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Question: Is a Madmax outcome coming before 2020? Thus do we need anonymity?
yes - 74 (46.5%)
no - 85 (53.5%)
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Author Topic: Is a Madmax outcome coming before 2020? Thus do we need anonymity?  (Read 102652 times)
AnonyMint
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January 05, 2014, 02:26:14 AM
 #41

P.S. I am not going to argue further with the socialist blablah, because there is nothing I can say that would allow him to understand how debt and taxation distorts incentives and cause activities to be less annealed (as in simulated annealing). He could try studying Taleb's math on Antifragility to get a clue about why localized annealing (versus Mayonnaise spreaded debt & taxation every where) is critical to resilience and avoiding catastrophic failure. But the best way to teach him, is to shut up and let him experience the coming Apocalypse first-hand.



Sent another email to Armstrong:

Quote
One last rambling email on this topic, unless you have some additional discussion to add. Again thanks for reading. I want you to know what I am doing, as I think it is important you factor this in your analysis. I also factor your analysis into my thought process.

I want to make it clear that I agree with you that attacking the millionaires and smaller billionaires is what can cause all capital to go into hiding and can spiral into horrific outcomes. We must do something about this.

I am not advocating blaming them in a global conspiracy. If there is an upper echelon power elite, I am saying these mainstream businessmen would not be knowingly complicit due to the key concept of compartmentalization.

There are 3 concepts I want to relay to you.

1. Death of fixed capital age

2. Does an upper echelon elite prosper?

3. Alternative solution

First, you've written about the coming technological unemployment. I have relayed to you the Oxford U. research which says 45% of existing jobs to be replaced by automation within 20 years. What this means is fixed capital investment and thus stored capital is heading towards irrelevant. Soon we won't need much capital at all, only our brains, as everything will basically be engineering work and the computers will eliminate the fixed capital barrier, e.g. the 3d printers will get so sophisticated they can print with numerous materials simultaneously and all work will be about design not about physical manufacturing. To read more about this theory, refer to my blog where I took the time to develop the concepts more precisely:

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

So this death of stored capital coming during this crisis is really about the end of the industrial age. We are heading into the computer revolution age. So that old capital must die, because it is irrelevant. It doesn't matter if they buy ancient coins and escape confiscation. That capital will wither relative to the gains that will be made by those who burst forward with these new technologies. So everything is happening on time and with a purpose. We need this deeper understanding, to see the big picture of how it all fits together.


Secondly, the Trilateralists, Bilderbergs, and CFR have their people installed in key positions in government throughout the world, even the past 8 of 10 presidents of the U.S.A.. If we exclude those "NY Club" bankers you write about which are only in for short-term profits and charging their mistakes to the public, we have remaining those who need stored capital and consolidation of political power to remain relevant so they can increase economies-of-scale, because they are basically dumb. The only way they can increase their power is to steal from the innovators with increasing centralized control over taxation, credit, and regulation. The global warming lie and carbon tax is an example. We have Monsanto trying to monopolize and make agriculture dependent on a razor blade model. We have similar attempts in the drug industry, internet moguls, etc.. I assert that these globalists will profit in your model of a global SDR reserve currency with floating national currencies. But my key insight is they will do so at the expense of destroying the industrial age. Hey but that is ok! It is dying any way. They are riding it down. But as you point out, this is very dangerous for numerous reasons.


Thirdly, thus it appears to me that you are working on a solution which caters to the dying capital age. Some of your clients may be dinosaurs. What if I am correct that it is possible to make a parallel fledgling economy which is virtual, untrackable, and is the revolution that will take over because it is much more efficient, prosperous, productive, and has greater degrees-of-freedom (fitness). Thus the old economy will simply collapse and fade away. But this is very dangerous, because most of the population are socialists and they are not ready to be productive in this new type of envisioned economy.

As you wrote, the youth are ready and they can probably morph theirs skills rapidly as the economic opportunities become clear.

We are moving to an electronic currency. The only remaining question is will it be centrally controlled due to lack of robust anonymity and thus trackable and taxable. Or will an alternative rise which is strongly anonymous and has other features which make it impervious to control with AML and KYC laws. I have studied this in depth during 2013. It seems the latter is a possibility, but I don't claim to be omniscient.

I just wanted to give this alternative perspective to chew on.

P.S. Remember the video (it is on YouTube) of Aaron Russo explaining how Nick Rockefeller told him about 9/11 before it happened and also about how the people would soon be chipped and tracked like cows. And yet you say there is no global power elite. Did you see the video of Aaron Russo interviewing the former IRS commissioner and he is told in Yiddish, "nothing will help you".

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AnonyMint
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January 05, 2014, 06:45:20 AM
Last edit: January 05, 2014, 07:12:44 AM by AnonyMint
 #42

Armstrong has published some additional comments on his blog which cause me to further explain myself.

I will below provide compelling evidence of the existence of the power elite and refute his claims about the creation of the Fed.

http://armstrongeconomics.com/2014/01/04/why-bother-with-government-just-the-facts/

Quote
Therefore, I work with those who know the game and are on the side of freedom – not the anti-corporation conspirators who will lead us into communism for they will be used to justify taking more power. I do not know if we can make a difference. What I do know is there are always opposing forces. Whatever I can do to preserve liberty I will do and if that means staying in touch and hoping we can argue when it comes down to a few hours in the middle of a crash and burn, then so be it.

I did not seek to be in such a position. Fate has put me where I am today. If there was some all powerful elitist group that was in control of everything, nobody would have ever bothered seeking me out and wanting to know what our computer was forecasting next. All I can say is I have yet to see some all powerful group that was in control. I can’t tell you how many top institutions around the world want to know what our computer says now.

We are all in the same boat. So sorry with the conspiracy people who just want to believe in some group they cannot identify, I cannot speculate

The power-elite are not in complete control. They are dumb capitalists who can't fight the fact that new knowledge (innovation) can't be bought at any price and is not generated in the ivory cathedrals of theoretical science, rather accretive in spontaneous discoveries. Armstrong's discovery of the cyclic order of market events and history is a perfect example. He didn't intend to find that, nor was it discovered by some theory proposed and then proved. Rather he stumbled on it.

And Armstrong probably can't fight the outcome of the death of the industrial age and the fact that most people are ill prepared for the technological unemployment coming and thus a political solution is unworkable. All that human capital was already destroyed by the multi-decade debt bubble which caused most people to acquire the wrong education. It is too late for most people who are not in their youth. They will demand the government tax and confiscate. There can be no political solution until after it spirals into dysfunctional chaos and gridlock disagreement as evident by 97% public disapproval of France's Hollande, yet still the French will demand their socialist cake and eat it too.

However, 9/11 wasn't some short-term market manipulation. It was a very sophisticated action that not only destroyed the evidence for the $trillions black-budget, the case files pertaining to Armstrong, but also set in motion the Patriot Act, the AML & KYC laws, and this taxation and wealth confiscation witch hunt underway. How can anyone possibly argue that is only short-term planning?

And who funded this elaborate anthropogenic global warming hoax? (see the links I provided upthread on that) And for the purpose of enabling a global tax on the carbon life cycle of nature (c.f. http://en.wikipedia.org/wiki/Carbon_cycle). As far as I know, the genesis was apparently in the UK with Thatcher discrediting the coal unions, but who was really behind that idea to fund junk science initially at the Royal Society.

For example, we know that Rockefeller funded the kafkaesque feminist movement (c.f. http://esr.ibiblio.org/?p=4934) which destroyed the USA which has now adopted all planks of the Communist Manifesto.

We know that Prescott Bush the grandfather of baby bush, was funding Hilter via his Union bank. I believe I've already read about the bankers funding the communist revolutions in Europe.

They are not in complete control, but they are not just short-term market manipulators either.



http://armstrongeconomics.com/2014/01/04/911-admixture-the-fourth-branch-of-government/

Quote
There were really terrorists involved. That does not negate the fact that WTC7 and the Pentagon were clearly targets that helped get rid of evidence and stop the investigation into $2 trillion in missing money. It is not an either or deal. What I am saying is I believe they KNEW in advance and used it to extend their power and clean up affairs just as they knew about Pearl Harbor and made up the attack at Tonkin Gulf and let us not forget the Weapons of Mass Destruction they couldn’t find.

All I can say is I do know what happened in MCC. That does not negate the government involvement any more than pretending they didn’t know about Pearl Harbor. The planes that were used could be also controlled from the ground. So I do not believe it was simply terrorist all on their own. I “believe” they used the terrorists as a decoy to achieve other goals. Can I prove that no! This is my OPINION.

What I can state is what happened in MCC. That is NOT speculation, theory, conjecture, or anything else. However, that does NOT say it was purely a terrorist act either. WTC7 fell by itself without anything hitting it and all government employees were evacuated prior to. It appears to be a professional demolition job. As for the “plane” that hit the pentagon (or missile) directly in the room where ALL the evidence was on the missing $2 trillion, is just too coincidental to be believable. I know people who were there and they say no plane debris. That was not the WTC where you could fly into that no problem. This was at ground level. Much more difficult to accomplish.

You acknowledge the fourth branch of government, i.e. the black budget, the CIA drug running, etc.. yet you say this is not a conspiracy? Only short-term planning? WTF logic is that!

Educate yourself on what really happened at WTC. Hundreds of architects and engineers have explained it is impossible for the buildings to have fallen from the 2 planes. They have provided the evidence of what really demolished the buildings.

http://ae911truth.org



http://armstrongeconomics.com/2014/01/04/the-real-conspiracy-2/

Quote
I wrote when the Arab Spring began and they saw how the youth organized using Twitter and Facebook that the various dictators did not control, what happened? The US suddenly needed the INTERNET KILL SWITCH in case we were under cyber attack. That was Sen. Joe Lieberman who introduced that and anyone who thinks they won’t do it because they will then lose the NSA – ya good one. Why do you think the NSA taps into Facebook? For Terrorists planning their next barbecue? When it comes to the civil unrest they expect coming this way from Europe, they will shut down the internet in a heartbeat out of self-interest – maintaining control and power.

Fine. Then the USA will fall off the map in terms of economic relevance. And rest of the world will take over. Just let them try, they will have pitch forks in D.C..

I can tell you right now there are many moderates who would give their lives if they take away the internet.  This would be all out civil war, the people versus Washington D.C..

I hope they try this! I really hope they do! They will get their asses handed to them.



http://armstrongeconomics.com/2014/01/04/a-very-valid-point-behind-conspiracies/

Quote
If you go through each step, you will see that the Fed was NEVER intended to be what it is today. It is always a work in process for with each crisis, Congress only messes things up again. It is always self-interest – not long-term schemes over decades.

Here is my evidence to refute this claim.

http://www.newswithviews.com/Spingola/deanna41.htm

Quote
On February 17, 1950, James Paul Warburg confidently declared to the United States Senate: “We shall have World Government, whether or not we like it. The only question is whether World Government will be achieved by conquest or consent.”[1] James Paul Warburg (1896-1969) was the son of Paul Moritz Warburg, nephew of Felix Warburg and of Jacob Schiff, both of Kuhn, Loeb & Company which financed the Russian Revolution through James’ brother Max, banker to the government of Germany.

http://en.wikipedia.org/wiki/Jekyll_Island_Club

Quote
Role in the history of the Federal Reserve[edit]

Jekyll Island was the location of a meeting in November 1910 in which draft legislation was written to create the U.S. Federal Reserve. Following the Panic of 1907, banking reform became a major issue in the United States. Senator Nelson Aldrich (R-RI), chairman of the National Monetary Commission, went to Europe for almost two years to study that continent's banking systems. Upon his return, he brought together many of the country's leading financiers to Jekyll Island to discuss monetary policy and the banking system, an event which was the impetus for the creation of the Federal Reserve.

On the evening of November 22, 1910, Sen. Aldrich and A.P. Andrews (Assistant Secretary of the United States Treasury Department), Paul Warburg (a naturalized German representing Kuhn, Loeb & Co.), Frank A. Vanderlip (president of the National City Bank of New York), Henry P. Davison (senior partner of J. P. Morgan Company), Charles D. Norton (president of the Morgan-dominated First National Bank of New York), and Benjamin Strong (representing J. P. Morgan), together representing about one fourth the world's wealth at the time, left Hoboken, New Jersey on a train in complete secrecy, dropping their last names in favor of first names, or code names, so no one would discover who they all were. The excuse for such powerful representatives and wealth was to go on a duck hunting trip on Jekyll Island.



http://armstrongeconomics.com/2014/01/04/conspiracy-theories-communism/

Quote
Constantly people insist there has to be these “rich” trillionaires who are out to enslave all people and create some one-world government. It is power they want not money? Those in the private sector are only concerned about money. Goldman Sachs, I believe,  filled government spots to eliminate the power to prosecute them so they could make money – not run government. I believe this is propaganda creating sinister groups is instigated by the very people who want to send the world into communism. For to go get these mythical “rich”, you have to take all the rights away from everyone. Who is trying to gather everything under the sun? The Bilderberg Group? Don’t think so. Have you ever heard of the NSA?

Q: Who does the NSA, Obama, CIA, FBI, and the United States government work for?

A: The likes of the Jekyll Island Club.

We have all these fingerprints of their evil doings, such as financing the Bolsheviks, Mao and the 57 million massacre of the Cultural Revolution, feminist movement, man caused global warming hoax, etc..

Please don't cite some inept Presidential investigation as evidence that the fox can control his henhouse. Is the 9/11 Commission not evidence enough of that!

Quote
Confusing 911 and economics is insane. The Government needed to get rid of WTC7 and the Pentagon to cover their own ass. They let 911 take place and I have stated before the first World Trade Center terrorists were in MCC NYC and were given the markers by Officer Kumb. They drew the world trade center towers on the wall of their cell with airplanes going into it one year before.

You don't think they can't plant some drawings on prison cells! Naivety!

9/11 set in motion this entire taxation and identification control mechanism. And you say it is not a long-term plan nor economically connected. Come on man. You are not this obtuse.

Quote
Thomas Jefferson put it best: “When the people fear the government, there is tyranny. When the government fears the people, there is liberty.” Even if these conspiracy theories were true, what will you do about it? Ask for help from government? These theories make people fear not government but sinister groups nobody can put their finger on.

There was no reason to fear the US government nor England during that time, because the colonies had sufficient resources to win.

But now we are dealing with the entire world turned socialist, and thus the people will demand the government exterminate anyone who stands up. Because the people are destroyed and they can't be helped. It is too late for the boomers and even the Gen-X. We wrecked the world with decades of debt. And we are past the point of no return.

Thus we can't win by political process nor by standing against overtly.

The elitest won. They put their plan into action as stated by Warburg.

And now the only way we win, is to outsmart them covertly with anonymity. And destroy their entire industrial apparatus by making it irrelevant.

This will open up the future for the youth. Unfortunately it is going to put the boomers out to pasture, but I guess they deserve it for fucking up the world with their hubris.

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January 05, 2014, 04:05:44 PM
 #43

.....
I think that is the reason  for all this data collecting. Knowledge is power. All under the guise of " preventing terror attacks" but meanwhile just harvesting other innocent peoples data. Personally if the NSA should look me up the only thing they will find is that i talk too much on the phone(hands free) even when I"m driving ( yeah NSA you got me there  i'm a bad bad bad man  Grin ), am a comic book and coin collector, l do a lot of volunteer work, love bitcoins, etc No real secrets there Smiley

Never, never, EVER fall for the logical fallacy that "Oh, I have nothing to hide, I don't care if they collect data on me."
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January 05, 2014, 05:30:46 PM
 #44

the 3D printing revolution is coming and we will buy downloaded designs and print in our homes
People won't pay for these designs! This time resistance from pirates will be real, not as it was with movies and music - MAFIAA can be met with 3D printed guns! Grin
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January 06, 2014, 12:44:35 AM
 #45

the 3D printing revolution is coming and we will buy downloaded designs and print in our homes
People won't pay for these designs! This time resistance from pirates will be real, not as it was with movies and music - MAFIAA can be met with 3D printed guns! Grin

People will pay commissions for custom designs, or donate to designers for existing designs. Plus, jus as iTunes and Netflix provides a service or storage and organizing more than the service of selling music and videos, people will pay to have someone else store, catalog, and provide designs for them, instead of having to keep them on their hard drives themselves.

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January 06, 2014, 02:13:20 AM
Last edit: January 07, 2014, 11:04:12 AM by AnonyMint
 #46

blablahblah, some education for you on simulated annealing:

https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18789
https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18911

http://blog.mpettis.com/2013/08/the-urbanization-fallacy/#comment-644
https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18944

https://web.archive.org/web/20130213161115/http://www.mpettis.com/2013/01/14/recognizing-the-need-for-economic-adjustment/#comment-21439
https://web.archive.org/web/20130624091541/http://www.mpettis.com/2012/12/28/the-imf-on-overinvestment/#comment-21099
http://blog.mpettis.com/2013/10/hidden-debt-must-still-be-repayed/#comment-3179
https://web.archive.org/web/20130531035050/http://www.mpettis.com/2012/11/17/is-there-an-asian-rmb-bloc/#comment-19397

The only remote possible strategy for survival might have been to kill a few dogs with kicks to the head and then lead the pack to eating the dead dogs. Then lead that pack against those who were watching the ordeal.

Top-down control must become a vicious cancer, because it must destroy everything by preventing annealing thus to survive people must violate the control. Annealing is precisely localized freedom.

The irony is how readers may not realize we are approaching top-down control in our own countries.

https://bitcointalk.org/index.php?topic=365141.msg4336719#msg4336719

The lie of debt and insurance:

https://web.archive.org/web/20130531035050/http://www.mpettis.com/2012/11/17/is-there-an-asian-rmb-bloc/#comment-21561
https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18682
https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18792
https://web.archive.org/web/20130217223504/http://www.mpettis.com/2012/10/07/how-to-be-a-china-bull/#comment-17172
https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-19070
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16630

The bankster business model (the global conspiracy):

https://web.archive.org/web/20130217223504/http://www.mpettis.com/2012/10/07/how-to-be-a-china-bull/#comment-17427

....
Not to worry! Those trees will be provided for free from the patented DNA banks of Monsanto...

When you plant 5000 or 10000 trees in a region where trees were not missing to balance the human impact elsewhere, isn't that also an attack on Mother Nature? What about irrigation?

Oh but power-elite globalist CNN's owner Ted Turner wants a utopia:

http://en.wikipedia.org/wiki/Georgia_Guidestones#Inscriptions

And Monsanto's genetically engineered razor blade model for agriculture causes the growth of super-weeds which render the land incapable of production.

And we don't need to wonder why the agricultural land failed at the end of the Roman empire leading to a 600 - 1000 year Dark Age. It isn't amazing all the overcapacity and stupid shit people can do when they have an unlimited supply of debt to fund their activities.

Armstrong wrote some detailed information about Cheney's role:

http://armstrongeconomics.com/2014/01/04/just-for-the-record-fourth-branch-of-government/http://armstrongeconomics.com/2014/01/04/just-for-the-record-fourth-branch-of-government/

And we know he was instrumental in 9/11 too. But Martin do you really think Cheney did this with his Neocon coalition, or did he have a higher echelon blessing. This 4th branch of government wasn't created by Cheney. I think it was Eisenhower who warned in a speech about the military-industrial complex control over the government.

My broad stroke prediction for the future:

https://web.archive.org/web/20130623021024/http://www.mpettis.com/2013/06/10/how-much-investment-is-optimal/#comment-23758
https://web.archive.org/web/20130502021707/http://www.mpettis.com/2013/03/21/when-do-we-call-it-a-solvency-crisis/#comment-21988
https://web.archive.org/web/20130411201742/http://www.mpettis.com/2012/12/04/three-cheers-for-the-new-data/#comment-20099
https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18823

My comments on the following pages cover the technological unemployment crisis ahead and I even summarize the 78 year cycle with a chart of the past events:

https://web.archive.org/web/20130629103550/http://www.mpettis.com/2013/02/21/a-brief-history-of-the-chinese-growth-model/#comment-21562
https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18853
https://web.archive.org/web/20130624091541/http://www.mpettis.com/2012/12/28/the-imf-on-overinvestment/#comment-20711
https://web.archive.org/web/20130411201742/http://www.mpettis.com/2012/12/04/three-cheers-for-the-new-data/#comment-20394
https://web.archive.org/web/20130531035050/http://www.mpettis.com/2012/11/17/is-there-an-asian-rmb-bloc/#comment-19226
https://web.archive.org/web/20130531035050/http://www.mpettis.com/2012/11/17/is-there-an-asian-rmb-bloc/#comment-19319
https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18648
https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18795

Outsourcing is peaking:

https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18898
http://www.gartner.com/newsroom/id/2550615 (decline to 2% for 2013 reached as predicted)

Chinese corporate debt is the highest in the world as a percentage of GDP:

https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18916

China's ruling class is checkmated:

https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16624
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16509
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16585
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-17032
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16951

The death of the industrial age, stored capital, and collectivism:

https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16735

My analysis of the Philippines predated the Forbes article:

https://web.archive.org/web/20130624091508/http://www.mpettis.com/2013/02/14/what-ill-be-watching-in-2013/#comment-21493
http://www.forbes.com/sites/jessecolombo/2013/11/21/heres-why-the-philippines-economic-miracle-is-really-a-bubble-in-disguise/

Brazil:

https://web.archive.org/web/20130217223504/http://www.mpettis.com/2012/10/07/how-to-be-a-china-bull/#comment-17177

CIA drives the drug trade:

https://web.archive.org/web/20130531035050/http://www.mpettis.com/2012/11/17/is-there-an-asian-rmb-bloc/#comment-19398


giantdragon, people will pay for open source because the cost of not paying will be higher, because those with money to buy will be those with designs to sell (the rest of society will be bankrupt). Thus we designers will be cross-pollinating our designs, i.e. working together to make them interoperable. Those who steal won't have the knowledge to use them effectively. I expounded on this:

https://web.archive.org/web/20130624015512/http://www.mpettis.com/2013/05/10/investment-and-consumption/#comment-23041
http://esr.ibiblio.org/?p=4946&cpage=1#comment-401450
http://esr.ibiblio.org/?p=4946&cpage=1#comment-401510
http://esr.ibiblio.org/?p=4946&cpage=1#comment-401595
http://esr.ibiblio.org/?p=4946&cpage=1#comment-401698

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January 06, 2014, 03:29:33 AM
Last edit: January 06, 2014, 03:39:51 AM by AnonyMint
 #47

http://blog.mpettis.com/2013/12/monetary-policy-under-financial-repression/#comment-8545

Quote
Michael in my opinion you make it too complicated. The simple story of economics is that top-down control (i.e. government) leads to massive failure.

We are headed to massive repression because people don't understand this. Socialism (top-down control) is peaking.

This repression will force people into chaotic strategies in order to survive.

Past detail on simulated annealing, etc from your lost blogs is here:

https://bitcointalk.org/index.php?topic=365141.msg4336719#msg4336719

http://blog.mpettis.com/2014/01/will-the-reforms-speed-growth-in-china/#comment-8541

Quote
Remember Chinese corporate debt is the highest in the world as a percentage of GDP:

https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18916

China's ruling class is checkmated:

https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16624
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16509
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16585
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-17032
https://web.archive.org/web/20130603115932/http://www.mpettis.com/2012/09/23/can-china-increase-export-competitiveness/#comment-16951

The only way for China to readjust is for the elite to lose power. But this will mean chaos, because the economic system (e.g. see corporate debt) is not capable of functioning without the elite. There has never been a smooth transition from a centrally controlled (top-down) economy to a bottom-up economy. Even the reunification of East and West Germany required massive financing from West Germany, which won't be available in this case due to the $150 trillion global debt (300% of global GDP), $1000 trillion of sovereign bond derivatives, and $1000 trillion of unfunded social liabilities.

There is only one way, which is an overshoot into chaos.

This is going to get very, very bad. War is very likely between Japan and China, because Japan is also losing hope. Even the youth have stopped having sex.

http://armstrongeconomics.com/2013/12/27/chinese-press-urges-retribution-against-japan/

http://armstrongeconomics.com/2014/01/03/cycles-in-demographics-sex-to-no-sex-free-love-to-no-love/

The entire world is headed for a Madmax outcome:

https://bitcointalk.org/index.php?topic=365141.msg4245914#msg4245914

By 2016 or 17, we will know.

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January 06, 2014, 10:23:49 AM
 #48

CIA drives the drug trade:

Correct.  Governor Clinton ran interference for the CIA drug flights which operated out of Mena, AR.  Oliver North oversaw the operation for awhile.  I saw him on TV about 5 years ago where he was revered as a war hero.  What a crock.
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January 06, 2014, 10:07:23 PM
 #49

I'm just wondering, does AnonyMint actually expect people to read all his links? I guess it's just another sign of rather extremely overblown ego...  Tongue

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January 07, 2014, 05:48:08 AM
 #50

I'm just wondering, does AnonyMint actually expect people to read all his links? I guess it's just another sign of rather extremely overblown ego...  Tongue

Haha I checked out his blog but was wondering the same thing. He's an interesting guy. I think he's doing it so he can show posterity that he was right all along if it turns out that way. Any comment Anonymint?
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January 07, 2014, 05:59:27 AM
 #51

So tell me a couple of things: when those IQ tests are designed and calibrated, who decides that a particular combination of answers, 'X', is 3-and-a-bit standard deviations above the mean and therefore worthy of 150 brownie points and widespread adulation, whereas another combination, 'Y' is only awarded 50 points despite X and Y being equally 'abnormal'? Oh, because IQ is a real-world test of fitness that everyone is assumed forced to try their best at, so low-to-middling results are less fit? Oh the irony...

That would be a good argument against the validity of IQ tests if they had no real-life predictive ability or if the questions had no correct answers.

If you look at IQ test questions, you'll see that one answer does indeed stand out as correct; the person who can identify this answer can also be expected to be good at solving the sorts of real-life problems that people encounter.

Your epistemological point is well taken (but can also be answered), but in practice these tests are perfectly valid. It just boils down to what I described above.
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January 07, 2014, 06:48:16 AM
Last edit: January 07, 2014, 11:02:46 AM by AnonyMint
 #52

P.S. I am done talking....

I am not for making people suffer,...

They have to undergo their learning by experience as depicted below.

But the world has never ended, not even once. Therefore your doomsday preaching makes you a fool.

For the people depicted below, this world ended. Yeah I know "it is different now", and every generation thought it was.

Resorting to shock tactics with the scary pictures shows that you don't have good arguments to back up your claims.
https://yourlogicalfallacyis.com/appeal-to-emotion

I bet sobriety won't convince you socialists either:

The OP and the link provided by Hawker disagree, as the former says 5% and the latter says 20% live in absolute poverty. The chart in the OP probably uses liar government statistics for inflation.

For example, one third or more of India's 1 billion population can't get proper nutrition. The government recently started to subsidize food, and this will drive India into bankruptcy over the next few years as the current account deficit as a percentage of GDP is rising above the "point of no return" spiraling failure. They installed an IMF alumni as the central bank governor to put this Communism into effect. Heck you can still buy a child in India. Slavery is very real and takes many forms. See below.

Although we lifted the material lives of humanity with technology, i.e. even people living on a few $ per day have a smartphone and ride motorized transportation, the power vacuum of democracy keeps the world in slavery. For example, in most countries the working class can not stop working else they can't pay their daily needs and debts. In the developed world we have massive debts to pay, i.e. our houses costs 10 times more than they should because we pulled aggregate demand forward by 30 years with 30 year mortgages. In the developing world, they spend 30% or more of their income just on food, and have much lower personal debt levels but their savings has been wasted with super high corporate debt levels:


On top of that, these charts will take a massive adjustment to the worse, once the Madmax outcome hits before 2020. Refer to the linked thread above.

Socialists love to refer to myopic statistics over limited timeframes which obscure the reality of the debt-slavery and power vacuum referred to lovingly as "democracy".

And yes if we realize that the power vacuum and the expansion of debt-slavery is at its source generated by the ability of the State to tax and have a monopoly on force, then a more anonymous form of decentralized altcoin might be a technology that again lifts the people of the world higher.

Only technology lifts the people, while government tries to waste all the gains.

The hubris and self-importance of the boomers who are so proud of their $150 trillion global debt bubble, with $1000 trillion of unfunded social liabilities, and another $1000 trillion of sovereign bond bubble credit swap derivatives.

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January 07, 2014, 07:00:12 AM
 #53

I'm just wondering, does AnonyMint actually expect people to read all his links? I guess it's just another sign of rather extremely overblown ego...  Tongue

Haha I checked out his blog but was wondering the same thing. He's an interesting guy. I think he's doing it so he can show posterity that he was right all along if it turns out that way. Any comment Anonymint?

Originally it was an attempt to see if I could change the mind of people.

Then it smoothly transitioned to market research and development of concepts for a coming altcoin.

By now you are correct, my commentary is winding down to organizing a record for posterity to hopefully show in retrospect that the minanarchists had something important to add to the study of macro economics.

It has occurred to me there is probably an effectual correlation between the debt-bubble misallocating human capital (time and education) and the lack of time for westerners to read in-depth expositions on macro economics. Most of us are too busy for example chasing the next speculation or slaving to meet expenses (see prior post) to actually study and research. And even many (or perhaps only some) those who study and research are influenced by the debt-funding in the academic system.

Yet blabblah assures us that debt doesn't matter.

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January 07, 2014, 09:04:45 AM
 #54

I beginning to think of Anonymint as a sort of prophet.  I have learned a great deal just from reading the past few weeks of his postings.  Anonymint, I salute you.  Keep up the good work.
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January 07, 2014, 09:06:53 AM
Last edit: January 07, 2014, 10:47:39 AM by AnonyMint
 #55


I was explaining to you the repeating pattern of result of socialism upthread. Remember debt is always future taxation throughout history.

1) Aggregate size of debt is irrelevant.

As I explained in my prior post upthread, distributing free money distorts all the feedback loops that provide the most efficient outcomes...

Distributing free money? Quote please.

Efficient is an adjective. It gives extra information about something. E.g.: an efficient car. But "efficient outcome" = weasel words, presumably meaning "efficiently follow what I secretly think is the best way"...

Unfortunately they don't teach us everything in school, so let's expound on macro economic (or more generally Entropic) efficiency, i.e. maximizing fitness. The Second Law of Thermodynamics states the entropy of the universe trends to maximum. Entropy is disorder, that means mathematically maximizing the number of independent, minimized probabilities, i.e. to maximize independent local actors, Taleb's Antifragility, resilience and fitness.

Let's start with a quote of myself from the Economic Devastation thread that CoinCube started when he read some of my seminal articles.

https://bitcointalk.org/index.php?topic=355212.msg3804256#msg3804256

I agree with the 'can't buy knowledge' part. Internet has made the cost of most knowledge almost free or next to nothing, something that people in the pre-internet era couldn't dream of. Hopefully these large amounts of knowledge available can bring some quality changes.

Nothing is free. Everything has a cost of human time. What you mean is the access to information is more open thus more freedom. Freedom and openness is not the same as free meaning no cost.

That is part of the rationale of why Eric S Raymond proposed the name "open source" instead of "free software".

Freedom of information publishing and access enables the division-of-labor to increase, i.e. for expertise to become more focused. Which increases the collective knowledge of society, trade, and prosperity, but this is not the same as the knowledge is free.

The purpose of money is that it enables me as an expert programmer to trade with an expert surgeon without finding a patient who needs both surgery and custom programming to act as our intermediate barter.

So we will see money moving more towards its primary function as a medium-of-exchange with short-term store-of-value and less of as a long-term, hard-on store-of-value. Why? Because knowledge workers crave knowledge more than money, because they can't buy the NEW knowledge they want with money, even if they tried. I explained why new knowledge can't be created out-of-thin air at ANY PRICE in the following linked section.

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

I expounded on that in 2013:

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

Degrees-of-freedom is potential energy. I will go find my writings and research on that from my copute.com



http://copute.com/index.html.orig

Higher-Level
| Degrees-of-Freedom

The more degrees-of-freedom, then the more a system can adapt to cooperate and fit to a desired solution. Imagine a car without reverse. That would be one less degree-of-freedom. The car would have to go around the block, to go backwards. That is inefficient.
With low-level issues alleviated, increases in the degrees-of-freedom correspond to (i.e. eliminating barriers to) robust compositional expression of higher-level semantics.

Higher-Level
| Degrees-of-Freedom
| | Physics of Work

The well established physics equations for work, can be correlated to the software development process to understand that efficiency to obtain programs with the best fitness to the desired semantics, is (exponentially) proportional to the degrees-of-freedom present in the compositional expression of higher-level semantics.

Higher-Level
| Degrees-of-Freedom
| | Physics of Work
| | | Fitness

Fitness is how well a particular configuration of a system fits the desired solution, e.g. how well a particular program fits the desired semantics.

For example, there would be gaps (i.e. errors in fitness) between a bicycle chain and a curved shape it is wrapped around, because the chain can only freely bend (i.e. without permanent bending) at the hinges where the links are joined. Each hinge is a degree-of-freedom, and the reciprocal of the distance between hinges is the degrees-of-freedom per unit length. Employing instead a solid, but flexible metal bar, the metal would remain fit to the curve only with a sustained force. The resisting force is a reduced degrees-of-freedom and an error in fitness. Permanent bending to eliminate the resisting force, reduces the degrees-of-freedom for future straightening some of the bend for wrapping to larger curves or straight shapes.

Higher-level semantics are analogous to adding more hinges. Cases in the higher-level semantics which don't compose, i.e. aren't unified, or where the high-level semantics don't fully express the desired semantics, are analogous to permanent bending.

Higher-Level
| Degrees-of-Freedom
| | Physics of Work
| | | Efficiency of work

Efficiency of work is the ratio of the work output (i.e. performed) divided by the work input, i.e. the efficiency is 100% minus the work lost to friction.
The lower the friction, then less power is required to do the same work in a given period of time. For example, pushing a cart on wheels, requires much less power than to push it without wheels, or to push it uphill on wheels. The ground rubbing against the bottom of the cart, or gravity, are both forms of friction. The rubbing is analogous to the permanent bending of the metal bar in the Fitness section, because the top of the ground and the bottom of cart are permanently altered. The gravity is a form of friction known as potential energy.

Given the friction is constant, then the input power (and thus input energy) determines the rate at which work can be completed. If the type of friction is potential energy, then the more work that is performed, the greater the potential energy available to undo the work. This type of potential energy is due to the resistance forces encountered during the work to produce a particular configuration of the subject matter:

Quote
http://en.wikipedia.org/w/index.php?title=Energy&oldid=435292864

Stored energy is created whenever a particle has been moved through a field it interacts with (requiring a force to do so), but the energy to accomplish this is stored as a new position of the particles in the field—a configuration that must be 'held' or fixed by a different type of force (otherwise, the new configuration would resolve itself by the field pushing or pulling the particle back toward its previous position). This type of energy 'stored' by force-fields and particles that have been forced into a new physical configuration in the field by doing work on them by another system, is referred to as potential energy. A simple example of potential energy is the work needed to lift an object in a gravity field, up to a support.

For example, a compressed spring wants to push back and undo the work performed to compress it.

Since the goal is to get more configurations (i.e. programs) in the software development system with less work, then these resistance forces must be reduced, i.e. increase the degrees-of-freedom so that fitness is closer to 100%. Visualize an object held in the center of a large sphere with springs attached to the object in numerous directions to the inside wall of the sphere. These springs oppose movement of the object in numerous directions, and must be removed in order to lower the friction and increase the degrees-of-freedom. With increased degrees-of-freedom, less work is required to produce a diversity of configurations, thus less power to produce them faster. And the configuration of the subject matter which results from the work, thus decays (i.e. becomes unfit slower), because the resistance forces are smaller. Requiring less power (and work), to produce more of what is needed and faster, with a greater longevity, is thus more powerful (efficient).


Higher-Level
| Degrees-of-Freedom
| | Physics of Work
| | | Knowledge

Knowledge is correlated to the degrees-of-freedom, because in every definition of knowledge one can think of, an increase in knowledge is an increase in degrees-of-freedom and vice versa.
Software is unique among the engineering disciplines in that it is applicable to all of them. Software is the process of increasing knowledge. Thus the most essential characteristic of software is that it does not want to be static, and that the larger the components, thus the fewer the degrees-of-freedom, and the less powerful (i.e. efficient) the software development process.

Communication redundance (i.e. amplitude) is a form of power, because its utility exists due to the friction of resistance to comprehension, i.e. due to noise mixed with the signal. The signal-to-noise ratio (SNR) depends on the degrees-of-freedom of both the sender and the receiver, because it determines the fitness (resonance) to mutual comprehension.

The difference between signal and noise, is the mutual comprehension (i.e. resonance) between the sender and the receiver, i.e. noise can become a signal or vice versa, depending on the fitness of the coupling. In physics, resonance is the lack of resistance to the change in a particular configuration of the subject matter, i.e. each resonator is a degree-of-freedom.


Quote
http://en.wikipedia.org/w/index.php?title=Resonance&oldid=432632299#Resonators

A physical system can have as many resonant frequencies as it has degrees of freedom.

http://en.wikipedia.org/w/index.php?title=Resonance&oldid=432632299#Mechanical_and_acoustic_resonance

Mechanical resonance is the tendency of a mechanical system to absorb more energy [i.e. less resistance] when the frequency of its oscillations [i.e. change in configuration] matches the system's natural frequency of vibration [i.e. natural change in configuration] than it does at other frequencies.


Degrees-of-freedom is the number of potential orthogonal (independent) configurations, i.e. the ability to obtain a configuration without impacting the ability to obtain another configuration. In short, degrees-of-freedom are the configurations that don't have dependencies on each other.

Thus increasing the number of independent configurations in any system, makes the system more powerful, requiring less work (and energy and power since speed is important), to obtain diversity within the system. The second law of thermodynamics says that the universe is trending to maximum entropy (a/k/a disorder), i.e. the maximum independent configurations. Entropy (disorder) is a measure of the relative number of independent possibilities, and not some negative image of violence or mayhem.

This universal trend towards maximum independent possibilities (i.e. degrees-of-freedom, independent individuals, and maximum free market) is why Coase's theorem holds that any cost barrier (i.e. resisting force or inefficiency) that obstructs the optimum fitness will eventually fail. This is why decentralized small phenomena grow faster, because they have less dependencies and can adapt faster with less energy. Whereas, large phenomena reduce the number of independent configurations and thus require exponentially more power to grow, and eventually stagnate, rot, collapse, die, and disappear. Centralized systems have the weakness that they try to fulfill many different objectives, thus they move monolithically and can fulfill none of the objectives, e.g. a divisive political bickering with a least common denominator of spend more and more debt[16].

Thus in terms of the future, small independent phenomena are exponentially more powerful than those which are large. Saplings grow fast into trees, but trees don't grow to moon (nor to end of the universe). The bell curve and power law distributions exist because the minority is exponentially more efficient (i.e. more degrees-of-freedom and knowledge), because a perfectly equal distribution would require infinite degrees-of-freedom, the end of the universe's trend to maximum disorder, and thus a finite universe with finite knowledge. It is the mathematical antithesis of seeking knowledge to have socialism (equalitarian) desires for absolute equality, absolute truth, or perfection in any field.

The organization of matter and natural systems (e.g. even political organization) follows the exponential probabilistic relationship of entropy and the Second Law of Thermodynamics, because a linear relationship would require the existence of perfection. If the same work was required to transition from 99% to 100% (perfection) as to transition from 98% to 99%, perfection would be possible. Perfection is never possible, thus each step closer to 100% gets asymptotically more costly, so that perfection can never be reached. This is also stated in the Shannon-Nyquist sampling theorem, wherein the true reality is never known until infinite samples have been performed (and this has nothing to do with a pre-filter!). The nonexistence of perfection is another way of stating that the universe is finite in order, and infinite in disorder, i.e. breaking those larger down to infinitely smaller independent phenomena.

Perhaps you did not actually read the linked pages I provided upthread, so I will copy some quotes for you about efficiency.

http://blog.mpettis.com/2013/08/the-urbanization-fallacy/#comment-644

Quote
The problem is that government is inefficient, because a) top-down is not as efficient at finding diversity of fitness as bottom-up (i.e. simulated annealing is only known global optimization algorithm), and b) vested groups corrupt and paralyze the centralized coffers. Right now we have bankers who keep the profits, yet socialize the defaults on their proprietary trading. QE was a way to buy the shit the bankers didn’t want and give them more money to go gamble with– it was never about getting more loans to businesses and restarting the real economy. And now we see the depositors will be bailed-in, but the defaults on proprietary trading will take precedence over the bank depositors and bond holders in bankruptcy. The G20 has turned into one huge fraud. So that is why I say upthread, don’t think your 20-something age bracket is going to win easily and that the politics of the boomers+corruption won’t succeed in taxing above the Laffer limit for a while as they spiral this sucker down into a police state.

So the Laffer limit is basically the breaking point where capital says “hell no” and goes to hide in a hole (in gold, but now we have a new technology). This is well underway as money velocity is way down globally and now it is falling over a cliff as you see all emerging markets reporting slowing and falling stock markets this week. I warned that this would happen and capital would run back to the dollar before the final big crash 2016.

It is not inflation that is the problem. We need inflation. The problem is that control over inflation is centralized, because money is a function of the majority. Fortunately we now have a technological solution that never existed before in the history of mankind.

http://blog.mpettis.com/2013/08/the-urbanization-fallacy/#comment-722

Quote
As far as I can see, you entirely miss Michael’s thesis, which is that the [Chinese] government has to stop repressing the consumer sector, by getting out of the way, i.e. stop manipulating interest rates lower, stop propping up failed and inefficient [export] industries, and stop trying to pick the winners. The focus should be on doing less suppression, not on picking what sector to throw more top-down resources at.

http://blog.mpettis.com/2013/08/the-urbanization-fallacy/#comment-511

Quote
There is already overcapacity in China for manufacturing and fixed capital investment projects.

It is possible to stimulate more demand with more debt, but this is just an illusion of employment until the expanding debt is written down.

China needs to move into higher-valued activities, in order to generate wealth, otherwise doing more of the same is making them poorer (using a forward valuation when the current unpayable debt is written-down).

But to move into higher-valued activities requires knowledge creation and knowledge creation requires fine-grained annealing (link contains a reference to Taleb’s Antifragility math). This is why I’m confident China can not rebalance without a Minsky moment implosion that topples their top-down manner of collecting and directing capital.

https://web.archive.org/web/20130213161115/http://www.mpettis.com/2013/01/14/recognizing-the-need-for-economic-adjustment/#comment-21439

Quote
GA, you’ve restated what Michael wrote, you are not disagreeing with his point. The point is that exports may be understated and imports overstated, thus the true surplus (and nominal GDP level) is much higher and the consumption level percentage of the economy may be much lower than stated.

In short, the economy may be even more unbalanced than calculated.

The other interesting aspect is that exporters may not be as unprofitable as reported, except the profits are accruing to the illicit economy and to a fewer number of insiders, so thus is likely misallocated (even the highest IQ people in the world could not allocated capital more efficiently than millions of monkeys making individual opportunity cost decisions).

Regarding that last bolded comment about monkeys banging on the code, listen to the genius Eric S Raymond on how this applies to The Cathedral (top-down, closed source) versus Bazaar (bottom-up, open source) model of software development. The bottom-up model is the only positive scaling law of software engineering. All others are negative scaling laws, i.e. the Mythical Man Month. Informally Linus' Law is "given sufficient eyeballs, all bugs are shallow". Or more formally, "given sufficiently large pool of developers and beta testers, every bug will be obvious to someone, but not the same someone".

An example of why bottom-up is better fitness (i.e. smarter, more productive, more prosperous) than one very smart guy's idea:

http://esr.ibiblio.org/?p=5178&cpage=1#comment-421250
(note the comment will never appear because Eric banned me 3 times, feel free to anonymously post my comment there so they will see it, since they are trying to choose a name we will all use for open source)

Quote
I like exploriment.

I have used delve naturally, "I will need to first delve into the code". However, I prefer to retain delve to mean when I am not necessarily implicating [experimental] modification.

My best alternative idea thus far is prodspect.

Other brainstorming:
edispect
editspect
experispect
modilyze
modelyze
twgeek
twerk

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January 07, 2014, 10:44:13 AM
Last edit: January 07, 2014, 10:54:52 AM by RAJSALLIN
 #56

I think Anonymint is an intelligent individual who thinks outside the box more than most. It's incredibly important to not get stuck in the views the media pumps into us and be able to look at things from another perspective. Of course I'm hoping that he and Armstrong are wrong on a lot of things and I think he would be the first to acknowledge if this happens. I personally think Anonymint is to negative but you also have to understand that things don't look to bright at the moment. A lot of areas are pointing towards the possibility we are in a pre war time like the 1930s.

It's extremely important that these things are discussed and also that we don't forget our history since history often rimes. Maybe we can combine our thoughts and think of some way to change the course of the future. for the record I do believe a truly anonymous crypto currency could be a step in the right direction. I'm not sure it's AnonyMints coin or maybe more likely zerocoin but any altcoin coming out with anonymity added will gain my attention.

Edit: I do agree with the poster above that intelligence from a standard IQ test isn't enough to make substantial assessments on someones intelligence. I've met people who have extremely high documented IQs who have been stuck thinking in a certain way and in such have a hard time seeing things for what they are. I think it's very dangerous to use an IQ test as something else than a proof of an individual having a functioning brain in a very specific area.

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January 07, 2014, 12:17:51 PM
Last edit: January 08, 2014, 04:03:46 AM by AnonyMint
 #57

RAJSALLIN,

Thanks.

I can either hope that what I've written in this thread is incorrect, or I can hope we can make an altcoin that busts us out of this mess.

I would prefer to be proactive on the latter, than hiding my eyes and hoping our global Titanic isn't sinking.



Something new I just wrote...

http://blog.mpettis.com/2014/01/will-the-reforms-speed-growth-in-china/#comment-8882

Quote
Global net wealth is apparently north of $200 trillion, so is $30 trillion that special given China's proportion of global population.

Let's not conflate claims on future labor (aka. stored money) with social capital. Michael had an entire blog about social capital, which delves into some of the differences. He and I probably disagree on some specifics, interpretations, and political models.

For example, it depends who controls that net wealth and what their incentives are. Since that wealth is (I assume) concentrated in top-down control, then we can't expect them to willingly turn this over to the broad population. Even if we could convince those wealthy to give it back, redistributing concentrated wealth is wasteful, because no top-down controller can devise the optimum strategy for choosing who gets how much. For example, I was recently tasked with awarding donations to the typhoon victims in the Philippines and it is very difficult to predict how people can waste money when they received for free.

My theoretical understanding of macro economic efficiency is that bottom-up systems anneal in microsteps of a multitude of independent actors, and this social capital is been destroyed over long periods of time with top-down control and debt, as evident if a large amount of stored money has been aggregated (then it is inherently dumb as I stated above), i.e. the Gini coefficients have risen and the middle class is threatened worldwide.

The western political reaction to this as we enter what I expect to be the second wave of this global debt crisis after 2015 will be to erroneously blame the rich (when we should be blaming debt and top-down vested interests in governments) and increase regulation which further curtail the freedom of small businesses with a negative feedback loop on income that spirals us into the toilet boil of a potential Dark Age. Instead of allowing the FREEDOM from chaos of unmanaged defaults (i.e. no public backstops, no organized repressment) which could spawn a renewal, instead the top-down control will cling to power, raise taxes far above the Laffer limit, and witchhunt all private wealth.

China appears to be trying to further some micro-managed delusion. I read for example how they are reviewing which solar panel manufacturers to kill. This is a sign that they apparently erroneously think they can have their cake (top-control control) and eat it too (expand market fitness and thus size).

China's model is built on being able to replicate the same activity, e.g. manufacturing, construction, etc.. The future markets are going to come from diverse bottom-up, accretive knowledge formation. I am not optimistic that China will be able to find a home for its $30 trillion on that bandwagon. East Germany was merged when the debt bubble was still young enough that dumb large capital could simply pour into the Euro (which along with LTCM and Russian default is apparently one of the factors for the exodus of capital during the late 1990s Asian crisis).

But how is that capital going to find new demand to invest in?

That global wealth is dying. The industrial age is dying. Oxford U. predicts 47% of all existing jobs will be replaced with computer automation within 20 years.

We are headed into a chaotic transformation from the industrial age to the computer revolution. This is inherently bottom-up, not top-down. See my link above, and remember that the bazaar (open source) model the only known positive scaling paradigm for software development. Top-down, closed-source, cathedral models is limited by the Mythical Man Month negative scaling.

I've overhead that China's software game and internet developers know this. Purportedly they (e.g. Baidu) break their organizations down into numerous small shops competing autonomously. Maybe they will be the next leaders of China.

As detailed in a past blog where Michael's showed a chart of possible growth rates, the assumption in his choice for muddle through outcome, is that the demand collapse contagion in the global economy won't be that excessive. Where will that $30 trillion go to seek demand, when the IMF is proposing an urgent confiscation and repression of savings throughout Europe?

Don't expect it to come from the developing world, because the top-down tail doesn't wag the top-down dog. Outsourcing is peaking:

https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18898
http://www.gartner.com/newsroom/id/2550615 (decline to 2% for 2013 reached as predicted by Morgan Stanley's model)

So China is going to need to enter a turbulent period where that $30 trillion is forced to take massive risks with winners and losers in a more free market economy.

I suspect some of China (and the developing world in general) is ready for this opportunity. I just don't expect turbulence to mild.



Edit:

http://blog.mpettis.com/2014/01/will-the-reforms-speed-growth-in-china/#comment-9032

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Additional thought. Tie this back into simulated annealing. Remember if cool ice too quickly, the local molecules don't have time to relax and find optimally distributed structures, thus we get cracks. Rapid global cooling top-down (e.g. massive expansion of debt, unbalanced model accumulating $30 trillion to a few taipans) creates cracks (in social capital) which can't be fixed unless we melt the ice and start over again.

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January 07, 2014, 12:29:39 PM
Last edit: January 07, 2014, 12:44:15 PM by AnonyMint
 #58

Continuing on my rebuttal to blahbab's assertion that I don't know the meaning of 'efficient'.

https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18944

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Thanks, Shelby. It shouldn’t need to be pointed out over and over, but complex systems manage themselves much more efficiently than any single intelligence can. A child can figure this out but not, apparently, many trained economists.

https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18682

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Quotes from the source you provided.

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“To prevent unearned income (economic rent) from adding to the economy’s cost of living and doing business, potentially rent-yielding infrastructure should be kept in the public domain”

Thus the result is an insufficient supply of low-cost housing in China, and instead 64 million unoccupied condos which the working class can not afford. Sorry but socialism is a failed economic concept. People don’t deploy their capital, if they can’t profit on it.

Now I read the government is subsidizing more low-cost housing. Remember what happens when you give away for free, that which is not free (snarled toll roads when tolls were eliminated past holiday season).

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“every day you are ultimately responsible for ensuring that 4 billion meals are served and 55,000 new jobs are created. Every day”

That is why top-down economies fail (horrendously). No leaders are smart enough to do the opportunity cost thinking for 1 billion individuals.

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“Because so many existing jobs get destroyed by automation”

And accelerating:

http://english.caixin.com/2011-08-08/100288640.html

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

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productivity grew at a 17% annually between 1995 and 2002

China’s labor force is now producing 3 times as much as it did 10 years ago

It is that Chinese manufacturers are becoming more efficient

But given the Yuan peg and the resultant macro-economic subsidy for exporters (include recent direct subsidies of low interest loans), we don’t know if that productivity is real. It could be false demand, created by subsidies, with real profit margins being near 0 (or as my recent Chinese friend confirmed, in many cases negative real profits).

With a top-down economy driven by exogenous forex manipulation, the data is less meaningful until the tide goes out and we can see where all the subsidies were and who is swimming naked.

This is an example of the model myopia the professor is writing about. You claim efficiency gains, without looking at the systemic data, which determines what is efficient overall in the exogenous market fulcrum. Coase’s theorem tells us that the free market will dismantle (route around) subsidies because they are inefficient:

http://www.coolpage.com/commentary/economic/shelby/Understand%20Everything%20Fundamentally.html#europe

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“Between 2000 and 2008 it contributed 43% of the country’s economic growth”

We won’t know what China’s *real* growth has been, until the tide of subsidies goes out. I suspect it has been near to 0 or less than zero. I fear a very bad outcome, because I understand that top-down economies are abject failures. If you say how can this be? How can an economy that has been reportedly growing at 10+% for decades, had no growth? How can it be that I see all this production and there be no real growth?

If you can’t answer those questions, then you know nothing about economics. And I don’t care where you got your PhD. China’s reported growth rate is a nominal figure. They don’t account properly for inflation. For example, they don’t account for the cost of stealing a peasant’s land and forcing him to the city, where his costs have skyrocketed. This works if the productivity has increased, but we don’t know if the productivity increased, because this mass migration was not done by free market forces, rather by top-down theft and slavery.

Yeah I am trying to shock you. Indeed China is nothing like a free market, as far as I can tell from a distance.

And China’s slavery system has been used to defeat free markets in the west, by creating a huge underbelly of unemployed in the west. But in some sense this is a market effect, because these people who are not knowledge workers, were sitting ducks as we come to the close of the industrial age. It was just time any way.

The USA has the best chance of adjusting quickly to the knowledge age, once the kids realize they shouldn’t be wasting $50,000 in student loans on a liberal arts education and instead invest their time at http://khanacademy.org or codecademy.org, etc..

China’s people could do that too, except it is not even in their mindset to produce knowledge for an income. As far as I know, they think you steal knowledge and the only things of value are hard assets and hard production (things that can be protected by force). Chinese culture understand the concept of force and the thick boot.

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“spends its foreign-investment income on imports rather than on foreign securities”

This means destroying the macroeconomic export subsidy, because it means real wages must rise must faster than they have been, in order to afford these imports. Remember China is the low price producer, so imports mean upscale goods.

The basic problem is that China can’t raise wages, because it doesn’t produce anything of significant profit. It has pursued a mercantile policy of stealing industries via subsidies and slavery.

This is a big difference from Japan, where Japan did at least produce high quality products with some profit margins. Even today, I am told not to buy a Korean or Chinese car, only a Japanese one is quality I am told (metalurgy, engineering, etc). And the Japanese cars are much more expensive where I am. I suppose you are all aware of the exploding Chinese capacitors:

http://www.guardian.co.uk/technology/blog/2010/jun/29/dell-problems-capacitors

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“annual productivity growth of 17% means wages rising 15% and national tax income rising 22% which means rising investment in education, infrastructure, and health care”

Exactly what this article is trying to explain is naive modeling.

Projecting statistics that are faulty, because they are nominal figures, that are not real adjusted to the reality of the macroeconomic subsidy and the resultant imbalances that we can gleem from for example the consumer share of GDP.

And this is why I think rebalancing will fail politically in China. The Chinese leaders will think they can just command consumer share to increase (as if that statistic is the source of the problem), yet they will protect exports and fixed investment simultaneously with targetted loans, etc.. They will be fighting against what they are trying to accomplish, and thus it will only rebalance when it implodes due to economic failure.

https://web.archive.org/web/20130206035650/http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18789

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I agree with your summary of the mathematical value of the free market, as it explains the problem of solving for the global minima, which is one way I have thought of the problem space in the past (coming from a computer science background and some study of artificial intelligence and models of the brain). As far as I know for solving *general* (unknown a priori) problems of N dimensions (variables), the only algorithm that won’t get stuck in a local minima, is some form of simulated annealing:

http://en.wikipedia.org/wiki/Simulated_annealing

Basically one needs to randomly jump sometimes after following a gradient. And doing this in parallel with multiple actors is much faster, especially if the solution space is changing (dynamic), which of course real life is.

Each autonomous actor moves along optimizing local gradients, and some are finding a more efficient gradient, and due to networking (communication), the other actors jump out of their inefficient gradient to copy the former.

To the extent a society suppresses networking and knowledge, it is going to be operating at the inefficiencies of the era before modern media and networks. So I concur that top-down information control would function at the lower levels of development, e.g. the agricultural and low information mass production industry.

I can’t think of any objections at the moment.

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January 07, 2014, 09:11:59 PM
Last edit: January 07, 2014, 09:28:33 PM by Phrenico
 #59

AnonyMint, I'm quoting you from another thread because I want to see if I can clarify your thinking on this, because I think you're wrong:

In the Quantity Theory of Money a constant money supply requires that the economy can grow only if the velocity-of-money circulation rises exponentially or the price level declines exponentially, neither of which are plausible for a healthy economy.

You have the cause and effect backwards here. When an economy grows, prices will fall unless there is an equal percentage increase in money supply or velocity.

Note that money supply and velocity can be understood as one term M*V with units dollars circulated/year and interpreted as the amount of dollars bidding for all of the goods produced each year.

Without any changes to the money supply or people's desired purchasing power balances (this influences the V), prices will fall exponentially. Below, you explain why you think this is unstable:


Defend your argument.

Exponentially falling price levels leads to hoarding and Dark Age.

Exponentially rising velocity leads to a bubble and massive misallocation of resources as people take on debt faster and faster.

Even if you dispute the above two, you have the problem that exponential trends can not continue forever.

Thus you mathematically require that all growth has to be taken back at some point.

Sorry you have no argument.

This is difficult for me to articulate, so fill in the gaps in my logic with your own.

Exponentially falling prices due to productivity growth don't lead to hoarding.

Most people look to Bitcoin's current price activity as a counterargument. Bitcoin is not a good counterargument because this phenomenon is a different type of deflation; it's a short-run effect that occurs while bitcoin is being monetized. If people expect that Bitcoin will increase in value faster than they can get return on their capital, they will certainly hoard.

Again, the only reason this is happening is because bitcoin adoption is still in the initial phases and hasn't reached equilibrium. This is a sigmoid trend and will not continue forever.

Why don't falling prices encourage hoarding?
Because even if the gold/bitcoin quantities are not increasing faster than the growth rate of the economy, it will always be prudent to invest your money because the nominal interest rate will not be negative. The real interest rate will always be higher in absolute value than the deflation rate.

Think about the dynamics of the equilibrium: if people were better off hoarding their cash than investing it, there would be no investment and the economy would not grow, and they wouldn't be better off hoarding because there wouldn't be deflation.

I don't see any reason why something as immaterial as the inflation/deflation rate should influence the real interest rate. In other words, why should inflation/deflation affect the relative amount of people producing things for consumption vs. investing in future production?

Another angle:
In response to someone who claims that inflation is good for the economy because it encourages spending/investment, I'd ask, "why would anyone invest in something productive when they can just put their money in a bank account and get nominal returns = real interest rate + inflation rate? Obviously this is sloppy reasoning, but it makes as much sense as the "deflation leads to hoarding" claims.
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January 08, 2014, 02:52:30 AM
Last edit: January 08, 2014, 05:04:23 AM by AnonyMint
 #60

Having a little fun today:

http://blog.mpettis.com/2014/01/will-the-reforms-speed-growth-in-china/#comment-9023

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If you've been reading Michael's blogs over the past years, you understand that doing more of the same thing that got you in trouble (repress the home sector and consumption share of GDP) will just make the imbalances worse. At some point, it just can't continue to get more unbalanced because for example peasant worker in the city can't find an affordable dungeon abode in shadows of the unaffordable high rises which constitute the illusion of wealth of the newly middle class.



Read also this linked post.

Wow that is a lot buzz words. Your source is some clueless marxist on these forums, except you are misquoting him too. its sad.

I quoted myself and I am the antithesis of a Marxist, specifically a minanarchist, Libetarian, Austrian economics ideology.

You are actually the Fascist, Socialist Pig but you don't realize why because you lack basic math skills as explained below.

Another angle:
In response to someone who claims that inflation is good for the economy because it encourages spending/investment,

That is not my reason for my claim as detailed in this and the linked post. Rather I am saying we have to continually dilute the large capitalists which want to use dumb fixed and guaranteed returns on usury with captured power vacuum of government to parasite and enslave "smaller things grow faster" investment.

I am 100% in favor of highly expert capitalists who invest (their effort, expertise, and money) at-risk in the highest returning ventures, not in usury and government capture. I am not the Marxist, but those who believe in dividends, bonds, and insurance are.

But lets put aside the class warfare propaganda for a second and how utterly wrong your goals and values are.

Even if I accepted your values of what is desirable, your proposed method would do the opposite of what you want. A 5% devaluation of currency per year means a 5% tax on savings account (0% tax on property). To believe that it will cause the rich to lose money while the middle class and poor will be unhurt by it is absurd. The rich keep all their money in assets which earn them dividends. When the money loses value all their assets gain value. Net loss is 0%. However, the middle class cannot afford to spend the time and risk their meager life savings and retirement on such plans. So they will instead be losing money every year. Meanwhile the poor don't have much in savings (but suffer a lot more for each loss), but they aren't getting their salary constantly renegotiated to keep up. If you adjust the minimum wage from 30 years ago for inflation it comes up to over 20$ in todays money, much more then they are actually making.
You are punishing the poor, taxing the middle class, rewarding the rich, and calling it a progressive method absolutely necessary to redistributing wealth.

The alternative is worse for the poor, as I stated eventually via compounding the rich must mathematically hold all of the money. (Worse as they aggregate more wealth, they become powerful enough to capture the government's taxation powers and then use the public backstop to guarantee their dividends.) Then you have slavery because they can dictate all the terms by which they will invest some money, i.e. interest rates could go as high as infinity if only one person held all the money. You need to learn the math of why more independent actors in an economy is directly correlated to macro economic efficiency and thus prosperity.

At least with the perpetual debasement, some money every year is being created to keep the rich from having a monopoly on available money. Instead of the dividends and interest bearing loans (bonds) of the rich gaining x% per year, they only gain (x - debasement)% or (x - inflation)%. The one big advantage the poor have is that smaller things grow faster. On a hot day, a guy selling cold mineral water can triple or quadruple his investment and a billionaire can never do that. So it is not the debasement tax that is regressive, rather it is the lack of debasement and a government tax apparatus that is regressive. Even minimum wage is regressive you fool!

Also please understand that prices P can still decline when M is rising due to increases in investment and productivity for supply Q without collapsing velocity V.

Thus I conclude math is not your strong suite. So STFU and stop wasting my time. Idiot. Go hide under a rock and let it sink in instead of coming back for sloppy seconds, thirds, fourths, ... to waste more of time explaining the same thing over and over again.

Now with the innovation proof-of-work, especially a design that leveraged CPUs that the lower class already own and would not allow GPUs, ASICs, FPGAs, and botnets, then lower classes would have some equal access to that newly created coin. More importantly in terms of maintaining a healthy supply of competing independent actors in the economy, there is a competition for the newly created coin, i.e. those who seek out microhydropower (small streams) which is the least expensive electricity on earth, a smaller economy-of-scale activity which the rich can't do.

And if we can defeat the government's power of taxation with anonymity and decentralized currency and 3d printing commerce, then take away the corrupt backstop of the rich and force them to risk their capital and compete (where they will get resoundly chewed up by smaller things growing faster).

While your intent of rich only taxes is evil, stupid, and counterproductive; the actual specific method you propose and its result of a middle class only tax & poor only penalties are even MORE evil, stupid, and counterproductive in every way shape and form. And the absurdity of it all is that you don't realize you are proposing it because you are so ignorant.

You idiots are why we end up with Dark Ages.

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