Economic Devastation

[OROBTC]

Haven't tried the barbecued rats yet though.

[...]

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

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

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

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

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

/OT


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

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

[TPTB_need_war]

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

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

Monetary Education 101

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

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

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

4. Due to the power-law nature of wealth aggregation (hey some people are just more motivated, skilled, driven, disciplined than the masses), if you don't pump money from the wealth aggregators back out to sea with the masses, then the entire economy stops and falls into a Dark Age. Then everyone suffers, including the wealthy (first the millionaires, but later the trillionaires also destroy themselves but they don't care because they are psychopaths who crave power and destruction <heck 1/100th of a $trillion is still $10 billion anyway>, they even masturbate to videos of the rape, pillage, and beheadings of entire African villages). If it isn't done decentralized, then centralized institutional structures rise up to do it, because the economy will die without redistribution of wealth from the power-law back to the sea of masses.

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

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

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

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

[CoinCube]

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

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

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

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

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

[Erdogan]

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

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

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

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

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

The keynesian smell is strong in this one.

You don't take into account the market. In a price deflation scenario, also described as the value of the money rising, this will have an effect on the interest rate, which will be lower, discouraging further money hoarding, and ecourage investments. Also lending, since money is plentiful, and lending will expand the money volume thus reducing the appreciation of money value.

What is correct, is that it will in general encourage saving. Saving is necessary for increasing the total volume of investments, and investments are the same as increased productivity of labour, therefore increased prosperity. The appearant keynesian shot in the arm you get from a depreciating money value, is just the hidden bloodsucking of the savers, the previous decennia of this is being uncovered as we speak. What you have saved, you don't deserve, they say, so we want to take that, for the benefit of the collective. What the saver really did, whas either produce more and consume normal, or produce normal and consume less, over a period. The saver is entitled to spend that at his own discretion.

Having access to sound money will have, if it ever happens, a profound and glorious effect of society: More freedom, more prosperity, more equality except for a few rich people, more peace.

You also don't take into account that the rich do not necessarily spend more. Having money is not the same as having other values, because money has only exchange value and no intrinsic value (a higly useful term). In fact, everybody could have a lot of money, say enough money for an extra house. Only if everybody in fact bought or built a house at the same time, or consumed it all on other things, or invested all the money at the same time, it would have an effect on the real economy. The feeling of economic safety that holding money gives, would be costless.

[CoinCube]

The keynesian smell is strong in this one.

You don't take into account the market. In a price deflation scenario, also described as the value of the money rises, this will have an effect on the interest rate, which will be lower, discouraging further money hoarding, and ecourage investments. Also lending, since money is plentiful, and lending will expand the money volume thus reducing the appreciation of money value.

What is correct, is that it will in general encourage saving. Saving is necessary for increasing the total volume of investments, and investments are the same as increased productivity of labour, therefore increased prosperity. The appearant keynesian shot in the arm you get from a depreciating money value, is just the hidden bloodsucking of the savers, the previous decennia of this is being uncovered as we speak. What you have saved, you don't deserve, they say, so we want to take that, for the benefit of the collective. What the saver really did, whas either produce more and consume normal, or produce normal and consume less, over a period. The saver is entitled to spend that at his own discretion.

Having access to sound money will have, if it ever happens, a profound and glorious effect of society: More freedom, more prosperity, more equality except for a few rich people, more peace.

In a monetary system with no debasement lenders would be far less willing to lend even at low interest rates because they would be able to get a guaranteed real return without any risk simply by holding. I have responded to your ideas more formally in a prior post.

Ok it is clear to me that I have not effectively communicated my argument so let's go another round and I will do so in a more formalized fashion. Lets examine the issue from the bottom up rather than top down and examine the game theory behind the decision to invest. Observe the case of an investor who is capable of making investments over his lifetime with a average annual return of x percent annually while operating in an economy that is growing at y percent each year and a monetary unit that is debased at z percent.

Scenario #1: x > y (Return on investment exceeds average economic growth)

In Scenario #1 the investor is capable of achieving average real returns greater then the average growth in the economy. In this scenario the investors decision is easy and he should always invest. The investor is the upper elite in terms of productivity and will always be better off investing regardless of currency debasement.

Scenario #2 0 < x < y (Return on investment is below average economic growth)

As you pointed out productivity is power-law distributed. Therefore it is mathematically impossible for the majority of humanity to fall into scenario #1. Most of humanity are and always will be be in a situation where their investments on average generate a real return that is less then the average growth rate of the economy.

The ideal outcome for humanity is that investors in this situation make these net positive but lower return investments. The growth rate y is not a single value but rather the aggregated sum of the growth vectors over all the individuals in the economy. If investors in scenario #2 do not invest the value of y and prosperity overall is reduced.

The majority of humanity in scenario #2 face a free rider deliema. In the extreme situation of z = 0 (no debasement) they are decisivly better off not investing and letting the overall growth in the economy increase their purchasing power. In this situation instead of making net positive investments the majority of humanity gain most by parasitizing the gains of the upper elite and prosperity overall is reduced.

This delima can be solved by introducing a non zero debasement rate z. As we raise the debasement rate individuals lose the incentive to be free riders. At a debasement rate of z = y all inverstors in scenario #2 like those in scenario #1 have a positive incentive to make net positive investments. Money loses the ability to parasitize on the gains of the productive. Furthermore money at this debasement rate maintains its ability to act as a store of value. Meaning that with a debasement rate of z = y a saver who chooses to defer consumption will still be able to purchase a like basket of goods and services in the future.

Now lets examine the situation where z > y and debasement rate is set in excess of the underlying economic growth. All investors still have optimal incentives to invest. However, what changes is that individuals on the upper portion of the power-law distribution now gain purchasing power in excess of what they actually produce.

To understand why this is the case we need only look at the example of an investor achieving returns of y in a world where z = 2y (a world where an debasement is twice the rate of aggregate growth). Such an investor is achieving a growth rate that matches the average in the economy, however, his rewards do not reflect that.

If such an investor starts with initial capital C then his returns over n years can be calculated as follows

Return = C((1+y)^n * (1-z)^n)

You can plug in different numbers to see what the exact result will be for varying levels of growth and debasement. However, in all cases where the debasement exceeds the average economic growth z > y our investor who contributed an average share to the growth of the overall economy finds that his capital significantly depreciated over time. Where does that purchasing power go?  It is redistributed to the upper elite who while they are the most productive gain purchasing power in excess of what they produce.

Such an approach does in theory maximize growth I do not dispute that. Historically this idea has been referred to as trickle down economics. However, you need to be honest about what debasement in excess of the aggregate economic growth really is. It is certainly not needed to maximize individual incentives to invest. Instead it is simply a redistributive mechanism. It is a form of reverse socialism redistributing from the poor to the wealthy because they in theory can better put capital to productive use.

I agree that in the end the market will decide between competing alternatives. However, in any realistic economy, real or virtual, there is a demand for at least one good which is used as a store of value that and is not intended to be used but simply to transfer purchasing power across time. The Bubble Theory of Money dictates that the optimal strategy is for everyone to standardize on the same asset as a store of value, and for this asset to be one of intrinsically limited quantity.    
 
My thesis is that a market of rational investors will choose the monetary unit that maximizes individual incentives to make productive investments while minimizing redistributive transfer from the poor to the wealthy. That level is a debasement rate that matches the rate of aggregate economic growth. You can make the case that society will be better off with reverse socialism if the wealthy later pay back their ill gotten gains by returning a portion of them back to the poor perhaps via the establishment of a guaranteed minimum income or other welfare type programs. However, any such an arrangement would be very difficult to stabilize in light of the problems outlined in the OP. Furthermore it is emphatically not compatible with anonymity.

[Erdogan]

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

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

[CoinCube]

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

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

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

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

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

[Erdogan]

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

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

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

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

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

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

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

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

[CoinCube]

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

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

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

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

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

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

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

[Erdogan]

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

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

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

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

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

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

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

To the last two paragraphs:

II) It could be made to adapt to certain world events, but someone have to manage that, or measure the world events, taking away the soundness. It will also take away the certainty of the volume, and therefore take away the possibility for the market to balance it. You can not as a market actor use your foresight to act and therefore balance the value, you have to depend on the manager.

III) The marketing is short time all right, eventually the appreciaton will be appreciated (!) by all actors and be cemented into the human culture. But there will be no problem, the market will make sure that the value of money can not increase unchecked. At some point, the need for investment signalled with the prospected return of the investment will be higher than the interest rate for lending all that money value, and it will also balance. Since there always will be an urge for saving, money will be supplied for lending. If an investment is not profitable, that investment should not be executed, it would be waste.

The appreciation we can expect due to the implementation of sound money, is only expected to go on while demand to hold money is increasing, after that it will stabilize somewhat. In the current situation, lending in bitcoin is not practical, but if you need a loan now, you can easily use fiat, and profit on the government inflicted devaluation at the same time.

And there will always be a balance between production and consumption, unless products are destroyed in stead of being sold.

[Scamc0p]

Armstong did another piece on global cooling
http://www.armstrongeconomics.com/archives/34854
and I don't really know what to make of it.

Our model tracks everything including climate.

So that's allready factored in in all predictions?

...We could realistically see famine reach the 33%-50% level. ....... we may exceed more than a reduction in population of one-third and reach the levels of the 14th century of 50%,...

these are worldwide numbers? Can someone translate that into a percentual price increase(range)?

Every 309 years serious shifts come. The end of the severe minimum in the sun spot activity was 1715. Thus 1715+309 = 2024 will be the start of a slide into a new minimum in sun spot activity.

Seriously bad shit can result.

We are headed into really bad and difficult times.

The main upside is we are more technologically advanced by now, so we can cope well if we get organized with the Knowledge Age.

OROBTC, I am changing my opinion on the value of UNREGISTERED guns (all registered guns will be seized by the government), but only if concomitant with a community of armed men for defense (not all alone which is certain to be overrun):

The best advice I have is try to move before the SHTF to a warmer area that is either too wet (thus some drying trend won't cause total drought) or a more rarely a warmer area that is too dry that might experience an increase in precipitation due to changes in prevailing winds or something. I don't have the data on which areas were best in the last Little Ice Age. Can any one dig up this data?

And then you need to make a decision whether you trust society in that area to remain civilized; if yes then go for populated areas and depend on community. If not and you can afford it, then maybe go for your own ranch heavily defended by sturdy male family (or perhaps robots will be available soon to employ as a defensive army).

Seems right now one of the most productive activities we men could do is start to acquaint ourselves with each other and making compacts to be neighbors and bond together to be able to provide the economy-of-scale to have a small rural community defense and diversification of food production and trading.

Photo of some of the nutcases we will be up against:

that's the question. It seems impossible for this to happen. I can buy a pound of rolled oats for 30 cents, you could quadruble the costs and life would go on*.

You apparently lack appreciation of the significance of both marginal prices in economics, and also the non-linear effects of chaos.

1. With marginal prices in Economics 101...

2. When the population has become dependent on high economies-of-scale in farming, distribution, credit, government, corporations, etc., and that is taken away by mother nature and or widespread war/pestilence..

OROBTC, please document your boating trip with receipts and also show where you filed the "lost gun" report on time, otherwise you will be charged with a crime (a recent ex post facto law under emergency terrorism powers granted to the President by the bought congress and kangaroo courts) and housed in this prison which we can't really maintain with food, otherwise known as a concentration camp.

Your family members are associated with terrorism and you are being taken into custody on suspicion of aiding and abetting terrorism. You have no right to an attorney.

Edit: my point is you need to be as invisible as possible to the State (as it can overpower you) and your male community needs to be as strong as possible against marauding nutcases. If you depend only on the State for the latter, then well you end up dead if the State can't maintain law & order (or the State itself goes F.U.B.A.R.).

Edit#2: I suggest another narrative. I long ago sold my registered guns and some of my traceable precious metals, and here is the paperwork to prove it. I paid all my taxes. The remaining precious metals are stored here and here is the paperwork. As for the precious metals I sold, I used the funds to manage daily expenses which I paid in cash as evident by my cash withdrawals from ATMs over this time. I lived a fairly high life during the recent years (and if the State already knows where you live, I say also some diversifications into land and improvements on the land). No I didn't covertly obtain precious metals nor cryptocurrencies with that cash by purchasing mining equipment with the cash. I believed in documented precious metals instead.

Edit#3: very careful with entrusting secrets to "friends" who can turn against you when they need to survive.

Edit#4: my overriding point is that traditional forms of diversification could be entirely useless if what we face in the future is a 309 year cycle event. Smooth this point is also directed to you. I guess CoinCube also.

That is some crazy bat-shit level right there. 2024 is when the holy war will erupt?
Japan is getting ready right now, Their government isn't standing for it anymore is has balls to do something about it before this happens. Call in the wagon

[TPTB_need_war]

Edit: To illustrate that until a currency becomes ubiquitous, then speculative ingress and egress will dominate exchange value, don't forget that Bitcoin is still debasing at 9.5% per annum (while exchange price has been declining), and during 2013 when the price rose the most the debasement rate was 33%:

https://en.bitcoin.it/wiki/Controlled_supply#Projected_Bitcoins_Long_Term

CoinCube, below I explain why raising the debasement rate to maximize competition up to a benefit for the super majority is ideal. You worry about for example frail old ladies who fall behind and can't live off their usury savings independently. Yet your concerns for the minority is inimical to the super majority. Family and local community should care for frail old ladies.

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

You are restarting a debate we had upthread— in the context of the increased clarity of my prior post. So (hopefully) I should be able to finally convince you that you are mathematically incorrect.

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

The bolded sentence is an illogical conceptualization of the game theory. Investing for higher return doesn't mean abandoning the currency, rather it means using the currency by transferring the currency to those who don't invest for a higher return (e.g. invested in a company that uses it to pay salaries or holds it as cash reserve bearing interest). It would be a disadvantage for any "savings" the investor retains to switch to a unit-of-account that debased faster (unless the interest rate is adjusted higher accordingly) since that debasement would be subtracted from his return (regardless of if the return-on-investment is higher or lower than the debasement rate). Moreover if the investor's return is not a guaranteed interest (i.e. not usury and not "savings") then he/she doesn't care if the unit-of-account for the return is in any particular unit. Rather he only cares about maximizing the return (versus risk) in any unit-of-account.

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

There is not one growth rate in an economy. Efficiency of production of some things grows faster than other things. Thus it is impossible to design a basket weighting for GDP or purchasing power which has the same relative impact on every member of society, since distinct demographics, personalities, and situations impact personal consumption priorities.

Who is to decide whose priorities are paramount?

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

There is no measurable equilibrium point because the economy has diversified personal metrics.

Rather the only metric I have been able to identify is the one I stated in my prior post:

3. Due to that squared law explained in #2 and coupled with the fact that small things and investments grow faster, the upcoming wealthy gain more from debasement than the egregiously wealthy. Thus debasement is a very natural, efficient allocator of wealth to the maximum production. The super wealthy can't focus their investments to the most productive because their wealth is too large to allocate efficiently. They are more concerned about safety, economies-of-scale, and return of capital, which retards production in the economy. [implication is that the more wealthy someone is, then the more reliant on usury for return-on-investment instead of non-guaranteed return (a.k.a. return versus risk)]

Thus raising the debasement rate redistributes capital from lower efficiency investment (and thus production) to higher efficiency investment and production. Thus benefiting everyone in society.

Thus the debasement rate should be set as high as such that a super majority of society can receive an increase in their personal purchasing power (personal priorities) that exceeds the debasement rate. This will not stop members of society from competing for higher return-on-investment, because to be in that super majority you must compete.

Whereas, if it were true that everyone had the same priorities and we could set the debasement to one monolithic purchasing power metric, then no one would have an incentive to compete. This is yet another example of why uniform distribution is lifeless. I mentioned this abstract concept in my two blogs, The Universe and Information is Alive!.

The problem is how to measure that in order to set an ideal debasement rate? The debasement rate must increase and decrease with some feedback loop which is the efficiency of production relative to a super majority of the society.

Referring back to my explanation about the Quantity Theory of Money:

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

We see that Δ real growth is somewhat related to Δ transactions × price. Thus such a feedback loop could modulate the Δ debasement rate by the Δ transactions × price.

The variables could be:

1. Debasement is a percentage of the transactions x price.
2. Relationship of this debasement to the transaction fee, if any.

Let's assume transaction fees are set by the market and are a better proxy for the real value to society of the transactions than transactions x price, because transaction fees modulate priority. Also market determined transaction fees are society's appraisal of the (equilibrium of tolerable or neglible) cost of unit-of-exchange which is a primary function of money w.r.t. commerce that demands supply of production, thus medium of flow in the power-law wealth distribution circulating pump.

Perhaps:

debasement = factor × transaction fees

Given annual velocity of money has historically been around ≈2.0, then if factor = 1, annual debasement ≈ 2 x weighted average transaction fee percentage. In other words with a factor = 1, an annual velocity of money = 2, and a weighted average transaction fee percentage of 1%, the annual debasement rate would be 2%.

I rather think micropayments on the internet might dominate the Knowledge Age economy, and given that transaction fees would be some what proportional to transaction data size rather than transaction price, I could envision the annual velocity of money increasing significantly (with the concomitant increase in efficiency in production and radically higher increase in typical purchasing power), yet the transaction fee percentage would increase from currently in Bitcoin perhaps to something perhaps 1% (just a rough guess). So we might see annual debasement rates rise to 5 - 10%, yet the rise in purchasing power for a super majority of the society participating in the Knowledge Age would rise much more than that, thus achieving the goal of crypto-currency in the Knowledge Age.

Ideally this debasement would be distributed proportionally to those doing the transactions (but in aggregate so that it is not possible to game by getting an individually higher distribution by sending individual transactions with higher fees), since they are the distributed economy and their transactions anneal back to the wealthy aggregators proportional to return-on-investment.

P.S. If you discern that the above is a potential design for a crypto-currency, then I agree.

[TPTB_need_war]

Japan Opens First Robotic Hotel

http://www.armstrongeconomics.com/archives/35137

[TPTB_need_war]

Greece will default.

No it won't!

Your model of the goal and outcome is wrong. Read my my post at the following link:

https://bitcointalk.org/index.php?topic=1082909.msg11937734#msg11937734

The entire EU will brought into debt crisis and only then will there be a monetary reset in a NWO slavery system.

Dumb ass European people can't even see what is so obvious to me since 2010 when I predicted this outcome.

[Rassah]

Well, we are getting close to 2015.75, and I'm getting excited!   I hope all those promises that were given here come true!

[OROBTC]

Well, we are getting close to 2015.75, and I'm getting excited!   I hope all those promises that were given here come true!

Well, I dunno.  I may be more ready to crawl under my desk, or even the bed...

It WILL be interesting to see if Armstrong wins this prediction.

Y2K and 2012 were both duds, neither came true...  I was completely unprepared re both of them (whew), a bit better so for 2015.75.  Armstrong and TPTB have both made a number of good calls that DID come true.  Armstrong has a strong grasp of history and cycles.  So, we'll see.

[TPTB_need_war]

For CoinCube:

uselessname18333,

The masses don't love money enough to hoard it (thus the power-law distribution of wealth), yet they need money as a unit-of-exchange (and thus as a unit-of-account and a reasonably stable store-of-value) in order to maximize the division-of-labor which is essential to maximizing production and efficiency (the inexorable march of entropy which can not be reversible per the Second Law of Thermodynamics which Einstein even said was the most fundamental law of nature). Even the Bible says employ honest weights and measures of which an anti-money would be a violation.

Thus the goal is not anti-money, but rather a technological advance into the Knowledge Age wherein capital is knowledge creation which is inherently not a homomorphism to spacetime, thus can't be financed with usury.

Q.E.D. End of discussion. I have work to do.

You are entirely missing the point.

Value is not a homomorphism to spacetime. Value is a diverse (n-dimensional) fitness landscape (entropy) where the relationship to time and space is such that they are not just dilated but not even structurally preserved.

Philosophy is not logic:

http://philosophy.stackexchange.com/questions/1247/are-different-values-of-nothing-equivalent/25124#25124

Philosophy is argumentation. I'd prefer more precise, actionable discussion, which was the stated intent in opening post of this thread.

Philosophy of morality is very relevant to this thread:

https://philosophy.stackexchange.com/questions/1597/is-it-immoral-to-download-music-illegally/25125#25125

[username18333]

Even the Bible says employ honest weights and measures of which an anti-money would be a violation.

Hark, “the pious or holy” (Plato) “the capital or money” (qtd. in username18333) is “a yoke” (Jer. 28.14).

For thus saith Jehovah of hosts, the God of Israel: I have put a yoke of iron upon the neck of all these nations, that they may serve Nebuchadnezzar king of Babylon; and they shall serve him: and I have given him the beasts of the field also.

[TPTB_need_war]

Anti-money folks have not given an explanation on how to efficiently produce anything absent the price mechanism.

Eg. pencil production consists of 80 phases, from assembling the machines used to mine graphite and fell trees (and the property rights to conduct such activities), to machine the pencils, pack, ship and distribute them for delivery to end customers. The decisions that people make to allocate the resources and intermediate goods, and the finished goods, and the information on supply and demand, are done on monetary terms.

Many supposedly bright minds have said that money (unit of account for financial calculations) can be done away with, but if they don't solve this issue, their world would not have pencils nor anything more complicated than that, because the production and distribution chain would be totally invalidated, and a tribal economy with organic food would result.

Even as we near zero marginal costs things will need to be able to compute energy and supply costs. Assuming we or AI do not discover unbounded renewable energies and materials or a new symbol to covet as as/more/somewhat important.

Even if energy was free, knowledge creation would not be. Remember value is not a homophorism to spacetime. Learn about how knowledge creation works. It is fitness landscape of unbounded degrees-of-freedom (entropy). Come on read my essays and really think:

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

http://www.coolpage.com/commentary/economic/shelby/Demise%20of%20Finance,%20Rise%20of%20Knowledge.html

Thus we will also need a metric for trade and investment. Without such a metric, then humans have no incentive to organize and produce. Note however that reputation is such a metric in a gift economy:

http://www.catb.org/esr/writings/magic-cauldron/magic-cauldron-2.html

But how do we acknowledge and reward reputation? What I've seen is a lot of bickering and paralysis in open source when there is not a benevolent dictator such as Linus Torvalds at the helm. Thus it appears that society rewards reputation by allocating a leadership role.

Thus I conclude the leader will then have capital which he can dole out in the form of whom he accepts pull requests from, gives commit rights to, etc.. This capital is yet another unit of money essentially.

But there is another problem. These units of status and status capital are not fungible. In order to transmit value out of projects which are generating too much capital and into projects which need an injection of capital, we may need a fungible unit because the experts in the former may not be applicable to the latter.

The generative essence point I am making is that fungible money is necessary for the driving the maximum division-of-labor, which is essential to the progression of entropy (which is not reversible overall, although maybe reversible as an illusion in some space per my upthread explanations).

I have made these points numerous times, but seems I can't get these concepts to plant in anyone else's brain?

[TPTB_need_war]

I am much more interested in practical ways how to make products in digital and real world, which would be free for the end user to utilize, with no monetary payment necessary to use them.

Many things in the Internet are such already. You can use Internet freely (in libraries, etc) and most of the content is free. Even elaborate content such as Facebook, Google etc that cost a lot to maintain, do not charge the masses for the service.

The economic calculation problem, is what Mises said would cause the Soviet Union economy to collapse in a few years (it did, industrial production was at -98% compared to Tsarian times), but prices were reinstated in about 1922-1925, following the example of foreign countries in market economy.

It is likely that clever business models will make an increasing percentage of goods available to the consumers without payment, especially as energy becomes cheaper and even free in the future. To get there, we need to allow the businesses to continue using calculation. Banning money as a unit of account is akin to banning numbers as a tool of mathematics. Surely both economy and mathematics could be done without, but the benefits of such an unnatural move would certainly not outweigh the drawbacks.

Again I agree banning metrics in economics is the same as banning human motivation and trade. Banning metrics in mathematics is to ban all dimensioned domains (spaces) and then we can only reason in terms of abstract concepts and logical relations (well that is if you don't also ban the boolean values of true and false).

What we really want to eliminate is the corruption of societies (e.g. socialism, public back stop for usurists, etc) that results from granting centralized authority over the issuance of legal tender. To accomplish that it is not sufficient to create decentralized crypto-currency, because the society can choose to use which ever money benefits the masses the most and the masses are oblivious enough to choose the free gifts of socialism and the NWO. The masses haven't seen a great outlet otherwise because the fixed-capital Industrial Age siphoned capital to the usurists.

By enabling a Knowledge Age that can resist the dumb choice of the masses by providing the technology for a reliable and easy-to-use anonymous internet and anonymous currency which can do decentralized payments at any transaction rate and also decentralizing the block chain (so the currency remains decentralized and censorship-proof), then people can start to see an alternative that provides much greater return on investment of time and capital, thus siphoning away value from the NWO which is a eugenics system that will spiral down into the abyss taking down everyone who stays in it (per the Revelation in the Bible).

Business models for giving away hardware "free" (in exchange for ways to monetize the asset via advertising as Google is planning to do or stealing energy from the user when they are charging such as the Larry Summers' 21 Inc business model) will be consolidated to the largest players in the market, because the margins are highly dependent on economies-of-scale. In short, this is another usury system and thus will be the property of the NWO and those masses who wish to perish. Investing in this is for people who have no idea how to put their capital to work in the Knowledge Age and thus their talents will be taken from them and given to someone who does.

P.S. It looks very likely that all I needed for the past 4 years was a fecal transplant so this Multiple Sclerosis would be cured. Imagine the work I could have accomplished had I not been sick! I didn't know this until just recently and now I am even confirming that when I don't eat, I don't have symptoms, so it is clearly my immune system attacking my leaky gut. But here is the deal. I can't afford to travel to Austria and the cost of the treatment, hotels, etc.. So I have no choice but to slog through my development with this chronic fatigue syndrome. Imagine how $20,000 could change my life and change the future of the world. But fuck people will criticize me as being a loser or a beggar if I mention any thing like this. They can go fuck themselves! I will finish my work even if more slowly than could have been in a world where capitalist weren't entirely fucking clueless about talent and ability.