Why I think the Galt Misses the Point on Decentralized rypto
Posted by CaptainKirk 3 months ago to Economics
I am 100% okay with getting flamed and being called names and told that this is all a big scam.
It has ZERO value, etc. etc. etc.
But please hear me out. In fact, I don't completely disagree with you, I started where you stand!
We need some form of money. Which must be a store of value (unlike the dollar).
And I ASK you to ignore BOTH the current instability of BTC pricing, and the difficulties in using it. [for now].
What were used, in the past, for money? (Glass beads, shells, various coins, etc. etc. etc.)
And what happens over time (People shave the coins (hence the ridges), people counterfeit the paper,
the English even came to an island with a bunch of glass beads. Bankers use inflation, and debt is used
to enslave us).
I am VERY confident that everyone here is a solid believer that GOLD/SILVER would work just fine.
(Even better if it wasn't so dang heavy... But I've seen plastic bills with pressed gold foil inside)...
The point is. WE NEED a money and a CURRENCY (something we actually spend) that we can TRUST.
We cannot Trust: CBDCs, the Dollar, etc. etc. etc.
But MANY people here REFUSE to consider trusting BTC, because it's "software".
The reality is. It is an IMPOSSIBLE to counterfeit currency. It's #1 drawback is that you can lose access to it because of some failure to keep the password. The #2 is the ability to have someone strong-arm your password from you... And I agree...
But in all honesty. I think if the Gulch [Which digital currencies allow to be geographically disconnected], used crypto as part of their "going on strike" from the rigged system... They would realize it solves a few problems.
Far more than it creates.
Yes, it requires Electricity, Internet, and Devices to transact. (Just like Credit Cards do).
And MAYBE we need some level of Coinage. I agree this is a weakness.
But here are the Strengths:
1) It's impossible to counterfeit! EVEN by Governments and by COURTS.
2) Once it's EVERYWHERE, it makes more sense to use it, then to try to go around it. [Chicken/Egg, I know]
3) It's trust is the SIMPLE fact that if you had MILLIONS in it, and you felt the network was at risk. You, too, could setup a few miners, to help keep the network DECENTRALIZED.
FWIW, I am not sold on PoS (Proof of Stake). This is where you put up money and you RISK that money to authenticate transactions... In such a way that if you try to approve (back door) a fraudulent transaction, your are penalized by having the money you Staked taken from you. [Reality: Some players have enough $$$ that they can afford to lose that money in order to "break" the system].
In PoW (Proof of Work), you solve tough math problems, and the first ones done get the reward (more coins).
This is why it is called Mining. You don't get an outsized amount of coins. In fact the difficult and price can be tracked. Miners are EFFECTIVELY Converting Electricity to Coins via a dollar cost averaging function. And this is a TOTAL DEMOCRATIC Approach. You join other miners, and you mine. You make some money for mining. But there are literally TOO MANY Miners for someone to sneak in and start trying to get "Bogus" transactions to be validated. Every ONE of these miners has EVERY TRANSACTION on them. The SECURITY is that the system is spread out. And that a bunch of RANDOM miners will have to validate your transaction.
Even China could not corner the market on mining in such a way as to corrupt it.
Yes. It is ONLY WORTH what the market says it is. BUT it is also back-stopped by what it costs to MINE new BTCs. Because if you are mining it, and it costs you $35,000 to mine 1 BTC. You have ZERO incentive to sell that at a loss. Much less a huge loss.
And I guess that's the final piece. It will be REALLY hard to manipulate when it is fully adopted.
Full adoption means the price fluctuations are gone.
Gold, Silver, Stocks, Bonds. These are all heavily manipulated.
And the final feature. Imagine the government tries to claim they lost 100,000 BTC last year,
and have no idea where it went.
Um, lets trace those transactions... AND Along the way, lets make sure that taxes were paid/collected.
Lets see. You gave a ton to XYZ Corp, what did they deliver? Where's the contract? (Oh, they were overpaid by 10x and didn't notice... LOL).
TBH... That final piece is why we should FORCE our government to use BTC.
And it's what I HATE about ME USING BTC... I don't want my transactions traceable like that.
But I would still want a Credit Card I use for transactions. And then Settle monthly for BTC.
The ONLY thing that would be public is I paid XXX Visa.
I think that's fine. But it still has a choke point. And that's the CC company.
BTC cannot be reversed. You spend it, it is gone. Escrow type services will be huge again.
Anyways. I throw these thoughts at this group.
Here are my questions:
1) If it were WELL ESTABLISHED and STABLE in it's value [changes would reflect the OTHER currencies inflation] and it proved to be a storehouse WOULD you use it then? (Why/Why Not)
2) If it guaranteed we could see where the government money was going, would you want the GOVT to be forced to use it?
3) What is a realistic Alternative? (That can't be counterfeited, and could you leave the country if all of your wealth was converted to that? Safely?)
Thanks in advance. I think this discussion is worth having.
And I have my concerns. But they are not with the safety/security of the asset.
It has ZERO value, etc. etc. etc.
But please hear me out. In fact, I don't completely disagree with you, I started where you stand!
We need some form of money. Which must be a store of value (unlike the dollar).
And I ASK you to ignore BOTH the current instability of BTC pricing, and the difficulties in using it. [for now].
What were used, in the past, for money? (Glass beads, shells, various coins, etc. etc. etc.)
And what happens over time (People shave the coins (hence the ridges), people counterfeit the paper,
the English even came to an island with a bunch of glass beads. Bankers use inflation, and debt is used
to enslave us).
I am VERY confident that everyone here is a solid believer that GOLD/SILVER would work just fine.
(Even better if it wasn't so dang heavy... But I've seen plastic bills with pressed gold foil inside)...
The point is. WE NEED a money and a CURRENCY (something we actually spend) that we can TRUST.
We cannot Trust: CBDCs, the Dollar, etc. etc. etc.
But MANY people here REFUSE to consider trusting BTC, because it's "software".
The reality is. It is an IMPOSSIBLE to counterfeit currency. It's #1 drawback is that you can lose access to it because of some failure to keep the password. The #2 is the ability to have someone strong-arm your password from you... And I agree...
But in all honesty. I think if the Gulch [Which digital currencies allow to be geographically disconnected], used crypto as part of their "going on strike" from the rigged system... They would realize it solves a few problems.
Far more than it creates.
Yes, it requires Electricity, Internet, and Devices to transact. (Just like Credit Cards do).
And MAYBE we need some level of Coinage. I agree this is a weakness.
But here are the Strengths:
1) It's impossible to counterfeit! EVEN by Governments and by COURTS.
2) Once it's EVERYWHERE, it makes more sense to use it, then to try to go around it. [Chicken/Egg, I know]
3) It's trust is the SIMPLE fact that if you had MILLIONS in it, and you felt the network was at risk. You, too, could setup a few miners, to help keep the network DECENTRALIZED.
FWIW, I am not sold on PoS (Proof of Stake). This is where you put up money and you RISK that money to authenticate transactions... In such a way that if you try to approve (back door) a fraudulent transaction, your are penalized by having the money you Staked taken from you. [Reality: Some players have enough $$$ that they can afford to lose that money in order to "break" the system].
In PoW (Proof of Work), you solve tough math problems, and the first ones done get the reward (more coins).
This is why it is called Mining. You don't get an outsized amount of coins. In fact the difficult and price can be tracked. Miners are EFFECTIVELY Converting Electricity to Coins via a dollar cost averaging function. And this is a TOTAL DEMOCRATIC Approach. You join other miners, and you mine. You make some money for mining. But there are literally TOO MANY Miners for someone to sneak in and start trying to get "Bogus" transactions to be validated. Every ONE of these miners has EVERY TRANSACTION on them. The SECURITY is that the system is spread out. And that a bunch of RANDOM miners will have to validate your transaction.
Even China could not corner the market on mining in such a way as to corrupt it.
Yes. It is ONLY WORTH what the market says it is. BUT it is also back-stopped by what it costs to MINE new BTCs. Because if you are mining it, and it costs you $35,000 to mine 1 BTC. You have ZERO incentive to sell that at a loss. Much less a huge loss.
And I guess that's the final piece. It will be REALLY hard to manipulate when it is fully adopted.
Full adoption means the price fluctuations are gone.
Gold, Silver, Stocks, Bonds. These are all heavily manipulated.
And the final feature. Imagine the government tries to claim they lost 100,000 BTC last year,
and have no idea where it went.
Um, lets trace those transactions... AND Along the way, lets make sure that taxes were paid/collected.
Lets see. You gave a ton to XYZ Corp, what did they deliver? Where's the contract? (Oh, they were overpaid by 10x and didn't notice... LOL).
TBH... That final piece is why we should FORCE our government to use BTC.
And it's what I HATE about ME USING BTC... I don't want my transactions traceable like that.
But I would still want a Credit Card I use for transactions. And then Settle monthly for BTC.
The ONLY thing that would be public is I paid XXX Visa.
I think that's fine. But it still has a choke point. And that's the CC company.
BTC cannot be reversed. You spend it, it is gone. Escrow type services will be huge again.
Anyways. I throw these thoughts at this group.
Here are my questions:
1) If it were WELL ESTABLISHED and STABLE in it's value [changes would reflect the OTHER currencies inflation] and it proved to be a storehouse WOULD you use it then? (Why/Why Not)
2) If it guaranteed we could see where the government money was going, would you want the GOVT to be forced to use it?
3) What is a realistic Alternative? (That can't be counterfeited, and could you leave the country if all of your wealth was converted to that? Safely?)
Thanks in advance. I think this discussion is worth having.
And I have my concerns. But they are not with the safety/security of the asset.
how much faith do we have in the federal government right now?
kinda hard to get that gold and silver in the middle of civil unrest
Of course, when you realize THEY HELD the physical and gave us paper slips. Printed TONS of extra paper slips to steal "real assets"...
Then defaulted on turning the paper slips back in for the real thing.
The enemy is a Satanic Luciferian Genocidal Globalist Peedo Bankster Cabal of Prussian origins.
BTW good luck trying to buy a silver dollar for $17.80. A common Peace Dollar sells for about $25. With a sell to us price of $18.74. Quite a spread between the Bid and ask but the bid is higher than the silver content value.
I tried my hand at trading, until I saw how they rigged things.
This particular day, I was recording my screen. And I showed my brokerage what transpired. The market flew over my order and filled orders way below me. Then skyrocketed higher (my expectations). But I did not get to go along for the ride...
They reviewed the video and the "tape" (this was F/X)... And they said:
1) The market went into "fast mode" where they cannot guarantee the spread (bid/ask)
2) Even though they moved 20 ticks past me, it was WITHIN the bid/ask spread, so there was no need to fill my order!
3) Our policy states that you have an 4 tick spread MAX UNLESS the market is in "fast mode".
ROTFLMAO. Effectively they said. We can steal from you, whenever the computer sees an opportunity to steal, but declaring "fast mode" before we steal, and then going back to normal once control is established.
I talked to an actual CME trader who said on his device he has a feature that tells him the RISK & REWARD of slamming the market X points in either direction, based on the stops they can trigger.
I packed my bags and moved on. These people have rigged every game in town.
The physical wealth must have the following properties:
1. difficult or impossible to destroy
2. existence and ownership publicly verifiable
3. does not decrease in value, or decreases very slowly
Some examples are:
1. Land (owned outright)
2. Gold/metals (assuming you can publicly verify that the bar is in whatever vault)
3. Stock in a public company (assuming you can insure it against collapse in value)
The tokens must then be insured by a third party (basically an insurance company) trusted to make holder of token whole in case of destruction of the physical wealth the token is tied to, or collapse in value of the thing. The tokens must be tied to only a part of the whole property to avoid issues with price fluctuations of that property. The tokens are basically liens and must be exclusive, no other token (or external lien) is allowed to be tied to the same physical thing. The tokens will also need to auto-merge (annihilate) when A owes B x and B owes A x. I don't have all the details on the exact protocol that will make all this practical, but I have some workable ideas.
This will make the price as stable as a rock (because the token will always represent the exact amount of value it is tied to). It is basically the same system as gold based money, but decentralized and expanded to work for any acceptable physical wealth. This will also transfer money printing ability to the rightful party - the person creating/holding the wealth, not some lame ass parasitic miner or predatory state.
The only way to create "new" tokens, is the associate them, permanently with a specific oz of a serialized bar of gold.
You can then SETTLE your "claim" by transferring your claim on THAT ounce for a another ACTUAL Ounce of Gold.
And that reminds me...
All money is a CLAIM on future goods.
I would also prefer that these tokens only exist short term. Let's say you have some wealth and you want to temporarily spend it. What you do is you digitally mint tokens (after previously jumping through some hoops to get it insured and verified) and you spend the tokens. Then, after some time, you perform some service or create some product that you sell to someone else, which grants you somebody else's tokens. What then happens is that the tokens you've previously given out get annihilated by the tokens that you've just received, the person holding your tokens gets those tokens you've just received and you get the claim on your initially tokenized property released. So, these tokens would not be permanent. You only use them to settle debts. Once the debts are settled, the tokens are annihilated. If you never settle the debt, when you die the property is sold and the tokens get annihilated as part of the estate reconciliation. If the property loses value, the insurance is on the hook for it. You will need to pay (with tokens) for insurance policy on the property for as long as those tokens are out there.
So, what I would like to see is non-permanent monetary base. When all the debts are paid back the amount of tokens in the system would be zero.
"All money is a CLAIM on future goods." - I would disagree with that. In my system, all money (tokens) would be claims on some already existing property, same as with gold-backed money, paper notes being claims on EXISTING gold in a vault.
My system is very efficient. It cuts out the banker parasites with their fees. And you already pay for insurance on your house and gold vault storage costs anyway. Might as well use that as your credit card / line of credit. There would be no token price fluctuations because the insurance companies will be responsible for holding the value. And no more parasite traders extracting value from artificial self-induced price fluctuations (pump and dumps?).
And the problem is the question. WILL it be delivered? Can it be levered?
The reason we call it a FUTURE claim, is that it is ONLY a representation, until you turn it in. THEN it is a claim. Making it a FUTURE claim, or a claim on a FUTURE asset.
Because someone can resolve it with EITHER the exact asset (by serial #), or by an effectively SAME/SIMILAR asset (by weight, purity, etc).
If it loses fungibility, it doesn't make a great currency, although it could still be "money".
I could foresee these crooked bastards paying you in MOLDY grain... Because that is the exact serial # of grain you had control over. Whereas a futures contract of grain has some well-defined values, but are highly levered.
Futures Contracts on Farmers Products are a good test example to put your concept through a test with. How would I do that, so that the farmer can cash out a little bit up front, and cover his costs as the year goes on?
In my system, the item that backs the tokens will not be deliverable. The only requirement is that the same item cannot be tokenized a second time. The item's owner can continue to hold it indefinitely. I don't see any issues with fungibility of my tokens, the insurance companies will ensure it.
Once the item is sold by the original owner, or the item is destroyed, something must happen such that the tokens (that were tied to the no longer valid item) get transformed into new tokens tied to some other item somewhere else in the system.
If the item is sold, it is sold in exchange for somebody else's tokens. However, the original owner doesn't get to keep the whole payment. Part of the payment (tokens) go to annihilate and replace the tokens that were originally tied to the item. So, it works like a lien. If you sell a house that has a mortgage, you get some of the money and the lender gets the rest.
If the item is destroyed, the insurance company that originally digitally signed the tokens has to replace the tokens that were tied to the original item. These new replacement tokens come from the insurance premium payments.
All of the above complexity would need to be handled by software (and presumably happen on the blockchain). The compliance with the rules would be enforced by the protocol.
Why should it be set up like this?
I set out to re-engineer the financial system to solve a number of problems. One of the problems is inflation and deflation. The value of money should be as stable as possible. In order for this to be so, the value of all money (tokens) that exist in the system must perfectly balance with the value of all wealth. There are basically the opposite sides of an equation. Another problem that I would like to solve is the existence of parasites that profit off the inefficiency of the current system.
The problem with bitcoin is that it has a fixed number of tokens. As more and more people start using it to exchange more and more goods, the value of bitcoin increases. This causes crazy swings in bitcoin price. This creates huge inefficiencies in the system. Bitcoin is no good. We need something as stable as possible. Additionally, there is a bit of unearned wealth transfer that happens in the direction of hodlers. Fuck that shit, those parasites shouldn't be getting anything. The only people who should be allowed to receive monetary wealth are the people who produced actual wealth.
The problem is reversed with fiat. It can be 'printed' and 'destroyed' on a whim (loans and repayment, etc). This also causes swings in price of money. Worse, some people are allowed to print without repayment, such as central bankers, etc.
The problem with gold based money is that you now need a whole industry (gold miners) to work really hard and produce all the gold that is needed to have enough monetary base to allow transactions to happen. This is really wasteful. Gold value has swings too as gold demand changes vs other goods.
The problem with having a monetary base is that it creates supply/demand for money. We don't really want money supply to get in the way of our production.
What I did is I redesigned the whole idea of money from scratch by inverting the concept. In my system, the total value of all tokens that can ever exist can never exceed the value of all real wealth that currently exist. That is how you keep the prices stable. The tokens are basically IOU notes backed by property of the debtor insured by an insurance company. Everyone has the right to mint these, and there are no people with special privileges in the system.
I would like to discuss details of this idea with anybody interested in debating for/against. However, I do want to point out that I didn't fully work through all the possible issues with it and it is still very much work-in-progress.
Actually, this is why a SATOSHI is 10^-8 of 1 BTC. ONCE BTC consumes 100% of the oil markets, for example, it's price will stabilize.
(it will likely be very high per BTC).
My view is that a Satoshi will be roughly $10 of value when BTC is used as a BRICS type currency.
The challenge of using other tokens is that you need mining for each type of token, and controls. You must make sure someone cannot MINT new "false" ones or cheat the auditors matching to physical.
If tokens are IOUs... They become Claims (future Claims on physical items).
But I like the fact that you are thinking about it.
THIS is what our forefathers were doing before creating our constitution...
Do you understand the basics of M1 (Gov Bonds), M2 (Fed Mulitplier), and M3 (Fed Window Multiplier) money supply
Realizing that M2 is hard to get...
You can think of M3 as the AVERAGE LEVERAGE of all banks (15:1) and multiply that by the Government Debt.
That's how much money is floating around in Dollars. And any attempt to reduce that causes massive deflationary pressures which will destroy the banks (ponzi schemes requiring every increasing dollar inflation).
In fact, if the US govt ran the FED window.
We could be completely out of debt. (Because the govt interest paid is on 1x multipler, but the interest collected is a 15x multiplier).
When people realize this. They should realize that the bankers have been stealing us blind forever.
The IOUs that I am thinking of are about facilitating exchange of time among members of society. The tokens-backed-by-existing-wealth thing is only a gimmick to keep the prices stable and prevent cheating.
In my system, the insurance companies play an important role in the minting of tokens. Additionally, the tokens should be publicly verifiable. So, when you do your transaction, your wallet software would do the verification to make sure the tokens are valid. Alternatively, the miners (ones producing blocks) may be ones responsible for doing verification. Any "false" tokens would be rejected.
By the way, I consider all states (governments? countries?) to be immoral. Any fraud or violence is wrong, no matter who dishes it out. Monopoly on violence is violence. No person or organization has the right to decree laws but logic and reason. The "forefathers" were statists, and so is the constitution. I guess it is a step in the right direction, but it has a long way to go before I will completely agree with it.
There is a lot of human predation happening in society. It takes place in all levels of society: the financial sector, the government, etc. It is a miracle that the thing (society) is able to continue existing. The day when predation is eradicated is the day when humanity will be finally liberated.
So, energy (Horse Power). Or original societies were limited in what we could accomplish by just HUMAN energy. Then TOOLS came, and became a multiplier. Then beasts of Burden. Then Machines, then electricity (as an input into machines) or other fuels.
Which is why I laugh when inflation does not include FOOD and ENERGY. Which is... ALL ENERGY.
Even food is effectively captured energy.
Selling for a profit is not predation (not that you said that). But "Rent Seeking" is... (That is using your POSITION to declare a fee is required to play/participate).
Interesting thoughts.
2. ???
3. profit!!!!
Energy is a resource. Oil is a resource. When you pay somebody for oil, you are not actually paying them for the physical thing. You are paying them for the SERVICE of pulling it out of the ground. Why? Because free market allows competition and competition lowers prices until they cannot go any lower. Why can't they go any lower? Because it becomes not worth their time to the person performing the extraction service. So, you are actually paying for somebody to do the work for you, not for the physical thing itself.
If oil existed but nobody was making use of it, then it wouldn't do any good to you. What is the price of energy when it is sitting in the ground and not being used? Zero.
The reason why original societies were so poor was not because they didn't have oil. It was because their productivity was shit. They had the same amount of time but they could not do much with it. Technology allowed them to be more productive and more rich.
When robots and AI are fully developed and deployed, everything will become dirt cheap. Why? Because you don't have to pay humans for their time, robots took their jobs. Robots don't have agency and don't have to be paid. Productivity will go off the scale. GDP will have a nuclear explosion. Even with the same amount of energy, everything will become dirt cheap. Why? Because you are not paying for energy, you are paying for human time.
The only exception to the above that I can think of is when resources are physically limited. Then prices will appear to have a non-human-time component to them, although, there is a case to be made that it still will relate to human time if you do a deep analysis on it.
Energy is a substitute for human time.
Especially when combined with Machinery.
And once you have all of these FANCY Machines and robots you speak of. What happens without electricity, fuel?
Take any advanced economy. Show me their GDP, show me their energy consumption. GRAPH them together. It's a tight correlation.
Now drive Energy Consumption to ZERO because it cannot be afforded, or found.
ONLY Human labor. No gasoline, oil, electricity.
What happens to GDP?
Energy is THE Master Resource.
Not Money. If any currency stopped existing, but energy was still flowing. things work. A new currency will be quickly implemented.
But stop the energy flowing.
Imagine the average household having $100K cash in the bank.
But nationwide. ZERO Electricity.
No Gas, No Fuel.
Those on farms would last the longest.
(especially if they had some animals).
But everything stops.
THIS is why I BELIEVE they are going after CO2 (it's the effect of using energy, even by humans, giving them the "right" to tax us for breathing).
Energy has a cost.
If that cost gets too high, stagflation from the 70s is back.
It's our biggest risk. And we are more worried about Gender Names.
==
BTW, everything CANNOT become dirt chieap.
They are already talking about INCOME TAX for each robot employed.
The $15/hr minimum wage is something the government WANTS because it guarantees you pay taxes at that income level.
If prices go down, tax revenues go down.
If incomes go down because nobody needs to work, then tax revenues REALLY go down.
I don't see TPTB allowing this.
Tax revenues go down but their costs also go down, so, that's not entirely a bad thing.
"If incomes go down because nobody needs to work, then tax revenues REALLY go down."
I don't see the "nobody needs work" happening. You could've said this 100 years ago. They actually did say back in the day, that in the future you would have to work 1 day per week because of increasing productivity. Yet, that didn't happen. One thing that did happen is the standard of living increased. People's greed is unquenchable, they will continue to work as much as possible so they can spend as much as possible. Additionally, what also happened is the parasite state added on a bunch more taxes and increased spending, so, I would imagine they will find ways to extract all that increased productivity. Depressingly, everyone will still live paycheck to paycheck.
"I don't see TPTB allowing this."
No, I think they are also very greedy. Their thing is going to be adding more and more taxes and keeping everyone in the hamster wheel.
These fuckers are looking for ANY excuse whatsoever to predate on society.
Nah, I think they are just trying to find an excuse to tax people and skim a share of revenue. These people are parasites. God forbid they think of the future.
If farming productivity goes down to per-industrial levels, I think everyone would need to suddenly become subsistence farmers. I don't know if I would call that a stop, just a huge decrease in wealth.
There is a case to be made that there wouldn't be enough farmland on earth to allow for subsistence farming with such a huge population (due to fertilizer increasing productivity of farms). So, maybe a large part of the population would die of hunger. But after that there would still be trade and money.
GDP is a measure of wealth per person. Ya, energy is used for increasing productivity. The more boosting of productivity, the more energy is going to be used. More productivity = more wealth.
Energy IS NOT a substitute for human time. These are completely different things. Energy can be used to increase productivity (save time). However, you still need to press buttons on the machines to direct energy into doing something useful.
Once the AI and robotics are at the right level, you can have them do the energy plucking. So, it will be a self-sustaining process. They can be set up to produce the electricity/fuel needed to run themselves. They are not going to ask for payment. The only reason why you need to pay for energy right now is because another entity (that has agency and has a social contract with you) is trading it with you for something else that it wants from you. Once you can produce your own energy using your own robotic AI swarms, you don't need to pay anybody for it.
The universe is full of energy. Matter is energy. You are literally sitting on a form of energy right now. Matter has an ungodly amount of energy in it. The only difficulty is the lack of technology to convert that matter to energy. Theoretically, if you could conjure up neutrons and direct them at a piece of matter, you can start up the process of converting it into energy. This is all very impractical right now, but eventually with some R&D investment I can totally see Back to the Future type Mr. Fusion devices running on banana peels and beer. If you had a small black hole, you could feed matter directly into it and it would emit a huge amount of Hawking radiation which you can capture and use. All you have to do is arrange matter in certain specific (as of yet unknown) shapes and combinations to allow all this energy conversion to take place.
What I'm trying to get at is the energy cost is limited by humans needing to do the extraction. That takes human time. Which is what the price is for, human time.
This whole energy is money idea is utter nonsense.
Consider monkeys. They groom each other. Now, let's imagine they invent money. They may start using it as payment for grooming. But they have no energy or technology. They just have their time. As you can see, no electricity or fuel is needed to exchange services for money. You might argue they use chemical energy in their muscles. However, that doesn't matter because that energy would have been spent anyway on something else less profitable and they would receive no money for it. Imagine a monkey grooming a rock. He spent energy on it, why didn't he receive grooming points for it? Because it is an exchange of services that is important, not the expenditure of energy.
What you want is to back your currency with EVERYTHING. That way, the value of your money is proportional to an average value of all wealth. If the difficulty of producing gold falls, it will just fall in value compared to everything else. Any parasitic actors trying to cheat the system aren't going to be able to do it.
I like the tokenization concept.
And in reality, your system suffers from one flaw and that is that to TRANSACT with others, you often have to AGREE on the "currency" for the "value". How do you price someones time?
Hyperinflation is a Psychological Issue. It happens QUICKLY because EVERYONE realizes "I would rather have than hold these dollars, because I will be able to barter for more dollars later". It becomes a race to the bottom for assets (spending every more $s just to close a deal. Think about the housing market when people were offering A LOT above the asking price to get the contract). Then add an accelerant.
It should not be static, though.
In reality, markets need a level of inefficiency in order to operate. Nat Gas is worth LESS in the summer than the winter. And you have to store it. So price fluctuations are normal/expected.
The prices for goods naturally fluctuate based on supply and demand for those specific goods. What I'm talking about is something else, it is having the value of 1 unit of "token" not change, on average.
You really don't want inflation or deflation.
When you have inflation, the poor suffer and the rich get more rich. When you have deflation, the reverse happens. You want fairness in the system, which is why you need the value of your currency to be as stable as possible.
Not really. I disagree. It is rather mechanical. If it was only in people's heads then what would happen is everyone raises their prices until everybody cannot buy or sell anything (because on average nobody will have enough currency). Then, they will have to lower prices back down to a level where people now have enough money to afford stuff.
Hyperinflation is when producers raise their prices but there is still enough money that SOMEBODY has (those that are closest to the money printer) that keeps buying their stuff. So, they keep raising prices. The money printing continues to increase because those guys keep needing more and more money to buy the same amount of stuff. This causes money supply to grow exponentially. Without money printing there is no hyperinflation.
Hyperinflation would be impossible in my system because in order to mint tokens you need to produce the matching amount of wealth and insure it. If you do that too much, prices for the stuff you produce is going to fall, and so would your tokens devalue slightly, forcing the insurance company to raise insurance rate and bankrupting you. Basically, my system is self-correcting.
The price of the insurance required would be devastating.
Also realize that the system could be attacked by outside forces that buy slowly, and then DUMP Quickly. Offering up the asset BELOW costs, to bankrupt the insurer, and trip other clauses.
Finally, if you pull back and think about what you are saying... It could be restated as:
"The tokenization will be centrally managed, like communism"
It literally has that feel now that you described the insurance process to ensure price stability.
The reality is that price is a discovery process that changes over time. The value of a new TIRE is significantly different 3 months before I need new tires, and on the side of the road on a busy street, or the side of the road 400 miles from everything.
I do believe that everything will be digitally titled. And along with the title, you will be able to have a digital representation that they will let you load into one of many metaverses (things I hope to never be involved in)....
No, that is incorrect. I was actually imagining the whole scheme running on some system similar to a cryptocurrency with some additional bits mixed in. You would have a decentralized protocol, multiple open source implementations of wallets and insurance software. Blockchain may also be very helpful. I have given some thought to the technical aspect of it, however, I haven't yet decided on a particular configuration of concepts that will make this work. Obviously, there are multiple ways to make it work, each of which has its pros and cons.
I myself am an ancap/volutarist and an individualist and would be opposed to state enforced anything and/or collectivism. I think of my system as existing in a free market without centralization. The insurance companies would be separate entities and tokens signed by them may not be accepted by all wallets. The wallet providers and their users would have to decide which insurance companies are worthy.
The problem with CBDCs (and such) is not that it is digital or whatever. The problem is the built in state backdoor with special privileges that allow predation/slavery. Also that it is compulsory, enforced with the threat of death.
Easy fix: voluntarism.
I don't actually care too much about price stability for individual items. If productivity goes up, the price SHOULD go down. If demand for item goes up, the price SHOULD go up (temporarily, until the producer ramps up production). However, price for items should not change without a permissible factor. I guess what I care about is the 'store of value' property of money.
The insurance companies will need to figure out how to make sure they don't lose money due to backing asset price volatility. If the price goes up for the item, they aren't going to suffer. However, if the price goes down, they will have to ask their customer to pay up. If their customer doesn't pay up, then they are the ones on the hook for it. If the insurance company doesn't cover, the wallet providers and users will just evict them from their wallets' trusted parties list. That will cause loss to the current holders of their tokens but somebody has to get hit with the loss in my system.
I don't think this situation you describe is a successful attack strategy.
Let's assume a party has been slowly buying houses at price of X. Then, they decide to start dumping their houses all at once. This causes the prices to fall. So, the new price slides down to X0.5. The thing is, they are going to lose money by doing that. The last house they sell is going to be priced at X0.5 but they initially bought it for X. So, how are they winning here?
Insurance companies are not going to be hurt by this strategy. They will likely have a hedge position that would go up when houses go down, assuming tokens backed by houses is what they are insuring. Additionally, what they will do is they will use their fund to buy up houses on the cheap. Then, they will wait for the price to raise back to X and will start to slowly sell the houses. So, they will win in this situation. Also, it is likely going to be the case that only a small portion of the value of the houses going to be backing the circulating tokens, because they will have a volatility margin and not the entire allowed backing amount will be backing the circulating tokens. So, there is very little risk in this situation. Of course, the risk will exist and supposedly they will calculate it properly and have a fund dedicated to covering any potentially sticky situation.
FLOAT determines the price.
So, if I can sell 10% of my position, and drive prices lower. I can force a DEFAULT in my OPPONENTS, triggering their sell orders, creating more pressure.
If the value is "truly" higher, then I, who started it all, just buy back 3-5 times my original sell, and I've managed to dollar cost average BELOW Market.
This crap happens ALL the time.
In fact, if you watch the market closely, you will see huge volume spikes in some stocks at the CLOSE. This is because Market Makers are allowed to trade OFF BOOK all day long, then bring the VOLUME of trades back onto the exchange at the end of the day, so nobody can front run them.
It's a complex system. It requires simulation.
Complex systems have EMERGENT behaviors.
You can do certain things in my scheme to make sure tokens hold the same value:
1. Don't use items with high price volatility to back your tokens.
2. Don't use items that have too much depreciation to back your tokens.
3. Don't use the whole value value of your item to back your tokens, leave a healthy margin for volatility.
4. Pay down overextended tokens.
Inflation is near constant in this fake world (In a natural world, progress is always deflationary, because we stand on the shoulders of those before us).
By Hyperinflation starts when you HAVE SO LITTLE TRUST that the currency will hold it's value, that you THROW your money at "THINGS".
And by throw, I mean, you buy whatever you can. And you are willing to pay ABOVE the ASK to get the thing, because going home with your cash, literally means you will be able to buy less tomorrow.
In Weimar Germany, shops raised their prices to cover costs. And they bought as much inventory as they could afford. The cycle starts. Then LESS flour is available, so they outbid everyone to buy more flour. But they will price that into their bread.
The people buying their bread will see the line forming, and the bidding wars start, raising the price of the bread. The SANE person you think of... JOINS the insanity when they NEED bread, and have BUNDLES of "currency". Because coming home without food is an undesirable option.
Once that game starts... It plays out like the HOUSING BUBBLE. With people LISTING a house for DOUBLE what they paid for it 2yrs ago, and it selling for 20% ABOVE that price in 24-48hrs.
FOMO: Fear Of Missing Out... It's a REQUIREMENT to by Hyperinflation.
Otherwise, it's just Inflation. It could be 200% or 800% inflation. That's just inflation.
The death spiral is when the PSYCHOLOGY changes and people REALIZE there is NO SAVING MONEY, there is very little value in money. AND it is WIDESPREAD.
It's hard to call it Hyperinflation when only 4 people in the whole country are behaving that way.
The only reason why you would have so little trust in the currency's value IS because it is getting devalued PHYSICALLY. The lack of trust doesn't just come out of nowhere.
All these strange psychological behaviors are CAUSED by money PHYSICALLY getting printed into oblivion.
The spiral is NOT because of psychology. If the money printing stops, there is going to be some whiplash in the system and after some time all the spiraling will dampen out to have the prices arrive at a stable point once again. The spiral continues because the parasites continue to predate on society.
The only requirement of hyperinflation is an exponential increase in the monetary base. FOMO isn't required. "Just inflation" is when you have a linear increase in the monetary base. At least that is how I understand it.
We disagree then.
First Money IS Psychology. That's why poor people who win the lottery end up worse off. The two are intertwined.
Second. PLEASE NAME One Country where the hyperinflation was stopped reasonably once it started?
Every case I Know of, the devaluations are wicked.
Yes, inflation is the cause, but usually NEVER the trigger. The trigger is that realization (by people en masse) that they are better off spending their money than saving it.
Look at our situation. Our USD has lost 97% of its purchasing power. That seems pretty severe... But it's happening slow enough and things are still available.
My goal in life is to figure out how stuff works exactly, and not by learning from a textbook but the hard way. Based on my experience with this, a lot of theories people have in their heads are bunk. I prefer to derive everything myself from scratch. It is the only way to be sure that it is true.
I hope I am not mistaken in my understanding. I have tried to see it from your point of view but it disagrees with what I know to be true. The mechanism, as I see it happening in the real world, is not triggered by realizations or psychology. In my view, inflation (and hyperinflation) is triggered by printing and spending new money in the market. Everything that comes after (shortages, price increases, realizations, savings spending) is a consequence, not a trigger.
Who cares if you don't realize you are poor. You are still physically poor and no amount of psychology is going to change that.
The speed at which money printing happens doesn't matter too much. The consequences are just stretched out over a longer period of time. I observe incredibly bad consequences of all the USD printing on the US economy. What has transpired is a terrible thing.
BROKE is a lack of money.
I know people who are poor because they are down to their last $7 Million, and they are dreadfully afraid they will outlive that money. (Dead serious here).
I don't think anyone is smart enough to figure out ALL of the stuff you are talking about without standing on a lot of shoulders.
I always start by reading others, then learning their language. Energy being a master resource comes from Dr. Chris Martenson. So does the plat against GDP, and the comment on Complex Systems.
I believe these are "base facts" you accept, or attack. I Could not defeat them as facts.
I go to others to get the definition of money.
To get the definition of inflation, and Hyperinflation.
That inflation "trips" hyperinflation is strange to me. We are always living in inflation (these days).
Typically a TRIPPING event is why people ask "How does a currency devalue? Slowly... Then VERY QUICKLY!"
If we cannot agree that it takes the MASSES to 'believe/see' the inflation is catastrophic to trigger Hyperinflation... Then we are at an en passe.
The very definition of trigger or trips... Says it
is something that sticks out.
And it is okay to disagree. I've learned to express my ideas better, and you have been exposed to different ideas.
As have I.
I wish you luck on your journey...
Wealth creation is done by people using their intelligence and time. When you pay someone, the cost is exactly human hours. It is a "you scratch my back, I scratch yours" type of thing. Money is back scratching I-owe-yous.
There is a saying: time is money. It is absolutely correct.
Energy is not a replacement for either money or time. You can use energy to power time-saving machines, but that doesn't mean what you think it means.
he makes some claims in there, and a few I don't completely accept.
But ONE stands out.
There are MANY forms of wealth in society.
There is PRIMARY Wealth. Which is fertile land, fresh water, available food.
There is SECONDARY Wealth, which includes tools, and community, etc. etc.
And Tertiary Wealth which is "currency".
Because without others to trade with, The third type of wealth isn't wealth. (he does a better job, I am paraphrasing).
Then there are contracts which are CLAIMS on future Currency or Goods, etc.
He uses this to describe money as a CLIAM on future goods (ie, what you can trade them for).
You might want to read some of his writings as you are dealing with similar issues.
FWIW, I disagree that Fossil Fuels come from Fossils and NOTE BURRIED Trees/Plants, etc.
When we burn trees, we get carbon, we make charcoal. And I just learned that the TYPE of carbon we release into the air is plant based...
So, outside of that ONE point.
I think he is spot on.
I think we have seen the best years of humanity in the last 70.
And we are at a turning point.
We will LIKELY enter YET ANOTHER Dark Ages.
And hopefully come out better later.
The other option is we stumble past the Dark Age, and actually do real good.
But I think that's smaller than the odds of guessing a BTC private key!
What exactly will stop me from growing my own food?
What exactly will stop me from distilling water?
What exactly is going to make the land under my feet disappear?
Answer: predatory humans stealing my food and water, kicking me out from all the livable places or charging me exorbitant taxes for it, bombing the shit out of everything with nuclear weapons and contaminating all continents, etc.
Yes, if human predation reaches a critical point, you better believe there will be DARK AGES.
By the way, I would include having too many children in the human predation category. All these idiots multiplying like rabbits only make it worse for everybody else. The only way they can sustain this shit is if they get the STATE to support their bad behavior by having the state steal shit from sane people and giving it to the fuckers. Speaking of which, I believe they are discussing doing something like that currently in the US Congress.
I guess you can say that land is 'produced' by discovering it and establishing claim on it. However, it is not something that is terribly valuable in itself. It would be valuable if there was a farm on it and the farm was producing income. Even infertile land can be made into fertile one (with some effort). There is plenty of land everywhere. A plot of land is cheap, especially in unpopulated areas. Look at the difference in price of an empty plot of land and one with a house on it. The difference is like 50x. So, the price you are paying is for human labor to build the house there, get the building materials there, make the building materials, etc. Now, some areas have very high housing prices, but that is caused by inexplicably high demand, which can actually be explained by factors such as proximity to high value producing capital (factories, jobs, etc). So, the source of high cost still goes back to human time/productivity. All cost is human time, or so I conclude.
Fresh water isn't terribly valuable either. There is plenty of it everywhere. Still, with a cheap enough energy source, you can easily make fresh water.
Food might be an issue closer to the poles, but if you look closer to the equator, food is DIRT CHEAP. You literally walk up to a tree, open your mouth, wait a little bit and some fruit falls from it directly into your mouth.
I (a complete newbie) tried growing food myself. I didn't even spend that much time on it. The stuff literally grew by itself. I also do water distillation regularly. Distilled water (not just fresh water) is basically free.
So, give me a break. This Martenson guy is a bit off. These things he says are wealth aren't actually terribly valuable. I agree they are somewhat valuable, but I wouldn't put them at the top of the most valuable things. These shoulders you are standing on aren't very solid.
What is valuable is something that people want/need that is also hard/time consuming to get. Usually, it isn't food or land or fresh water. If that was the case, we would all be dead floating through the darkness of space.
Money is just a proxy for human time, so, no shit money is valuable.
A house (not the land it is on) might be hard to get. It takes a lot of human time to build it. A car is also not terribly easy to get. It is quite a time consuming process to make, even with all the automation. Building a profitable company is nightmarish hard. It takes an extreme amount of time to get valuable metals (gold). That is why these things cost a lot compared to food and such. It just takes way too much human time.
I tried that but a lot of the shoulders were crooked.
Hyperinflation is when money supply doubles every x number of days, right? So, let's say everyone decided to all the sudden spend all their savings. The savings would NOT exceed the start money supply amount. If they all went out to spend all their savings, things they would buy would run out and would increase in price, however, after a while they would run out of money and stop buying, which will cause the prices to go back down. So, the savings would just move to someone else (to the producer of whatever they were buying). So, there is no way to trigger doubling of money supply by spending savings. Even if you tried to, you would just be able to keep it up for at most 1 cycle (x number of days). However, for hyperinflation you need at least a few cycles. There physically need to be multiple doublings of amount of money in people's bank accounts. So, unless they are spending on their credit cards and there is no credit limit, you can't really have a hyperinflation just from people losing trust and spending their money.
Of course, this view is rather simplistic and money velocity would be important as well. However, I think it still demonstrates that psychology isn't going to cause it.
Inflation and deflation can coexist.
Taking Housing Prices.
No huge inflation in Montana.
I don't like that you created your own definition of hyperinflation.
Inflation is seen as the increase in PRICES.
So, lets take all the savings there is in the USA Today.
And have the government declare that ALL stored assets EXCEPT SILVER will be taxed 20% annually.
What do you think happens to the price of silver?
Without increasing the money supply?
It will INFLATE.
Now, the question is did the value of the underlying dollar decrease. YES, because holding it now comes with a punitive tax.
Regardless, everyone starts selling their excess assets in order to position into Silver.
But Silver has a FINITE Supply.
It's price responds.
Inflation is BETTER described as TOO Much money chasing a small set of assets.
If the assets being chased are unlimited.
There will never be inflation (in that asset).
I get that you don't think "Psychology" matters.
But look deep into the stock market.
It's all FOMO. It's all Psychology.
I am not making that up.
This is the result of reading many books on this and other topics.
I've been to a LOT of auctions.
The entire process is to disable the thinking part of your brain (the incessant repeating of numbers, etc). So that you are responding with your lizard brain.
I will argue that you can have UNLIMITED INFLATION (like we've had)...
And you will NOT SEE HYPER INFLATION.
UNTIL FEAR Kicks in.
Fear that your life savings is about to be made worthless.
Otherwise, why would you empty your bank account and start buying assets?
I think the COUNTER ARGUMENT is easier to make. WITHOUT "Emotion", hyperinflation never starts.
I guess you may have a point to some extent, these days you might say that is done by people doom spending and defaulting on their debt. But then the lender has to pay up, or so I understand. However, if they drag it out indefinitely maybe that is kind of like money printing via psychology. I'll give you that one, but only on a technicality.
I think you are starting to get it.
The correct definition of inflation is an increase of money supply.
Now, I know that the definition of inflation currently being used by the masses goes something like "general increase in prices". However, that is not a correct definition. This definition has been promoted by the statists to confuse people. That is one of the psychological tricks statists use. They alter inconvenient words so that everyone is mixed up and confused about the true source of their problems (the state). Back before the statists screwed up the meaning of this word, "inflation" did not mean "an increase in prices".
Even the statists admit this:
https://www.clevelandfed.org/publicat...
The reason why statists fucked up the word is because they want to redirect the blame for increasing prices away from themselves onto the producers of goods and services. "Your prices went up? Ah, that's too bad, damn those greedy capitalists!"
You see, when money supply goes up but the supply of goods and services stays the same, you start to have shortages as producers are unaware of what is happening and don't produce more stuff to meet demand and don't raise the prices to prevent the shortages. Next cycle, producers think it is a boom (because they see a spike in demand) and they ramp up production. However, they are unable to do so because all of them are doing this at the same time and there are labor shortages. So, they raise their prices so they can hire more people for higher cost. However, that is not enough because labor wants even more money now that their costs went up (because everybody raised their prices). So, for a while the system goes into a bit of a wage-price spiral, at least until an equilibrium is reached.
So, increase of money supply (or alternatively an increase in monetary base) causes an increase in prices across the whole system. That is inflation.
Prices also increase and decrease for other reasons that are not related to inflation, such as an increase/decrease in productivity, temporary events that cause demand to shift across the economy, etc.
Inflation and deflation are mutually exclusive. A money supply / monetary base cannot go up and down at the same time. These two CANNOT coexist at the same time by definition. Now, some parts of the economy separated by distance and lag may experience inflation while others may experience deflation due to money all the sudden leaving one area while going elsewhere, however, each part of the economy experiences either inflation or deflation, not both. In your hypothetical silver example, price of silver would increase while prices of other assets decrease, however, overall the average price level (and money supply/monetary base) will remain the same. That would not be considered inflation by the original definition.
Define 'reasonably'.
I am not a history major, so, I can't really recite exact excerpts from history for you.
One example that can be looked at is:
https://en.wikipedia.org/wiki/Hyperin...
It seems to have ended 'reasonably' in that case.
Supposedly, Javier Milei is working on stopping it 'reasonably' in Argentina.
Hyperinflation stops eventually. It is not sustainable. Either the money printing stops being exponential or the currency is rejected by its users.
Zimbabwe is the one with 10 MILLION DOLLAR bills.
The problem is that HYPER inflation is unreasonable levels. So once it trips, it over compensates (and that's all emotion).
But the main point is loss of faith.
Things fail to the point that people actually switch from the currency to direct barter. Until the currency is replaced by a new currency (all new bills are issued)
The exact price amount doesn't matter. It only matters relative to everything else. Initially, nobody will know what anything should cost, so, it will be a chaotic start. But, over time, the value of 1 unit of "token" will settle to some average. It would be the insurance companies that would act as a force that would balance the value of 1 unit of "token", or so I theorize.
The prices for specific products and services (or human time required to produce them) would be set by supply and demand.
It's true value is being established as the number of participants are increasing.
I will be honest, I think there are way too few BTC. But I realize their goal was that Satoshi's would be the quoted price in the future.
As you grope around with your ideas... You are getting to the core issues. Decentralized. Trustless. Exchangeable. Divisible. Relatively efficient/quick. (Remember when paying with a CC was SLOWER than using cash? I do. They opened a BOOK and SCANNED IT to see if the card had been cancelled... LOL)
Back to pricing things like my time. I've refused to work for BTC, and I won't contract to pay someone in BTC until the price stabilizes, or the price negotiation would have to happen MONTHLY... I'd be bankrupt. BTC was $5k when I got started. If I agreed to pay my employee 100k in BTC (meaning 20 BTC). Well, by the end of that year, BTC was like $25k each. If I did not buy them all up front, I would have had to file bankruptcy.
Stability has to work its way into the system.
Of course, we think the USD is stable because we are USD Centric (and most of the world is because it WAS the reserve currency). But as that changes... We are going to see more wild fluctuations in USD.
I was considering seriously taking it up as a personal project, ironing out all the details and writing the wallet software for it, however, I decided against it. The parasites (the state) are probably going to squash it and the sheeple will continue using a backdoored CBDC. So, it would be a waste of my time.
That's the problem. The gold backed currency would hyperinflate. Prices for everything else would go up. There is going to be a wealth transfer to Bezos. That's no good.
But, if your currency was priced to ALL wealth, the tokens that were backed by gold would be replaced over time by insurance companies that insured them with tokens that are backed by something else (due to loss of value) and the value of the currency would stay the same along with the prices for everything else.
They TIED the dollar to Gold.
And they PRINTED like drunken sailors.
Until France did the math, and tried to get their gold back. And we reneged!
Gold has failed every time CURRENCY/SCRIPT/PAPER that represents it, that can be counterfeited (even if the government considers their counterfeiting LEGAL inflation).
This is why it MUST be digitally ENCRYPTED/TIED to a public block chain.
Because Counterfeiting/INFLATION becomes impossible.
That's all we want. Some form of currency without FAITH that our CORRUPT overlords will not lie to us if/when they want...
This was a DEFAULT on our debts.
We failed to return the GOLD back to people who gave us Gold for the pieces of paper..
Could government employees control access to the Internet and thereby keep individuals from using their holdings for commerce?
First, Use the Dark Web. (When the govt goes "there", we have to go "THERE")...
Second: Move. use your device in a country that is not stopping you. (AND magically, your old country can't stop you from accessing your BTC from that new country).
try leaving the country with 500 lbs of Silver.
Versus a partial key that decrypts a file already waiting where you are going. Stored in some arcane file on your phone (me, personally encrypted into an image), others with hardware devices, etc. etc. etc.
The government cannot shut down the Dark Web. I wonder why? Because the IPs are indistinguishable from "normal" ones. It's the Dark DNS and knowing how to navigate that makes the difference.
BTW, how long after they do that, before someone offers an alternative internet? (The rebirth of AOL? LOL) These things are hard to shut down... WHEN the government needs them to do all of their evil tracking...
But I think there is a place for a little of everything. Gold, Silver, Lead, Brass, Crypto, Paper, Coins. Goods, skills. Books, Knowledge...
You might in fact gain as silver coins often sell at a premium greater
than gold coins to spot. You might get a heck of a back ache in the
short term though delivering. ;^)
I agree there's a good argument for all the things in your list (plus
vitamins, plants, seeds, water purification, energy generation, and
non-prescription med treatments.)
The point is that the "exchange services" come at a fee. My wife bought a gold coin. Paid $85 "fee", and bought at the ASK. Gold moved up $15/oz. She asked what she could get for it. When I explained she sells at the BID, and they charge another FEE to sell it. She was LIVID.
She realized. Actual GOLD has to go up enough to cover the handling fees. It's not to be traded lightly... But 90% of people can't do the math until the math hurts them, LOL.
Finally, have you tried transacting in it recently? (Most people end up selling a chunk, and then dealing in the cash).
Silver holds the value, the cash is the reflection of that value. Silver is for saving to be used for future purchases. If and when we are back on a constitutional currency you will be able to transact in silver ,but no need than ,except for coins.
And, had he done that, he creates a TAXABLE event that is quite large. And pays a fee on those ounces as he converts them.
Then he pays the fee again in the future.
I just looked at APMEX a fair source for Silver.
The cheapest you can pay is $1.79 OVER SPOT per ounce.
But many fees are 2.00 MORE than that.
for the most part, it's about 10% of the price of silver to re-purchase your silver.
You would HONESTLY sell that kind of weight, pay the fees to the person you sold to (bid/ask spread, and their per ounce fee)...
THEN pay the income taxes on the gains.
Then re-purchase on the other side, at about 10% (basically spending 50 lbs only on the BUY side of Silver).
Heck, I suggested he CAST it all into some kind of Statue, and ship it like it was nothing. But then that turns it into SCRAP silver, and destroys what he gets on the other side (if/when he sells).
I think you are not considering the scale of the problem. It's easy when you are broke to take all of your belongings. Nobody cares.
It's even easier if they don't know, or it's completely digital.
The problem is our governments. That CREATE These difficulties... Not the person who amassed a bunch of silver/gold over his life. And then realized his country was going totalitarian on the people.
We came close in the USA, and I do NOT think it was an accident!
And it uses PEOPLE (Miners) throughout the world to do the transactions INSTEAD OF USING Banks that are centralized, and can BLOCK and STEAL your money, or prevent you from sending it to places they don't like.
BTC allows us to get the bankers out of the money system! And that's EXACTLY What I feel we need!
Pioneer in Digital Currency and in someways paving the path to CBDC. The last few years has shown it to be a money laundering machine . ThinQ Ukraine and FTX as one example. BTC also sucked massive amounts of potential precious metal investment.. Silver and Gold prices have been intentionally suppressed by the Bank cabal. Yet banks have been buying Gold in record amounts hmmm is that good timing or manipulation. Speaking of deep state , Jamie Demon of JP Morgan said in Davos that the Government should just shut down Cryptocurrencies and employ CBDC. Bankers will never be out of the Money system they will evolve to whatever system is adopted. Bankers should never have been allowed to own the FED. We need to get back to constitutional money or digital currency backed by Gold or Silver or other value. Thin air doesn’t cut it.
1) The bankers or CIA could be behind this (and this might have been a dry run to work out the bugs). I will give you that!
2) I 1,000% disagree that it has NOTHING behind it. It has SOURCE Code, which we can all read. And the ecosystem of Miners that prevent a single entity from controlling it. We know that MORE BTC cannot be created out of thin error (It can NEVER be devalued via inflation).
3) Money Laundering? HA. (this is a Deep State Lie/Message). Because it is 100% transparent as to the transactions (albeit anonymous enough)... If you are DUMB enough to use BTC to commit a crime. ONCE someone rolls over on you, or once they trace your withdraws to such transactions... YOU are TOAST. Your entire LEDGER of transactions. Everyone you paid via BTC become well known. IMNSHO Only MORONS would use BTC to launder money.
If you want to LAUNDER MONEY... Use UBC or any other large bank. They take their cut, and NOBODY ever gets "caught" and goes to jail, loses their assets.
4) But realize... We can identify a lot of details b/c of the crypto in Ukraine. Please tell me how many of our weapons were sold on the black market for $ and how much $? Who (or which wallets) transacted in this way?
This is the whole point... Government should have to pay in BTC for everything, so we can trace it
5) It's harder to shut down than that. But the Courts have already ruled it is PROPERTY (UNLIKE your Dollars)... And shutting down peoples ability to access their property will force people to leave to countries where their property has value, and court cases back home.
Thin Air Doesn't Cut it. True. But I think you are trying to say "Pure Faith" doesn't cut it.
And when it comes to that. I think BTC wins.
If you own BTC, and could trade freely with it, WITHOUT government being able to stop you.
And with the knowledge that the Central Bankers can be side stepped... Would you use it?
the CBDC is thin air, and worse. They can change the algorithm any time they want.
We know this.
But the opposite of CBDC is simply DDC (Decentralized Digital Currency).
Again, even if ONE country says "No BTC"... You still own your BTC.
You have the option of leaving. And they can no longer tax it.
I appreciate your thoughts, and I cannot disagree with all of them, or the fact that there is RISK HERE. There is! But there is risk in everything. Including the government making it illegal to have any SILVER, GOLD (Already done), Guns/Ammo (Done so many times throughout history...), land, specific land.
Just as I would NEVER recommend someone replace 100% of their dollars, or go 100% into GOLD or SILVER or LAND, or what not. I do not advocate putting ALL or more than 10% of your wealth into BTC.
The FACT that they allowed BTC ETFs tells us 3 things:
1) It is here to stay [because stopping it now would break stuff in bad ways]
2) They are going to sideline it into an investment over a currency and play games to make it difficult to transact in...
3) They REALIZED. They CANNOT just turn it off. It would cause a Galt like Strike.
500 years from now... I will not be around. But I hope people are living CLOSER to nature.
And I don't see the little people putting up with more and more CBDC style control.
Getting with the BTC idea... Is exactly the difficulty in swallowing the Red Pill in the Matrix.
And the Gulch's approach of leaving your wealth behind, and starting again, with just WHAT YOU bring to the table...
Thank you for your points...
I can tell you Ukraine put up to $50,000,000,000. In to FTX as an investment in Bitcoin. It was then laundered back to US Politicians. James O’Keefe and OMG exposed how this occurred. On FERC website political donors are listed by zip code and their donation amount and date of donation. Millions of American giving donations of for example $1.67 then $1.36 and 3.87 all in the same day and up 40 or 50 donations per week for some names. Clearly a software program was used to spread out large amounts to be spread amongst many thousands of unwitting donors. These donations , the lions share went to Act Blue. Or thousands of Wisconsin residents donated to the opponent of Herschel Walkers senate race in Georgia. Really . I recognize that Crypto was not exactly exploited for this fraud and Money distribution . Many fraudsters are blackmailing folks and they require crypto payments. Oh well. I can get on board with a crypto if it is backed by some value. The
but any form of paper if just worthless
one based on computer paper doubly so
after the EMP or Solar Flare
That's the purpose of miners being decentralized and spread throughout the world.
And your can (and should) print your "keys" and store them safely...
After the EMP, you can log back in, and have full access to your money. Spread across millions of miners throughout the world.
Finally, mylar bag. Put your device in there.
In fact, your car keys should be placed in a faraday cage so they don't steal your car with a repeater... LOL
watch the British movie "Threads" or read the Wiki summary
hint, it makes "The Day After" look like Mary Poppins
In our case (B/C they didn't let Trump fix it, and he recognized it, and tried!)... It would take down our country.
The point was that the EMP would have to take down ALL Miners everywhere.
YES. If that happens. Guess what... The physical gold you are sitting on is pretty much toast as well. You are talking a Mad Max scenario. But we are knocked back to the stone ages at that point. I think the LAST thing you are going to worry about is CURRENCY. Only barter will be happening...