All of that debt is in the form of federal reserve notes. BTW, that amount is trivial in comparison to non-federal debt such as personal debt (everybody who owes money to credit card companies and banks), corporate debt, and debt owed by state and local governments. Of those the debt owed by California and a couple of other states (Illinois and Michigan come to mind as well) are the big issues as those government can't simply print up the money to inflate the currency away.
Yeah, Bitcoins would seem incredibly valuable as a way to "park" assets in such an economic upheaval.
According www.usdebtclock.org total personal debt (mortgage + consumer + credit card) is now 16.212 Trillion, that's only 2 Trillion more than Federal debt. State debt and municipal debt combined are only 3.2 Trillion. So the Federal government debt now constitutes 14 Trillion of 33.6 Trillion's worth of national, state, municipal and private debt. The federal government is by implication responsible for the 3.2 trillion in state and muni debt, I can't imagine them ignoring it if the defaults begin. Even if they do attempt to ignore it the federal reserve will step in to "stabilize" the situation by beginning to buy up that debt too. Through the FDIC the federal government is actually responsible for ALL debt since the FDIC is implicitly backed by the treasury. So to summarize, the Fed will through QE2 support the treasury. The treasury will support the states and the munis. The FDIC will support the deposits (which is all backed by other debt and basically amounts to all the money and therefore all the debt in the system) and the FDIC is in turn supported by the Treasury. End game, the US defaults on ALL it's debts by converting it all into "sovereign" money and paying off the friends of the fed first with everybody else getting in line behind them. I guess only a very small proportion of people will get paid before the dollar crashes and the rest of the line is sent home holding bricks of useless cash. Alternative is let the system fail. Either Ron Paul style by letting people opt out early into alternative currencies or by simply letting it crush itself under it's own weight. Result is actually quite similar, US needs to default and get a reset. Investors in US bonds need to take a knock since it wasn't such a prudent investment to kick off with. If left unsupported the system would clean itself out very quickly and the US would have a real recovery within 12 to 18 months. It would however scare the life out of the populous. If the federal government keeps trying to "fix" it the system might take up to a decade to restructure, very bad outcome as this would greatly prolong the suffering. |
|
|
|
|
Watched Mao's last dancer yesterday night, found it quite entertaining.
Something interesting I noticed was how prosperous 1981 USA was vs 1981 China and what a big impact the discrepancy between what Lee was taught in school and the reality on the ground must have been for him. Also the US was miles and miles ahead of China at that stage and China really posed very little threat to them (again at that stage), military wise or economically. Almost all the would be needed to convert peasants to freedom was to show them the enormous gap between slave labour under communism and life under a relatively free system. Unfortunately the US now represents China more than it did in 1981 and China represents the US more than in 1981.
So as the system deteriorates due to constant constriction from bureaucrats, I think it is possible for the remaining pockets of freedom to progress so far beyond the majority of the system in terms of economic influence and technology that an oppressive system would no longer pose a coercive threat to even a small free society.
As a thought experiment, imagine what a chain of islands with a total population of only 10 million could accomplish under unfettered markets given the starting point of today's technology vs the US if the current course is kept over a 50 year period.
PS I of course assume the small free society is at least left relatively unhindered for the most of the 50 years.
|
|
|
|
|
They'll have to brute force them from our cold dead consoles!
|
|
|
|
Hi guys, Don't know how many of you are aware of the indy tv-show Pioneer One. Basically it's a fan base funded television show that has been released via the torrent network. Check it out http://pioneerone.tv/ |
|
|
|
|
Gene, after reading some of your previous posts I can see where you are coming from. If I understand your view correctly you are concerned that government and libertarian arguments are used in favour of rich entrenched interests and do not end up improving the lives of everyone. I can totally respect that view.
However if we ever did have your kind of world, and there were plans to improve life in some way and I chose not to participate. Would someone need to force me to or could I go my merry way in peace?
|
|
|
|
What I see here are several people who imagine themselves as lords over their own private domains who can exist completely independently of others. What utter nonsense. The limiting case of these kinds of hallucinations is a situation where everyone is in a race to the bottom to abandon the very qualities that make them human. It doesn't take much thinking to anticipate what a world based on values of absolute greed and selfishness would be. As a matter of fact, we can see what such a world would look like. Check out Somalia. Tell us how nice it would be to raise a family there.
Thankfully, normal humans understand that we require cooperative efforts to survive and improve our condition. Sure, democracy isn't perfect. It just happens to be far better than anything else we know of. Compromises are obviously required. The question we should be asking is: do we wish to make our lives better individually at the expense of others, or do we try to take the concepts of solidarity and basic human decency seriously? What kind of world do we wish to live in? To see our children live in?
You may all go back to your regularly scheduled Ayn Rand readings. Good day.
Ayn Rand was an objectivist and she did believe in limited government but not in Anarchy. She said Anarchy would destroy civilization and freedom, much like you are stating now. On the other side many Anarchists are not Anarcho-Capitalists and Anarcho-Capitalists are not necessarily Objectivists. Most Libertarians are not devout Anarcho-Capitalists and would not favour a Somalia like situation. So exactly who of us are you attacking  If all these groups of us can find an amicable way to debate why not rather join the amicable debate? "Thankfully, normal humans understand that we require cooperative efforts to survive and improve our condition."
The entire point of Austro-Libertarianism (The view espousing limited government as a logical outflow from economic understanding) can almost be summed up by this sentence of yours. The more freely and the more easily that can happen the more civilized civilization becomes. Within democracy you actually get so varied a set of views of what is a government and such a large variety of outcomes that there is actually choice as to which type of democracy is the best type of democracy. So to correct Churchill; a constitutional democracy based on limited style of government is not perfect but it's the best type of democracy we know about. Besides if you are an American and are referring to how well it seems to have worked there, remember that you are in a constitutional republic (or at least you used to be) and not in a pure democracy that is part of why it worked out so well. |
|
|
|
Hi again guys, Very happy at how this post is turning out  I started skimming over the last few posts since they seem to debate specifics regarding what would constitute freedom. A lot of people I talk to are very "libertarian" although don't go into full blown anarcho-whateverism. Most of these people actually have no conscious political interest but get quite excited when they begin to see that our present form of government would do better by getting out of the way and allowing people to solve their own problems. If I can throw in a uniting cry "the freedom to solve out own problems" I think we can go a long way to identifying people and organizations that are useful and not so useful to reaching the desired ends. But also it is necessary for people to debate until they can settle on a well formed view that has withstood debate. What I find a little disturbing about many of the "freedom minded" is how much they focus on the decay of freedom. They go on and on about how everything will lead us into the dark ages and ignore incremental progress like the collapse of communism, the liberalization of China, the end of Apartheid, the changes in Swedish socialism since the 1990s. I personally believe and hope that most people, even those in government, are open to "the freedom to solve our own problems". People also become very open when it becomes abundantly obvious that the gov. is in the way. A great mercy from the Most High is that the market eventually wins. Even if the government wins for a period of time, eventually the market will overwhelm their policies through economic forces. Unfortunately that might be proceeded by a few decades, or even centuries of regression. Another encouraging idea is that there are always pockets of freedom. During the Soviet Union there were black markets, I'm sure that even if we "lose" there will be a remnant where ideas can be debated freely even if it is only the super geeky. I suppose the next questions are: *How do we get members for the cryptography revolution? *How do we complete the cryptography revolution? |
|
|
|
|
One of my great fears, and I'm sure some of you share it, is that an oppressive and dictatorial style of government will become the norm and that these local governments will have supranational structures imposing on them the equivalent of one world government.
One of the ways that the people can remain free is by privately controlling the means of communication. The internet is for instance 99% privately owned. The entire government portion can be shut down to tomorrow and the world might not even notice. Unfortunately the political class specialize in showing up to a private party late and then shouting "lets get this party started!" as they impose rations and regulations on previously content happy party goers. I suspect this is why they call their groupings "parties"
The internet has not escaped their attention and obviously we see their fingers in everything. They shout terrorism and child pornography to high heaven but forget that the people themselves are vested in eradicating child pornography and that terrorism is mostly aimed at governments (directly or indirectly).
Cryptography of course makes the common man stronger than the NSA. Thanks to communications protocols based on redundancy and privacy ensuring software it has become possible to read your e-mail from almost anywhere with more secrecy than the US military can apply to its top secret documents. Thanks to cryptography applied to VPNs I can bypass "US only" restrictions and access sites like Hulu.com. The cypher-sphere creates a place of freedom and anonymity that is guaranteed by mathematics and not the whim of an elected official.
My question:
Do you think we will prevail or will government grow until it crushes its host?
|
|
|
|
Both silver & gold have significant industrial uses, as well as potential uses that are cost prohibitive due to the high monetary value. Off the top of my head, in the absence of a functioning market for silver or gold (unlikely, even in a war zone, Nazi sub captains carried a bar of gold for this reason) then gold makes a better bullet than lead and silver has antibiotic properties that are significant enough to be critical in dire situations without proper modern medical facilities.
Conclusion remains the same, money does not need to have alternative uses to be useful or valuable. If it properly fulfills the requirements of sound money it will be valuable. |
|
|
|
|
If I post something here and nobody reads it... did it have value?
|
|
|
|
Bitcoin does not require intrinsic value to function well as a medium of exchange, but gold does not support your statement. Gold has quite a bit of intrinsic value, which is one reason that it has been such a sound money for over 5000 years.
Don't get me wrong I really like gold and silver and am in both, but honestly, if denied access to a functioning marketplace what do I use them for? "If you see the price of gold go up beyond $2000 you might want to sell some of your gold and buy lead" -Robert Kiyosaki |
|
|
|
"Intrinsic value" is a value beyond what the object has as a medium of exchange. For example, a peanut farmer cannot eat all his crop (perhaps he doesn't even like peanuts), so his crop has no intrinisc value for himself. However, he sells his products to people who, presumedly, do have a use for said peanuts. To the farmer, the peanut crop has little or no intrinsic value, but to the general population it does. As a result, the crop has a real market value that is independent of it's trade value (to the farmer) and independent of speculative value. Said another way, even if peanuts were used as a medium of exchange in his twon, the farmer's crop value would not drop to zero with the introduction of a better medium of exchange, such as silver coins. Likewise, a mattress or shelter also has a definable value outside of the context of their trade value.
Thus, a paper currency has little intrinisc value.
Very, very well stated. However, I still think it is semantic, if peanuts were used as trade but also as food that could also be said to give them "alternative" value. If they were no longer money, they could still be food, but a better peanut-variety could supplant them as a desirable food source and then they'd be back to square one. Perhaps they could then be used in a bio fuel plant. The fact that a peanut is more versatile than a bitcoin and from a semantic POV has more "intrinsic value" does not make it more valuable as a currency. Bitcoin lacks "alternative value" as something else outside maybe an experiment in cryptography. This is somewhat unimportant since all the qualities it does have makes it a pretty decent form of money. If "alternative value" == "intrinisc value" then I'd have to answer the question "Should money have intrisic value?" with a resounding no. Both bitcoin and gold prove this. |
|
|
|
My question is this: - Is the whole peak oil thing and it's doomsday predictions just a bunch of mis-information?
- If the consequences of peak oil are what some of these "experts" are predicting, what contingency plans do all of you have in place?
- Assuming oil was exhausted, do you think the market can innovate to support the current world population? If so, how? I personally have yet to see a technology or resource that could even remotely compete with all of oil's uses.
Essentially, I'm just trying to see whether any bitcoiners think there is validity to all of these peak-oil claims. And if there is, what you propose we do about it. I'm so glad I get some exposure to this kind of discussion again. I want to go off on a bit of a tangent and reference Nassim Taleb and say that it might be more productive for us to simply admit that we do not know. I've been on so many band wagons this last decade that I've started to wonder if I have a fascination with apocalyptic scenarios (Global Warming / Climate Change, Economic Collapse, Peak Oil, Global Federalization) Some of these things are starting to seem like less of an issue (with the exception of US economic collapse) So for me personally I don't know. What I do think is that the entire system has not been allowed exposure to enough random shocks to ensure a stable base. So due to governments, oligarchies, supranational organizations all maintaining the status quo in many fields critical to human survival for too long, it makes any pending adjustment back to something more efficient and robust a potentially painful and very unpredictable one. Something might go wrong but it might be completely unexpected (nuclear war for instance) The only contingency that I can come up with is to attempt to prepare and benefit from what you feel will most likely happen (me I'm buying bullion and increasing current cash flow) but at the same time prepare for a world that may be much more chaotic than it is now. The second part would need us to turn into a well educated survivalists that are motivated by the fun and excitement of experimentation. That makes it both enjoyable in the present and profitable in the future. |
|
|
|
Money/currency has intrinsic value because people need and value the abilities to:
1.Trade in something that is widely accepted for almost any other good/service.
2.Highly divisible.
3.Non perishable
4.Could act as a store of value. (Though this is somewhat optional)
That's not intrinsic value, that's monetary value. Very different thing. It is necessary for people to have a highly liquid means of trade same as it is necessary for them to sleep comfortably or have comfortable shelter. A house or a bed can then be said to have no intrinsic value but "shelter value" and "sleep value". The discussion is semantic. We need money, else trade is going to be laborious and inefficient. It is filling these needs that grants money its usefulness to us, its 'value'. |
|
|
|
|
Money/currency has intrinsic value because people need and value the abilities to:
1.Trade in something that is widely accepted for almost any other good/service.
2.Highly divisible.
3.Non perishable
4.Could act as a store of value. (Though this is somewhat optional)
Even ZimDollars had intrinsic value while in use if we look at what money is useful for. Although it's relative value compared to other goods and services was in continuous decline.
BitCoin fully fulfills these requirements even adding more features and therefore has "intrinsic" value. Saying that money has no intrinsic value is an existential observation akin to saying food has no value since you will die anyway. Money is an crucial means to a desired end.
|
|
|
|
|
I understand that the current system does not allow for a near immediate secure update, but wouldn't a system that can, in addition to full security, provide a faster clearing time be preferable to bitcoin and end up supplanting it?
|
|
|
|
|
"The best way to collapse a government is to let it run its course."
-Martin A. Armstrong
If BTC is made illegal (most definitely will be in many jurisdictions) BTC is not the only one going down. Gold and silver will also probably be confiscated or trade will be prohibited.
If there are no more hiding places for people to keep save the fruits of their labors then the whole economy will grind to a halt causing incredible amounts of unnecessary suffering. Eventually this suffering will peculate up to the powers that be and a policy change will occur. IE soviet union disbanding, apartheid being dropped from law etc. etc.
In the meanwhile there are incredible investment opportunities as the government cannot and is not interested in controlling absolutely everything.
But we should pray that the changes in policy occur sooner rather than later.
|
|
|
|
Doubt it. That's not a bug, but a feature.
Okay, but a feature in that it simply takes longer or in that it incentivizes people to add transaction fees? |
|
|
|
|
Personally I see the same value in BTC as I do in gold. It has all the qualities of a store of value and a currency.
So personally I'm willing to take a small portion of my income and buy Bitcoins as a speculative investment. I base this on the soundish economics that there is a coming multi-national currency/debt default and a bit of blind trust and belief in the idea of BTC.
This stimulates the economy in that businesses are encouraged to trade in BTC because they can always cash out to a BTC exchange who then sells their BTC to me for real money.
Also if a steady rise in the BTC price is observed as speculators like me go long, this will encourage businesses that BTC is a save method of payment which is increasing in "real world" value and not decreasing.
|
|
|
|
|
Show Posts
