Bitcoin Forum
December 01, 2021, 01:31:25 AM *
News: Latest Bitcoin Core release: 22.0 [Torrent]
 
  Home Help Search Login Register More  
  Show Posts
Pages: « 1 2 3 4 5 6 [7] 8 9 10 11 12 13 14 »
121  Economy / Economics / Re: Martin Armstrong Discussion on: April 11, 2016, 07:11:13 AM
I seem to recall that Fred Harrison had a notional 22 year cycle for real estate, partly
based on generational cycles. There are other cycles - see this :

Years start from a strong el nino 82/83 87/88 97/98 09/10 16/17?
 http://www.reuters.com/article/us-weather-lanina-braun-idUSKCN0X215F
"A slowdown or reversal in this cooling trend does not seem likely as the atmosphere is becoming increasingly supportive of it. The Southern Oscillation Index, a measure of pressure tendencies over the Pacific Ocean, made a massive leap out of El Niño-favoring territory last month and is now ahead of the pace of similar years 1998 and 2010 (tmsnrt.rs/1TwETSN)."
"But given both the record peak it is coming from and the recent changes in the ocean and atmosphere, it would actually not be surprising to see the transition happen just as quickly as in 1998, if we truly are to enter into a stronger La Nina (tmsnrt.rs/1N5ek0p)."
"Now the model predicts a healthy La Niña by July, further dismantling the delayed La Nina theory (tmsnrt.rs/1N5h1PA).

The benefit of a model comes from your ability to ask it the right questions, so adding data
to a model doesn't necessarily help. I'd rate Socrates as 60% MA and 40% data.
122  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: April 11, 2016, 07:04:05 AM
Just for the humor

http://www.zerohedge.com/news/2016-04-10/italy-seeks-last-resort-bailout-fund-ringfence-troubled-banks-meeting-monday
"Italian bank shares have lost almost half their value so far this year amid investor worries over a E360bn pile of non-performing loans - equivalent to about a fifth of GDP. Lenders' profitability has been hit by a crippling three-year recession."
Comments :
"SumTing Wong : Why am I seeing Monty Python's bit about "bring out your dead" in my mind?"
"CarpetShag : How about a "cordon sanitaire""
"gatorengineer : Kinda like the cartoon monster swallowing the dynamite."
"Yen Cross : You can't make this shit up... Ohh wait... " Yes you can"."

Does Kuroda still believe in PeterPan? Who knows?
123  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: April 09, 2016, 09:05:43 PM
Recent news on tax havens got me thinking about bitcoin - but see this:

http://amlcft.com/fincen-and-nar-jointly-release-voluntary-aml-guidelines-for-real-estate-professionals/
"The National Association of Realtors (NAR) has just published a paper entitled: Anti-Money Laundering Guidelines for Real Estate Professionals. The fact sheet and suggested voluntary guidelines were developed over the past several months in collaboration with the U.S. Department of the Treasury. In February of this year, Treasury issued regulations for non-bank financial institutions requiring certain plans and documentation for anti-money laundering actions. At that time Treasury exempted the real estate industry from the regulations because most cash involved in real estate transactions is regulated through other entities."

So, Real Esatate purchases in, for example, New York, or London get a
pass from the legislators but bitcoin gets hit with AML and KYC, both barrels?
Clearly bitcoin exchanges are not making the right "noises" in the halls of
power, or maybe terrorists, criminals and paedofiles just do not buy property?

There may be a simpler explanation for this and it has to do with PriviLege
and taxation. You may, or may not, be surprised to hear that those working for
the European Commission, the IMF, the UN, and some other bodies are, for all
practical purposes, above the laws of their host country. Mostly, there are
sensible reasons for this - raping your maid is not one of them BTW. Unfortunately,
this does, of necessity, create a "Them" and "Us" and those of "Us" with
sociopatic or psychopathic tendencies by their very nature will want to transit
to "Them" status to carry on their activities with fewer restrictions, such as
having to pay taxes, or explaining how the money got into their bank account.
Hence in a world where the Central Bankers are busy doing asset price inflation,
the PriviLeged would like to have as few questions asked about their property
purchases, and their legislators seem happy to oblige - and I chose that word
carefully.

I put this up front because it is too easy to become focussed on the mechanics
of money laundering and of tax evasion when it is the people involved who matter.

So, 2.6TB, 11+ million records worked on by 400 journalists . . .
http://www.irishtimes.com/business/financial-services/who-are-mossack-fonseca-1.2593760
"Today, Mossack Fonseca is considered one of the world's five biggest wholesalers of offshore secrecy. It has more than more than 500 employees and collaborators in more than 40 offices around the world, including three in Switzerland and eight in China."
And no outcry in the main stream media about hacking, or national security, or
copyright or trade secrets, the sort of things that bitcoin gets pilloried for
when the MSM is having a quiet day. Could it be because the legislators want
this sunk quickly and quietly? Obama and Cameron and others have loudly proclaimed
that something will be done to get everyone to pay their taxes, but nothing gets
done. I seem to recall that certain resources got cut just as they appeared to be
getting somewhere. And see this:
http://www.zerohedge.com/news/2016-04-06/panama-tax-haven-leak-bigger-picture
"The consequence of its operations is that money laundering is now at such levels and so widespread that the authorities have recently admitted defeat in its battle of attrition by stating openly it has been completely overwhelmed and lost control. Keith Bristow Director-General of the UKs National Crime Agency said just six months ago that the sheer scale of crime and its subsequent money laundering operations was "a strategic threat" to the country's economy and reputation and that "high-end money laundering is a major risk"."
To judge from the comment "one of the world's five biggest" it's possible to say
that millions of high net worth individuals are hiding their ownership of property.

I'm fond of privacy myself, and that's one of the reasons I own bitcoin, but I've
paid my taxes. It goes with the territory, so to speak - in ancient Rome for example
"Every five years a citizen had to register himself there. He had to declare the
name of his wife, the number of his children, his property, his possessions, from
his slaves to his ready cash to his wife's jewels and clothes. The State had a right
to know everything, for the Romans believed that even "personal tastes and appetites
should be subject to surveillance and review."[1]" Hence, to maintain a balance
between power and responsibility, those with the most should be the most open -
however, surveillance as a method of control and of oppression is an entirely different
matter.

Let me suggest that the world is moving from a time of plenty to a time of famine.
The incoming changes are too complex to deal with here, but clearly, benefits
promised will be unable to be delivered. Worse still, the privacy and PriviLege
outlined above will make grave situations worse. "They" will evade taxation while what
little we have will be taken from us by the State. This system needs to be changed
and change will come neither quickly nor easily to the Leona Hemsleys of the world
who ensure "only the little people pay taxes".

Oh, and BTW, "much of the leaked information will remain private"
You didn't think they would let us know their secrets did you? You'll hear just
enough to divert attention from what's really going on.

[1] Plutarch, Cato the Elder, 16.
124  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: April 09, 2016, 09:04:39 PM
A week ago, I posted this in another thread. Apart from one comment
to the effect that "this can't be so" things carried on with the usual
"Capitalist Pigs" and "Socialist Scum" way of thinking. I'm posting
here just for the record:

Y'all make yourselves comfortable, this one will take a little time.

I'll begin with the thought that to really mess up an economy, some
form of centralised decision making is needed. That's very different
from Adam Smith's invisible hand and its implied equal distribution of
power and insight that enable each individual to perfectly understand
the future and to have the fortitude to maximise his or her personal
outcomes irrespective of short term gains. Indeed, that perfection
presupposes that each individual is born into the world with perfect
knowledge. The real world is somewhat different.

In a way reminiscent of the Big Bang theory, microscopic advantages can
play out over long periods of time to create Empires and Catastrophes.
The key to this amplification is referred to in monetary terms as
compound interest. Compound interest sets in motion the idea that
something can grow exponentially forever. In a finite world, and given
differences that are far from microscopic, despite best efforts at
competition, one entity can eventually buy everything. This is the
perfect capitalist monopoly, something the game called "Monopoly" was
intended to demonstrate.

This illusion depends on the assent of a vast majority of the
population. The very idea of money is the outcome of a belief that debt
will be paid, and this in turn depends on social norms collectively
agreed. To the extent that monopoly and competitive capitalism
exists, it owes its existence to these conventions. There is thus
a paradox in the concept of Perfect Communism : The State owns
everything including the individual, but then requires the consent of
everyone for its existence. The Perfect Capitalist has a similar
paradox: his dependence on the legitimate monopoly of violence of the
State for his or her existence, but owning everything not owned by the
State.

Some may find difficulty in understanding that  Perfect Communism and
Perfect Capitalism should coalesce to the same solution, but from the
point of view of an owned individual, these differences are at best,
academic. Individuals find economies of scale in mutual cooperation,
and such conflicts that do arise are settled in a market of buyers
and sellers. The mutual satisfaction of these deals is unavailable in
the winner-takes-all world of grand strategies, that usually forces
war onto one or more of the players.

For the State and the Capitalist, War is a convenience for demanding
complete subservience and loyalty in their populations, while at the
same time diverting attention from the conflicts of interest writ large.
Chief among these are the paradox referred to earlier: the moment that
Perfect Control is manifest, it becomes the moment that collapse begins.

Left to itself, the system would endlessly cycle through the rise of the
Individual, the rise of the State, the rise of the Capitalist, and into
Collapse. As a consequence, political and monetary systems have grown to
mitigate these long wave cycles, seeking to move to a quasi-stable
equilibrium that maximises the wellbeing of elite sectors within
populations. Despite protestations, it is clearly not in the best
interests of any elite that resources, information and power structures
should be diffused through the population because that would strengthen
the invisible hand of the majority to produce an outcome that may more
effectively promotes the interests of society as a whole.

Consider Durkheim's New Religion of the West: The cult of the Individual,
finding expression in the Enlightenment, in the French Revolution, and
more recently in the youth movements of 1960's, and 1970's. Did
prosperity bring individual freedom, or did individual freedom bring
prosperity? Can proof by contradiction provide an answer?   

Consider, for example, the waging of war. As explained above, war is
almost never in the interests of the mass of individuals but most often
an unintended outcome of the narrow concentration of wealth and power.
Those waging war are certainly conscious of the enormous costs, but
calculate that the burden of these costs is either worth paying or
will be paid by others. Rarely are the costs paid for in advance, but
almost always by increases in public debt. Indeed, in today's world,
public debt, that burden upon the taxpayer, is the only available
recourse. Were the elite forced to pay for that war themselves it would
entirely negate the reason for their existence. 

Thus the Elite faces a choice: War, and poverty for the masses, or share
as an individual and invite prosperity. Thus, individual freedom comes
first and prosperity for all follows.

Well, that's the theory. How does this work out in practice?
In the long run, you get a steady drift toward totalitarianism and the
pretence of economic "stability" followed by catastrophic collapse and
war. Keep an eye on economic inequality as this tracks the progress of
power moving into the hands of the PriviLeged.

In the near term? That depends on where you live. Nothing says
instability like the gulf between the actions of the ECB in propping
up the EuroZone's financial structure, and action in real life to
forestall a wave of migrants seeking a home in Europe. There are less
obvious contradictions in Asia, and in North America, but Europe is
the game in play at the moment. To state the obvious, Germany could
have transferred work to Greece, but preferred to keep the work
within its borders and to invite migrants from outside the EU to
grow its GDP. Weren't the Spaniards, Irish, Poles, Ukrainian workers
good enough, or desperate enough?

I'll give the EuroZone another two years, a little less if the UK votes
to exit this year, could be longer if they get lucky. All of the
leaders that could potentially hold the thing together are now damaged
goods, and well past their sell-by date. But to try to keep things under
control, there will be more pressure to reduce individual freedoms.
"We are all in this together" - well Mr Cameron, some are more "in it"
than others, and as Mr Hollande (18% popularity) found out, Edicts do not
always pass. 

And what do the migrants, perhaps 80% young unskilled men do once
they set foot on a southern Mediterranean shore where the unemployment
rate among young unskilled nationals approaches 50%? Make matters
much worse, and they will keep coming until the balance of economics
compels them to stay in their home country, or migrate elsewhere.
That is almost as absurd as paying people to dig holes and others to
fill them in again thus boosting GDP and giving a fake impression of
growth. Or, in a more technically advanced setting, bomb a country's
infrastructure back to the stone age and them provide billions in aid
to rebuild it in exchange for resources.

Ah, yes, resources. Scarce resources. When resources become scarce,
they either get rationed or monopolised, and my bets are for more
rationing, which means more controls, more government, less freedom.
And that in turn means less growth, specifically, lower global
productivity, and down that road lies collapse via hyperinflation
and depression. Everywhere.

Hang onto your bitcoin, and neither a debtor nor a lender be. 
 
PS: And the latest? There seems to be competition to see who can cause
the biggest unnecessary crisis in Greece (see IMF). Do they actually
think they are in control of this? 

It's likely that "neither a debtor nor a lender be" needs some further
explanation, though I should point out that money was not the intended
focus of my earlier post.

If you are in business, borrowing and lending (extending credit) is
unavoidable. It goes with the territory. The advice really makes the
point that you should avoid placing your future in someone else's hands,
and most certainly to avoid borrowing in order to extend a loan
because that is the business of banks. 

Today, much of the stigma is gone from being in debt, and the linkage
between debt and prison is gone. While forms of slavery still exist
in the world today, to most of humanity, the idea of owning another
person is repugnant. That enlightenment is recent, perhaps less than
200 years, and is perhaps the result of machines costing less than
people. It perhaps the benign face of Capitalism.

Regarding the question of why money must increase, the time preference
of consumers and others is the answer. See here :
http://www.zerohedge.com/news/2016-04-01/path-final-crisis
"Market interest rates consist of the natural interest rate plus two
additional components: a price (or inflation) premium that reflects the
expected decline in money's purchasing power, and a risk premium or
entrepreneurial profit premium that reflects the perceptions of lenders
of a borrower's creditworthiness and generates an entrepreneurial profit
for those engaged in lending."

Maybe later I'll write something on the return of privilege (separate
legal status) for the Elite in Europe and elsewhere.
125  Economy / Economics / Re: Economic Totalitarianism on: April 03, 2016, 09:27:27 PM
It's likely that "neither a debtor nor a lender be" needs some further
explanation, though I should point out that money was not the intended
focus of my earlier post.

If you are in business, borrowing and lending (extending credit) is
unavoidable. It goes with the territory. The advice really makes the
point that you should avoid placing your future in someone else's hands,
and most certainly to avoid borrowing in order to extend a loan
because bankers have that enterprise sewn up. 

Today, much of the stigma is gone from being in debt, and the linkage
between debt and prison is gone. While forms of slavery still exist
in the world today, to most of humanity, the idea of owning another
person is repugnant. This enlightenment is recent, less than 200 years,
and is perhaps the result of machines costing less than people. That
makes it the benign face of Capitalism.

Regarding the question of why the quantity of money must increase,
the time preference of consumers and others is the answer. See here :
http://www.zerohedge.com/news/2016-04-01/path-final-crisis
"Market interest rates consist of the natural interest rate plus two
additional components: a price (or inflation) premium that reflects the
expected decline in money's purchasing power, and a risk premium or
entrepreneurial profit premium that reflects the perceptions of lenders
of a borrower's creditworthiness and generates an entrepreneurial profit
for those engaged in lending."

Maybe later I'll write something on the return of privilege (separate
legal status) for the Elite in Europe and elsewhere, to keep things on-topic. 
126  Economy / Economics / Re: Economic Totalitarianism on: April 02, 2016, 09:00:48 PM
Y'all make yourselves comfortable, this one will take a little time.

I'll begin with the thought that to really mess up an economy, some
form of centralised decision making is needed. That's very different
from Adam Smith's invisible hand and its implied equal distribution of
power and insight that enable each individual to perfectly understand
the future and to have the fortitude to maximise his or her personal
outcomes irrespective of short term gains. Indeed, that perfection
presupposes that each individual is born into the world with perfect
knowledge. The real world is somewhat different.

In a way reminiscent of the Big Bang theory, microscopic advantages can
play out over long periods of time to create Empires and Catastrophes.
The key to this amplification is referred to in monetary terms as
compound interest. Compound interest sets in motion the idea that
something can grow exponentially forever. In a finite world, and given
differences that are far from microscopic, despite best efforts at
competition, one entity can eventually buy everything. This is the
perfect capitalist monopoly, something the game called "Monopoly" was
intended to demonstrate.

This illusion depends on the assent of a vast majority of the
population. The very idea of money is the outcome of a belief that debt
will be paid, and this in turn depends on social norms collectively
agreed. To the extent that monopoly and competitive capitalism
exists, it owes its existence to these conventions. There is thus
a paradox in the concept of Perfect Communism : The State owns
everything including the individual, but then requires the consent of
everyone for its existence. The Perfect Capitalist has a similar
paradox: his dependence on the legitimate monopoly of violence of the
State for his or her existence, but owning everything not owned by the
State.

Some may find difficulty in understanding that  Perfect Communism and
Perfect Capitalism should coalesce to the same solution, but from the
point of view of an owned individual, these differences are at best,
academic. Individuals find economies of scale in mutual cooperation,
and such conflicts that do arise are settled in a market of buyers
and sellers. The mutual satisfaction of these deals is unavailable in
the winner-takes-all world of grand strategies, that usually forces
war onto one or more of the players.

For the State and the Capitalist, War is a convenience for demanding
complete subservience and loyalty in their populations, while at the
same time diverting attention from the conflicts of interest writ large.
Chief among these are the paradox referred to earlier: the moment that
Perfect Control is manifest, it becomes the moment that collapse begins.

Left to itself, the system would endlessly cycle through the rise of the
Individual, the rise of the State, the rise of the Capitalist, and into
Collapse. As a consequence, political and monetary systems have grown to
mitigate these long wave cycles, seeking to move to a quasi-stable
equilibrium that maximises the wellbeing of elite sectors within
populations. Despite protestations, it is clearly not in the best
interests of any elite that resources, information and power structures
should be diffused through the population because that would strengthen
the invisible hand of the majority to produce an outcome that may more
effectively promotes the interests of society as a whole.

Consider Durkheim's New Religion of the West: The cult of the Individual,
finding expression in the Enlightenment, in the French Revolution, and
more recently in the youth movements of 1960's, and 1970's. Did
prosperity bring individual freedom, or did individual freedom bring
prosperity? Can proof by contradiction provide an answer?   

Consider, for example, the waging of war. As explained above, war is
almost never in the interests of the mass of individuals but most often
an unintended outcome of the narrow concentration of wealth and power.
Those waging war are certainly conscious of the enormous costs, but
calculate that the burden of these costs is either worth paying or
will be paid by others. Rarely are the costs paid for in advance, but
almost always by increases in public debt. Indeed, in today's world,
public debt, that burden upon the taxpayer, is the only available
recourse. Were the elite forced to pay for that war themselves it would
entirely negate the reason for their existence. 

Thus the Elite faces a choice: War, and poverty for the masses, or share
as an individual and invite prosperity. Thus, individual freedom comes
first and prosperity for all follows.

Well, that's the theory. How does this work out in practice?
In the long run, you get a steady drift toward totalitarianism and the
pretense of economic "stability" followed by catastrophic collapse and
war. Keep an eye on economic inequality as this tracks the progress of
power moving into the hands of the PriviLeged.

In the near term? That depends on where you live. Nothing says
instability like the gulf between the actions of the ECB in propping
up the EuroZone's financial structure, and action in real life to
forestall a wave of migrants seeking a home in Europe. There are less
obvious contradictions in Asia, and in North America, but Europe is
the game in play at the moment. To state the obvious, Germany could
have transferred work to Greece, but preferred to keep the work
within its borders and to invite migrants from outside the EU to
grow its GDP. Weren't the Spaniards, Irish, Poles, Ukrainian workers
good enough, or desperate enough?

I'll give the EuroZone another two years, a little less if the UK votes
to exit this year, could be longer if they get lucky. All of the
leaders that could potentially hold the thing together are now damaged
goods, and well past their sell-by date. But to try to keep things under
control, there will be more pressure to reduce individual freedoms.
"We are all in this together" - well Mr Cameron, some are more "in it"
than others, and as Mr Hollande (18% popularity) found out, Edicts do not
always pass. 

And what do the migrants, perhaps 80% young unskilled men do once
they set foot on a southern mediterranean shore where the unemployment
rate among young unskilled nationals approaches 50%? Make matters
much worse, and they will keep coming until the balance of economics
compels them to stay in their home country, or migrate elsewhere.
That is almost as absurd as paying people to dig holes and others to
fill them in again thus boosting GDP and giving a fake impression of
growth. Or, in a more technically advanced setting, bomb a country's
infrastructure back to the stone age and them provide billions in aid
to rebuild it in exchange for resources.

Ah, yes, resources. Scarce resources. When resources become scarce,
they either get rationed or monopolised, and my bets are for more
rationing, which means more controls, more government, less freedom.
And that in turn means less growth, specifically, lower global
productivity, and down that road lies collapse via hyperinflation
and depression. Everywhere.

Hang onto your bitcoin, and neither a debtor nor a lender be. 
 
PS: And the latest? There seems to be competition to see who can cause
the biggest unnecessary crisis in Greece (see IMF). Do they actually
think they are in control of this?
127  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: March 27, 2016, 08:25:53 PM
The term "fractional reserve banking" seems to be creeping back into useage
on the pages of this forum. I've given some thought as to why this mistaken
identity persists even among those who should know better. Let me be clear
about this. The term "fractional reserve banking" requires a gold standard or
its equivalent. Fractional reserve banking ceased to exist for all practical
purposes in 1971 when Nixon ended the covertibility of the US dollar into gold.

Now, I have the difficulty of explaining the present system, but I'll not attempt that
because it is best you work it out for yourselves. I'll simply say that you need
to see the wold differently.

One possible reason for the above error in perception may be bitcoin itself.
Bitcoin owners are well aware of the limited ability of the cryptocurrency to
expand, and may confuse the insubstantial but constricted nature of bitcoin for
the various ponzi schemes masquerading as fiat currency. The breaking of the
link between gold and the dollar should give a clue to what is really happening.

It's time to think differently about banking - fractional reserve or otherwise.
128  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: March 20, 2016, 08:44:53 PM
When Germany surrendered in 1918, France among others, demanded reparations.
The resulting arrangement could be said to have created the Weimar hyperinflation
and following that, the rise of the Third Reich.
You may have heard that Keynes advised that the Treaty would fail. Now may be a
good time to revisit his reasoning.
Germany had to pay France, and others, in gold. Logic dictates that in order to
make the payments Germany had to export goods and services - to run an export
surplus, and to do that Germany needed a weak currency. Leaving aside the
magnitude of the needed surplus for the moment, France, in particular,
would not permit that because politicians would not survive the massive transfer
of jobs from France to Germany that would result from the imbalance in trade.
I will not attempt to provide any justification for that shortsighted political
failure, except to note that the recent history of the Greek economy suggests
that not much has changed. In both cases they were told it would not work.

Which brings us to today, the migrants, and excessive unemployment among young
unskilled and semi-skilled european men in particular. This time around, though,
it is Germany that imposes conditions, and to date Germany has benefited from
an undervalued currency, and a frugal population. At the moment German, and the
EU still have some options. The most sensible of these is for Germany to stimulate
its domestic consumption - in other words to start spending like a sailor on
shore leave, thus destroying the German export surplus. That's probably not allowed
within the EU, but nevermind.

It's more likely that Germany et al, will continue down the route of competitive
devaluation - weakening the currency with, for example, negative interest rates.
Strangely, there does seem to be some foresight here, or maybe they think frugal
savers are masochists, and otherwise good value for being ripped off. Anyway,
if interest rates become negative enough, the average saver will buy bitcoin,
or gold, or stuff 500 Euro notes into their mattress. Whichever alternative
savers choose, the bankers are likely to lose control, and that would never do.

So, now that cryptocurrencies are no longer the sole perserve of criminality,
large denomination banknotes seem to be the favoured scapegoat for crime and
terror. Ah, if only money could be locked down so that we mortals needed the
permission of a Central Banker like the FED to move it ... dream on Bangladesh ...
129  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: March 13, 2016, 07:57:22 PM
Thinking about these statements form the Bank of England, I can't help but wonder
whether they are _that_ stupid. If, as seems likely, this is some sort of diversionary
tactic, there must be desperation bordering on panic to publish this. To be clear, the
three points in question are :

* Bitcoin provides trustless secure transactions. It's entire purpose is to eliminate
the need for trusted third parties in the exchange of goods, services, and money.

* Bitcoin exists because the people who use it trust neither governments nor Central Banks.

* Bitcoin will neither support nor suppress the Business Cycle. To try to use a centralised
cryptocurrency for such a purpose invites disaster.

Read the full article here :
http://www.bankofengland.co.uk/publications/Pages/speeches/2016/886.aspx
"So rather than try and give a lecture on monetary theory, or pre-empt the results of ongoing
thinking on this issue, I'll seek to make only a few very broad, conceptual points, touching on
the following questions:
what is the key innovation in private-sector digital currencies such as bitcoin?
what is a "central bank digital currency"? and
what might be the economic implications of introducing one?
"Acting as a trusted third party is precisely what a central bank does."

As a bonus, some views, mostly on the US economy, on where the world is gone in 2-3 years
http://fass.kingston.ac.uk/downloads/PERG-KFBM-Macroeconomic-Outlook-Issue-1-Feb-2016.pd

130  Economy / Economics / Re: Economic Totalitarianism on: March 13, 2016, 01:14:25 PM
good overview - I'm left to wonder whether any of this is an act of war ...

https://socialecologies.wordpress.com/2016/03/10/capital-behaviors-the-subtle-art-of-tyranny/
"For an empire, the flip side of propaganda is popular ignorance. Second, there is the stick to go with the
propaganda carrot - a heavy reliance on covert intervention in the periphery and domestic surveillance
and oppression."
"Aside from collecting national security information, the NSA has been involved in commercial
espionage on behalf of corporations, including stealing technology. In 1994 the NSA and the CIA
turned over data that caused the European Airbus Industries to lose lucrative international contracts
to their U.S. counterparts."
"In fact it has become so pervasive that the largest data broker in the United States today,
the marketing giant Acxiom has 23,000 computer servers processing in excess of 50 trillion data
transactions annually. It keeps on average some 1,500 data points on more than 200 million Americans,
in the form of "digital dossiers" on each individual, attaching to each person a thirteen-digit code
that allows them to be followed wherever they go, combining online and offline data on individuals.
(Foster and McChesney)
131  Economy / Economics / Re: Martin Armstrong Discussion on: March 07, 2016, 09:28:00 PM
Somehow, I have difficulty believing that the US Stock market and the US dollar can
continue to soar. Mean reversion gonna be a bitch an' all even as it is.

I can agree with MA from the trader's perspective, and that accepts that markets can
remain irrational longer than I can stay solvent.

But eventually, rational wins, and fundamentals matter.
132  Economy / Economics / Re: Economic Totalitarianism on: March 07, 2016, 09:22:10 PM
"The solution is to minimize the size of government, no matter what form politics takes."

Exactly. If Skynet ever takes over, its first task will be the printing of arrest warrants for
TPTB and the executive branches of governments.

Have fun speculating on what comes next :-)
133  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: March 06, 2016, 08:04:22 PM
Some ideas can be expressed simply in mathematics, but are challenging
to present via the written word. When talking about "stability" in
economics, banking, and in finance, words take on meanings more suited
to the world of Alice in Wonderland. Here is some scene setting before I
link to an article on the economics of Wilhelm Ropke that seems to have
been swept aside by the headlong rush to inflate. 

My starting point is one of financial equilibrium. A condition which,
if undisturbed, could continue indefinitely. The goods produced equals
the goods consumed, savings equal investment, and the money supply is
constant.

For this condition to be stable, the rate of interest paid must equal
the rate of capital destruction. When, for example, a fleet of ships
is insured at effectively, interest, the cost of insurance must, in
the long run, equal the cost of ships and cargo lost at sea. If that
balance is lost, the way is open to unrestricted and exponential
growth in money, or more precisely, debt.

When there is a fixed supply of money, eg gold or bitcoin, the system
has a built-in feedback mechanism that over the long run tends to
bring the system back into equilibrium. In the short run, political
and financial imbalances tend to favor particular nodes within the
network. While the creation of money by adding entries to the assets
and to the liabilities columns of a ledger, should theoretically
affect everyone equally, in practice those closest to the change gain
most.

With the abandonment of metallic restrictions on the money supply, and
the suggested abandonment of some paper fiat currencies, it is timely
to ask Why? and to revisit some earlier thoughts on these things:

http://www.epictimes.com/richardebeling/2016/02/wilhelm-ropke-the-economist-who-stood-up-to-hitler/

"But Rpke had no sympathy for Keyness belief that the market was inherently unstable and permanently in need of government management of "aggregate demand." In Rpkes view the Great Depression represented a "rare occurrence" of an "exceptional combination of circumstances" that required "a deliberate policy of additional 'effective demand` into the economic system." But, Rpke continued, Keyness construction of a "general theory of employment" based on the exceptional circumstances of the early 1930s was a "counsel of despair" and an extremely dangerous one, because it created a rationale for continuous government tinkering and a strong inflationary bias harmful to the stability of the market economy in the long run. Indeed, Rpke became a leading critic of Keynesian economics after World War II."

Insanity - doing the same thing repeatedly, and expecting a different result ...
134  Economy / Economics / Re: Economic Totalitarianism on: March 04, 2016, 10:44:51 PM
An ongoing court case centering on encryption has thrown light upon the total incompetence
of those in power. And this is not just about the USA and its legal system, it calls into
question the fitness for purpose of every government currently in place. 

First, understand that without privacy, there can be no private property.

We presently rely on a dual system of ink on paper, and on electronic records for securing
ownership of property. Written records run the risk of fire and flood, and electronic records,
at some point, rely on encryption for their continued existence. That ability to keep proof of
ownership secure is most commonly described as privacy. Without privacy, only the use of
force secures private property. 

Indulge me as I go through a thought exercise. The interconnectedness of our computer systems
increases every year, as does the computer power at each node. There are already concerns
about the vulnerability of these systems to anyone more sophisticated than a script-kiddie.
If that continues indefinitely, or of a bad actor preempts natural emergence, this interconnected
system will eventually become self-aware. That's usually referred to as Skynet in discussions.

The only defence against such intelligence is an ability to partition the system to limit the
reach of any individual section. A sort of privacy. And for that you need secure encryption.

The very last thing that governments should be pushing for today, are weakened encryption
standards and backdoors and trapdoors that "only" government can use, built into every
internet capable device by law.

Why blame conspiracy when incompetence explains so much, and insanity completes the picture?
135  Economy / Economics / Re: Forget Grexit. BREXIT is the Bigger Threat to Europe. on: February 25, 2016, 08:23:30 PM
Back in the 1980's when North Sea Oil was booming, the UK contributed ~2Bn per year
to subsidise French farmers, Irish roads, and Italian corruption. That greased many wheels
within Europe, but these things do not last. North Sea oil and gas moved the UK from
being the sick man of Europe to the world's fifth largest economy. Today it is 50:50 but
the memory remains.

Today, Germany wants Frankfurt as the financial centre of an European superstate, and that
is frequently at odds with what, specifically, the City of London wants.

The other players in the game are the UK landowners - they want Shengen extended because
more immigrants means more rent, and more income to them. Farmers and fishers want out
because they lost out when the UK went into the EC, supposedly to favor British industry.
Recently, big chunks of British industry were bought by foreign investors, hence there is no
broad support for staying in from that quarter.

And finally, having seen the politics and the financial games playing out in Greece, and in
Ireland, staying in the EU will be a hard sell to any sane Brit. There is no way the ECB
will look favorably on  post-2008 bailouts of British Banks. 
136  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: February 22, 2016, 10:02:54 PM
If you look carefully, parts of the truth can no longer be hid. Europe is holed below the
waterline, as this article shows in a much better way than my feeble efforts:

http://www.zerohedge.com/news/2016-02-22/there-definitely-something-strange-going-sweden
"If you look at GDP and population growth figures projected by the government, we are seeing something that I had never seen before: projected negative GDP per capita growth rates in a period of economic cycle recovery . The only reason for that is immigration; Sweden is bringing in a lot of people who consume but do not produce much."
"Before historically when we had low 0.5% population growth GDP per capita and total GDP growth were similar numbers. Now with the high population growth we have of more than 2% per year, we need more than 4% GDP growth in total to achieve that historical per capita growth of around 2% per capita."
"Swedes always like to say that "we don't want it like the United States"; I joked it's almost becoming too late for that, now the best Sweden can hope for is "we don't want it like the Game of Thrones". The inability of the European leadership to deal with the crisis is at once surreal and fascinating, almost like witnessing a Donald Duck version of the fall of the Roman Empire in real time."

How long? June and October 2016 will give a much clearer picture.
137  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: February 15, 2016, 11:05:16 PM
Do you enjoy fairytales? Some new ones are circulating, are you sitting comfortably?  I'll begin.

A long. long, time ago, in a galaxy to too far away, Ratings Agencies gave reliable appraisals
of AAA rated debt. (For my thoughts on AAA ratings, read my earlier posts). Gentle Asian and
innocent Aryans outsourced their due diligence to these bodies rather than interpret arcane
texts in foreign, to them, language. Such was the trust of these naive marks that products
later described as "toxic waste" and "monkey dung" were eagerly purchased as risk-free
investments.

How did this come about, you ask? People believed that house prices would, except for
brief intervals, always go up. Banks built 5% pa increases into their models, and it was
good politics for everyone, even NINJAs, to own their own home. If you haven't yet seen
"The Big Short", maybe you should to pick up some of the details.

The film, among other things, offers this insight: Rating Agencies, given a choice between
selling their soul, and losing a fee, will choose to give Toxic Waste an AAA rating.

It used to be that AAA ratings were given to government backed securities, and the
debt of a very few select companies. This allowed bankers to sort of lift dockets off the floor
of the bookmakers, bundle them together, and sell them as a bet on Secretariat. or Seabiscuit
trading at face value. The buyers were pension fund managers and inexperienced administrators
in foreign lands. Even so, when things fell apart, the big banks were quick to threaten
armageddon or worse if the government did not make good their losses with taxpayer monies.

True to the tales of yesteryear, the Empire continues to crush rebellion, while promising jam
tomorrow. They even gained some much needed credibility when low oil prices gave a subsidy
running into billions to developed economies ... resulting in 0.4% growth. So no surprise that
the shine is wearing off what once was AAA rated government debt, for example, Italy.

What to Do Huh Draghi to the rescue ... put the ECB (ie the european taxpayer et al ) on the
hook should the whole thing go to hell in a handbasket by booking this stuff as collateral.

So, where's the tale from the Brothers Grim ...

The UK plans a referendum soon to decide yes or no to a Brexit. Suppose the UK peasants
get wind that they might be sold down the river (again - don't mention Greece) and may
run for the hills. Other countries may decide that that thing about not being able to leave
the EuroZone may be left to the lawyers, after all, he who exits first exits best, and maybe
Portugal, Italy, Greece, and Spain would be only too happy to dump their waste into what could
become the world's biggest bad bank..

More of Horror Story don'tcha think?   (Bitcoin excepted ;-))
138  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: February 12, 2016, 11:44:31 PM
To follow up on my earlier post - it may seem obvious that the correct time for bank regulators
to seize a bank is just before it goes insolvent (think WAMU, for example). That does still happen
to smaller banks. Unfortunately, when a bank gets big enough, that becomes problematic, while
at the same time, the more levered, or even insolvent a big bank is, the more money it makes.

What to do? They think they have found the answer:

http://www.zerohedge.com/news/2016-02-10/negative-rates-are-dangerous-oecd-chair-warns-our-entire-system-unstable
And I think the politicians find it convenient to believe that the central banks have it all under control. But its not true,
Nevertheless, European experience does point to the merits of less austerity as opposed to more. I particularly think that there are many countries, maybe Portugal is part of this, where there should be a lot more government money spent on infrastructure: the US, Germany, Canada, and the UK would certainly be included.
The answer to insolvency is not simply to print more money it may get you out of the problem in the short-run but it simply makes it worse and worse over time. At some point, maybe where we are now, you truly get to the end of a line. You see that what you have been doing is just a short term palliative that is actually making the disease worse.
I think there are a lot of grounds to believe that depreciation works less well than it used to. First, in Greece we know that wages have come down a lot. But the country is characterized by such a degree of oligopoly and rent-seeking that all thats happened is that profit margins have gone up. As a result, theres no signal coming through prices to get a change in resource allocation from non-tradables to tradables.
My number one fear? Thats the same as asking me where it will start. When you view the economy as a complex, adaptive system, like many other systems, one of the clear findings from the literature is that the trigger doesnt matter; its the system thats unstable. And I think our system is unstable. Where could it start? Who knows, Id probably say China but I have no idea and nobody has any idea. 

Hmmmm  ... they had no problem stuffing money into the pockets of the rich, and now?

http://www.zerohedge.com/news/2016-02-11/war-cash-central-banks-survival-campaign
To make this clear, I like to paraphrase a famous (and good) quote from Alan Greenspan, back from 1966, during his Ayn Randian days: The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
Negative interest rates mean that your bank account shrinks day by day, automatically. Your $1000 in January becomes $950 by December. And where does that money go? To the banks, of course, and to the government. They syphon your money away, drip by drip, and theres nothing you can do about it. This accomplishes several things for them at once:

http://www.zerohedge.com/news/2016-02-10/here-exchange-left-stunned-janet-yellen-looking-deer-headlights
And since we doubt that Janet would chose a legacy of being the first Fed Chairman thrown in jail, even if it is not that far below a legacy of totally mangling the Fed's attempt at renormalizing rates at a time when the entire world was careening into a recession, we expect absolutely no cooperation by the Fed in this ongoing criminal matter.

Sooooo ... blow $Trillions in academic experiments and the world is at your feet, but a hint to a hedge fund
could land you in jail ... Got it! Gotta love Central Banking :-)
139  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: February 05, 2016, 09:11:08 PM
I'm writing this after reading some loose thinking on banking practices, and because it
may become relevant later this year. I've seen "fraud" and "deception" used as if they
meant the same thing, and sometimes the difference is important.

Companies are supposed to be structured with a clear separation of debt and equity.
If you own equity, you are a part owner of the company, and if the company fails,
you lose your money. Theoretically, if a company fails, the debts should be repaid
to the creditors in full because running a ponzi scheme is illegal, to take the concept
to extremes. For most companies, the creditors, usually banks, will make very sure
that the company remains solvent, ie that the value of the equity is greater than zero.
When things look shaky the creditors will ask for collateral against the company's debts.

So, continuing to trade, and drawing a salary while knowing that the debt cannot be
repaid, that is fraud. Selling a dud company to sophisticated investors, that is
deception.

Banks, for historical and other reasons, are somewhat different. Bankruptcies happen.
A model bank in bankruptcy is intended to still have some excess assets above that
needed to repay creditors, implying that common equity is entirely wiped out, and
there should never be an expectation that depositors (creditors) could lose any money.

Clearly, the average depositor is unlikely to be able to any of the TBTF banks and
both ask and receive collateral on concern that all is not going well with that bank's
business. Indeed, bank regulation seems to be constructed to ensure that the
public is unaware of the true state of the bank until well after the fact, if the facts
of 2008 are anything to go by.

An interesting side effect of cryptocurrencies could be to make the bank's balance
sheets both transparent and current, if the contents of their blockchains were
publicly accessible. Now, there's a thought.
140  Alternate cryptocurrencies / Altcoin Discussion / Re: DECENTRALIZED crypto currency (including Bitcoin) is a delusion (any solutions?) on: January 16, 2016, 09:30:12 PM
Some thoughts on decentralisation and anonymity -

There exists a set of at least two cryptocurrencies 0, 1, ... N. The minimum set
contains at least one cryptocurrency with these characteristics at the limit :
 
*a fixed number of coins. This money can attract no interest. This is preferred
for hoarding and has a deflationary effect on market prices. This tends to
depress the economy. Transaction costs are paid for by fee income. Transactions
are relatively infrequent.

*a known number of coins, with a guaranteed cessation of trading X years in
the future. Accounts holding these coins attract interest at rates approximating to
the geometric increase in the quantity of these coins in circulation. These coins
are preferentially spent into circulation, and have an inflationary effect on
market prices and tend to stimulate the economy. Transaction costs are paid for by
mining. All debts denominated in the coins die with the cryptocurrency.
There are always two or more cryptocurrencies in the market. A voting algorithm
provides a majority of cryptocurrencies the means to ensure that a valid cease
trading order is effective. Ideally, that blockchain should be destroyed.

The intent of this writeup is to show that it is possible to design a system that
should restrict the ability of an elite group to concentrate economic resources
via the use of cryptocurrencies.

While CAP theory suggests that one cryptocurrency cannot know the internal state
of another cryptocurrency, it should be possible for cryptocurrencies to
collectively decide whether another cryptocurrency should continue to exist.

There is thus no restriction on individual choice on whether to begin a new
cryptocurrency or on individual choice on whether to use a new cryptocurrency
for transactions. Total collective freedom of choice.

Pages: « 1 2 3 4 5 6 [7] 8 9 10 11 12 13 14 »
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!