Bitcoin Forum
October 16, 2021, 03:51:14 PM *
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 »
141  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: January 16, 2016, 09:14:49 PM
Sometimes, you take a break, get back, and find that all your problems are somehow solved.
Yeah, right. Then some months later, you find that all the things you once worried about were
artfully concealed, and it is now too late to put a fix in. We are not quite there yet.

If you have been paying attention, metals are various fractions of their all time highs of recent
years, and oil is perhaps a quarter of its price in mid 2014, depending. There should be
bankruptcies in progress now. That's how prices recover. The strong devour the weak.

So all the problems are somehow solved? The magic of technology has quadrupled the flow
of oil and of metal without increasing costs? Probably not. The US$ exchange rates have
more than doubled since mid 2014? Clearly not. And if not what?

Leap forward a year or two, with recession, and with low oil and low metal prices. Then comes
a point where mining companies can no longer pretend to be viable, even with unlimited
financial support from their bank. At that point, their bank's solvency may be at risk, even
with not-so-hidden subsidies from their central bank. Think sub-prime II. And this is more than
just one bank, especially if the economy is now in recession, if the strength of the currency
continues. And, just like the miners and the oilers can be kept on life support by their banks,
their banks can be moved onto life support by their central bank and the big banks.

Why do this? you might ask. I'll mention that in this situation a few will decide the fate of the
many. There could be other reasons, inertia, for example, or just having financial crisis as a
business model.

This way, you get two years of throwing fiat money after bad, more malinvestment, and good
opportunities extinguished in exchange for transfers of wealth and power. After that, it gets
worse. 



 

142  Alternate cryptocurrencies / Altcoin Discussion / Re: DECENTRALIZED crypto currency (including Bitcoin) is a delusion (any solutions?) on: January 09, 2016, 10:41:31 PM
If you think of alternative currencies as providers of information on the state of fiat currencies,
then exchanges provide a relationship (information exchange) between partitions. You are
correct in that there is no "formal" transmission mechanism, the question is whether the
CAP theorem renders such a link impossible.

Edit: The question perhaps should be stated as how important could such a mechanism be?
143  Alternate cryptocurrencies / Altcoin Discussion / Re: DECENTRALIZED crypto currency (including Bitcoin) is a delusion (any solutions?) on: January 09, 2016, 10:28:52 PM
From my reading of the CAP Theorem, Bitcoin has consistency and availability but cannot be partitioned.
Hence cryptocurrencies, as a group, have inherent partitions, availability, but no consistency as a group.
144  Alternate cryptocurrencies / Altcoin Discussion / Re: DECENTRALIZED crypto currency (including Bitcoin) is a delusion (any solutions?) on: January 09, 2016, 10:15:14 PM
My biggest mistakes have happened when the obvious question went unasked.

Thanks for the reply, though.
145  Alternate cryptocurrencies / Altcoin Discussion / Re: DECENTRALIZED crypto currency (including Bitcoin) is a delusion (any solutions?) on: January 09, 2016, 09:59:10 PM
"You must use PoW or PoS and thus the problems of centralization and government control are the end result of all of what we are doing here. And helping to force a world government cooperation of regulating the internet, encryption, and Bitcoin mining. Bitcoin is a Trojan Horse that weakens the nation-states and traditional banks, which must fight back by cooperating with a world governance regulation of the internet and Bitcoin mining."

Disagree - once inequality passes a critical limit revolution is inevitable. While some would prefer
a world government, it is not an optimal solution, indeed, there may not be a single optimal solution.

With regard to cryptocurrencies, I doubt that a single cryptocurrency ie bitcoin, can provide an optimal
solution to the paradox of thrift, and for that reason alone other currencies must exist.

Before taking this further, what is the CAP theorem referenced earlier?


146  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: December 15, 2015, 10:43:42 PM
https://www.sprottmoney.com/blog/big-banks-caught-using-credit-default-swaps-to-destroy-nations.html
"Readers were presented with a detailed explanation of the tag-team of fraud which made possible such extreme manipulation of interest rates. It begins with manipulation of the credit default swap "market," a crooked book-making operation where the "bookies" taking the bets not only place most of the bets themselves, they also adjudicate on any disputes on the settlement of bets. More pure fraud ."
"Just to pay the interest on its debt (to the same, Big Bank crime syndicate), the U.S. government would have to begin by shutting down the entire government, and disbanding the U.S. military, in order to bring spending down to zero. Then it would have to double everyone's taxes in order to come up with the full payments to the parasitic bankers. And then, in a few weeks, the U.S. economy would totally collapse - just as Greece's economy did in 2011."
"We have more unequivocal evidence showing that this "probe" is a cover-up, and not a bona fide investigation. It starts with another headline ."

Nothing to see here, move along. In other news, Citibank gets sued re fiduciary responsibility for
toxic mbs and other securities sold 2005-2008. Just the cost of doing business.

What was that business model? remind me?
147  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: December 13, 2015, 10:41:20 PM
Just an update to say that things may be moving faster than I had expected.
On the positive side, the number of people starting to ask questions is
growing. Thoughts in the direction of "Financial crisis as a business model"
are starting to appear.
148  Economy / Economics / Re: Economic Totalitarianism on: December 13, 2015, 10:35:17 PM
One thing about the EU, they never let a crisis go to waste. This next move is a problem for
several countries, but especially for the UK and Ireland. Those islands could lose control of
their surrounding seas, and that leaves question marks over oil and gas resources.

http://www.zerohedge.com/news/2015-12-10/ft-shocker-eu-unveils-standing-border-force-will-act-even-if-government-objects
"However now in the aftermath of the Paris suicide bombings and the indefinite emergency
"pre-crime" laws instituted in France, conventional wisdom in Brussels is that Europeans' eagerness
to trade sovereignty (and thus liberty) in exchange for (border) security, is far greater."
"One of the most contentious elements of the regulation would hand the commission the power to
authorise a deployment to a frontier, on the recommendation of the management board of the newly
formed European Border and Coast Guard. This would also apply to non-EU members of Schengen,
such as Norway."
"If the plan is approved by EU states, Frontex's replacement will have a slew of new powers,
including the ability to hire and control its own border guards and buy its own equipment.
It will also be allowed to operate in non-EU countries - such as Serbia and Macedonia, which have
become transit countries for people trying to reach northern Europe "if requested."
"All have been spot on, but not even this aggressive and accurate forecast predicted that Europe
would be so bold as to effectively take over border and population control sovereignty across the
entire continent. It is about to do just that."

Given that control appears to be in the hands of "when things get serious you have to lie", forgive
me if this seems somewhat less than a well thought out plan, and for wondering how long will it
take before it is revealed who really is pulling the strings on these puppets?
149  Economy / Economics / Re: Economic Totalitarianism on: December 07, 2015, 09:21:01 PM
Ever wanted rid of all those government forms that ask irrelevant questions?
That red tape that stops the right things from being done? What about getting
some legislation that means that anyone can bypass the regulations and
overrule the bureucrats - sounds just the thing doesn't it. Well, the UK is well
on its way to heaping everything since Magna Carta onto the bonfire. There's
just one precondition: _No Growth_

If you can put up a case that you are promoting "growth" that get-out-of-jail-free
card is all yours!

http://services.parliament.uk/bills/2014-15/deregulation.html
http://www.lowimpact.org/how-ttip-fits-perfectly-with-the-deregulation-act-which-can-overrule-all-other-laws-if-they-affect-growth-or-corporate-interests
"The Deregulation Bill, proposed by Tory privatiser Oliver Letwin, slipped into law at the end of the last Parliament. It can change all other law, according to criteria of "growth" ie business interests. It fits perfectly with the EU's deregulatory agenda, and that of TTIP and the other new "trade" agreements, which have largely come out of the City of London via the UK government anyway."

If you believe that KYC and AML regulations are now part of bitcoin's history,
maybe I can offer you another bridge for your collection :-)
150  Economy / Economics / Re: The economic model behind Bitcoin is flawed on: December 06, 2015, 08:37:03 PM
"Why would the things be different for your coin?"

There seems to be an acceptance of this paradox of money : that particular
forms of money cannot be both a store of value and a means of exchange.

Stated differently this becomes Gresham's Law:
https://en.wikipedia.org/wiki/Gresham%27s_law

Summary : "Bad money drives out good"

Regarding Government : "When a government overvalues one type of money
and undervalues another, the undervalued money will leave the country
or disappear from circulation into hoards, while the overvalued money
will flood into circulation."

Thus when government introduced their fiat money, specifically paper fiat
money, silver and gold coinage went into hiding. It is instructive to
observe that when the Mongols conquered China, the conquest was greatly
facilitated by the issuance of new paper money (at an extortionate
exchange rate). Fiat money is merely a transfer of power from savers to
the issuer of the fiat money. All fiat money is credit (and debt).

<Insert Rothschild quote here>

These things were once universally known. Today, the internet has made
new forms of money possible, and bitcoin may only be the first of many.
The lessons of history are being re-learned. For some, it may be painful.    
This collective amnesia is surely not accidental - the punishment for
currency debasement could be both gruesome and medieval, hence those
promoting fiat currencies have strong incentives to succeed.

History suggests that store-of-value money is sub-optimal, and that a
trimetallic (gold, silver, bronze) currency has advantages (and
disadvantages). This paper asks the question:
https://www.mpls.frb.org/research/wp/wp536.pdf
"The puzzle, of course, is not why sovereigns carried out debasements
(in fact it might even be why they did not do so more often),
but rather why did private agents respond so."

The author does not directly provide a convincing answer. It seems
probable that an informed merchant, on learning of a forthcoming
debasement, will borrow, then covert the bullion into debased coins,
and replay the debt at profit. Thus proximity to the Mint may have  
determined the market price of the debased silver coinage.

Note also "Accountants and merchants would count in livres of this
or that coin, and convert to gold coins to keep track of the
different values of the silver coins ..."

Monetary systems gravitate toward store-of-value (bitcoin) and
"overvalued money" that floods into circulation. Clearly, banks and other
middlemen are incentivised to keep fiat money circulating. Whether
bitcoin can disintermediate the third party in future transactions is
an open question, and there could be an opportunity for the right altcoin.
151  Economy / Economics / Re: The economic model behind Bitcoin is flawed on: December 01, 2015, 11:26:38 PM
I *think* what you are trying to say is that miners are incentivised to hold (save) bitcoin,
thus viewing bitcoin as a monetary store of value. The paradox is that the value of
bitcoin to society is its use in trade (to simplify somewhat) and that no coin can
claim both these features. 
152  Economy / Economics / Re: Economic Devastation on: December 01, 2015, 11:14:57 PM
"Markets certainly are interested in a level playing field where there are no borders, capital controls"

The Eurozone, as envisaged a few months before the events in Paris, _requires_ free movement
of people to function. Unemployed and underemployed Portugese, Irish, Italians, Greeks and
Spaniards, are supposed to relocate to areas where labour resources are deficient. Similarly,
goods and capital are _required_ to freely flow within the Eurozone.

Absent free flows of people, goods and capital, the economic advantages of the Eurozone are lost.
It will be impossible to move onto the next level, a political union. Certainly there is no chance of
France giving control of its budget to foreigners if it is now locking down its borders. And if
sovereign states are saying no to central control, it is only a matter of time and opportunity
for sovereign currencies to be re-introduced. Unfortunately, that brings with it a risk of war.

France's unilateral imposition of totalitarian controls - I will not call them laws - means the
end, certainly of the Euro, unless other states also move to enact identical controls.

Oh, and that 1% rounding error masquerading as economic growth - smile as you wave goodbye!
153  Economy / Economics / Re: The economic model behind Bitcoin is flawed on: November 29, 2015, 10:12:00 PM
"accumulation of bitcoin will reduce the price of bitcoin,"

That makes no sense.

"what if there was a fee for holding bitcoins for a long term?"

That is not a solution. There is already a free market for cryptocurrencies.
The solution is to invent a better cryptocurrency, or more specifically, a
cryptocurrency that does some things better than bitcoin.

Think ahead. What happens when the next halving occurs? Will the miners
have to raise the fee to stay viable?
154  Economy / Economics / Re: Economic Devastation on: November 29, 2015, 08:56:24 PM
Regarding malpractice by banks to SMEs, I'd suggest searching "RBS" + "Tomlinson"

Allegedly, 1000's of SMEs were asset stripped by the bank's restructuring office.

I would caution that the bank would argue that the companies were not worth
saving. However, in a financial crisis, the decision to save or to sacrifice can
often be somewhat based on politics. This is unlikely to be confined to just one
bank, it is just a matter of degree and distress.

As a separate issue there is a report on Finland's crises 174043.pdf that suggests
that a failure to moderate the deregulation of Finland's banks and savings institutions
followed by hot money inflows, made worse by the Soviet collapse, caused a sharp
contraction in GDP and jobs.

I'd guess that bitcoin would be unable to mitigate either of these problems.
155  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: November 28, 2015, 10:13:08 PM
"Everybody has a plan until they get punched in the mouth" - Mike Tyson explains that
you are how you react to events.

An economist might express that thusly - here's the end of Hayek's Nobel prize speech:
"The recognition of the insuperable limits to his knowledge ought indeed to teach
the student of society a lesson of humility which should guard him against becoming
an accomplice in men's fatal striving to control society - a striving which makes him
not only a tyrant over his fellows, but which may well make him the destroyer of a
civilisation which no brain has designed but which has grown from the free efforts of
millions of individuals."
http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1974/hayek-lecture.html

It seems that lately, TPTB plans have been getting punched in the mouth - Syria,
Ukraine, Egypt, Afghanistan and others. Despite these setbacks, TPTB keep coming back
for more.

Conspiracy theorists suggest that all this is some sort of master plan to run the world
under one government. This belongs with some other ideas that a four year old child
if asked, would tell you that it just won't work.

Unfortunately, at the moment, I have to add Bitcoin to the list of great ideas with
fundamental flaws. And, that's a big problem. By itself, bitcoin will not scale well
enough to replace fiat currencies when the banking systems break, and if there is no
alternative, civilisations will have to live with the consequences of the failures of
their financial systems.

Bitcoin is vilified by bankers and governments whose own faults are orders of magnitude
greater, some as specifically identified in earlier posts in this thread. We should not
allow our recognition of these faults to blind us to the limitations of Bitcoin, nor
to restrain efforts to produce viable alternative cryptocurrencies of greater utility.

Most recently, there are suggestions that all digital currencies should be suppressed.
That would be tantamount to banning encryption, but that kind of totalitarian
thought will not easily be turned aside.

I began this thread by suggesting that we need better adjectives and a clearer
understanding of their meaning to better discuss banking and related financial
services. I hope I have moved your thoughts on this and on Bitcoin a little
further on. Cryptocurrencies need to be moved to the next level to attract the trust
that money currently enjoys, and there is not that much time left.

In an earlier post, this:
"This emerging nonlinear structure forces the system to take, or "collapse" to, one of
its multiple possible realisations, which means that those realisations, actually and
unceasingly replacing one another in a dynamically random, or "chaotic," order are
dynamically symmetric among them, while they always differ in their detailed, partially
irregular structure."

It seems likely that the structure will become more loosely coupled as empire collapses.
The number of viable system states will as a consequence fall significantly, and
transmission across parts of the financial network may become impossible without
significant external effort. As an extreme example, the bitcoin blockchain in the east
could differ from the blockchain in the west. Today, such change seems highly unlikely,
but in fifteen or twentyfive years from now?

To move to where we need to be we need to clearly know where we are now, and to be able
to discuss changes in a way that is easily understood. That's easier said than done.
156  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: November 21, 2015, 10:20:25 PM
Just to dispel any thoughts of paranoia or persecution, I'm stating that I'm doing
my best to avoid judgement of particular nations, banks, and economies. Some stories
are easier to access than others, and that leads to bias. YMMV.

http://www.theguardian.com/business/2014/feb/03/anglo-irish-executives-irish-banking-crisis
"Three leading figures in the defunct and disgraced Anglo Irish Bank - Sean FitzPatrick,
Pat Whelan and William McAteer - will each face 16 charges of unlawfully providing
financial assistance to individuals for the purpose of buying shares in Anglo Irish
in 2008."

Think about that for a few moments.

Then think about company share buybacks. And then about incentives for company
executives whose remuneration is tied to the price paid for share in the stock market.
Company share buybacks are legal, because a legal route exists, and because that
route is transparent, it is reasonable to suppose that market manipulation is near
zero. I'll guess you're comfortable with that.

Suppose the money for the share buyback comes from a subsidiary of the Company.
Still comfortable? What if the Subsidiary is only partially owned by the Company?
And if the Subsidiary is wholly owned by a group of Companies, all of whom have
their shares bought by the Subsidiary? Still comfortable?

What if the Subsidiary is the country's Central Bank, and its owners are the major
in-country Banks? Think that cannot happen?

http://www.zerohedge.com/news/2015-03-25/bank-japans-10-trillion-equity-portfolio-not-large-says-bank-japan
"So after buying 35 billion yen worth of shares yesterday, the BoJ now owns 2% of
the entire market and looks set to square off against GPIF (which, as we noted last
week, is set to move aggressively into stocks at the implicit urging of the BoJ and
the explicit urging of PM Abe) in a battle to become the single largest holder of
Japanese equities. Here's more:"

This is not the place to go into QE and its impact on markets in detail, nor the
variations on a theme played out by the ECB, the FED, the BoE, and the BoJ. It's
kinda like that myth of a "trickle down economy" that stimulates growth by flowing
money from the very wealthy to the masses, except it works in reverse. 

This video is perhaps the best exposition of how QE is supposed to work:
https://www.youtube.com/watch?v=d1Mug1EPaAo (skip the first 6 minutes)

There's just one technical hitch. What happens to all the grossly inflated assets
and to those "sterilised" reserves when the next implosion begins, and bankruptcies
happen? Unless, of course, we are on a "permanently high plateau".

Suppose the worldwide interest rate hit 50% tomorrow. Too Scary? Well, late last year
Russia hit 17%, so maybe 20% is a good figure to work with. Impact: All the interest
rate swaps (derivatives) betting against high interest rates get crushed; The bond
market folds in on itself, eg, 10 year bonds should fall to around 20% of face value;
and mortgage backed securities could become, for investment purposes, worthless.
Government paper would not be far behind.

That's called asset price deflation, and it could happen well before western interest
rates reach 20%. There would be winners and losers in the financial sector, with losses
likely socialised. Capital investment would be immediately curtailed, together with
other economic activity, providing a race to be bottom between production and wages.
 
I'm predicting that production will shrink faster than wages. That particular path
leads eventually to hyperinflation, but obviously, to get there you have to pass
through 20% interest on loans, and through "stranded assets" - production capacity
that has no functioning markets.

https://www.youtube.com/watch?v=j4SRsGn14PI - Someone will have to explain why the
machines cannot be turned back on.

And no, hyperinflation is not going to happen tomorrow, nor next month, nor even next
year - we would finish better off if it did happen that way - that's the end, and this
turning is barely begun.  I'm not alone in thinking there is a precipice out there
somewhere:

https://www.youtube.com/watch?v=Pc-q7D35tpE

Meanwhile I'll be shocked, shocked when I read that this "assistance" is legal. 
157  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: November 15, 2015, 08:36:36 PM
A couple of sub-plots before I get to finish. Something (not) completely different . .
https://www.youtube.com/embed/tS_Xbfl03mc (Monty Python + 1929 + economics)

Derivatives. "Financial Weapons of Mass Destruction". Buffet's comment was engendered
by a realisation that it was no longer possible to accurately evaluate bank balance
sheets because the risks brought by derivatives were unknowable. Today, the nominal
value of the world's derivatives is some $600Tn. To paraphrase a prominent economist,
derivatives do not matter because we have bet against ourselves? Well, anything $600Tn
in size matters. These are concentrated in JPM, HSBC, RBS, MS, CA, GS, DB, and a few
others. A quick calculation will suggest that even a modest counter-party risk would
prevent a market in derivatives from functioning - a 2% risk premium is unaffordable.

Forget LTCM and Black-Scholes - IMHO there is no good way to price derivative risk.
The Lehman Bros bankruptcy brought some of the legal issues into sharp focus, even
though the bankruptcy is still playing out and the wheels of the law grind slow. Thus
not too long ago, the banks took the opportunity to cement derivatives into place
near the top of the payout queue when bank assets are in liquidation. They couldn't
and wouldn't price counter-party risk into the derivatives so they want to pass the
risk onto those least able to assess and carry the risk.

You, poor fool, may have placed your money in a bank. The bank now views you as a
liability. If "your" bank is one of the above mentioned, they will check to see that
any withdrawal or transfer you make of _their_ money is going to a worthy cause. Such
as supporting their gambling habit in the banks casino, generally known as the
derivative market. If bankruptcy is declared you get "promoted" from a liability to
the status of an unsecured creditor. Whoopee! You get to queue close behind a whole
bunch of institutions, with "your" bank's gambling buddies closest to the trough.

It doesn't have to be this way. Derivative contracts could be cancelled on entering
bankruptcy, but guess what? Well, my guess is that this would crush the derivatives
market. And would the world be a better place for that?

Just in case you haven't grasped the play here, consider this. Somewhere there is a
casino, exclusive to all but a dozen owner-members. They play roulette, with a
special rule for zero. When the ball falls into that zero, the member with the
nearest bet gets a bailout, and the others divide up the losing bets. Guess who
placed the losing bets? Everybody who isn't a member. That's not an exact analogy,
but close enough.   
158  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: November 08, 2015, 11:09:04 PM
If you are a Central Bank, last week's post was not good news. It suggests that, in
the first place, Central Banks should have been killed off in the 1940's because they
were clearly unable to "do what it says on the tin." It turns out that there are a
couple of things that Central Banks excel at:
* Moving wealth from savers into Government (and banker) pockets *
* Creating debt to fund "wars" [5] *

It takes two to tango, and banks have always had a symbiotic relationship to their
government. Maybe Central banks and their regulators have learned from history and
from recent publications. Who knows? maybe they can learn something from that new kid
on the block cryptocurrencies, maybe when they realise this threatens their domain
their minds will be wonderfully concentrated. There again, maybe not.

The rational response to an imminent Seneca Cliff and a power law failure distribution
would likely be to break the system up into smaller, dissimilar pieces, and where
possible, to limit the buildup of the equivalent of flammable undergrowth or snowpack,
as appropriate, for natural power-law catastrope-driven systems. That would ensure
at worst, graceful progressive collapse that could be managed within the wider world.       

Instead, Central Banks have undertaken "Stress Tests" with the intention of primarily
reassuring depositors that it is safe to keep their money in a bank, that taxpayers
need not worry about more bailouts, that risk is low for bond investors, to identify
banks that have excessive exposure to risk, and those banks that need more capital. The
astute will note that these goals are both mutually exclusive and avoid scrutiny of some
of the real risks in the system.

The financial system tends to concentrate risks in the biggest banks. The smaller banks
are forced to merge, and if weak, have to re-capitalise. Smaller stronger banks face
competition, and hence tend to increase leverage and risk. I may be an unwanted
consequence that the Stress Tests expose the margins of safety of smaller stronger banks
and thus encourage risk-taking and leverage. The effect is to move the herd toward the
precipice, except that this precipice tends to move in the wrong direction in times
of crisis.

It is as if random slabs of material placed on a table are gradually formed into
dominoes of various sizes, then aligned and linked together. Linking the banks together
only provides safety from individual errors of judgement and localised shocks. But if the
table is gradually tilted, then a catastrophic collapse can and will happen. 

The point of concern for such a system is not only the damage such a collapse will
cause, but also that where government intervenes to support particular banks, and in
a situation where every bank is at risk of bankruptcy, the choice of which bank lives
and which bank dies is both somewhat arbitrary and also subject to the vagaries of the
political process. 

As ever within the Banking System, the seeming order is something of an illusion. The
ZIRP [6] policies enacted over an extended number of years have created structures that
would, under normal interest rate policy, quickly collapse. More on these later.

The malinvestment is leaking into the real economy as corporate entities use cheap
credit and divert profits to buy back shares instead of investing in research and
development of new products. They do this because the real economy is in trouble.   
Cheap money should theoretically drive investment in distant horizon projects like
nuclear fusion, large scale electricity generation, and development of resources
such as oil-fields. Instead it accumulates in the arteries of the financial system,
waiting for the heart attack to occur.

[5] "war" is used here in its loosest sense, including merely the abrogation of the
normal checks, safeguards, and balances provided by the legal structures to
totalitarian authorities.   
[6] ZIRP is another propaganda scam. They haven't banned usury.
159  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: October 31, 2015, 09:36:47 PM
Hindsight, it seems to me, is vastly overrated. I have learned that two people can
look at exactly the same facts and take totally opposed positions. I can only state
that a superficial inspection leads me to the following views:

* Prior to 1929 the US economy had the advantage of rising productivity, especially
agricultural productivity, and a more than adequate supply of crude oil. This led to
a strong dollar, and made US produce expensive compared to other nations.

* In 1929, things that could no longer continue, stopped. That left a residue of excess
debt, ponzi financing, other risky investment, and fraud. These elements were
sufficiently large, and in combination with depressions in other nations, to create
an economic depression over most of continental North America. The US economy
would continue to contract until trust was restored in the financial system.

* The discovery of a supergiant oil-field containing some 5 billion barrels of oil
restored economic confidence and activity in several States. It also created at least
the expectation of $5Bn worth of collateral within the financial system and allowed
the creation and circulation of further monies by fractional reserve accounting.
This drove the stabilising of the Stock market in 1932 via a form of ponzi financing,
and the DJIA first bottomed at 50, then rose to 80. (BTW 5 billion barrels of oil at
2011 $100 per barrel prices is $500Bn - of the same order as TARP).

* While the above was in progress a form of currency war was ongoing. Gold was
shipped to Europe in the years prior to 1933, and in 1934, the US$ was significantly
devalued against gold, and hence against the rest of the world's currencies.
Immediately after the devaluation, gold was shipped from Europe to the USA.
This moved 40% of the claims on wealth from the pockets of US savers to the pockets
of prior recipients of US government spending, and was a de facto default on its
debts. 

* There is no convincing evidence that any of the post 1929 government or Fed Reserve
polices had any long-term effect on the US economy, except for the seizure of gold
and the 1933 devaluation of the dollar.

The lessons to learn from 1929? Be aware that the gold you and your fathers
deposited at your banks has become the property of the banks Central Bank, which
eventually hands it on to your Treasury and public into ownership. Real estate
investment especially and common company shares are the last things you want to own
in a depression. If you want to find your way out of depression, finding the newest,
world's-biggest-ever oil-field in your backyard is a good start. Were the lessons
learned? or were they merely a barrier to profits?
160  Economy / Economics / Re: Unrestricted Banking and Problem Banking on: October 31, 2015, 09:36:12 PM
If everybody knows the crap game is crooked, but they still play because it is the
only game in town, is still fraud? Well yes, but that's not the point. I could go
on to explain the technical difference between bank insolvency and bank illiquidity,
but it really doesn't matter.

Why? Because, to misquote President Bush, when this sucker goes down, it will not
matter if a bank is solvent, liquid, illiquid or insolvent. What will matter is the
advice the politicians get, and for that they will rely on their regulators and their
Central Bank - who are owned by? probably the competitors of the bank under scrutiny.

It actually makes more sense to seize a solvent bank because the good assets can
shore up other banks and the bad assets can be passed to the taxpayer to make good.

But I've skipped ahead a week or so. More next week.
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!