time around. ;)

James A. Donald, you were there at the beginning with Satoshi. Now stay with me as I fix Bitcoin. But you won’t be able to prove it is me doing the work ;)


=====================================
Another line of summary at the following link:

http://relativisticobserver.blogspot.com/2013/07/observing-microsoft-part-3.html?showComment=1375616451672#c6434436042918130550

First a macro-economic point w.r.t the relative trajectories of Microsoft, Apple, and Google. Some details were in the prior blog.

The western empire is dying (empires move periodically from Europe to America to Asia to Europe... (http://armstrongeconomics.com/2012/07/04/hyperinflation/)), but empires never collapse with hyperinflation (http://blog.jim.com/culture/radish-explains-what-racism-means.html/comment-page-1#comment-343342), rather always deflation and onerous taxation (police states devolution into abandonment of the cities).

The future (after 2016 when the USA begins its big economic collapse) after China has its 1929 handoff depression in 2016 (http://armstrongeconomics.com/wp-content/uploads/2010/05/armstrongeconomics-sometimes-the-lunatic-fringe-do-get-it-right-5-1-10.pdf), is consumer economic volume and growth will be focused in the developing world predominantly Asia. The stock valuation of these companies should be based on their market share in Asia. The collapse starting in 2016 (maybe ending 2020 for Asia, 2033 for West) will do that.

I hope Tim Cook (Ballmer is hopeless) is aware. You may not agree, yet I have studied the evidence that this repeats every 78 and 224 years. The Google people may not understand this, but they understand that global market share is the future, so they arrive at the same optimum long-term strategy.

Anony

You show all the traits of someone that is on antidepressants and has just learned about economics, actual real , economics.

if you take that the wrong way , don't,  as its not meant as an insult.

if I'm right of course , continue... of course...

Careful with your subjective bias when the record clearly shows that Armstrong predicts everything every time without fail. 30 years of record is enough to show you that your bias is irrational.

https://en.wikipedia.org/wiki/Cognitive_dissonance

http://www.simplypsychology.org/cognitive-dissonance.html

http://psychcentral.com/blog/archives/2008/10/19/fighting-cognitive-dissonance-the-lies-we-tell-ourselves/

birdbrain, it will be proven by 2016 that everything I wrote above about the coming deflation is correct. Now stay on ignore (I encourage other readers to click the ignore next to your name on the left to show you that you speak only noise) with your other dimwitted commentators who have nothing intelligent to say.

All of what I wrote is just a re-summary of Martin Armstrong's Pi model of international capital flows. It has enabled him to make the following correct predictions years in advance of the predictions coming true. He spent $100 million developing the research and having his computer find all the correlations. That is when he discovered that human nature and thus international capital flows also move in waves, just like everything else in the The Universe (http://unheresy.com/The Universe.html#Matter_as_a_continuum) (my blog) does. That doesn't mean we can predict what any individual human will do, only that we can predict the macro waves. Martin Armstrong helped me to make a public prediction that gold would decline (http://www.marketoracle.co.uk/Article39304.html) from $1550 to under $1200. I was also the person who exactly predicted the 2011 price moves of silver back in Oct 2010 (http://www.marketoracle.co.uk/Article23786.html). So shut your birdmouth. It is also allowing me to predict that the DJIA will go to 39,000 before 2015.75 and that gold will probably go up to 1424 - 1550, then crash back down to 1050 or below. Gold will not make new highs under after 2015.75. Now you just wait and see if I am correct again or not. I made one mistake betting too early on China's collapse last year, because I wasn't reading Armstrong (who makes it very clear China won't collapse until 2016).

• Predicted the Sept 2000 market top, Nov 2002 market bottom, January 1st, 2005 yearly high for the NASDAQ to exact day! (http://www.contrahour.com/contrahour/2006/06/martin_armstron.html) in document that was published in 1997 which also predicted the 2007 market top and earlier had predicted the upturn in commodities in 1977 (http://raynoreport.com/10/07/martin-armstrong-predictions-still-look-true/)
• Predicted back in Jan. 2012 (http://www.jsmineset.com/2012/01/27/jim-opines-on-martin-armstrongs-latest-prediction/) that gold would decline from $1600 to below $1200 before 2015 even while everyone was screaming he was nuts. This year he was writing a blog every few days shouting that gold was going to fall. The goldbugs hated him.
• He predicted the top in gold in 1980
• He predicted the crash of 1987 (to the day!) and that bull market in Japan would continue until end 1989
• His model predicted an event something like 9/11 would happen
• many, many, many more correct predictions than I care or have time to go compile for you

P.S. I am sending a link to this rebuttal out publicly. ;)

=================================

Note I was starting to lean towards Armstrong's cycles when I INDEPENDENTLY discovered his 78 year cycle in Feb. 2013 (http://www.coolpage.com/commentary/economic/shelby/Housing%20Recovery%20Illusion.html). The key was looking at long-term charts for strange patterns that stand out like a bloody nose. This caused me to integrate his 3 x 26 = 78 year model into my understanding of technological unemployment (https://bitcointalk.org/index.php?topic=160612.msg2001613#msg2001613) (follow the sub-links at the above linked pages to get to a table of historical dates evidence of the 78 year cycles).

LaudaM has been placed on ignore and reported to the moderator for trolling (for the comment immediately above this one which has disappeared since I reported it, he said "he is an alien fuck"). He doesn't say anything meaningful and turns my thread into a circus of meaningless noise.

> Be careful. Going to 1/50th the value is still hyperinflation, even if he
> does not like to apply that word.   A 98% loss of value of the currency is
> still loss, still hyperinflation, still devaluation, still deadly if you
> hold that.  Armstrong is master of confusion and
> illusion.

1/50th of the value, but you still had to pay your taxes in Rome in 99% gold! A two-tier money system. We have the same thing now.

Your gold investments will go up from $1000 to $3000 - $5000, but they will tax you at 90%. Go look at the tax rates after 1929.

You are missing the point. In empire collapse, you are squeezed between deflation and inflation.

Now the things you must use go up in price, but the things you invest in (houses) go down in price (and even if you invest in gold, they will make sure you lose just as in Rome).

You can't beat the empire. There is no place to run to, except the mountains.

This time the mountains is Bitcoin. But Bitcoin has flaws. I am working on it.

Armstrong is not at all confusing for me.

He has never said that gold won't go up. What he said was that gold would go down first from 2011 to 2013/4/5 (three possibilities for the bottom). Then gold will NOT make a new all-time high until after 2015.75.

And gold will NOT go to $50,000! It will go somewhere in the $3000 - $8000 range, probably $5000.

He has not said that gold isn't money. He has said that a strict gold standard is never sustainable, and he explained why. Society must oscillate between gold and fiat money, because of at least two reasons:

1. Debt isn't possible on a strict gold standard (no fractional reserves)

2. Strict gold standard means savings is 100% more important than production and knowledge formation, because savers (who do nothing but sit on their gold) always get wealthier. You can't pay investors more, because the supply of gold doesn't increase as fast as the increased production value.

Really this is so elemental. Armstrong is just a lot smarter than most people.

Surely everyone took you as serious and cared about your nonsense. refering @first few posts under you.
Hey let me rewrite my article that i published back in '09 that bitcoin would reach 200+$. It's all legit trust me.

I have actually now have read some of it, and well the conclusion? Wasted 2minutes of my precious time.
Yes I like to be on your ignore list, because trolls@internet too op for you  :D

Now seriously, this is one of the rare posts that I do not like.

Do you think I care about your call for Bitcoin to go to $200, when I am writing about how you are going to lose it all because you are not anonymous and there will be a wealth tax. I am writing about how empires die. You are writing about speculation.

Get off my lawn child.

How did you not get this..

I'm not anonymous? *turns online 69 VP's*. Relax nothing againsts you, no offence, but I just don't like it. Entitled to the opinion. If i read it completly ever, there might be a different opinion on this.

I have no idea what that means.

You can attempt to use Tor or other services to be anonymous while sending a spend transaction for Bitcoin (and other activities on the internet), but:

1. Most users don't figure that out

2. Tor isn't really anonymous (they traded away higher anonymity to get low latency)

3. After 2033, mining stops, so the only way to obtain coins anonymously is meeting someone in physical person (very risky).

Well TOR has been proven a problem, and according to the recent incident it's been infected by either FBI or NSA, so that might be a problem.

Tor was designed to be compromised. We can do better:

http://blog.jim.com/economics/bitcoin-as-a-speculative-bet.html/comment-page-1#comment-342148

Click this first link below to read the following text in the context of a longer discussion between myself and James A. Donald (the first person who interacted with Satoshi at the cryptography forum where Satoshi announced Bitcoin).

http://blog.jim.com/culture/radish-explains-what-racism-means.html/comment-page-1#comment-345588

Apologies for this long comment, but I wanted to make it very clear that when empires fall, it is very dangerous for the citizens of the empire.


Indeed, when empires collapse, there isn't hyperinflation, rather the empire state exerts its power until it has destroyed itself (and the citizens) from within. Armstrong wrote more about that today quoted as follows.

http://armstrongeconomics.com/2013/08/05/nsa-collects-word-for-word-according-to-pbs/


http://armstrongeconomics.com/2013/08/05/how-empires-collapse-a-orderly-path-to-conclusion/


http://armstrongeconomics.com/2013/08/05/obama-trying-to-cover-up-another-investigative-program/


You wrote more about that here (http://esr.ibiblio.org/?p=4927&cpage=1#comment-399994):


Before I was banned, I also rebutted Winter's theories on the decline of Rome here (http://esr.ibiblio.org/?p=4946&cpage=1#comment-402900):


And here (http://esr.ibiblio.org/?p=4946&cpage=1#comment-402880):

Anony , you of course do know that Martin Armstrong worked for the federal government don't you ?

In fact if you research carefully you can see the very strong connections between Martin Armstrong , and the many many webs that make up the broard federal communication systems  intelligence network .

They might not seem obvious to you straight away , but if you do actually research you will see the connections .

Furthermore , with regards to the NSA designing and releasing Bitcoin , well ,  I think you can look at Martin Armstrong's well connected history in this regard also.

Now do not misunderstand my response to you , as going in a somewhat tralfamadorian direction , but I have to ask you Anony , how well do you know Martin Armstrong ?

Just how well ....

So that is why the USA tortured him in maximum security prison for 7 years while being held on a bogus contempt of court charge without a proper trial?  ::)

Are you sure you live on planet earth?

Discussion between myself and James A. Donald (the first person who interacted with Satoshi at the cryptography forum where Satoshi announced Bitcoin):

http://blog.jim.com/culture/radish-explains-what-racism-means.html/comment-page-1#comment-345629


;)

I hope you saw my proposed solution (http://blog.jim.com/economics/bitcoin-scaling-problems.html/comment-page-1#comment-342437).

I also feel strong anonymity is very important, because I think the government may become oppressive as end-stage Rome. The only way I can see (http://blog.jim.com/economics/bitcoin-as-a-speculative-bet.html/comment-page-1#comment-341731) to obtain digital coin anonymously is through mining (not an exchange) using a mix-net or dc-net that is more anonymous than Tor (http://blog.jim.com/economics/bitcoin-as-a-speculative-bet.html/comment-page-1#comment-342148), i.e. tradeoff high latency for better anonymity (become impervious to timing attacks). Mining in Bitcon is falling fast (as a % of existing coin supply) to be at 0 in 2033.

I don't know,  possibly ?

Maybe you're from a paralel dimension Earth?

more likely something closer to a chronosynclastic infundibulated version of that . , if that were true.

Hey you two (or three) trolling twerps who are cluttering this thread with nonsense and noise.

Ego is for little people (http://esr.ibiblio.org/?p=1404) and demonstrated by those who can't build, talk (http://esr.ibiblio.org/?p=3514).  ;)

I have put you two (actually three yet he stopped recently) both on ignore, thus the thread reads much more sanely and clearly (for those who put you two or three on ignore).

Frankly, if you two (or three) put yourselves on ignore, your sanity might return because you would be forced to actually comprehend the useful information, and develop some robust thinking skills.

Well he seems to think he's smart and important  :D :D
I guess we have been striked with his ignore list.

Point #2 above hasn't been explained clearly enough for most people to understand.

Martin explained this very abstractly by saying the supply of gold can't expand with the expansion of the economy. Goldbugs ignore this explanation, because they say the value of gold can increase accordingly.

What is missing is that when investors invest in a productive business, they expect to get a ROI which is greater than just sitting on their gold. So if via such investments, the economy grows at X% where X is greater than the expansion of the physical gold supply, then some of the investors can't be paid, i.e. the savers in gold take the gains from the investors in the form of price deflation.

Why can't otherwise smart people see that? I dunno. Cognitive dissonance? I mean I know one guy who claims he scored higher than me on the SAT (but not on the Math) and is a famous silver promoter, and for some reason he just can't seem to understand that (or at least hasn't indicated to me he got the point).

Some people point to the Byzantine empire (Eastern Rome) as an example of a sustainable gold standard. In every case where there was a gold standard, either it wasn't the only money (i.e. banks were creating gold receipts which were backed only by fractional reserves) and/or gold was being imported into the economy thus expanding the supply of gold faster than the 2% per annum expansion of global supply due to mining.

How can anyone make this any more clear? Whoever can't get this, should shut up, they don't have sufficient IQ to be commenting on the matter then.

P.S. Bitcoin is worse than gold, as the increase in supply stops entirely in 2033. Clearly a flawed design, for the reasons above, and also because mining of new coins is the only SURE way to anonymously obtain bit coins.

http://armstrongeconomics.com/2013/08/05/confiscation-of-gold-possible-or-not/

About the above "Confiscation of gold", the key points to remember are:

1. They can't confiscate what you physically hide, but other than coins for barter (no need to assay, trusted), you won't be able to invest that wealth (easily and efficiently in large size) without paying the confiscation or taxes, because the powers that be control the avenues for investment. So all this BS from goldbugs about they can't confiscate what you bury in a hole, is only valid for the Madmax scenario, not for the scenario where they make a new money system after the crisis and you can't enter it without paying the confiscation or taxes. I warned of this years ago:

http://www.marketoracle.co.uk/Article20327.html (End Game - Gold Investors Destroyed)
http://www.financialsensearchive.com/fsu/editorials/moore/2010/0615.html (copy)
http://www.gold-eagle.com/article/no-money-exists-without-majority (No Money Exists Without The Majority)
https://bitcointalk.org/index.php?topic=226033 (discussion)

2. They won't bother confiscating gold if there isn't that much wealth to attack (if the payoff is less than the effort and cost). So bear in mind, that a more anonymous Bitcoin alternative (coming soon), which they can not confiscate, will pull wealth away from gold. A possible reason the Bible speaks of a 666 mark on the forehead and hand (governments will need to physically track you to re-enable their power to tax you after I am done destroying that power), is because the governments are going to be destroyed by a truly anonymous Bitcoin alternative which they can not confiscate. Most people don't realize this is actually possible:

http://blog.jim.com/economics/bitcoin-as-a-speculative-bet.html/comment-page-1#comment-342148
https://bitcointalk.org/index.php?topic=160612.msg2847982#msg2847982


3. Physical gold can't create a new economy. We can't go back to physical barter and have any where near the maximum divison-of-labor we have now (thus quality of life would plummet). Forget it. An alternative to Bitcoin which is is truly anonymous and thus can't be confiscated, could potentially render the USA empire fiscally impotent sending it away powerless with its tail between its legs.

Ok Anony sorry for interrupting your well put together  depressed and semi schizophrenic predictions of our certain doom and gloom .

Just a leaving note old friend .

Take yourself less seriously .

Try to focus a little more on the self , and you may see opportunity out of adversity, such is the way us  humans work .

Oh also it's 2013 , I'm pretty certain everyone knows the score by now.

Can't you read? I already did.


Also:

http://blog.jim.com/culture/radish-explains-what-racism-means.html/comment-page-1#comment-346422

Here is the direct link to that Catherine Austin Fitts video:

http://www.youtube.com/watch?v=0EiMUPdtFXI

Excellent video to bring to my attention.

Essentially she is arguing that the Private sector is extracting itself from the Public sector, as the socialism (statism) is dying.

But she makes the mistake of not identifying which portion of the private sector is allowed to go free and which portion is being held slave to the Public sector.

Btw, Martin Armstrong's ECM Pi (8.6 years = 3145.9 days) model also has the Public sector wave ending in 1981, and the Private sector wave extending to and peaking in 2033, and 2033 is also when the 26 year down portion of the Real Estate cycle bottoms:

http://armstrongeconomics.com/models/7219-2/

Armstrong has also called for the dollar to strengthen and the developing world to crash due to being short the dollar (as they received massive dollar loans as this was only place for international capital to earn a decent return, but now the flow is reversing back to the USA as Fitts also noted).

W.r.t. to old and new economy (robotics, etc) and return to USA of more hitech manufacturing, good to see she read my emails a few months ago, as she is now repeating my theme. Well I can't assume she learned that from me :)

Fitts calls for long-term boom in the stock market (when asked about China becoming new reserve currency she said "impossible now, something to study 20 years out"), so her view of the USA stock market possibly rising through 2033 I guess wouldn't be an anathema to Armstrong.

However, Armstrong has called for crash in 2016 that will be worse than 2008. Fitts rather views collapse as more likely for the developing world-- not for the USA. Rather she sees a slow-burn (to 2033?) of defaulting on socialism for the USA (at least, does she include Europe and G7? I think so). She sees roving failures globally and nationally, but not one big catastrophic moment of failure globally.

She agrees with Armstrong that the G7 (in defense of the Public sector) is attacking safe havens. She mentions her estimate of $40 trillion stolen from the public sector by those in the Private sector (banks, military establishment, etc) who own the government.

She didn't acknowledge that those powers that be are not attacking safe havens that include themselves and their $40 trillion, rather the
attacking of the safe havens is to go after all the competition from the millionaires and the upper middle class. So this is power consolidation, power grab. She could refer to my recent emails about how empires die, and how they destroy themselves by destroying their tax base-- the upper middle class who create businesses.

She agrees with Armstrong that the USA (G7) empire will not go quietly into the night and they are twisting the arm of the G20, and they will use their power to attack anyone who is not playing ball in their system.

Fitts argues that the USA can reinvent itself, but she misses one very important point. Demographics. Europe even more so. The West can excel at high tech but it can't become lean overall as a society until the boomers die off (i.e. another 20 years or so, i.e. 2033 again). Whereas, the developing world can quickly grow after resetting itself with defaults. Heritage foundation data shows the developing countries have a very low level of government as share of GDP unlike the West, so they are poised to grow after the recent influx of credit is purged in a collapse coming soon (2016). Young people simply adapt more quickly and are highly motivated to do so. Old people are hanging for a "few more good years".

Armstrong thinks the rising interest rates will choke off the old economy and exacerbate the sovereign and local government fiscal positions (not to mention how this will set off derivative defaults on the interest rate swaps, and derivatives get first priority over bond holders and depositors), thus causing a collapse into deflation, i.e. austerity along with rising taxes and hunting down all capital. This is not so different than Fitt's slow burn, except for key point.

Armstrong thinks "safe haven" will come to mean any capital that is not buying a "get out of jail free card" from the government, i.e. all middle class wealth will be targeted.

So this is the difference between Fitts and Armstrong, and I am sure Armstrong is correct, because Fitts missed the point that demographics don't afford her scenario of a widespread recovery and the powers that be want a bunch of slaves with them in control (i.e. they don't want to give up control to millions of free enterprice, they want fascism).

The reality will probably end up being somewhere in between Fitt's optimism and Armstrong's pessimism, especially since yours truly is working on a better Bitcoin that can hide capital from the bastards and build the new economy under their nose.

You are responding to my point that gold can never be the only money because it would penalize investing for productivity by giving the returns to those who sit on their gold, because the gold supply doesn't expand fast enough to pay the investors the ROI on the expansion of the economy due to their efforts and risk.

The problem with any tax is that the elite capture it in the Olsen scramble (http://esr.ibiblio.org/?p=984). Top-down is not a solution. We need decentralized solutions.

Inflation is not a problem, because it benefits the working class, whose wages will rise proportionally and depletes the idle capital of the capitalists who are not investing in new technology and productivity.

The problem with inflation as it is created now, is that the elite get their hands on the levers that create inflation and thus give the debased money to themselves.

This problem elite capture won't be possible in a better Bitcoin, that contains sufficient continuous debasement (i.e. inflation), because no entity can control the rate of debasement.


The technological singularity is nonsense. I refuted it here:

http://unheresy.com/Information%20Is%20Alive.html

Note that Nicolas Taleb agreed with me.

But I do agree that if we earn our ROI in knowledge gained, instead of dollars saved, then for those who are in that new economy they will not be controlled by monetary capital. And thus knowledge capital can grow much faster without being burdened by monetary controls (how much capital do you need to write a new software program in your bedroom?) and in a decentralized manner. My Copute plans are all about that model of the future.

Fitts and you (and everyone else too) are being fooled to some degree by the international capital fleeing Europe and the developing world into the dollar assets forming a bubble. This is a deadcat bounce.

This will drive capital out of bonds (so it can chase also these higher returns) and these high interest rates will choke off the US economy (and globe) by 2016.

Be aware that many people are locking in 5/1 ARMs because they are still 3% while fixed mortage rate loans moved to 4+% recently. Thus this boost in the economy is going to get killed by the higher interest rates coming with those ARMS adjust in 5 years. Many other examples like that of why this bounce is going to collapse.

Armstrong is always correct, because he does not do analysis based on fundamentals which are always questionable. Rather his timing models relate how international capital looks at relative opportunity cost OVER TIME:

http://armstrongeconomics.com/2013/08/07/fundamental-analysis-always-questionable/

In addition to mining, other than risky personal meetups, one can be paid anonymously, i.e. only known by their private key, e.g. license some digital works where the author is only identified by the private key.

bcc: Kristen Linton @ Solari to pass on to Catherine

Three more points of evidence that seem to argue that Catherine's optimism is unrealistic:

1. Obama's Health Care plan is going to significantly impact to the negative any business where labor is a significant component. How do we get widespread recovery of the economy without widespread involvement of labor?

2. Catherine's model of individuals and small (rural!) communities reinventing themselves is precisely what happens when empires fail. The cities become empty and only those who fend for themselves in the rural areas survive. It is not a model for society wide recovery, rather it is THE model for collapse:

http://blog.jim.com/culture/radish-explains-what-racism-means.html/comment-page-1#comment-345588


3. What Catherine describes as a slow burn (e.g. the now sick small farmers in her region being turned into welfare dependents eating GMO by the greed of the fascism which outlawed their organic farming in favor of GMO, Monsanto, and corporate farming) is analagous to how the end came about in Rome:

http://blog.jim.com/culture/radish-explains-what-racism-means.html/comment-page-1#comment-344589



My further comments are interleaved within yours below.


Even if the elite were entirely in control (which Armstrong argues is impossible and I agree), why would they want to hold interest rates down? The ROI on each new dollar of debt has reached a few pennies in China and just about every where in the world. There is overcapacity in every sector, e.g. even here in the Philipppines they are building a shopping mall on every corner while the people still only earn $200 per month.

If they continue pumping more debt into the global economy, they will cause massive social unrest because of the waste. They have to move now to next stage which is defaults, which will bankrupt everyone but themselves. They can use the Public sector to hunt down all the remaining capital and assets that isn't theirs (so they will own the growth phase that comes after this wipeout). They got their $40 trillion and have it positioned. For example, they are building pipelines across the USA to carry natural gas to new export terminals so they can export to Asia which they keep dependent on imports, because for example they come to the aid of Japan Senkaku islands and Philippines Spratly islands to keep China from developing these huge natural gas fields.

They have given Dept of Homelove (hands down kid's pants) Security the right to purchase billions of hollow point bullets (which are illegal in war because they are so gruesome) and 2714 tank-like vehicles. Does that sound to you like they are preparing for a subtle slow down and
slow-cooked frogs in the boiling pot?

Nothing every crashes like that. In nature, all exponential phenomenon have a long period of exponential gestation, a phase-shift blow off where the nominal change is now large, an then a waterfall collapse that is much shorter than the gestation period.


Exactly. And now the Fed and the Treasury Dept is telling all the banks that their derivative books won't be bailed out in 2016 and that they need to start unwinding. This is another reason we are seeing the interest rates going up radically since May. The derivatives will take priority to the bond holders and the depositors, e.g. bail-ins are coming.

They are getting ready to default the global economy and they will be the only ones left standing after the dust clears.

They will use this leverage to force the developing world to follow their aims. But remember, they are not entirely in control. And their plan will leak. For example, I am creating the better Bitcoin that will enable private capital to run and hide (and still be liquid unlike gold in large size will be trapped by taxation, but the better anonymous Bitcoin will not be).


You know I have been calling for that too for past several months.

The point is that the elite will own this sector. The proprietor's capital won't survive the coming wipeout unless they play ball with the elite, except for the leakage I am talking about above.

Also this sector will either be very low labor (thus not a big impact on the general economy in the USA), else they will play ball with the elite (e.g. to get a waiver from the Obama administration on health care or otherwise not abused by the IRS).

Fascism 101.


China and Asia will still win on anything that is labor intensive. This is why Asia will be #1 as we come out the crisis.

The elite are planning to use the hitech community in the USA as slaves, while keeping Asia as slaves by controlling key inputs such as energy.

"The elite are planning to use the hitech community in the USA as slaves, while keeping Asia as slaves by controlling key inputs such as energy."

I'm bored Anony what's the news?

How will Asia be kept slaves with energy ?

tell me all about it>

Roll tape......

There is no problem for workers when their wages keep up with inflation.


Exactly. Who is receiving the QE?

With Bitcoin mining, the elite don't receive the printing.

;) :wink:


Inflation rises faster than wages because the elite are wasting the printed money, i.e. capital misallocation, thus causing economic decline.

Without inflation, the economy can't grow. I already explained why in my prior email where I explained that the investors who fund a project need to get back more than they put in. But this can't happen with a strict gold standard where only gold is the money, because money supply is limited to 2 - 3% per year.

I am sorry if you can't grasp this. It is exclusively to be understood by people with an IQ above 140. Most can never get this.

In the Quantity Theory of Money:

M x V = P x Q

The investor could be paid by increasing V, but we can't just keep increasing the velocity of money forever. M has to increase.

If you can't grasp that, I don't know how else to explain it to you, that you could grasp.

The problem is top-down control over money printing. Decentralized money printing is absolutely necessary, else the economy can't grow.

Only people with very high IQ are going to understand this.


Incorrect. It was built on fractional reserves by the private banks all through the 1800s at least.


The printing is given to those who mine the Bitcoin. And now I will be proposing that the M scales with the P x Q. Completely decentralized. No one can steal. Money supply will grow with the economy. No central bank needed.


You deny the facts above.


Interest goes to the lenders and savers. Giving it away to all the people is stealing via socialism.


You propose more top-down statism, which leads always to socialism. Top-down organization is not decentralized. It always leads to politics and vested interests.

Iron Law of Political Economics:

http://esr.ibiblio.org/?p=984


Have you not learned anything in 3000+ years of recorded human history?

The moneychangers buy the government and the politics.

You propose more of the same.

http://pro.contrarianprofits.com/Cameron49/LJMTP800?h=true

(click close on your browser tab for the above link, then click "stay on page", then the transcript will appear so you don't have to listen to the whole video)

That came from a link in a Casey Research post:

http://www.caseyresearch.com/cdd/how-to-invest-to-avoid-a-chinese-slowdown

Here is more about it:

http://stockgumshoe.com/reviews/macro-trader/whats-the-mysterious-400-billion-cameron-parish-project/

Can you shorten down those posts or use better formating? I might actually be able to read them :S

Indeed no one knows every individual action, and Armstrong doesn't attempt to predict what his model does not model.

The misconceptions of the British in 1781 have nothing to do with the validity of Armstrong's Pi model. His model was found by inputting $100 million in data from the history of the world into a computer which then searched for repeating patterns. Thus it was discovered that Pi is fundamental. Well that makes plausible sense, since The Universe is composed of frequencies which are multiples of Pi (in the Fourier domain of
spacetime).

I am searching for one instance since 1970 where Armstrong's prediction of trend and timing was grossly incorrect. Have you found one? I haven't found one yet.

His computer validated that the Pi cycles were always correct since the beginning of recorded time.

It is difficult for me to deny the scientific method. How about you, you prefer to believe in the tooth fairy?

And the data from 1790 to 2012 says:

http://www.measuringworth.com/growth/

http://www.measuringworth.com/growth/growth_resultf.php?begin%5B%5D=1790&end%5B%5D=2012&beginP%5B%5D=&endP%5B%5D=&US%5B%5D=UNSKILLED&US%5B%5D=MANCOMP&US%5B%5D=NOMINALGDP&US%5B%5D=NOMGDPCP&US%5B%5D=SAP&US%5B%5D=POPULATION&UK%5B%5D=GDPC&UK%5B%5D=GDPCP&UK%5B%5D=POP&gold%5B%5D=NEWYORK&gold%5B%5D=SILVERRATIO

The average annualized values from 1790 - 2012 are as follows.

3.26% - Production Worker Compensation
5.24% - Nominal GDP   
3.18% - Nominal GDP per capita
1.99% - Population (millions)

3.26 + 1.99 = 5.25 which is very close to 5.24%

In other words, the increase in nominal GDP was spread proportionally to the workers, diluted by the increase in the population.

So the only problem was if the money supply was increasing faster than the nominal GDP, i.e. if the velocity of money was declining. Indeed the velocity of money is declining now, because the bastards have their hands on the levers of money supply creation and are hoarding it for themselves.

Here is the same data again 1970 - 2000:

5.46% - Production Worker Compensation
7.82% - Nominal GDP   
6.68% - Nominal GDP per capita
1.07% - Population (millions)

So we see that lately the workers have been cheated.

5.46 + 1.07 = 6.53, which is 1.5% less than 7.82%.

M2 increased only 7.12% from 1970 to 2000, so velocity was increasing:

http://www.economagic.com/em-cgi/data.exe/frbH6/m2

So it appears the bastards were able to steal about 1.5% per year from the working class from 1970 - 2000. Hopefully we could eliminate that by eliminating their control over the printing of money.


So ideally we want to scale the money supply by the optimum nominal GDP growth rate. That appears to be 5% historically. Bitcoin will not scale its money supply after 2033, and thus MUST be debased by external credit else the economy would stop growing if Bitcoin was the only currency.

I will be proposing for my new alternative to Bitcoin, that the mining of new money follows a similar curve to Bitcoin but never declines below 5%. That way it can support an economy whose average annual growth rate is 5%.

Note the growth rate can go higher or lower, because the velocity of money can change, but over time it will have to average the same as the growth rate of the money supply.

i think he's just now exclusively talking to himself mate.

probably best to just quietly walk away?

make sure he does not have any sharps nearby.

this is sometimes called "new world depression"  its generally the associated effect of finding out that the world is actually run by some scammers that run into a "legal tender" issuance scam in the early 1800's (or there about) then proceeded to discover that if they purchased the control of the new invention called "Television" they could also control most peoples minds.

what occurs is that the victim discovers that the flimsy reality in which their whole world was built , is a complete sham, it typically effects not the Baby boomer demographic as they actively "choose" to keep believing in the fake fork of reality until entity death.

its the people caught right in the middle , not the net generation but the somewhere between X and y generally.  

it can manifest itself in many ways , all the way from violence to apathy , to furiously studying a specific subject.

** i will add there is an overall economic effect here that is somewhat out of control of the victim also. **

most psychologists will try to focus on "self" and "now" and "thoughtfulness"  as they will say that looking towards the past will cause depression as it can't be changed and looking towards the future will cause stress as the future has infinite possibilities .

this is how i would treat it:

stop caring , and make your own life better.

when you wake up Anony ask yourself  "what can i do with some of this knowledge to make my life better" , start thinking about "yourself" , not just "self" .


** note

When I say the baby boomer reality is a "fake" fork its fake to me but completely real to them, as they are the observer its a completely valid from of reality fork,  unfortuatly its the short one - this is why "TV" is doomed to become a multidimensional form of information , as i theorized many years ago .

the short fork is that older reality as the observers of it stop observing, it will simply go away , and the prevalent much more complex fork will exist , this fork is multidimensional in nature and will bring many advancements.

****

hilariously i can simply prove this correct , there is a funny and specific effect that an observer can note from a different fork,  ready for it:

An observer of an alternate reality fork, should notice that the short fork is becoming less and less credible to you as an observer , this could manifest itself in strange and "unreal" occurrences that you would observe by looking at that reality, as all reality can be observed, as less people observe that reality should look generally thinner and thinner , more and more strange/"unreal" if you like.

http://armstrongeconomics.com/2013/08/09/what-can-we-do/

http://armstrongeconomics.com/2013/08/09/email-service-used-by-snowden-shuts-itself-down-warns-against-using-us-based-companies/

I suspect he may be reading my emails, because he nearly copied some of my recent statements verbatim:

That decentralized inflation is not bad:




On how empires end with police state and not hyperinflation:




http://armstrongeconomics.com/2013/08/09/is-hyperinflation-associated-only-with-revolutionary-new-governments/

A direct quote of my "to a hammer everything is a nail" statement I have made 3 times recently:






http://armstrongeconomics.com/2013/08/08/pakistan-bans-gold-imports/



http://armstrongeconomics.com/2013/08/09/crime-is-also-rising-in-europe-among-the-youth-solution-more-police-restore-border-checks-not-lower-taxes-to-create-jobs/



My point about demographics is the key distinction for the west:

http://armstrongeconomics.com/2013/08/08/the-next-generation-pensions-r-vanishing-why-the-dow-may-yet-double/

http://blog.mpettis.com/2013/08/the-changing-debate-over-chinas-economy/#comment-304


http://blog.mpettis.com/2013/08/the-changing-debate-over-chinas-economy/#comment-329

New York did not become the financial capital of the world until after WW2 (http://www.pbs.org/wgbh/americanexperience/features/general-article/newyork-postwar/). As you know, this was because Europe imploded and capital fled to the new frontier. The Florida land bubbles were caused by gold fleeing Europe into the USA. The same is about to happen to the USA going to Asia circa 2033, but first we have one last hurrah for the dollar as the emerging markets are short the dollar (either bond issues or China's dependence on exports) and capital will rush back to the core economy as global socialism implodes (again, which is what caused prior world wars).

Note the Asian crisis at the turn of the 21st century was caused by capital rushing back to Europe for the launch of Euro (and we see how that speculative capital flow into PIIGS ended up now).

Although Asia is not #1 per capita, they have several times more population. And if valued on a PPP basis including TRUE health care and social services costs NOT SHIFTED INTO THE FUTURE BY BEING OFF BALANCE ENTRIES, then Asia is already ahead of the West in aggregate (perhaps not per capita but we really don't know until the write-downs come). One can argue that Asia will have to pay for their elderly one day, but that is not a significant balance sheet item now or anytime in next few decades. The Japanese throw their 50+ off the job bus (http://soberlook.com/2013/07/the-clock-is-ticking-on-abe-to.html).

The USA was importing immigrant labor so labor was not in oversupply as is the case in Asia. So we shouldn't be comparing wages, rather social balance sheets (c.f. Michael's astute blog about "social capital").

Again my theme has been that socialism's peak also corresponds to some massive technologically induced unemployment in the former dominant economies (this corresponds every 78 years to the collapse of real estate in the dominant economies), e.g. the factories disrupting cottage industry going into the 20th century and now computers and internet with outsourcing, robotics, automation (even accounting and POS system integration, etc).

====================

http://blog.mpettis.com/2013/08/the-changing-debate-over-chinas-economy/#comment-305


http://blog.mpettis.com/2013/08/the-changing-debate-over-chinas-economy/#comment-333

Didn't verify so I will take your word for it. And indeed this is why I had been bearish on China, because I didn't see how it could become more open without a complete change of political and philosophical culture. I even criticized their top-down educational culture, population-wide (cultural) disregard for intellectual properties rights, etc..

Then Armstrong made some valid points that shocked me-- points we all probably know but didn't bring to our conscious mind yet (i.e. cognitive dissonance).

1. The West is less open. Shocking but true. We have the illusion of free speech, but in the Wallstreet protests they just arrest you for stepping on the grass. A recent news story reveals anti-terrorism forces are showing up at individual homes 100 times per day, e.g. a husband did an internet search for "backpack" and the wife searched for "pressure cookers". Consider the relative level of regulation and government share of GDP. Even California has made it a criminal offense not to comply with Obamacare.

2. Some claims the Chinese don't have true private land ownership (the man who blocked a highway disagrees (http://www.dailymail.co.uk/news/article-2236746/Road-built-building-couple-refuse-China.html)), yet in the USA we don't own our house (http://armstrongeconomics.com/2013/08/08/us-property-taxes-wipeout-savings-profit/).

And I add my own point:

3. Although we can view Asia as top-down managed, in reality there is massive choice and competition, but as a Westerner you might not see it because you expect it to take the same forms you know at home. Some claim that China doesn't have private health care, but I bet they have ubiquity of private folk medicine-- there is a "quack doctor" in every community in the Philippines. James White wrote about this w.r.t. to manufacturing diversity, and alibaba.com is evidence of that. In the Philippines I can choose from three (or five) nationwide PREPAID cell phone networks (so I need at least a dual-simm phone) meaning I can buy a new simm in 30 seconds have a new number. In the west, you nearly have to give a blood sample to get a phone number and USA has much slower internet because of telcom monopolies (http://www.huffingtonpost.com/2013/07/24/us-internet-speed_n_3645927.html). The list goes on and on...

=======
Its depressing that the world is moving to a lower common denominator of liberty, with Asia's top-down systems as the best we have to look forward to, but actually what appears to be happening from my perspective is we are moving to anarcho-capitalism where an alternative Bitcoin will make it nearly impossible for the nation-states to tax and spend. The frontier of freedom appears to be on the digital highway. There is actually technology for all of this, e.g. Chaum's high-latency mix-net, dc-net, OTR, and the Socialist Millionaire algorithm.

No it is not. Top-down is never the same result as free market decentralized, c.f. my prior link to Some Iron Laws of Political Economics.

If I ignore your future posts, you know why.


Absolutely not, the difficulty scales to the ROI on the hardware and electricity.


Expiration of the 5% debasement needed by economic growth is a big mistake and is why I will be making a better Bitcoin. See my posts upthread.

I probably won't reply to you again, because you have so many misconceptions and I am lacking time. No personal insult intended.


False. We need ever higher difficulty to prevent a 51% attack.


We've got to have 5% debasement, else you can't get 5% growth over the long-term trend.

Who else is going to manage that distribution better? Again see the Some Iron Laws of Political Economics.


Socialism already failed every time. Sorry.

http://blog.mpettis.com/2013/08/the-changing-debate-over-chinas-economy/#comment-339


Sorry, you couldn't have been more wrong.

I was including Europe, which has insanely high rates of taxation.

USA income and capital gains taxes are on the way back up (http://armstrongeconomics.com/2013/05/26/11836/) (and that doesn't include that caps on FICA do not adjust higher as fast as true inflation), the investment tax and regulation costs (hidden tax) in Obamacare (http://armstrongeconomics.com/693-2/2012-2/obamacare-the-investment-tax/) starts next year, and Obama wants more (http://armstrongeconomics.com/2013/07/26/september-chaos-obama-wants-1-6-trillion-more-in-taxes/'). Property taxes so high, you can't own your house (http://armstrongeconomics.com/2013/08/08/us-property-taxes-wipeout-savings-profit/) (property taxes were minuscule in the 1950s). There are many hidden taxes due to regulation (http://grandfather-economic-report.com/regulation.htm) that did not exist in the 1950s. There has been a 1250% increase in taxation for a family of 4 since 1948 (http://grandfather-economic-report.com/tax.htm).

Pottery records indicate that production continued to increase into 5th century, but then the rate of clearing and expedient farming methods to keep up with the tax and debt reached the point where soils collapsed, irrigation was polluted, and the economy collapsed. We will know the true condition of the USA when interest rates rise several percentage points (by 2016) and then eventually to double-digits. Don't forget a $quadrillion in interest rate swap derivatives, and those have been moved in front of bond holders and depositors when bankruptcy hits. Note the Fed is privately telling banks there will be no more bailouts. Ditto Europe is preparing for bail-ins, over $100,000 is gone (and if you take it out now there will be clawbacks), and under $100,000 will be limited to 100-200 euros withdrawal per day. After that reduction in money velocity crashes Europe, they will have to make the capital controls even more severe.

http://blog.mpettis.com/2013/08/the-changing-debate-over-chinas-economy/#comment-395

1) I provided a link upthread about telcom monopolies give us slow internet in the USA. Regulation has multiplied and now touches every small business, as explained in the link I provided. Indeed, the New Deal launched many of the programs we have today, but now the programs are pathological, e.g. you can't build on your land because the federal government makes some environmental ruling about an insect or otherwise comes to steal your rural land. Google "sheriff stops federal government" and there is a lot more in that rabbit hole than I care to detail here.

2) The low property tax percentages (you've got state + local schools, etc) are mostly if you live far from civilization where the opportunities for employment are much less. And either property taxes and/or sales taxes will be skyrocketing because the state and local governments are under severe financial stress which will get worse (the demographics of the USA are not improving any time soon, and many retirements to pay).

3) In the 1950s, nearly no one paid capital gains, mostly only corporations. Now a significant percent of the population are investors, e.g. their 401k plan, etc.. I already provided a link in prior comment that capital gains is increasing from 15% to 18.8% under Obamacare, and dividends are no longer taxed as capital gains rather as income where the top rate is increasing from 33% to 35%. In 1950s, dividends were not taxed as income. Note capital gains on gold is taxed at 28% and you are going to need gold to maintain your net worth after 2016.

4) You fail to assimilate that most Americans weren't paying much tax back then. Did you just ignore the data in the link I provided as quoted below?


Nearly no one paid the top bracket income tax rates in the 1950s. There wasn't an Alternative Minimum Tax as we have now at 20%, so used loopholes to avoid paying any tax. And the middle class was only paying 2%.

Also the regressive sales taxes we have today were progressive back then, meaning again that most people didn't pay them (or the top rate). And the highest rate I've found is 3% with most at 2% or less (http://taxfoundation.org/sites/taxfoundation.org/files/docs/pn29.pdf) (and most weren't even paying that) and some locales have over 10% now.

Although it is true that we have a huge underbelly that pays no tax (used to support leftist arguments that taxes are low), that socialism is exactly what it going to tax the middle class into extinction over the next decade as the fiscal situation deteriorates as more boomers retire and interest rates rise.

When Reagan lowered taxes, they also closed many of the loopholes and deductions that were available to the middle class.

A google search for "Hauser’s law" brings up a relevant historical chart showing that those top tax brackets in the 1950s weren't being paid.

http://blog.mpettis.com/2013/08/the-changing-debate-over-chinas-economy/#comment-416


http://blog.mpettis.com/2013/08/the-changing-debate-over-chinas-economy/#comment-434

I was reading the Philippines Inquirer news section on some days earlier this year, and nearly every time I read about some bond issue by a corporation denominated in dollars (e.g. MegaWorld, Ayala Land, San Miquel, etc). My hypothesis is that QE sat at the Fed but it raised the reserves of the banks allowing them to loan out more money, but this doesn't show up in Western credit increases rather somehow the loans are ending up in the developing world. Or it could just be investors seeking higher yield due ZIRP in the West. I read from Martin Armstrong that this was going on in Latin America too.

But now the Great Rotation has started and capital is rushing back into the dollar, USA housing, USA equities, and as this drive USA interest rates higher, then it has a spiraling upwards feedback because potential home buyers rush to lock in the rates before the rise more, international investors (escaping coming capital controls in Europe and depreciating Yen due Abeconomics) rush to grab higher rates with an appreciating dollar, and domestic investors jump on the bandwagon (noticing that the recovery in equities since the 2008 crash is now more than just a recovery given new all-time highs).

This rotation is also pushed by declining GDP in China, Europe, and thus rest of the developing world which feeds commodities and manufacturing inputs (notice a deadcat bounce in copper, gold, and stall in USA equities since China released better data past week).

This rotation thus reveals the developing world is short the dollar (they owe dollars) while their currencies decline relative to the dollar due to this shift in capital flows. This will bring the developing world to its knees between now and the end of 2015, while the USA non-bond (except high yield) assets and dollar will be skyrocketing. Yet simultaneously this rise in USA interest rates and dollar will be choking the real economy (along with Obamacare tax rises coming 2014 and plans for more increases), thus in 2016 we will likely see the USA economy roll over, as Europe, Japan, and the developing world will likely already be sinking into the abyss by 2015 (c.f. my upthread post on the net liabilities of Germany, France, USA, and UK greater than the PIIGS although this is hidden in accounting gimmicks, also German and French banks are bankrupt, again hidden in accounting gymnastics).

Michael offered his calculations on China in an email (http://www.financialsense.com/contributors/michael-shedlock/how-fast-can-china-grow-not-as-fast) to Mish Shedlock. The problem is those calculations don't factor in a 30 - 50% contraction (contagion) in global trade.

Face it, the world is bankrupt financially (maybe not in human and real capital in the countries with much youth but the write-down can be chaotic). Fasten your seat belts. Giant Portobello ahead.

http://blog.mpettis.com/2013/08/the-changing-debate-over-chinas-economy/#comment-437

Armstrong's ECM (Economic Confidence Model) is global (and based on time multiples of Pi, i.e. 224 yrs ≈ 78 yrs x 3.1459, 78 yrs ≈ 26 yrs x 3.1459, 26 yrs ≈ 8.6 yrs x 3.1459, 8.6 yrs ≈ 1000 x 3.1459 days) and it expected the turn downward and shift of exodus capital flows to accelerate Aug 7, 2013. Right on time on Aug 7, Europe decided that depositors will only be able to withdraw 100 Euros per day (http://deutsche-wirtschafts-nachrichten.de/2013/08/07/neue-eu-regel-sparer-muessen-um-guthaben-unter-100-000-euro-bangen/) when a bank is bailed-in. Imagine the collapse in monetary velocity thus GDP upon widepread bail-ins. I've read that banks' trading losses have priority in bankruptcy ahead of bank investors and depositors.

http://blog.mpettis.com/2013/08/the-changing-debate-over-chinas-economy/#comment-438

Armstrong arrived at this ECM model with the scientific method by back testing the hypothesis to all recorded history (http://armstrongeconomics.com/models/the-end-of-time/) (even spending $100 million to obtain the data and build the computer model) and then to the future, and has been more accurate than any other forecaster. I have not been able to find one forecast from him since the 1980s that didn't come true. Predicted the Sept 2000 market top, Nov 2002 market bottom, January 1st, 2005 yearly high for the NASDAQ to exact day in document that was published in 1997 which also predicted the 2007 market top and earlier had predicted the upturn in commodities in 1977. Predicted back in Jan. 2012 that gold would decline from $1600 to below $1200 before 2015 even while everyone was screaming he was nuts. This year he was writing a blog every few days shouting that gold was going to fall. The goldbugs hated him. He predicted the top in gold in 1980. He predicted the crash of 1987 (to the day!) and that bull market in Japan would continue until end 1989. His model predicted an event something like 9/11 would happen, etc, etc, etc..

http://blog.mpettis.com/2013/08/the-changing-debate-over-chinas-economy/#comment-439

Clif Droke wrote an article challenging the Great Rotation based on the Kondratieff wave (http://www.financialsense.com/contributors/clif-droke/the-great-non-rotation'), while explaining why the divergences in the USA equities are largely an exodus from low yield muni-bond funds. Thus the net capital ingress is much higher than he realizes as it is obscured by an egress which is funding the ingress. Kondratieff only used data from when the economy was primarily agarian and thus commodities. Unlike Armstrong who gathered data from 10,000 B.C. until now, the Kondratieff wave is only valid for commodities and thus yes gold won't likely bottom until 2014 (under $1050). Yet the ECM model sees the DJIA doubling (after a dip now due to deadcat bounce in China) by 2015.75.

I know this blog is not about speculation predictions, yet what I am writing about here is the model for the unraveling dominoes order of the coming global contagion, i.e. the international capital flows. Herbert Hoover wrote about the Great Depression, it was as if capital where chairs on the deck of the Titantic, rushing from side-to-side of the global economy unable to find a safe haven and real growth. This is what happens with ZIRP and sovereign debt end game all through out history. This pattern repeats as Michael wrote in his blog about "Globalization". The ECM quantifies the timing of the (business, political, technology) cycles.

Why does energy transfer in waves and why does human action occur in waves (i.e. cycles)? Michael possesses a physics background so he can readily appreciate inertia, acceleration and force. For example, if you push on a twig then you increase the force until it breaks. If you put too much force on a thick enough twig, you fall down as it breaks and your inertia pulls you forward. Then you recoil, i.e. a wave. Everything in the universe has an inertia, including every human and thus human action. My blog is linked on my name and I wrote more about this in The Universe.

Thanks for making the point, but I think the high valuations are based on the same quantity of goods & services still being transacted in the economy and Bitcoin taking a larger share of that economy. So those high valuations reflect the relative rise in purchasing power.

However this (extreme valuation result) points to another flaw in Bitcoin, which is that only 21 million coins will ever be mined. Thus Bitcoin would crash the global economy (if it gained dominant share) as I explained already:

https://bitcointalk.org/index.php?topic=160612.msg2881311#msg2881311
https://bitcointalk.org/index.php?topic=160612.msg2892394#msg2892394

A fixed alternative to Bitcoin needs to have a persistent 5% per annum debasement in order to maximize economic growth and fairly balance the return of Bitcoin savers vs. business investors:

https://bitcointalk.org/index.php?topic=160612.msg2895021#msg2895021

http://finance.yahoo.com/blogs/the-exchange/bitcoin-money-just-terrible-205752180.html


The author above is entirely correct in that either Bitcoin becomes regulated so the authorities treat it as money, else they discourage it by taxing it as a good (as they do precious metals).

The only way around this is anonymity for all Bitcoin users, as I wrote about before as follows. And note economies do move underground when the government taxes above the Laffer limit as they are now (https://bitcointalk.org/index.php?topic=160612.msg2914705#msg2914705).




Note I think Zerocoin would still be useful to break block chain analysis, even if one has perfect anonymity.

I should keep an eye out for the possibility that Europe could bounce until 2014.675. I need to search for facts that can tell me how long this bounce is likely to last. I don't want to be too early again, as I was on China last July 2012.

As I've been expecting, looks like we will get that a deadcat bounce in capital fleeing Europe and developing markets into the USA, which may put a temporarily top on the USA equities. Safe haven bond yields in Europe are increasing (exodus from safe havens) and US Treasury yields are declining (from recent dramatic rise) which is a combination of capital coming out of USA equities taking a breather, capital coming out of safe haven European bonds, and lower PPI placing doubt on Fed's Sept. taper.

http://www.reuters.com/article/2013/08/14/markets-usa-bonds-idUSL2N0GF0OJ20130814

http://www.bloomberg.com/news/2013-08-13/germany-s-bonds-fall-for-second-day-before-zew-sentiment-report.html

China and Europe are both posting deadcat bounces from their declines.

Europe's bounce is all confidences increases and more debt caused by a strong Euro, very low interest rates in the safe haven countries (my Belgium friend says he can borrow 5000 Euros any time and pay 230 per month), and increased government spending.

http://www.tradingfloor.com/posts/french-gdp-soundly-beats-expectations-572561113

http://www.tradingfloor.com/posts/euro-area-businesses-upbeat-economy-59627692

A chart shows it is just one of those bounces in a persistent decline since 2009:

http://www.tradingfloor.com/posts/french-production-contracts-sharply-gdp-should-rise-anyway-1352928205

And the big picture is still weak:

http://www.theguardian.com/business/2013/aug/14/eurozone-recession-germany-france-crisis

But the most important datum is what likely caused strong Euro, how about $1.7 trillion dollars being converted to Euros by the USA Fed!

http://hat4uk.wordpress.com/tag/french-debt-174-of-gdp/


So the Fed is blowing another bubble in the Euro and Europe, which provides a temporary deadcat bounce, but what happens when this €1.3 trillion flees a renewed crashing Europe back to chase yield in the USA markets (either directly or via leverage as it allows Europeans to continue to borrow and access their deposits longer).

Aug. 7 was clearly the turning point where Europe has committed to crash and burn (with the help of the Fed pushing European confidence falsely up to increase debt levels on what is already an insanely insolvent Europe), and first we get a deadcat bounce through the September elections at least.

They likely did this to help get Merkel through the September elections in Germany.

So we should get that deadcat dip in the US equities now, until the above manipulation by the Fed works its way through the system.

Then rockets up on US equities and further collapse for and exodus of capital from Europe and developing markets. The fundamentals all over the world are that debt is increasing but marginal-utility-of-debt has gone negative globally, thus confidence bounces are volatilty noise and the trend is spiraling the toilet bowl, with the US dollar at the center of the vortex sucking everything until it collapses on itself.

Then and only then, will gold make new highs:

http://armstrongeconomics.com/2013/08/14/gold-outlook/

Remember on Exter's Inverted Pyramid, that US federal reserve notes are at the bottom just above gold. Patience goldbugs, patience...

http://armstrongeconomics.com/2013/08/18/money-had-never-been-tangible-period-if-you-do-not-understand-what-money-is-you-will-lose-your-shirt-more/

At the above link, what Armstrong is trying to say that gold can't be the ONLY thing we use to measure value.

I had explained in past emails why we can't have the ONLY money be something that is very limited in supply growth because this would limit the rate that the economy can grow (due to prioritizing savers over at-risk investors). That is a difficult concept to understand and only 1-in-a-million will ever understand.

But even that is not a complete conceptualization. We can't have ONLY one thing be money, because never can one thing adjust to the dynamic changes in GDP, money velocity, etc.. This is why many different things are money, and they have different strengths and weaknesses (or lets just say different qualities or properties).

The economy trades between these different forms of money, because the business cycle exists. Business cycles MUST exist, because waves are a fundamental quality of inertia. Our universe is based on inertia.

So Armstrong's mistake is saying that gold is not money and trying to say that a store-of-value (wealth) is not a form of money. The reason Armstrong makes this SYNTACTICAL distinction, is because he is trying to say that money is the most liquid form of asset, i.e. the one the most people will accept in trade. It is true the dollar is more liquid than gold in many scenarios, but we are at a time where sometimes dollars are not liquid and gold is, due to capital controls and hunting down capital of all U.S. citizens.

What Armstrong is saying that is 100% accurate is that there isn't one form of base money that is tangible which everything else being not money. He is 100% correct about that.

Unfortunately this topic is above the heads of most people, so it doesn't matter how many times and ways Armstrong attempts to explain it, only a few people will truly understand.

Although money can not be tied to a single tangible thing, because the economy must expand faster or slower than the supply of that tangible thing grows. Notwithstanding if the supply of that thing can be manipulated (e.g. the US government manipulated the supply of silver to drive China bankrupt in the 1920s enabling the socialists come into power).

So humanity must have an intangible money (sometimes known as fractional reserves of a tangible good, e.g. gold), so that debt can be created otherwise how can you pay back the lender (i.e. saver) if the economy grows faster than the supply of the tangible thing grows? Well if the value of the tangible things grows due to its limited supply, then the saver is rewarded even with an interest rate lower than than nominal GDP growth rate. But the saver takes all the increase in productivity. And what about the at-risk investor who is responsible for capitalizing those investments that create those increases in productivity? Lenders can't do that, because they refuse to take a loss, i.e. they want a guaranteed ROI-- the interest rate. So in a fixed (rate of increase of) supply money system, the saver takes the ROI from the at-risk investor. Thus society sinks into a Dark Ages, which is what happens when hoarding takes place into a tangible money when humanity loses confidence in intangible money, debt, leverage, and thus civilization collapses. Go back in history and you will not find any exception, including Byzantine (if you know the details of the history well).

But it isn't debasement of the money supply that is bad, as it can end up in workers' salaries increasing minus the portion taken by the at-risk investors who deserve it. Any worker has the opportunity to become an at-risk investor too.

What is really deleterious is when an elite group can control the debasement of the money supply. Then they can buy the regulators and run amok, e.g. the New York bankers "Club" (as Armstrong calls them, but I think he is naive and the "Club" is global including the Asian elite!). I expect Asia will cast aside its elite top-down managed economy in the coming crisis so it can rise to be #1.

Here follows the main point I want to make.

We now have the technology for money that can be debased on a set schedule that can't be controlled by any elite.

That technology is the Proof-of-Work system in Bitcoin.

However, the urgent challenge is that Bitcoin can be attacked by the "Club" using anti-money laundering laws to force everyone to reveal their identity (this is what the Edward Snowden/NSA stuff is really about), pay taxes (on capital gains earned on money itself....what a racket!), and confiscate (in the cause of fighting terrorism or tax shelters).

However, there is a solution to this. There is a combination of anonymity technologies that can be applied to an alternative bitcoin (and a new name), such that the "Club" will be impotent.

Stay tuned...

I am referring to item #6 is the following document:

http://silverstockreport.com/2013/6-myths-inflation.html

The following is unarguable. I will refer any more of the above genre of nonsense to the following proof.

A Gold-only Economy:

1. Miner adds 2oz per year.
2. Investor invests his 100oz per year.
3. Workers are paid 1oz per year by investor.

The workers buy their production with their salaries as funded by the investor. The miner can also buy this production. So the maximum return on investment for the investor is 102oz per year, i.e. 2% per year. This is if the investment doesn't fail, so the risk is the investor will get 0oz back.

This economy can never grow, because no investor is going to take that loss (downside) risk for that tiny amount of upside return.

A rebuttal point is that some investors can lose and some investors can gain, thus providing for the winning investors to earn more return than the money supply increases.

But the problem is that capital will over time move to those who are consistently able to increase production. Thus over time the rich can no longer get more than 2% return. So what do they do? They turn to lending at a guaranteed interest rate provided by a public backstop, because it is the only way they can deploy their capital safely (because even if they are successful 90% of the time, it doesn't offset only a 2% upside).

On top of that, the workers (consumers) will not turn over their money as fast, i.e. they will sit on it, if the production is increasing faster than the money supply is growing, because they are gaining value for the risk-free action of sitting on money.

Thus the 2% upside potential is reduced to a negative potential on the upside. Loss-loss proposition for investors. So they become usurers, no other choice.

Understand that inflation is necessary to bleed money from the risk-adverse workers to those who know how to manage risks-- the successful investors. Even the Bible says money will grow wings and fly away. It must be this way.

Also it was never the case that the money supply in the USA was only metal. There always existed loans and fractional reserves.

Incorrect.

1. A tax will always be gamed by vested interests, c.f. Some Iron Laws of Political Economics (http://esr.ibiblio.org/?p=984).

2. Capital sitting in a hole for a lifetime before being dishoarded is orders-of-magnitude too slow.

Debasing decentralized digital money removes the ability for any vested interests to capture and manipulate the debasement. And it is continuous, not waiting for a death event.

Your "Debasing decentralized digital money" will be gamed too.
How do you force rich people to use your money if it's not in their selfish short term interest ?

As usual your ignorance of Asian nations differs none to many , also I can note that the Russian federation is not essentially a " top down " system , there are many revolutionary reforms taking place , none of which are backward or western .

What saddens me is the ignorance at which westerners , believe  they " own" or even know how to define " freedom" .

Yet all around them is none of it , and nor has there been for a long time .

Generally someone gets rich and maintains wealth by accepting the money that majority decide to use.

you know what's safer for you ?....

keep chatting here on this thread by your self.

correction..

safer for others.

Isn't there some disease that you meantioned or something to explain his actions. He's posting to himself in his own thread all the time...

The two Muppets are back, I must be saying something important. Their envy is unparalleled.

"Guys" (males?) I don't give a horse's-ass what you "think" (brains?).  :P You two bozos are certified idiots (and trolls).

" New World Disorder" , or "New World Depression"

I won't be tedious with the detail, but its just the consequence of shifting reality from the observer.

To successfully play the inheritance tax the riches should employ layers of legal structures like trusts over holdings over corporations and so on. Using simpler structures increases the risk of government attack, the heirs should be properly distanced from the capital while remaining the beneficiaries. Usage of too long legal chains is dangerous because of raiders attacks, there will be too many doors where they can put the foot in. So properly created (and maintained, and renewed, and disposed) structures are expensive and while the government gets nothing at the due time, the money actually are injected into economy via peoples who do all that work and via taxes that have to be paid to support said legal constructions. So even avoided inheritance tax creates additional money flow in such liquidity deprived economy you've described. OK, the riches can buy lawmakers and abolish that tax (which they actually did here in Russia in 2005), but let me quote myself: "Properly implemented inheritance tax"
Inheritance tax (as every tax) is an economic intensive that modifies human behaviour. Knowing that money will be confiscated, umm, taxed after his death an individual will spend more. Be it spent on himself or donated to the Church or charities, or spent in corporate wars makes no difference in this context - it will be spent, it will create new money flow, new economics activity and new jobs.
The immobilized money pose no danger, the economy will be served by the rest of it. The troubles start when there is no effective money pump in the country, usually such situation is caused by ineffective government, but that's another question.

Edit: I'm sorry, may be I missed where you stated it - what kind of debasement do you mean? "One point" inflation, proportional decentralized inflation, demmurage or something else?

Easier is put your money in a perfectly anonymous decentralized digital currency, then transfer it to your heirs anonymously.

One might tell the government they bought gold bars and buried them, but they were stolen.

Disclaimer: I am not giving financial nor tax advice, consult your own professional advisor.


Creating new coins forever:

https://bitcointalk.org/index.php?topic=279340
http://blog.mpettis.com/2013/08/the-urbanization-fallacy/#comment-644

Best to click the following link to read the following discussion in context:

http://blog.mpettis.com/2013/08/the-urbanization-fallacy/#comment-689


Note that the two leading journalists (http://www.theguardian.com/world/2013/aug/19/edward-snowden-nsa-secrets-glenn-greenwald-laura-poitras) publishing the Snowden revelations are Glenn Greenwald age 46 and Laura Poitras age 48.

The leaker Snowden was age 29, who believes everything might work out okay if the people become aware of what is going on. His naivety got him stuck in Russia, because he didn't plan for the near-term reality that the political transformation he wants will require years or a decade or more. There is an interim reality which we X-gen look at realistically.

In the link I provided upthread [in the thread at the link at the top of this] about traits of us X-gen, we are untrusting and see through BS to the truth behind the curtain. We don't believe in "don't worry, everything will work out okay", because it didn't for us until we strived to make it so. Thus, our idealism is measured in results.

Timing is important. Gold will go higher than $2300, but first it will come back down again to $1050 or below (after this Fall 2013 deadcat bounce). Because capital is flowing out of the rest of the world into the dollar, and a stronger dollar and booming USA equities meaning a rush out of gold temporary. Until the dollar gets too strong, the US Treasuries interest rates too high (choking off the USA economy), exports to rest of world cratering, and the ingress capital flow stops or reverses, then the world collapses and then gold rockets as the only remaining safe haven. Yet don't forget we have the decentralized digital currencies coming as another outlet for capital yet this is probably too small to absorb $40 trillion (but we will see, I'll be content if I gain 0.0001% = $40 million of that for my programming efforts).


You and your astute STEM fields student body are not the problem.

My point is that a significant percent (probably the majority or nearly so) are pursuing liberal arts not STEM degrees, the aggregate statistics show they are accumulating significant per capita debts, they are able to support themselves (tuition, boarding, food stamps perhaps) with this funding (would otherwise be unemployed given the bad economy), thus the economy will implode faster once they can't borrow more, and they will have no choice but to throw their political support to socialism (along with the boomers) to tax higher than the Laffer limit. Remember debt is always future taxation, even if you write it down the misallocation cost was already incurred. Just think about the effects of getting the wrong kind of degree, of not being young any more, of having kids already, etc..

On top of that, I want to reiterate my point from my prior comment, that as we write down the capital stock, the remaining capital is going to be scarce and so interest rates will skyrocket. Thus the (strictly undischargeable in bankruptcy) student loan debts will grow, not shrink. It is your non-linearity point about interest rates and debt rising beyond 100% of GDP (an individual's annual income). Thus this will become a 15% discretionary income garnishment tax (paid to the bankers or the government is the same now, same entity) for 25 years by law.

The new proposals are for all new federal student loans to be indexed to Treasuries plus 1 or 2%, and Obama's version has no cap on the interest rate!

Even homebuyers are locking in 5/1 ARMs because the spread between fixed rate mortgages increased by a percentage point this summer. Crazy.

The above is the reason I want to crash the system as soon as possible with a new decentralized digital currency (that can scale to Visa-scale, Bitcoin's current blockchain design can't). The sooner we can stop the youth from destroying themselves with debt, the better for the future.

Ok but what is your plan to redistribute money equally.
Your decentralized digital currency won't solve this problem.
If it succeed it will only allow the rich to escape tax.

It will also allow the poor and middle class to escape tax (and debt collection), and they pay most of the tax.

The solution is not to tax the rich more (impossible), but to tax everyone less, and shrink the parasites who rely on taxation.

Money should not be distributed equally, that is socialism. Rather it should be distributed to those who generate the most profitable returns.

Once you remove the ability to control the system by controlling the printing of money, then those who are now making money by gambling with other people's money (keeping the profits and charging the losses to the public) will go bankrupt.

When you are poor you have no money, and even more you have no money to put in a virtual currency.


Taxation is used to build the common (road, school, etc...)
If the people who manage taxation use are bad, then the problem is not taxation, but the way you chose those managers (politician) !

What you are proposing will be the tragedy of the common.

There is more to life than money.
How do you evaluate the returns that can't be counted in money ?


You are just changing the rules by witch they win now, what makes you think the new rules will not make them win even bigger ?

Oh no. The anonymity does not work in the long-term and is quite expensive. For anything important consider it nonexistent.
Next, there is a big difference between breaking the law (as your solution suggests) and getting around it. And with numerous jurisdictions and almost infinite amount of badly written laws there is no need for big money to break the law.

Yes, but what exactly kind of inflation? Are you going to propose adding the interest to each coin proportionally?

I am not going to argue with a communist socialist. I aim to destroy your ideology, i.e.  make it impotent and bankrupt.

Big money is going to die any way in the coming massive deflation. Socialism is going to attempt to confiscate all wealth.

Anonymity can work long-term. It is for people who want to survive. The rest of you can stand in line at the rationing stations and assisted suicide (ahem I mean national health care) booths.


Miners get it. Everyone can be a miner with GPU-resistant PoW. A free market. No equality. No socialism. Capitalism.

If you don't like it, buy the SocialistCoin instead and let's see who comes out on top. ;)

BRIC share of world (global) GDP had risen from 37% to 50% in a decade:

http://www.marketoracle.co.uk/images/2013/Aug/unprecidented-22.gif

If the chart above doesn't appear, click here (http://www.marketoracle.co.uk/images/2013/Aug/unprecidented-22.gif).

http://www.marketoracle.co.uk/Article41956.html


http://www.bloomberg.com/news/2013-08-19/clouds-gather-over-asian-economies-as-capital-flows-back-to-u-s-.html


Capital is shifting as it always does:

http://armstrongeconomics.com/2013/08/22/no-single-investment-will-ever-be-perpetual-it-all-changes/

India is falling over the cliff:

http://soberlook.com/2012/05/indias-gdp-growth-hits-wall.html

http://www.businessweek.com/stories/2008-07-01/indias-economy-hits-the-wallbusinessweek-business-news-stock-market-and-financial-advice

http://www.businessweek.com/news/2013-08-14/india-restricts-foreign-exchange-outflows-to-stem-rupee-s-plunge

Indonesia is falling over the cliff:

http://www.ft.com/intl/cms/s/0/f88cb13a-fb45-11e2-8650-00144feabdc0.html

http://im.ft-static.com/content/images/a1bb3664-fbaa-11e2-8650-00144feabdc0.img

http://www.economist.com/news/asia/21584032-rise-economic-nationalism-compounds-broader-worries-about-south-east-asias-giant-slipping

Thailand has entered recession:

http://www.bbc.co.uk/news/business-23751846

Brazil is falling apart physically and financially:

http://www.theguardian.com/business/economics-blog/2013/jul/25/brazil-real-economic-crisis-pope-francis

http://www.ft.com/intl/cms/s/0/7dd98ed6-059f-11e3-ad01-00144feab7de.html

http://www.businessinsider.com/5-key-charts-on-brazils-economy-2013-6

http://www.financialsense.com/contributors/john-mauldin/2011/08/12/the-geopolitics-of-brazil
(see the geographic issue and map at above link)

China's collapse is underway, with debt growth outpacing GDP, meaning it has to borrow more and more just to sustain what it already borrowed, and it is accelerating away in a spiral:

http://www.businessinsider.com/chinas-credit-bubble-charts-2013-6

http://blog.mpettis.com/2013/08/the-changing-debate-over-chinas-economy/#comment-233

The strength in the Euro has been "capital contraction", which caused a slight blip up in GDP but will implode into itself:

http://armstrongeconomics.com/2013/08/21/thailand-enters-recession/
(correct link even though it is about Thailand, it mentions Euro)

But even Germany is bankrupt:

http://armstrongeconomics.com/2013/08/22/the-european-debt-bomb-unbelievable/

The NET debt-to-GDP ratios are higher for the core of Europe, e.g. Germany, France, Spain, and Italy than for the other PIIGS.

-------------------------

http://www.idgconnect.com/IMG/224/5224/bric0952-620x354.jpg?1372156737

I know a thing or two about GPU miners ;) Yes, you can prevent GPU mining. BTW, scrypt is a bad way to do it ;)
But I know one and the only one way to prevent ASIC mining - copyright or patent PoW function and explicitly forbid ASICs in the license agreement. I guess you don't like such kind of things.
Anyway, if there will be such a battle, ASICs will be created in matter of months. And I most probably will be a hired gun. Hired by that big money you intent to destroy :D

I know how to defeat ASICs. First, I defeat GPUs with my nested Scrypt, thus also forcing ASICs to access 16 GB of DRAM. Since the ASICs can be made much cheaper than the DRAM, then users will plug an ASIC chip into their USB 3.0 port (or perhaps PCIe) and access the DRAM on their system.

The point is the ASIC won't be cheaper for the non-PC owner, but more expensive, because they have to go buy 16 GB of DRAM too.

I will level the playing field. I have already explained how to do this technically, it is buried in my posts at bitcointalk.

I solve energy-efficiency too.

I'm about to read your linked piece on Germany being bankrupt - i bet it relies on the assumption that Germany will fund the rest of the EU, in which case it is dead wrong of course.

at a point Germany will "opt-out" .

LOL, I guess the only one you are able to argue with, is yourself.

And if you think we are living in a socialist world, boy you are to far in your head to be reached.

very messy Anony..

you are stating that Germany is bankrupt because :

Hans-peter-Busson said some German municipalities are already bankrupt , and doesn't state which ones he claims are, and doesn't give any number to the statement or any evidence what so ever.

he works for Ernst Young and was pushing "privatization" as a solution , maybe we need to know which places are bankrupt first , and perhaps the Germans can decide if selling off land is the answer.

or what about just - oh you know, leaving the Euro?

if you are talking about "Taxation" you have been necessarily distracted there is a reason the income Tax came in a year after the Federal Reserve Act in the US.

there is plenty of productive capacity , take a step back.

My reply is come back to me in 2016 when you see how correct I am about all of this.

I don't have time to waste arguing. I am working on a solution (but it won't help the socialists, they will perish, including Germany).

And now that I know I was arguing with Europeans, no wonder you don't make any sense.

P.S. productive capacity is useless when global contagion collapses your exports. German banks are bankrupt too.

i'm sure you are , i'm sure you are...

yes of course , Germany has no scope what so ever to shift who they export too, and in that same sense , a generalized and localized "northern" withdrawal from the Euro Currency, of course well that couldn't happen...

But  then of course  , stupid me I didn't think , why would they want to do that , they have to accept economic destruction because , wait,  you said it would happen right  ?

let me just get the German foreign minister on the telephone/......

 {yes sir , that's right , yes AnonyMint Sir, ok yes ok, I'll tell him....}

Anony - Germany says you are right , and they are going to throw in the towel , government is hereby dissolved , they asked if you have your solution ready yet ?

There won't be any country to shift exports to, as the entire world will implode into debt collapse circa 2016.

Um, what about the nation's that are not running huge debts , and the debts that they are running , that could get dissolved , if say , the structure of the monetary system shifts , I'm talking of course about the commen knowledge that  Brics nations might move to a direct swap basket of currencies.

Do they get destroyed by debt in that scenario ?

That's a good idea about making hashing core dirt-cheap and have memory size be the limiting factor for hashing. There is a bottleneck in your solution, the bus throughput depends on memory access pattern (or packet size in case of USB), and it seems to be possible to adjust that pattern for bulk scrypt calculations.
Regarding ideologically loaded part of the conversation - sorry, I withdraw myself from it.

Sounds like you are quite knowledgeable about hardware considerations as they impact the design of the hashing algorithm. If you don't mind (?), I will send you a PM when I want my code to be evaluated. Note I may be sending it from a new anonymous identity, so I hope you won't ignore my PM at that future time. Thanks.

digitalindustry, the BRICs are pumped up by excessive debt for domestic fixed capital investment (e.g. China) and/or exports driven by debt-driven developed country demand. Both of these will implode and there is nothing that can stop it.

After that, from a much lower level, the world can grow again.

Armstrong continues to explain what is money:

http://armstrongeconomics.com/2013/08/24/14007/

I don't want to be involved into politics. The world is already gone mad and my efforts will only make things worse.
The code (or whitepapers in Primecoin or MC2 style) published for open discussion would be quite OK. BTW, take a look at posts from FPGA era. There was a lot of brilliant ideas, now they are useless for Bitcoin and too heavy for altcoins.

As I suspected you have rudimentary just learned understanding of economics , you have the numbers side of it, that's Not a problem , and I know your intentions are good , but just pair back the arrogance a bit and you will more efficiently get  objectives achieved.

If you participate , even if you don't believe in the project you will see that you will achieve small objectives that sum to something you probably did not first conceive .

Best to click the following link to read the context of the discussion, in which I explained that Keynes(ism) never proposed to run deficits year-after-year, yet the failure of Keynesism is he assumed government was rational and self-limiting.

https://bitcointalk.org/index.php?topic=279771.msg3024388#msg3024388

Click link to watch video.

http://www.marketoracle.co.uk/Article41995.html#comment213296

Germany has recognized Bitcoin as "private money", i.e. as a currency for tax purposes, perhaps (still unclear) meaning you won't be taxed capital gains.

But I still think if the governments can't regulate it, they will try to tax it as capital gains. I think they are assuming by declaring it a currency, then they can regulate it.

The tax details are unclear:

http://www.spiegel.de/international/business/germany-declares-bitcoins-to-be-a-unit-of-account-a-917525.html

Precious metals are a private money. They are absolute wealth.

Don't confuse these with the unit-of-account, which will always be something that expands fast enough in supply to allow the economy to grow 5% per annum without transferring the rise in productivity from the investors-at-risk to the savers of gold (buried in a hole or vault).

Also the unit-of-account should be able to pay for the most things (weighted by per capita expenditure) that people need. Thus it should not require a physical meeting to complete a transaction.

Precious metals are what you hold for insurance, i.e. if the unit-of-account system stops functioning. Even then precious metals don't always serve their purpose, because when the system fails, sometimes food is what people need most and no one will accept precious metals. This has happened numerous times during Dark Ages.

This is why I am becoming much more excited about the potential for a digital decentralized currency where the fixed rate of debasement (fixed before launch by the creators) can't be controlled by anyone. And which is anonymous so it can't be taxed. This will destroy the bastards who rely on feeding debt and socialism to the masses, because they have the power to tax and debase.

Good find. Yup. Remember I told you that.

And look at the other angle I mentioned which is LNG exports from USA, and the suppression of the development of gas fields in the China Sea by the meddling USA (pretending to protect the Philippines from China, bullshit!):

http://www.dailywealth.com/2271/us-natural-gas-exports-fuel-world

http://pro1.contrarianprofits.com/135289
(after page loads, click to close the window, when it prompts you, choose Stay On This Page, then you can read the transcript instead of watching the video)

Now you see what the BP nonsense in the Gulf of Mexico was about. It is about them gaining control over the area, so they can do as they damn well please. You know BP is building a gas pipeline across the USA.

Big oil owns Australian natural gas:

http://online.wsj.com/article/SB10001424127887324904004578538831952138920.html

Another angle:

http://armstrongeconomics.com/2013/09/04/syria-iran/


> Tuesday, September 3, 2013
> Will The United States Go To War With Syria Over A Natural Gas Pipeline?
> Michael Snyder
> Activist Post
>
> Why has the little nation of Qatar spent 3 billion dollars to support the
> rebels in Syria?  Could it be because Qatar is the largest exporter of
> liquid natural gas in the world and Assad won't let them build a natural
> gas pipeline through Syria?  Of course.  Qatar wants to install a puppet
> regime in Syria that will allow them to build a pipeline which will enable
> them to sell lots and lots of natural gas to Europe.
>
> Why is Saudi Arabia spending huge amounts of money to help the rebels and
> why has Saudi Prince Bandar bin Sultan been "jetting from covert command
> centers near the Syrian front lines to the Élysée Palace in Paris and the
> Kremlin in Moscow, seeking to undermine the Assad regime"?  Well, it turns
> out that Saudi Arabia intends to install their own puppet government in
> Syria which will allow the Saudis to control the flow of energy through
> the region.
>
> On the other side, Russia very much prefers the Assad regime for a whole
> bunch of reasons.  One of those reasons is that Assad is helping to block
> the flow of natural gas out of the Persian Gulf into Europe, thus ensuring
> higher profits for Gazprom.  Now the United States is getting directly
> involved in the conflict.
>
> If the U.S. is successful in getting rid of the Assad regime, it will be
> good for either the Saudis or Qatar (and possibly for both), and it will
> be really bad for Russia.  This is a strategic geopolitical conflict about
> natural resources, religion and money, and it really has nothing to do
> with chemical weapons at all.
>
>
> It has been common knowledge that Qatar has desperately wanted to
> construct a natural gas pipeline that will enable it to get natural gas to
> Europe for a very long time.  The following is an excerpt from an article
> from 2009...
> Qatar has proposed a gas pipeline from the Gulf to Turkey in a sign the
> emirate is considering a further expansion of exports from the world's
> biggest gasfield after it finishes an ambitious programme to more than
> double its capacity to produce liquefied natural gas (LNG)."We are eager
> to have a gas pipeline from Qatar to Turkey," Sheikh Hamad bin Khalifa Al
> Thani, the ruler of Qatar, said last week, following talks with the
> Turkish president Abdullah Gul and the prime minister Recep Tayyip Erdogan
> in the western Turkish resort town of Bodrum. "We discussed this matter in
> the framework of co-operation in the field of energy. In this regard, a
> working group will be set up that will come up with concrete results in
> the shortest possible time," he said, according to Turkey's Anatolia news
> agency.Other reports in the Turkish press said the two states were
> exploring the possibility of Qatar supplying gas to the strategic Nabucco
> pipeline project, which would transport Central Asian and Middle Eastern
> gas to Europe, bypassing Russia. A Qatar-to-Turkey pipeline might hook up
> with Nabucco at its proposed starting point in eastern Turkey. Last month,
> Mr Erdogan and the prime ministers of four European countries signed a
> transit agreement for Nabucco, clearing the way for a final investment
> decision next year on the EU-backed project to reduce European dependence
> on Russian gas.
> "For this aim, I think a gas pipeline between Turkey and Qatar would solve
> the issue once and for all," Mr Erdogan added, according to reports in
> several newspapers. The reports said two different routes for such a
> pipeline were possible. One would lead from Qatar through Saudi Arabia,
> Kuwait and Iraq to Turkey. The other would go through Saudi Arabia,
> Jordan, Syria and on to Turkey. It was not clear whether the second option
> would be connected to the Pan-Arab pipeline, carrying Egyptian gas through
> Jordan to Syria. That pipeline, which is due to be extended to Turkey, has
> also been proposed as a source of gas for Nabucco.Based on production from
> the massive North Field in the Gulf, Qatar has established a commanding
> position as the world's leading LNG exporter. It is consolidating that
> through a construction programme aimed at increasing its annual LNG
> production capacity to 77 million tonnes by the end of next year, from 31
> million tonnes last year. However, in 2005, the emirate placed a
> moratorium on plans for further development of the North Field in order to
> conduct a reservoir study.As you just read, there were two proposed routes
> for the pipeline. Unfortunately for Qatar, Saudi Arabia said no to the
> first route and Syria said no to the second route.  The following is from
> an absolutely outstanding article in the Guardian...
> In 2009 - the same year former French foreign minister Dumas alleges the
> British began planning operations in Syria - Assad refused to sign a
> proposed agreement with Qatar that would run a pipeline from the latter's
> North field, contiguous with Iran's South Pars field, through Saudi
> Arabia, Jordan, Syria and on to Turkey, with a view to supply European
> markets - albeit crucially bypassing Russia. Assad's rationale was "to
> protect the interests of [his] Russian ally, which is Europe's top
> supplier of natural gas."Instead, the following year, Assad pursued
> negotiations for an alternative $10 billion pipeline plan with Iran,
> across Iraq to Syria, that would also potentially allow Iran to supply gas
> to Europe from its South Pars field shared with Qatar. The Memorandum of
> Understanding (MoU) for the project was signed in July 2012 - just as
> Syria's civil war was spreading to Damascus and Aleppo - and earlier this
> year Iraq signed aframework agreement for construction of the gas
> pipelines.The Iran-Iraq-Syria pipeline plan was a "direct slap in the
> face" to Qatar's plans. No wonder Saudi Prince Bandar bin Sultan, in a
> failed attempt to bribe Russia to switch sides, told President Vladmir
> Putin that "whatever regime comes after" Assad, it will be "completely" in
> Saudi Arabia's hands and will "not sign any agreement allowing any Gulf
> country to transport its gas across Syria to Europe and compete with
> Russian gas exports", according to diplomatic sources. When Putin refused,
> the Prince vowed military action.If Qatar is able to get natural gas
> flowing into Europe, that will be a significant blow to Russia.  So the
> conflict in Syria is actually much more about a pipeline than it is about
> the future of the Syrian people.  In a recent article, Paul McGuire
> summarized things quite nicely...
> The Nabucco Agreement was signed by a handful of European nations and
> Turkey back in 2009. It was an agreement to run a natural gas pipeline
> across Turkey into Austria, bypassing Russia again with Qatar in the mix
> as a supplier to a feeder pipeline via the proposed Arab pipeline from
> Libya to Egypt to Nabucco (is the picture getting clearer?). The problem
> with all of this is that a Russian backed Syria stands in the way.Qatar
> would love to sell its LNG to the EU and the hot Mediterranean markets.
> The problem for Qatar in achieving this is Saudi Arabia. The Saudis have
> already said "NO" to an overland pipe cutting across the Land of Saud. The
> only solution for Qatar if it wants to sell its oil is to cut a deal with
> the U.S.Recently Exxon Mobile and Qatar Petroleum International have made
> a $10 Billion deal that allows Exxon Mobile to sell natural gas through a
> port in Texas to the UK and Mediterranean markets. Qatar stands to make a
> lot of money and the only thing standing in the way of their aspirations
> is Syria.The US plays into this in that it has vast wells of natural gas,
> in fact the largest known supply in the world. There is a reason why
> natural gas prices have been suppressed for so long in the US. This is to
> set the stage for US involvement in the Natural Gas market in Europe while
> smashing the monopoly that the Russians have enjoyed for so long. What
> appears to be a conflict with Syria is really a conflict between the U.S.
> and Russia! The main cities of turmoil and conflict in Syria right now are
> Damascus, Homs, and Aleppo. These are the same cities that the proposed
> gas pipelines happen to run through. Qatar is the biggest financier of the
> Syrian uprising, having spent over $3 billion so far on the conflict. The
> other side of the story is Saudi Arabia, which finances anti-Assad groups
> in Syria. The Saudis do not want to be marginalized by Qatar; thus they
> too want to topple Assad and implant their own puppet government, one that
> would sign off on a pipeline deal and charge Qatar for running their pipes
> through to Nabucco.
> Yes, I know that this is all very complicated.
>
> But no matter how you slice it, there is absolutely no reason for the
> United States to be getting involved in this conflict.
>
> If the U.S. does get involved, we will actually be helping al-Qaeda
> terrorists that behead mothers and their infants...
> Al-Qaeda linked terrorists in Syria have beheaded all 24 Syrian passengers
> traveling from Tartus to Ras al-Ain in northeast of Syria, among them a
> mother and a 40-days old infant.Gunmen from the terrorist Islamic State of
> Iraq and Levant stopped the bus on the road in Talkalakh and killed
> everyone before setting the bus on fire.Is this really who we want to be
> "allied" with?
>
> And of course once we strike Syria, the war could escalate into a
> full-blown conflict very easily.
>
> If you believe that the Obama administration would never send U.S. troops
> into Syria, you are just being naive.  In fact, according to Jack
> Goldsmith, a professor at Harvard Law School, the proposed authorization
> to use military force that has been sent to Congress would leave the door
> wide open for American "boots on the ground"...
> The proposed AUMF focuses on Syrian WMD but is otherwise very broad.  It
> authorizes the President to use any element of the U.S. Armed Forces and
> any method of force.  It does not contain specific limits on targets –
> either in terms of the identity of the targets (e.g. the Syrian
> government, Syrian rebels, Hezbollah, Iran) or the geography of the
> targets.  Its main limit comes on the purposes for which force can be
> used.  Four points are worth making about these purposes.  First, the
> proposed AUMF authorizes the President to use force “in connection with”
> the use of WMD in the Syrian civil war. (It does not limit the President’s
> use force to the territory of Syria, but rather says that the use of force
> must have a connection to the use of WMD in the Syrian conflict.
> Activities outside Syria can and certainly do have a connection to the use
> of WMD in the Syrian civil war.).  Second, the use of force must be
> designed to “prevent or deter the use or proliferation” of WMDs “within,
> to or from Syria” or (broader yet) to “protect the United States and its
> allies and partners against the threat posed by such weapons.”  Third, the
> proposed AUMF gives the President final interpretive authority to
> determine when these criteria are satisfied (“as he determines to be
> necessary and appropriate”).  Fourth, the proposed AUMF contemplates no
> procedural restrictions on the President’s powers (such as a time limit).I
> think this AUMF has much broader implications than Ilya Somin described.
> Some questions for Congress to ponder:(1) Does the proposed AUMF authorize
> the President to take sides in the Syrian Civil War, or to attack Syrian
> rebels associated with al Qaeda, or to remove Assad from power?  Yes, as
> long as the President determines that any of these entities has a (mere)
> connection to the use of WMD in the Syrian civil war, and that the use of
> force against one of them would prevent or deter the use or proliferation
> of WMD within, or to and from, Syria, or protect the U.S. or its allies
> (e.g. Israel) against the (mere) threat posed by those weapons.  It is
> very easy to imagine the President making such determinations with regard
> to Assad or one or more of the rebel groups.
> (2) Does the proposed AUMF authorize the President to use force against
> Iran or Hezbollah, in Iran or Lebanon?  Again, yes, as long as the
> President determines that Iran or Hezbollah has a (mere) a connection to
> the use of WMD in the Syrian civil war, and the use of force against Iran
> or Hezbollah would prevent or deter the use or proliferation of WMD
> within, or to and from, Syria, or protect the U.S. or its allies (e.g.
> Israel) against the (mere) threat posed by those weapons.Would you like to
> send your own son or your own daughter to fight in Syria just so that a
> natural gas pipeline can be built?
>
> What the United States should be doing in this situation is so obvious
> that even the five-year-old grandson of Nancy Pelosi can figure it out...
> I'll tell you this story and then I really do have to go. My five-year-old
> grandson, as I was leaving San Francisco yesterday, he said to me, Mimi,
> my name, Mimi, war with Syria, are you yes war with Syria, no, war with
> Syria. And he's five years old. We're not talking about war; we're talking
> about action. Yes war with Syria, no with war in Syria. I said, 'Well,
> what do you think?' He said, 'I think no war.'Unfortunately, his
> grandmother and most of our other insane "leaders" in Washington D.C. seem
> absolutely determined to take us to war.
>
> In the end, how much American blood will be spilled over a stupid natural
> gas pipeline?
>
> This article first appeared here at the Economic Collapse Blog.  Michael
> Snyder is a writer, speaker and activist who writes and edits his own
> blogs The American Dream and Economic Collapse Blog. Follow him on Twitter
> here.
>
> http://www.activistpost.com/2013/09/is-united-states-going-to-go-to-war.html#more

I believe there is an elite cartel who are members of coordination groups, e.g. Bilderberg, Trilateral commission, Council on Foreign Relations, etc..

I believe that the dollar is the reserve currency (i.e. global unit-of-account) because most of the world's exported energy is priced in dollars.

I believe this cartel understands that the only solution to sovereign debt crisis is a new global SDR unit-of-account which is tied to a basket of assets and is independent of sovereign fiscal policy, i.e. all countries' currencies will float against these coming SDRs. Thus governments will run too high of debts, will be slave to the controller of the SDRs, as Europe's nations are now slave to the Euro controllers.

I believe the only way to force the world to use a global unit-of-account is to require it for purchases of things everyone needs, e.g. energy and global taxes (i.e. carbon credits). Anthropogenic Global Warming (AGW) is well known to be a fraud. It was popularized by elite controlled mass media and I believe ostensibly for the above purpose.

Thus the issue in the Middle East is that some countries refuse to join this plan and want to remain independent of it. Thus the plan that General Wesley Clark stated was in effect 20 days after 9/11, which is to overthrow 7 M.E. countries.

I thus believe the point of all this is to route control over energy supplies to those who follow the plan of this elite cartel.

Thus I don't believe the elite cartel is failing or losing power. I believe they will be even more powerful after the sovereign crisis is resolved in favor of this new SDR solution.

I am disappointed that Martin Armstrong does not write about or appear to share this perspective, i.e. he thinks the "Club" are idiots who can't tie their shoelaces and destined for failure and he things something like SDRs is necessary and good solution. For that reason, I am not sure if he is naive, complicit, or more knowledgeable than me.

For this reason, I think something like a better Bitcoin is the only savior of mankind at this point. Nevertheless, I am a pragmatist and recognize that I may just not have the correct perspective on human progress, cooperation, and the future.

Armstrong correctly explains that it is the depth-of-liquidity that maintains a reserve currency:

http://armstrongeconomics.com/2013/09/05/behind-the-curtain-why-syria-must-go-it-is-gas-this-time/

But that misses the point of what maintains the depth-of-liquidity.

The reason the dollar is now the reserve currency is because the international capital fled from Europe in the early 1900s to the USA. The USA became the dominant financial center with the rise of New York in the 1950s.

Capital fled from socialist (big government) Europe to capitalist (small government) USA, because the large government (as % of GDP) model was bankrupt and could only steal capital, not support return-on-investment.

However, if you are in control of the levers of the reserve currency and the immense power it yields, how do you prevent upstart economies from gaining the economy-of-scale to challenge the liquidity of the global reserve currency?

Well you make sure they always need to pay their major expenses in the reserve currency, thus you drain their productivity back to the liquidity of the reserve currency.

In the developing countries, food and energy are 30+% of the average families' budget. Cost of food derives from energy (fertilizer, tractors, and delivery to market). Thus if you price energy in the reserve currency, you keep the developing countries on the hamster wheel.

Now the big change coming after this sovereign crisis is that the reserve currency won't be a particular nation's currency, rather it will be an SDR attached to a basket of assets (which the elite can manipulate in price via their control of energy) which all nations' currencies float against.

Thus no nation will be able to sell international bonds in their national currency and will be completely enslaved by the elite.

Unfortunately it does not, because such coins which don't use PoW can not be secure. This is an unarguable mathematical conclusion:

https://bitcointalk.org/index.php?topic=285701.msg3064154#msg3064154
https://bitcointalk.org/index.php?topic=285701.msg3061431#msg3061431

Worms meet can and can opener > hand > Excelsior.

An alternative goal could be to shut off M.E. energy to give control to the big oil companies who control USA natural gas.

I don't know if the USA has plans to ship LNG into Europe from Louisiana. Seems easier to reach Europe from there, and then use BP's pipeline across the USA to ship LNG a shorter distance from west coast to Asia.

The elite have options.

Saudi is one of those countries with an exploding population, and thus if you shut off oil income, the entire M.E. can go fundamentalist chaos.

I had understood the plan was to topple Syria and Yemen before Saudi Arabia. First they wanted to suck Saudi Arabia in as doing these illegal activities, then it can revealed in a Wikileaks to turn the wrath of Arabs against Arabs.

Total chaos is indeed I think the more likely master plan.

It is obvious that Halliburton, BP et al have been preparing for a major future for exporting LNG and raising production levels with fracking. Halliburton (Dick Cheney) invented fracking.

> I still think the Syria issue could remain an indefinite impasse for quite
> some time.
> I also think there could be a bargain being set up where Russia and Iran
> maintain some autonomy while the monarchies of Saudi Arabia, Qatar, and
> Bahrain are allowed to be overthrown.  Saudi Arabia is in the crosshairs,
> the neoliberals are setting up the taken down in the MSM and using
> gatekeeper writers in the alternative media.  If my suspicions are
> correct, then this would be a very slick and convoluted move that few
> could have guessed - a fascinating twist.

I addressed those issues at the links I provided:


Also, we can decentralize energy with PoW:

https://bitcointalk.org/index.php?topic=285701.msg3090924#msg3090924

http://www.nestmann.com/civil-forfeiture-of-cash-it-could-happen-to-you

Yeah but why is Russia not going to participate?

Because Russia also wants the Middle East to fall into chaos, so that they won't receive that competition for oil and gas pipeline to Europe.

Russia is pretending to be the good guy to gain international power, yet they also want the USA to attack, but they want to be in public position of being against it, so when they profit from oil, no one will accuse them.

Harboring Snowden is to gain that appearance of being against the USA.

In fact, the oil powers want to have monopoly on oil and want to put the M.E. into chaos, as they ramp up production in the USA (Russia has its production with a strong military to protect it) and interfere with production any where else in the world, e.g. Spratly Islands in South China / West Philippines Sea, in Nigera, Middle East, Venezuela, etc.

---

> I thought about this scenario several times and was
> not convinced it has a high degree of probability.The
> level of destruction you describe would destroy the
> already teetering global economy and unleash chaos in
> the developed world.  I don't believe TPTB are able or
> willing to simultaneously risk a battle on the home front
> and international conflict, esp. at a time when public
> consciousness is about to reach a tipping point.

They need to blame the economic implosion coming on something. Better to blame it on Obama, than the banks.

I pretty sure about this. They always planned to sacrifice Obama, as they did Hitler.

> Of course, it's important to consider all possibilities.
> I strongly suspect that many times Russia straddles the
> globalism framework and might routinely cooperate in the
> geopolitical theater.  I did warn today in comments on the
> Syria issue that we should be aware that the worlds' elites
> might cooperate to share M.E. power and profits and in the
> process come to an agreement to control the masses in their
> global techno fascist surveillance prison.  That being said,
> I don't think the Russians want to be bootlickers for western
> elites, especially after the way they were humiliated when their economy collapsed - made to grovel.  Let's hope egos and
> centuries of mistrust force a compromise of a multipolar world,
> that would give us some breathing room. As I said before, maybe
> plan B is to foment unrest in the Gulf monarchy states.  That
> would work out well for the western elites and Russia, plus
> Russia's satellite Syria would be spared.  Maybe what is
> happening now is the big set up for "plan B," the expected
> compromise (kind of Hegelian too).  That would be very slick
> and the staging has the trademark appearance of Brzezinski et al.

It is possible Syria and Saudi will be spared, but how do you get chaos in the Middle East to both provide distraction about the economy and also to give the USA a monopoly on energy without chaos in Syria (thus Iran, Israel, etc)?

Ha ha I guess you both look a little silly/ stupid with this recent news hey ?

Mr bible and Mr paranoid ?

The Russian Federation just brokered the deal that allowes the west to save itself from itself.

This deal was brokered by foreign minister Lavrov the face of the syrian war , the man on the right side of history , the man of peace .

You poor confused children don't understand that the Russian Federation has moved on from the 20th century idea of occupation and aggression .

The system they are emplacing the structure of which was built on multidimensional information systems does not need war.

So now if the " west" insists on attacking this nation the minority agressors that lead our majority peacful human populations , they do so with the lowest and smallest amount of political and social credibility. 

Try hard to understand smart friends, when you are forced to attack  you lose.

It time to step back from the system of war , as the major human population becomes aware.

It is all about the USA overthrowing the dictators who are not friendly to Western oil corporations. Simple as that. The Neocons are nothing but an arm of the oil behemoths.

http://www.independent.co.uk/news/world/middle-east/iran-to-send-4000-troops-to-aid-president-assad-forces-in-syria-8660358.html

"Arab dictators are supposed to be deposed – unless they are the friendly kings or emirs of the Gulf"

"In Arab eyes, Israel’s 2006 war against the Shia Hizballah was an attempt to strike at the heart of Iran. The West’s support for Syrian rebels is a strategic attempt to crush Iran. But Iran is going to take the offensive.  Even for the Middle East, these are high stakes."

http://armstrongeconomics.com/2013/09/12/putin-pens-nyt-op-ed-urging-caution-in-syria-very-informative/

"This is absolutely correct and every source I have confirms the US will undermind the only chance we have to help President Hassan Rouhani in Iran who was elected by a landslide of young Iranian who disagree with the old hardliners and want Iran to rejoin the world community. Obama will destroy the creditbility of those election and Rouhani will not stand a chance."

 ;D This

See first B&W chart (energy paradigm waves) down the page after the stock market charts:

http://www.gold-eagle.com/article/breakdown

I guess you are too naive to see that Putin is just protecting his monopoly on natural gas exports to Europe.

And he packaged in a "I am a good guy" to fool you.

http://blog.mpettis.com/2013/09/rebalancing-and-long-term-growth/#comment-1406


Amen to orthogonal models (don't expect anyone to really grasp the distinction in your point though):

https://groups.google.com/d/msg/scala-language/lChLcLES_Dk/b78ywjsHcbMJ


Coup de Pettis, merci beaucoup!


And the high-consumption companies are a greater share of global GDP, thus expect a massive implosion of global GDP ahead, which will mean the high-end 3-4% growth target for China is impossible.


Yup, it ain't gonna b purty bro.


Now you are being more realistic.

Cheers.

http://en.rian.ru/images/16132/59/161325922.jpg

I don't know what your talking about ?


In all seriousness you are deluded, the Russian Federation is stopping an attack , you can talk about where gas pipelines go all day , so what , Syria is a nation it's being attacked by bank sponsored cannibal terrorists , Russia is sticking to int law and helping the world.   The moon is going around the earth as well , should we be talking about that in relation to the Presidents evil plans to defend , Russia's interests and by default humanity .

The sober truth about USA economic trajectory. There is a structural shift ongoing along with global sovereign debt collapse.

http://soberlook.com/2013/04/what-happens-to-workers-who-drop-out-of.html

---

Birdbrain, I guess you forgot about all the people Putin has murdered to maintain power. Like the guy they poisoned with radiation who died a few days later in the UK.

Shouldn't this be in some political section of the forums or something?

The middle east isn't using altcoins for all this oil crap yet so why is this here in altcoins section?

-MarkM-

it (this topic) exists so I could post a picture of the President with a puppy - for that reason and that reason only.

all of these 9 pages have built up to this point , Anonymint will tell you himself.

he is in full compliance with he puppy picture.

i'd even go as far as to say he is "pro" the President / Puppy picture.

The OP of this thread is being further explained and agreed to over in another thread:

https://bitcointalk.org/index.php?topic=195275.msg3350891#msg3350891