Bitcoin adoption slowing; Coinbase + Bitpay is enough to make Bitcoin a fiat

[jabo38]

Ethereum team mentioned something about forcing each of the miners to keep a copy of the blockchain on their hard drive to avoid pools all together.

[snip]

I'm just having a tough time seeing a good solution for mining to avoid centralization.  

I know the solution.  

I am a newbie to cryptocurrency so these could be stupid questions.  It seems like to me PoW is just kind of like a lottery and the bigger the ASIC, the better chances of winning the randomized lottery.  The point was to make people spend effort to earn bitcoin I think, right?  But really it seems like to me that what we need miners to do is secure the network.  That is the most important thing they do, right?  So, instead of making miners use lots of power to win a lottery and thereby indirectly secure the network, why not just assign the miners a direct role of securing the network and the miner that does the best job wins.  I read about in NEM, that they were thinking about a new system called PoI although I have no idea really what it means or how it works, but I think it was suppose to be something along those lines of rewarding nodes directly that processed the most transactions.  Would this be part of the answer? Or could it be?

[AnonyMint]

The other reason the emerging markets will accelerate their decline after July 1, 2014 and dollar+NYSE will rally:

http://armstrongeconomics.com/2014/04/06/the-man-who-thought-he-was-king-and-wants-to-rule-the-world/

July 1st because of the new FATCA reporting requirements

If anything, it will cause a capital contract back in the USA and that is behind a dollar rally – not collapse.

FATCA was passed back in 2011 and introduced by one of the most dangerous Democrats on Capitol Hill – Harry Reid. He is as much a Marxist and so extreme left he makes the perfect bookend to match McCain who never saw a county he would not invade. FATCA was passed back in 2011 and ever since Americans have been thrown out of banks on a worldwide basis. I have reported how FATCA is destroying the world economy – not the dollar. It should be noted that highly unusually, FATCA was not subject to a cost/benefit analysis by the House Ways & Means Committee because nobody dared to look at what they KNEW was unconstitutional and treated ALL American citizens as economic slaves.

[snip]

Under international law, FATCA is clearly a violation for it is imposing requirements on institutions outside the USA over which they have NO territorial jurisdiction. FACTA considers the entire world belongs to the IRS.

FATCA requires foreign financial institutions (FFI) of broad scope – banks, stock brokers, hedge funds, pension funds, insurance companies, trusts – to report directly to the IRS all clients’ accounts owned by US Citizens and US persons (Green Card holders).

[snip]

If a [foreign] institution does not comply, the US will impose a 30% withholding tax on all its transactions concerning US securities, including the proceeds of sale of securities on that institution;s entire business.

In addition, FATCA requires any foreign company not listed on a stock exchange or any foreign partnership which has just 10% U.S. ownership to report to the IRS the names and tax I.D. number (TIN) of any US owner.

[snip]

thank you so much Nevada for infecting the world with this crazy Marxist. Even Hitler respected the sovereignty of Switzerland and did not invade them simply because Germans had accounts there. Reid respects no borders nor does he respect the Constitution or International Law.

jabo38, unfortunately I can't allow this to be the Proof-of-work 101 thread. I think you can get help on learning about proof-of-work in
other threads on this forum. Appreciate your participation. Hope you understand it is my role as moderator to keep the thread focused.

[jabo38]

yep, no worries

[AnonyMint]

The most ideal solution for anonymity on the public block chain is not Zerocash (Zerocoin) nor CoinJoin (current Darkcoin) for detailed reasons I won't fully summarize in this post.

And the most ideal solution for anonymity of your IP address (i.e. your connection to the internet) is not Tor nor a VPN nor I2P/Darknet (Anoncoin), which are often honeypots and you don't know when they are or not.

To be anonymous, you need both underlined types of anonymity.

The latter can be obtained in some cases with a unregistered mobile device or WiFi access, but this isn't readily available to everyone, the governments are trying to eliminate these options, and if you reuse them you are eventually correlated. There is a more ideal solution to the latter that doesn't require these.

Well one could make an argument that Zerocash (not Zerocoin) doesn't require the latter, because it hides even the amount of the transaction, but still the government can compel you to give up your password if they know you are sending transactions. Zerocash has other weaknesses which I think are unacceptable, e.g. if the setup was hacked you have no way to know if the coin suppy is being increased more than allowed and thus the money supply is always unknown and the 8.7ms (115 transactions per second) verification speed per i7 core means it might not scale well for micro payments. One thousand i7 cpu cores would be required to process 100,000 transactions per second, not including denial-of-service attacks transaction spam. That would probably force centralization of mining.

[johnytelevision]

Are we sure we want it to be just another fiat ?

I would prefer something completely different. Different from anything already existing.

[Drai]

Are we sure we want it to be just another fiat ?

I would prefer something completely different. Different from anything already existing.

This is way my answer was 'no'
Cannot be fiat!

[AnonyMint]

Can anyone explain to me the intended meaning of the prior two posts?  

[rdnkjdi]

[snip]
]If the cpu coin is widespread enough to drive sufficient demand, the price of Botnets will simply rise to match their hardware cost. They aren't unlimited in supply. Botnets compete for the same computers that users will want to use to mine with. No problem really if thinking big, only while small it is a threat.

Cloud computing won't have too much of an advantage, only the economies-of-scale on electricity mostly, but the wise small-scale miner can locate with microhydropower to beat them and the home miner doesn't care about electricity cost. The Tilera CPUs won't compete. If you mean admins hijacking their company servers to use their downtime, this is just a form of Botnet.

Also the word will get out. People will start reclaiming their computers from hijackers. Thus driving the price of Botnets up further.

In the near-term, the botnets won't have the right CPUs in most machines, so they will run inefficiently, something like an order-of-magnitude less than a recent Haswell.

Also the value of the coin scales to the value of the mining network, so if home users drive difficulty to the moon (because the electricity cost isn't significant compared to other appliances), they will also drive the price of the coin to the moon.
[snip]

The problem in my mind is wealth allocation.  When talking about decentralization - I think in terms of decentralization of power and release of new funds.  If the price of botnets rise.  Then isn't the wealth being released to those who own the botnets.  Granted - it might be he who winds up with the coin is purchasing the botnet.  So in reality he's just getting a good deal on amazon instances.

So really.  AWS, botnets, borrowing my companies resources are all the same issue.  Perhaps you are right on the generation of processors.  As botnets tend to be much older computers.

My opinion is still that hard drive space and memory as a requirements would help with the botnet issue, the farming issue (the cost of mining each coin mass produced would be closer to the cost of what the general public already owns - vs just a fraction of it (processor).  

I would LOVE to get behind a anonymous CPU only coin.  And honestly I think there are many who are on board with the idea of bitcoin or various alts who would feel the same.  Who are invested with the idea - but a little disenchanted with the massive centralization.

[AnonyMint]

rdnkjdi, if the demand for botnets drives the price of renting or purchasing them to the same cost as renting or purchasing the hardware else where, then no one is getting coins at lower cost than anyone else. Is that point clear?

The botnet owner gets a higher price for his botnets but that has no impact on the cpu coin's economy. I am happy if botnet owners make a lot of money, that is the only way people are going to learn to protect their computers and at least the hardware isn't sitting idle. The botnet owners are providing a useful service.

I just have a way of seeing paradigm shifts that others don't.

For me most things other people think are immoral, are just economics.

[rdnkjdi]

rdnkjdi, if the demand for botnets drives them to the same cost as purchasing the hardware, then no one is getting coins at lower cost than anyone else. Is that point clear?

The botnet owner gets a higher price for his botnets but that has no impact on the cpu coin's economy. I am happy if botnet owners make a lot of money, that is the only way people are going to learn to protect their computers and at least the hardware isn't sitting idle. The botnet owners are providing a useful service.

I just have a way of seeing paradigm shifts that others don't.

To an extent it makes sense.  Just like AWS price goes up if the price of coins go up to make it profitable to mine on AWS.

I'm going to have to absorb it.  Crypto is an easy way to monetize botnets - and my guess is that the guy who rents the botnet.  While he will pay more for it than he would have prior to this wildly popular CPU coin.  He will still be paying less per coin to generate than the person purchasing a new computer or renting AWS will.

[mgburks77]

Matter, energy, and spacetime are all governed by the same physical laws. Life is a combination of the three acting in accordance to those physical laws.

I agree with you that this is the prevailing current theory.  I just think that in 50 years we will have an upgraded and different understanding of matter, energy, space time, and how life and consciousness play into these.  I know that is a weak argument in that I can't refute you with science.  I'm basically arguing the ridiculous point of "my imaginary science is better than your real science." It is just my gut feeling and gut feelings don't count for much in a forum like this.  So, I'll give it to you that you made the superior comment and I'll be left twiddling my thumbs hoping someday science upgrades proves me right.  Hahaha.  

Your opinion matters to me, and I am glad you shared it. 

[AnonyMint]

[snip]

While he will pay more for it than he would have prior to this wildly popular CPU coin.  He will still be paying less per coin to generate than the person purchasing a new computer or renting AWS will.

Why do you say AWS is cheaper than buying hardware? I don't think so. Amazon has to make a profit. It is cheaper only for the very short-term (or unspecialized execution instance hardware thus Amazon can employ Xeon chips with 12+ cores) when you haven't yet reaped enough return to pay back your hardware. On the long-term buying your Core i7 Haswell or later hardware direct is cheaper as far as I know. Also Intel is scheduled to release a Haswell-E enthusiast chip in late 2014 or early 2015 which has 8 cores (16 hyperthreads) bringing that cloud economy-of-scale hardware to the desktop. That is assuming you don't need more than a simple cable modem or DSL internet connection.

For as long as botnets are cheaper than new hardware, you and I can go buy a botnet instead of new hardware. What is the problem? We will drive the botnet price up until they cost same as equivalent hardware.

To facilitate this, we should make it super easy to deploy a botnet, such that any person can do it with a single click.  

It is a wise-ass quip like this that used to get me in trouble with some high school teachers or some other authorities (especially never embarrass a policeman, instead bend down and kiss their jackboots). They don't like it when we speak such heresies. I don't intend derogatory nor wise-ass malice, rather just matter-of-fact with shoulders shrugged.


Rant:

If we don't let people learn from their mistakes, then we wonder why the world is becoming dumber.

Remember moralists always accomplish the opposite of their stated empathy. They will argue we shouldn't encourage theft of computers, yet should we also put a policeman in front of every house that refuses to lock its front door? We would bankrupt society if we encourage people to be irresponsible. Socialists think they can protect people from everything, as if they are God. We can afford to be so self-important, because we are funded by $223 trillion in debt, $1000 trillion in derivatives, and $1000 trillion in unfunded social welfare promises. Ultimately the best is always to put the correct economic incentives in play, then let individuals make their choices. We aren't talking about murder here, rather putting idle computers to work (obviously idle otherwise the hijacked computer's user would surely realize their computer is not responding well). Even the animals are thriving at Chernobyl, meaning the earth renews itself.

Recent examples:

No doubt about it, if you are shorting the fundamentals, you are trapping vulnerable people. Shorters are deliberately making it costly for the unfairly regulated chinese to exit the market.

Are we supposed to hold the hand of the Chinese and remove all risk. Do you know what happens when you remove all risk? Then there is no valuation convergence on truth. And everyone starves to death. That experiment has been tried, it is called Communism.

http://armstrongeconomics.com/2014/03/30/even-cuba-abandons-communism-when-will-we/

I seem to regularly piss off socialist lunatics as Gandhi did.

When Gandhi was studying law at the University College of London, there was a professor, whose last name was Peters, who felt animosity for Gandhi, and because Gandhi never lowered his head towards him, their “arguments” were very common.
One day, Mr. Peters was having lunch at the dining room of the University and Gandhi came along with his tray and sat next to the professor. The professor, in his arrogance, said, “Mr Gandhi: you do not understand… a pig and a bird do not sit together to eat “, to which Gandhi replies, “You do not worry professor, I’ll fly away “, and he went and sat at another table.
Mr. Peters, green of rage, decides to take revenge on the next test, but Gandhi responds brilliantly to all questions. Then, Mr. Peters asked him the following question, “Mr Gandhi, if you are walking down the street and find a package, and within it there is a bag of wisdom and another bag with a lot of money; which one will you take?”
Without hesitating, Gandhi responded, “the one with the money, of course”.
Mr. Peters, smiling, said, “I, in your place, would have taken the wisdom,
don’t you think?”
“Each one take what one doesn’t have”, responded Gandhi indifferently.
Mr. Peters, already hysteric, writes on the exam sheet the word “idiot” and gives it to Gandhi. Gandhi takes the exam sheet and sits down. A few minutes later, Gandhi goes to the professor and says, “Mr. Peters, you signed the sheet, but you did not give me the grade.”

But we are at least in agreement about something (HURRAH!) with regard to shorting: I don't participate in that market either, not so much for the reasons you stated but that it seems morally wrong to profit from the failure of a market (I remember the Soros-short inspired sterling crash of the eighties).

All this moral crap really annoys me. Shorting helps to prevent selloffs from being so severe, because shorts cover on the way down and provide buying demand.

Moralists always cause the opposite of what they portend to.

Successful trades buy low and sell high. They dampen market fluctuation, increase stability, and are in my view the most moral of all.

You do realize don't you that is no refutation of what I wrote.

The operative phrase is "buy low". That means don't catch a falling knife.

[rdnkjdi]

[clip]
Why do you say AWS is cheaper than buying hardware? I don't think so.
[clip]

Oops - I intended to say I would assume rented botnets are cheaper than AWS or buying your own hardware.  Because they cost the owner his time - whereas Hardware \ AWS involves getting Intel & Amazon their slice.  Morons are always cheap to find & exploit - I'm living proof

[clip]
To facilitate this, we should make it super easy to deploy a botnet, such that any person can do it with a single click.  Wink
[clip]

Yes!  Fine with me - my biggest concern has much less to do with forcing legitimate mining than it does trying to insure a level playing field for all who get involved at the point they get involved.

Knowledge always has a hand up.  But to an extent long term mass adoption means leveling the playing field otherwise it turns into a pump and dump when those involved feel they've been contributing to the wealth of some clever person (KnC) who has found a way to exploit the system in a way it wasn't quite intended to be used.

Of course ... I dunno.  The fed seems to be doing ok  

[AnonyMint]

Agreed.

It is the same as the point about legalizing drugs. If we legalize and make access to botnets available to all, then the pricing equalizes and the criminals don't have a monopoly.

There are effective means for preventing and checking if your computer is hijacked.

We can't protect people against themselves, just as with drugs. Education is probably the best antidote to ignorance (but not necessarily education provided by the State, because then it teaches all that nonsense about we have to protect people from themselves and the earth is in danger from man, thus we need big government "solutions" which are really just a way for the elite to tax and steal, etc)

Once upon a time in the USA, I remember parents used to teach their kids common horse sense, and one could leave their front door unlocked without worry. There was a sense of community and the kids who did mischief were scolded but not put on Ritalin.

http://armstrongeconomics.com/2014/04/06/inflation-is-not-always-caused-by-change-in-money-supply-deflation-is-engulfing-europe/

If you really want to stop the violence, legalize drugs, tax them, and regulate them as they did with booze. That defunded the Mafia more than anything and the gun battles in Chicago ceased (like the song the night Chicago Died). As long as there is a tax-free profit to be made, you will never stop the violence.

Martin Armstrong is wrong on this point. It is important to refute him, because he arguing against anonymity.

Indeed legalizing drugs would lower their cost, make them more widely available, and thus through competition defund those Mafias that control distribution now. The taxing part has nothing to do with it! He conflated.

When drugs are illegal, non-criminals are unwilling to risk it to distribute them. Thus the criminals takeover the business.

I would prefer drugs weren't available, but the above is the economic reality. And it is not my right to impinge upon and judge for others what they want to do to themselves.

[AnonyMint]

What we have now is the adjustment to the reality that the adoption curve is really log-logistic as I have shown, thus rpietila's claim from his linear adoption projection chart that the price should be $900+ is likely incorrect.

My best way to convince you this is so, is to note that there is no way the universe would remove all competition to make it so easy for lazy investors to become so insanely rich. To become very wealthy requires active knowledge in developing and managing. The universe doesn't hand great sustained wealth to people who make one lucky decision. Rather (even the greatest of all time such as Jesse Livermore) speculators always end up back at 0 eventually.

Bitcoin is not going to $0 and it is going higher eventually. But the rate of price appreciation will not be "to the moon" although another speculative frenzy might make you believe that one more time (to your great demise because next time it will really crash hard because adoption will have drastically slowed and there will be other vastly superior competitors taking over the ecosystem).

Btw, I have looked into the eye of the future of crypto-currency and I have seen that Bitcoin is going to be wiped out. I have seen some new designs in the past few days that blew my mind.

You are going to be hit with an onslaught of very serious altcoins and not just my designs.

[AnonyMint]

http://gigaom.com/2014/04/07/bitcoin-will-be-part-of-the-global-banking-order-says-circle-ceo/

Summary: Bitcoin will one day be subject to global treaties and central bank interventions, predicts Jeremy Allaire, one of the virtual currencies’ biggest backers.

The future of bitcoin will be determined by central banks, standards bodies and corporate contributors. That’s the view of entrepreneur Jeremy Allaire, who used a Monday morning keynote address in New York to set out out a vision of the digital currency that is decidedly unlike the decentralized dreams of many early bitcoin backers.

Allaire, whose startup Circle is vying to taking bitcoin into the consumer mainstream, spoke at Inside Bitcoins, one of a growing number of event franchises capitalizing on a spike of interest in payments and virtual currencies.

According to Allaire, bitcoin’s emergence as a global payment platform will depend on governments altering anti-money-laundering laws, and helping bitcoin service providers integrate with the world’s existing banking infrastructure. In his view, the choice between bitcoin and conventional fiat currencies doesn’t represent an “either/or” proposition. Instead, he predicted the two systems will one day become intertwined through commercial banks and ATM networks.

More remarkably, Allaire also suggested that national governments could one day establish treaties to regulate bitcoin mining cartels, and act as market makers for bitcoin through their central banks.

[AnonyMint]

http://armstrongeconomics.com/2014/04/07/panic-cycles-of-marchapril/

The Panic Cycles have been hitting going into the end of March/early April. This is generally showing shifts in trend near-term but more so that capital is really getting confused where to go.

Martin Armstrong often quotes Herbert Hoover about international currency movement at that time of the early 1900s into the Great Depression.

"During this new stage of the depression, the refugee gold and the foreign government reserve deposits were constantly driven by fear hither and yon over the world.

We were to see currencies demoralized and governments embarrassed as fear drove the gold from one country to another.

In fact, there was a mass of gold and shortterm credit which behaved like a loose cannon on the deck of the world in tempest-tossed era."

Herbert Hoover Memoirs, 1952 Greatest Bull Market In History, p354

Capital today is running hither searching for a safe haven and not finding one. Armstrong often says it was like re-arranging the deck chairs on the Titanic.

At that time, it was the technological unemployment due to the  Second Industrial Revolution that kicked in with factories that accelerated the demise of the cottage industries in Europe, which thus caused capital from Europe to run around seeking a safe haven. It mostly ended up in the USA.

http://armstrongeconomics.com/2013/12/01/gold-hedge-against-making-money/

The USA was bankrupt in 1896 when JP Morgan lent it gold. After World War I and II, the USA had 76% of the total world gold reserves and that is what the dollar became the reserve currency. It was WAR and capital flows that made the dollar what it is. Europe became too socialistic after the wars and thus remained second-rate.

Why The Only Solution is Technological

By the time you realize I am correct, you will be behind the others who realized earlier. Most people are still on the Titantic rearranging the deck chairs (see quote of Hoover). This is why the USA is actually booming until 2015.75, because capital is now fleeing into the USA from the emerging (peripheral) markets where the riots first manifest. But this ends up at the core reserve currency at the end game 2016ish. We can see how regulation appears to be a very loving and correct direction (listen to her charming speach). She is head of the IMF that is proposing 10% confiscation (termed "financial repression") of bank account balances across the EU to bring debt back to 2007 levels (i.e. not a solution and they will have to come back for more and more).

My opinion is that anything that does not circumvent law (which can be a legal activity, e.g. see the "Don't follow me, I'm the 5th car") is going to end up destroyed just like that dramatic upthread chart of the population of Rome falling from 1.3 million to 30,000 (because everyone fled the government). Apparently the-powers-that-be in the USA government are moving towards totalitarian allegiance analogous to recent events in the Ukraine. The entire premise of the Economic Devastation thread is that the Ineptacracy of socialism can't stop until it kills everything or until one of the following occurs:

• A new technology renders the government impotent.
• A Benevolent dictator like Caesar crosses the Rubicon to restore sanity

Note the people rising up as in Ukraine is not a solution, because they have no economically viable technology to remain decentralized. They will fall right back into the power vacuum of democracy with escalating chaos with Egypt as a recent example, because the fundamental problem is economic bankruptcy due to peaking socialism and debt (the people are not ready to embrace the decentralized Knowledge Age and the end of a public welfare and retirements system). Only a dictator or a technological solution to the power vacuum is a solution at this time (the contentionism has swung to anarchy because the time to make new social constitutions is not now for reasons stated).

And the benevolent dictator is also not sustainable, e.g. Rome continued to destroy itself after the vested interests of socialism killed Caesar. This is why only technology is responsible for sustainable gains in the lives of the people. Note CoinCube and I have postulated that in the theory of contentionism (a new term we invented) the top-down order (with socialism being one form) plays a role in the organization necessary to spawn new entropy, e.g. decentralizing technology.

Thus the only popular thing left standing will be the one that is impervious to government.

Gold and silver hoarding leads to a feudal Dark Age (which historically typically have long durations, e.g. 600 years), because the velocity-of-money (V in the Quantity Theory of Money) collapses. V is already down -50% since 2008. Capital is already running and disappearing into hoards. This will accelerate (as more frogs wake up from their blissful ignorance of what is going on and jump out of the boiling pot) if we don't have technological solution very soon.

And I have good news for you. I've had an additional epiphany recently that I have not written about publicly. I am becoming uber confident that Bitcoin is not the future of commerce, finance, and business. And become more confident I see (all the economic and algorithmic details of) the future technology in my mind's eye. Stay tuned, it won't be too long now. Commerce, finance, and business will never go back to centralized again. This changes the order that had existed since Mesopotamia.

So this isn't about crossing a crisis and coming back to the same notions of the way things are today. This is leaving the old ways behind forever.

P.S. Three prominent forecasters (with not such stellar prediction performance as Martin Armstrong who predicts the same, yet all with a correct model) are predicting "economic devastation" ahead. CoinCube do you think they read your thread and got that quoted term from you? (your thread in in the top 3 listings at Google for that quoted term)

P.S.S. W.r.t. to Bitcoin becoming government compliant, there is this problem that there isn't just one global government (yet), so its global fungibility will be pecked away by the discordant nation-state vultures. And as the recent Mt.Gox fiasco exemplifies, there isn't anything the government touches that doesn't get bloated and less efficient.

"An elephant is a mouse built to government specifications." - Lazarus Long.

pungopete468, hope you don't mind if I use your comments as an example the capital is starting to fret and get confused where to run to.

I don't care about the price of Bitcoin, it's nothing more than a speculative investment now. I feel despair right now because I'm living within an irrational system where the only logical outcome is complete and total collapse. I feel like every attempt to secure wealth is an act of futility. We're all just ducking and covering before the bright burning flash. I fear the new world will be unrecognizable and hostile when compared against the one before it.

Even Martin Armstrong has no clue what to do and has started to write in a tone of despair.

http://armstrongeconomics.com/2014/04/03/rising-threat-of-international-war/

The West is being outplayed by Russia on every front for the economy is declining and Russia can smell the blood. Then the likelihood of war in Asia cannot be ignored. As the economy turns down, we may yet see a war between China and Japan. As we pointed out in the Cycles of War report, that cycle of border clashes with China has also unfolded precisely on that cyclical study.

War correlates with the economy. WWI follows economic decline of Europe and the 26 year Long Depression just as WWII followed the Great Depression. When things are booming, there is no major international war. Turn the economy down and that is it and it becomes time to get even for old wounds. In China the dislike of Japan for previous history runs deep to the point you could not really find even a Japanese restaurant in Beijing. Likewise, in Europe, the resentment against Stalin runs extremely deep.

With the Western economies turning down and no hope in hell of surviving the pension crisis, war is needed to escape the broken economic promises. This is a sad statement to even have to make. But the majority are just a herd of sheep and cannot see past the rear-end of the lamb in front of them.

I have hoped that publishing these studies we could help mitigate the coming crisis, but as I have said previously, you cannot manipulate a trend. It looks like all we can do is prepare for own survival. This is just the way government escape its failures – thinning the herd.

http://armstrongeconomics.com/2014/04/06/poland-confiscate-bond-holdings-from-private-pension-funds-more-deflation/

Poland on Wednesday confiscated all bond holdings of private pension funds. This will be booked on their balance sheet to reduce their debt to GDP ratio by as much as 8%. This is actually being discussed as I have reported in Europe and the USA. Most will follow that same course and fail to realize that government CONSUMES national wealth – it does not create it. This is part of the deflationary cycle we are in and WHY I have stated there is ZERO chance of hyperinflation. Governments are confiscating wealth – not printing their way out of anything.

http://armstrongeconomics.com/2014/04/06/inflation-is-not-always-caused-by-change-in-money-supply-deflation-is-engulfing-europe/

Silver declined from 1919 into 1932 during a huge inflationary boom. So where is the beef? I deal in facts – not opinions. Prove to me there is some one-to-one relationship between the supply of money and inflation – PLEASE!. There is no such relationship and I have the largest database in the world tracking money supply even into ancient Roman times.

The velocity of money peaked with the 1998.55 (July 20th) peak in the Economic Confidence Model. As taxes have been rising, tax enforcement has risen, and the insane changes to capital gains taxation where you pay now on gains, but losses you can only write off $3,000, investment declines as does VELOCITY. The greed of government has all combined to reduce long-term investment. Then add the 2011 hunt for Americans worldwide and you have a classic trend of collapsing velocity in money that negates inflation and increases cash holdings as liquidity declines further. Corporate cash is at a record high $1.64 trillion demonstrating how the velocity of money is also critical. If the velocity increases yet the supply of money remains unchanged, this will be inflationary for more people are spending and money turns over rapidly without increasing the supply. Nonetheless, increase the money supply, as the Fed has done, but raise taxes, tax enforcement, and the collapse in the velocity of money will offset any increase.

Raise taxes on the “rich” to help the poor, sends capital fleeing from an economy and all you have left are the poor. Just look at Detroit and fast-forward to all the cities. There is no such thing as creating “social justice” through taxation. It is no different from saying everyone in school will be given the same grade so there is “educational justice”. The smart will stop studying (producing) because they will get nothing in return for their effort.

We are only equal in rights – not ability or talent. I have no dreams of being a rock star because I cannot sing.

http://armstrongeconomics.com/2014/04/06/french-socialists-cannot-just-stop-reform/

European countries are struggling with their high taxes, little entrepreneurship, and crazy socialism that is eating their economy from within like a cancer. The best thing they can hope for is a Russian invasion so they can pretend that was the cause of their economic failure.

About 50% of the French youth just want to leave France.

[snip]

France’s trade balance has declined from a surplus of 1 percent of gross domestic product in 1999 to a deficit of 3 percent last year with ZERO prospect of reversing.

http://armstrongeconomics.com/2014/04/05/lagarde-part-ii/

Keynes made it clear you move to deficit spending only in a depression to stimulate DEMAND, and otherwise you lower taxes in just a recession to stimulate DEMAND – something they will never do.

Politicians took only the part of Keynes they wanted to hear. Nobody in their right mind EVER advocated deficit spending every year with no intention of ever paying anything back. This is not Keynesian economics – it is fiscal mismanagement.

http://armstrongeconomics.com/2014/04/04/hsbc-perhaps-the-worst-offender-of-depositor-rights/

Get caught carrying even $50,000 in cash in the USA and they have the right to seize it PRESUMING it must be illegal. Anyone who dares to think there will be some return to a gold standard is dreaming. These people are eliminating cash and even when it is in a bank you still have to prove it is yours! A friend got divorced and the account was being split in half. The bank refused to wire any money to the wife at a separate bank until they showed up in the bank to prove why they were moving money and this was in Switzerland. There is ZERO presumption of anything being yours. Welcome to 1984 – it’s just a little late on arrival – 31.459 [Pi x 10] years to be exact.

This is coming down to what is yours is really theirs and always negotiable so shut-up and be thankful they let you spend anything for yourself or your family since they have the right to everything.

http://armstrongeconomics.com/2014/04/04/the-new-age-of-virtual-protectionism-the-us-virtual-oligarchy/

The US hunting of Americans doing any business offshore and in the process they are destroying economic expansion to the point only the big multinationals can go offshore. This is having the de facto impact of a virtual oligarchy in the USA since only the big multinationals can operate. Small business is being destroyed by the IRS policies and the greed of Congress seeking more taxes rather than reform is contracting international trade that can ONLY fuel the coming economic collapse. Add to this trend the Cold War and the net outcome is the same result that spiraled during the Great Depression – PROTECTIONISM.

http://armstrongeconomics.com/2014/04/04/influence-v-discovery/

It is shameful that the West is convoluted (invegalled) in such political corruption that they will destroy what we have before they will ever consider their approach is dead wrong. It is always a battle against the self-interest of government because they THINK influence is the key. They accused me of being TOO influential for their own failures. They only pray in silence for my death in hopes that will end my influence and then they will be right at last. They are just fools standing before a mirror and looking upon themselves as king. Our problem, we remain the victim of their delusions of greatness. The object that must endure their folly.

http://armstrongeconomics.com/2014/04/04/china-adopted-our-capital-flow-models/

Virtually every major government is following our models. Yes, I met with China directly and they had a printed copy of everything I ever wrote and read it.

I have spent untold amounts of money building this analysis back for thousands of years to see HOW everything functions over time and if it has ever changed.

[snip]

Politicians know nothing about what they are doing. Why did the S&L Crisis unfold? Because Democrats came in and altered the tax codes to get more money as always and impacted the write off in real estate creating a one way market – SELL. Then they blamed S&Ls when they were regulated and told to invest in real estate. Every single economic collapse is set in motion by GOVERNMENT. Never has any investigation ever turned up a single private cause.

The Plaza accord starting the G5 (now G20) to manipulate the dollar down by 40% in order to reduce the US trade deficit, created the 1987 Crash and sent capital rushing back to Japan that they did not understand creating the 1989 Bubble. Now Europe is trying to outlaw short-selling thinking that will stop the collapse. That will accelerate the fall.

Here is my letter to Rubin in 1997 when he was starting the same stupid stuff trying to talk the yen up for trade. After I sent this letter, he shut up. Someone has to remind these clowns about reality. It was Geithner who had to reply. Nonetheless, the 1997 Currency Crisis unfolded.

[snip]

We have spent vast amounts of money to collect databases from ancient times to date to see how capital flows dictate war and even the rise and fall of nations. Some have tried to mock the idea that there can be a cycle to war, yet they have never attempted any such analysis demonstrating their bias that precludes any advancement. Yet they persist in trying to criticize what they do not understand nor have ever attempted to test.

http://armstrongeconomics.com/2014/04/03/economics-sanctions-do-not-move-or-we-will-commit-suicide/

Economic sanctions against Russia are really stupid. It is like the scene from Blazing Saddles where he points a gun at himself and says if anyone moves, then black guy gets it. The US is really delusional for Russia’s annexation of Crimea has heightened concerns in Asia about the possibility of China using force to pursue its claims. The US actually thinks imposing economic sanctions on Russia will be a deterrent to China is just amazing. If the USA imposes sanctions on both China and Russia, who is left to trade with? Europe where the cost of living is already 2x that of the USA and in decline?

[klee]

http://gigaom.com/2014/04/07/bitcoin-will-be-part-of-the-global-banking-order-says-circle-ceo/

Summary: Bitcoin will one day be subject to global treaties and central bank interventions, predicts Jeremy Allaire, one of the virtual currencies’ biggest backers.

The future of bitcoin will be determined by central banks, standards bodies and corporate contributors. That’s the view of entrepreneur Jeremy Allaire, who used a Monday morning keynote address in New York to set out out a vision of the digital currency that is decidedly unlike the decentralized dreams of many early bitcoin backers.

Allaire, whose startup Circle is vying to taking bitcoin into the consumer mainstream, spoke at Inside Bitcoins, one of a growing number of event franchises capitalizing on a spike of interest in payments and virtual currencies.

According to Allaire, bitcoin’s emergence as a global payment platform will depend on governments altering anti-money-laundering laws, and helping bitcoin service providers integrate with the world’s existing banking infrastructure. In his view, the choice between bitcoin and conventional fiat currencies doesn’t represent an “either/or” proposition. Instead, he predicted the two systems will one day become intertwined through commercial banks and ATM networks.

More remarkably, Allaire also suggested that national governments could one day establish treaties to regulate bitcoin mining cartels, and act as market makers for bitcoin through their central banks.

And all these guys will prefer Ripple (for obvious reasons):
https://twitter.com/Ripple/status/450859716831629312
https://twitter.com/marleenvkammen
http://www.linkedin.com/in/mvankammen

As for the other uses that BTC can have (XRPs can be confiscated) only a truly anonymous coin can deliver them:
http://www.dgcmagazine.com/bitcoin-a-jack-of-all-trades-is-the-master-of-none/

On another note, what happened to the argument 'If they ban it the price will skyrocket!'?
China+Russia hit hard and the price plummeted. Why?

Because of Bitcoin's weaknesses (no real anonymity) - when they attacked it was wounded. An assault led to a retreat.

I bet that on a real anonymous coin that cannot be beaten, the fact that it will be almost immediately banned will really skyrocket it's value because it will be nothing else but a confession from the authorities of a DEFEAT!

We can't fight it otherwise (IRS, taint analysis -> loss of fungibility etc) so we just BAN it (like most countries in EU deal with assault rifles, WEAPONS!)...

[mgburks77]

China+Russia hit hard and the price plummeted. Why?

I also think it is because the govs of Russia and China know what they are looking at, a weaponized monetary instrument. They will punish users harshly for using it and there is no anonymity so users can be easily identified.

I imagine as well that an instrument that was safe to use would have a different effect.  

human liberationists need a "Thermopylae" to counter the trojan horse we have been given.

[alxs]

I also think it is because the govs of Russia and China know what they are looking at, a weaponized monetary instrument.

James Rickards book The Death of Money: The Coming Collapse of the International Monetary System which I have yet to read, supposedly outlines how and why collapse is inevitable and thus bitcoin is born.  Problem, reaction, solution.  I think this has been plan of G20 all along and possibly they intend to blame bitcoin as this occurs.

http://armstrongeconomics.com/2013/11/20/the-bitcoin-hearing/

We are headed into an electronic currency regardless of what people say. Bitcoin will not survive, but it is useful to get people accustomed to a cashless society. The difference will be that the government version will be no ”anonymity”  and what it being touted as a benefit is the elimination of crime – drug dealers will be eradicated (plus the government will get 100% of all its taxes).

I think the G20 is cooperating on the implementation and transition to the blockchain including Russia and China.
After listening to Bobby Lee describe manipulation on the exchanges I suspect Chinese government was possibly involved
in both 2013 bubbles.  March 2013 - "Top Central Banker In China Says Beijing Is Ready For The 'Currency War' To Begin"

10 Jul 2009 - Russian President Dmitry Medvedev pulls new world currency from his pocket
http://www.telegraph.co.uk/finance/currency/5796892/Russian-President-Dmitry-Medvedev-pulls-new-world-currency-from-his-pocket.html

I think we are witnessing and living through a carefully orchestrated plan that is being guided and prodded along with bits slowly being
revealed.  Incubate it in a community for a few years, then begin to take it over in 2014.

"Jeremy Allaire: ‘Bitcoin Needs Greater Governance to Reach Mass Adoption"
http://www.coindesk.com/jeremy-allaire-bitcoin-needs-greater-governance-reach-mass-adoption/

St. Louis Fed Economist: Bitcoin Could Be A Good Threat To Central Banks
http://www.businessinsider.com/interview-with-david-andolfatto-2014-4

I'm convinced Chinese government is working hand in hand with US.  

I bet that on a real anonymous coin that cannot be beaten, the fact that it will be almost immediately banned will really skyrocket it's value because it will be nothing else but a confession from the authorities of a DEFEAT!

ZeroCash or whatever won't be banned but can be demonized. And besides, the CIA needs untraceable funds for black box operations.