Because “money” is a human construct, the same problems will arise again and again regardless of what it is based on. That is, until human consciousness elevates…
Once again I am reminded by George Carlin and his bit about religion being one of the greatest bullshit stories of all time. If he were alive today, he would remind us that there has never been a concerted effort to democratize finance for the people and cryptocurrencies are no different.
Think about the balls it takes to tell ordinary people, to trust this vault of coin that anyone can own and track via technology, and time stamping, but is stored in technological netherworlds, has massive swings in valuations, regulation, and the feeble ability to cash out during a meltdown? It's like a new world order bullshit story of epic proportions for people who play the lottery or take on massive student just to belong to a profession.
Lastly, the fact that the powers that be, who control finance, media, and technology companies, have not killed it out right means that the empire has found it useful in some way -- so this alone is enough to be wary of the product. And we should be vigilant in NOT forgetting that the world's reserve currency (the dollar) is under massive pressure in the future by our own hand (Ukrainian foreign policy - Multipolar world order economic arrangements in other parts of the world). One quick look at this (https://www.usdebtclock.org/) - $30 Trillion should indicate that we have a massive debt, currency, and military spending problem in the future. And considering our history in the world of finance (Theft, World Trade extortion, Massive inequality in the wealthiest country, and pursuit of perpetual dollar dominion), the 2008 Fin Crisis may turn out to be a walk in the park to what happens next.
its money. throughout history, the power that concentrated wealth gives people makes them craven. smoking gun proof is the rise of tenure & multibillion dollar endowments at the ivy leagues. Look at the things they teach young people now. The pursuit of truth has been replaced by the pursuit of boutique ideology that only serves the elites.
Look at the college loan debt relief SCAM. Only college students with Title One status can apply. All students working their way through school, they get no relief. Biden's MANDATE:
Stop working and let the government support you but only if you give away everything you own. "You will own nothing and you will be happy".
"in 2035 you will own nothing and be happy" -> WEF promotion of renting, leasing and subscription models over sales, within a capitalist, corporate framework. The class war has already been won and labor lost. Now they're simply trying to divide what's left of the semi-intelligent rabble along lines of "cultural marxism" and allegations that Biden is a "communist."
I can't believe they call him a communist. He is arguably the worst red-baiting, Russophobe of all time!!! This Ukraine business and Russia mania is as indefensible as it is incoherent. Russia stole the election? What a joke!!! How do you steal an already stolen rigged-ass two party election?!!!
They want you to question VOTING because they want to get rid of it:
This whole thing was planned long ago:
“We are grateful to the Washington Post, the New York Times, Time Magazine and other great publications (Biden's FREE advertisers) whose directors have attended our meetings and respected their promises of discretion for almost 40 years… (censorship)
…It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is more sophisticated and prepared to march towards a world government.
The supernational sovereignty of an intellectual elite and world bankers is surely preferable to the national autodetermination (VOTING) practiced in past centuries.”
LOL no kidding. As if it matters one bit unless you're a very rich person, in which case the only thing that matters then is how much of a tax break you'll be getting from R's vs D's. The whole thing is rigged from the start. Any talk from either fake "side" about stolen elections (whether the evil Putin or Dominion, et. al.) is absolutely missing the point and designed to distract from the truth. Namely we aren't ALLOWED any real choice in the matter.
Exactly, TY for your understanding. Wanna know what is real? Propornot. (as in, is it Russian propaganda or not... Guess what kind of journalism was on the list...) Taibbi had a brush with this nonsense. How about Obama era Dems using Ukrainian intelligence (post coup) to target American journalism in an effort to rid our press of any actual liberalism? Is it treason if you farm that sort of authoritarian behavior out to your puppet govt in a faraway land or are you just a traitorous loser? This war has been on the calendar for ages and Biden is the perfect brand ambassador for our weapon makers. It's almost as if he were put there or something. Like, doesn't he feel a little pushed out there when he brags about the BILLIONS we've dumped into weapons for Ukraine? I can't prove it or anything, but I just can't believe he actually won the Dem primary. I don't know a single actual person that voted for him here in Nashville! But beware, RUSSIA!!!
Exactly. This is the correct interpretation of the quote, not the ridiculous bullshit circulating around that it was some sort of veiled (or not so) allusion to communism. As if. The rent seeking masters are telling us that we will rent or lease anything of substance from them for eternity and be happy about it. Anyone who's ever used Adobe or Microsoft software knows this. As does anyone who's ever used a John Deere tractor. Or "owned" an Apple product. Or planted Monsanto seeds. Far from a commie plot given voice, this is the finance capitalists' victory cry after successfully turning labor - even skilled - into a commodity and setting us rabble about each others' throats over nonsense and vagaries like cultural marxism, antifa, etc.
When you take out a 30+ note on a home and will never pay it off in full or if you "buy" a car with zero down and a 9 year note, with no intention (on your part or theirs) that you'll ever actually OWN the vehicle, can anyone see where this has gone?
Yep. Same idea with Bill Gates. RE: CCP, in the early days of the Bolshevik revolution and after they took power, numerous American corporations, oligarchs, financiers and banks were happy to be involved so long as there was a path to profits. However, those same interests would never, ever support even plain old socialism 'back home' in the Wild West USA. Of course these same actors acted in support of Hitler and numerous other far-right Latin American and Asian dictators. The Europeans supported far-right African leaders who would do their bidding. Bill Gates doesn't have a communist/socialist bone in his body, but he knows a profit opportunity when he sees it.
Sometimes it pays to listen to fool's. Trump being one said a few profound thing's. Fake News, it all is. Wall Street is the biggest casino in the world, it is followed by the city of London. It would be a good idea to get along with Russia, of course but not for the MIC who donate. "You think we're so clean" referring to all the military and financial evil the USA does in the world. Even Ray gun said trust but verify. Listening pays!
> to trust this vault of coin that anyone can own and track via technology, and time stamping, but is stored in technological netherworlds
It wasn't supposed to have been done that way. At least, that's not how it was designed. *You* are supposed to store your cryptocurrency, on a computer, a smartphone, or a small portable gadget. Technically you're storing a sort of key or title to it that proves it's yours and gives you exclusive control over it, but that's beside the point.
Naturally the first thing grifters did was to spread FUD that this is "way too hard and complicated for normal folks" so they could offer an alternative: "give us control instead!" And then shortly after that came the easy money schemes, the margin trading, the fractional reserve banking for crypto, and all the other things that poison normal markets.
But of course it was going to go this way. People are trained to be gullible, or at least their natural gullibility is refined and exacerbated, by the schools and the media on behalf of the con artists who own them and most of everything else. You can design all the theoretical, algorithmic, and technological perfect systems you want, but tech isn't magic and it can't fix stupid. The banking system works on paper too.
The rot in our country is apparent, yeah. If you still have a nose to smell it. If you're not rotten, desperate and conniving yourself. I suppose to a maggot rot smells like the sweetest of bouquets.
Almost no one who "owns Bitcoin" from a Coinbase like entity can explain the Bitcoin algorithm, or even explain how it works in vague terms. It's become a complete shit show.
Economics and politics are the new religions and they are clashing with the old religions (Catholicism, etc), but only because every religion is a power grab by people who want to use new ideas, technology or some symbol to get a free ride from the rest of us. How do we know if a new ideology is also a new religion? The purveyors of said philosophy will try to silence you, if your doth protest too much or even just try to bring rationalism into the debate. How many women and men who resisted the Catholic Church's expansion across Europe or the world lived to tell their tales?
True and after your death provided the entertainment, the church split your property with the prince, not a bad racket. They also used and still use social ostracizing to control you. Of course they want to control your sexuality, your life force. It all works because Homo sapiens can believe anything and the ruling classes have always been able to exploit the flaw. "One priest is better than a hundred police, cheaper and more effective"! You could say the same for a teacher or media person. Remember, Edward Bernays the father of modern propaganda / or was an American. Goebbels learned from him.
Well...the delusions of religion seem able to pass on for millenia, & maintain a modicum of civil order as people self regulate under fear of gods judgement. Today the woke & corporations sell gender ideology, sin without forgiveness and a 1984 vision of society. I would suggest the religious BS has more staying power than the Woke religion of todays elites, which is mutually assured destruction. Ever notice religious black people are happiest & hopeful ones...vs the woke version.
Agree! The Pope used to burn you alive for saying that the world was round. Now the Pope has his own astronomer. Religion is based on emotional needs and it's not amenable to reason. Just another tool in the toolbox of the ruling classes. Fortunately or unfortunately as the case may be, many people, not just black people are happy and religion is a big part of it but as us motorcyclists say "if I have to explain it to you, you wouldn't understand"! Thankfully I can have deeply religious friends because both them and I are tolerant.
That's easy; money. Lot's of atheists but even the jihad people believe in money and it's 100% faith based just like the invisible man in the sky. It's got a whole bunch of rules just like religion. Rule of law is a distant third, again, a giant fraud. The ruling classes have lots of tools in their extractive toolkit and it all starts as soon as you are born with your parents. Now, of course your parents mean well and so do "mostly" the schools. The media and the churches, not so much. The biggest lie is that they are teaching you critical thinking whereas you are born with that ability and their job is to take it out of you and they're very good at it.
I have had the pleasure of working on banking industry efforts where Maxine Waters was seated at the table. She is neither knowledgeable nor bright. I have met Larry Fink. He is very knowledgeable and very bright.
This example is ubiquitous and explains much of the danger to the economy and country in general related to the Wall Street corporatism games being played at the multi-billion dollar level. It explains the Great Recession. It explains why the root causes to the Great Recession have not been eliminated.
It is the professional looter hive of quid-pro-quo. Big government politicians and bureaucrats that lack the capabilities to start and grow a business but needing high income and wealth to meet their social hierarchy expectations, and get it from other people's money. And private sector brains that note the easier path to great wealth by gambling other people's money instead of producing real products that generate returns (because that path is more difficult).
This stuff has been going on since the federal government gained enough tax revenue to loot. During the Gilded Age is was off the rails... politicians and government employees transparently demanding cash from the wealthy for favorable policies and projects from government. Then over time controls were put in place by new politicians with stronger morals and seizing the opportunity in response to media-reported scandal.
Historically it has been the media that has provided some counter control of this getting out of hand. But check it out now. Blackrock, Vanguard, State Street, etc... together they own the controlling interest in the large media companies that own all the media content. They also own controlling interest in much of big tech. Wall Street wants the favors from the Biden Administration, and so in return, Wall Street directs the media that it owns to attack the Biden Democrat opponents while propping up the Biden Democrats. When the GOP takes over the national legislature (made more difficult if Wall Street thinks it is not in its best interests and directs its corporate media concerns to push voters for Democrats and against Republicans), Wall Street will just shift in its offers to help GOP politicians for quid pro quo.
I have no doubt that the owners of Substack have a business plan with an exit strategy to sell the business. And I have no doubt that Larry Fink has it on his radar. So get these articles out while you can!
BTW, seems that auto financing loans are another bubble ripe for popping.
Seems hard to believe in an inflationary environment, but apparently prices are rising even faster than wages, leaving car debtors who were once flush with cash having to decide between paying the rent and paying the car note.
edit: apparently there is also a lot of garbage auto loan paper out there, the Tahoe equivalent of NINJA loans.
Dealers’ lots are pretty full in my area for the first time in years. Looks like manufacturers have caught up with demand just as we are tipping into a recession. There may be some good deals on cars in the next year or two.
I was focusing on default rates (climbing steadily), sales (down double digits across the board) and then quality of auto loan paper of recent vintage (hot steaming garbage).
This actually fits hand in glove with the oversupply. There are fewer qualified or interested buyers and plenty of collateral damage coming for the banking system. I wouldn't touch consumer loans with a ten foot pole.
You can generalize this to recent statements made by the CEO's of major retailers. Target in particular took a major beating from having far too much inventory relative to their sales pace, and others are surely in the same boat.
Because of this newfound oversupply, inflation may not last long. I don't think the Fed should be hiking in this environment. Real interest rates may be negative, but they're not negative enough to stimulate economic growth in our moribund economy. I think massive fiscal consolidation and strategic default would be smarter moves. We already effectively strategically defaulted on debts to Russia by confiscating (excuse me, "freezing") their assets, and forced them to in turn default on their USD-denominated bonds to boot.
The Fed is pinned by a dual mandate that applies only to price stability and employment. Low unemployment is going to be easy to maintain with demographics and long COVID. It will be a welcome relief for besieged American workers. Economic growth is not actually a prime directive for the Fed at all. This is up to the Executive and Legislative branches.
Furthermore, with our idiotic SWIFT moves, we have cast a permanent shadow over the USD/IMF SDR's as reserve currencies. When the USD was *the* reserve currency, we had a permanent bid from price-insensitive players. This kept real interest rates low. We will now have to actually offer a competitive return on investment to attract capital, which is going to be a monumental challenge to an economy that has spent 70 years living the easy life. It will take a very, very long time and a lot of suffering to trim the fat and build new muscle.
Good to know. I stopped car shopping when I realized used cars with tons of miles were just slightly less expensive than new cars with inflated prices. Talk about sticker shock.
Looking forward to some reasonable prices on cars. I have been waiting for some time now, though, for the supply chain to get fixed and prices to revert to mean.
It doesn't feel great when you're the one who has to clean it up. I'm not a cat, just their servant (although catless at the moment.) I will admit to having pulled blades out of their butts. The things I do for love.
Taibbi's article is nominally about cryptocurrency, but it's really about how trust gets farmed out rapidly and evaporates like a vampire in direct UV light. If the "communications revolution" accomplished anything, it was speeding up the con. There are no long cons any more, only the shortest of short cons. Welcome to three-card monte world.
Fiat currency runs on trust in institutions, which is all but dead.
So true Kosh. Trust is the central theme here. Imagine the country who's claim to fame are pay-day lenders, packaged "shitty" CDO's with huge leverage, and Arby's sandwiches (Jon Stewart once claimed Arby's sandwiches were like 'shock and awe' for your bowels) are the apostles of truth?
But trust on this one. Yeah right. The country who lied about WMDs, torture, surveillance programs, and fomented about 17 coup attempts in the last 2 decades is saying once again to the public, trust us. Sickening.
Except, I don't agree that they give a flying youknow whether we trust them or not anymore. They know what is best for the unwashed masses. Our trust, like our opinions, are all irrelevant. What did that White House econ adviser say in a blase' MSM interview? Suck it up on price per gallon; we are here to protect the Liberal World Order. Of course --- what was I thinking?!
Agree mostly. Trust though, can be used against the people via propaganda.
Russian red-baiting since 1950's. Bush telling citizens to go out and spend after 9/11. Jimmy Carter's "malaise" speech was denigrated by the press and public. Ukraine, Syria, Iraq and Afghanistan lies, and our defense department's budget dwarfs the rest of the world. There is a great deal of truth to your comment of "get with the program" - not asking for trust but demanding compliance. However, TPTB still own media, drug/tech companies, and are able to manipulate finance, education and policy to bend to their wills. Gilens and Page 2016 study shows just this (Oligarchy) but they are using multiple methods to achieve this result.
Totally agree. Except, now they don't have to be subtle about anything. If it is true that a group is now actually offering money/bounty for tips on the physical whereabouts of Supreme Court Justices --- this IS sickening and should be put down immediately, but it will not be. (Guess the AG is still stewing about not getting a life-time appointment.) This is the first step for taking care of someone's family financially if they will be a "martyr" for the cause.
I am thoroughly convinced at this point that the destruction of public trust in institutions was deliberate, and it runs far beyond currency. I'm sorry; nobody smart enough to acquire that much power is going to accidentally and consistently screw up almost everything just credibly enough that we're fixated on it and not the story behind the stories. Nothing posed a greater threat to the deep state than the actual state.
I nevertheless have more faith in fiat currency backed by a government that has a wickedly talented and ruthless security state and nuclear weapons than ones developed by standards committees and white papers. I've had brushes with the former, who apparently did not find me suitable for purpose, and endless stints in the latter.
Crypto "mining" basically consists of computers coming up with complex math problems, and other computers solving those math problems. So, tons of electricity gets used in the currency generation process, especially once you factor in the A/C to keep the computers from overheating.
The alternative to mining is war. It is a defense budget, and has nothing to do with transaction processing, which can be done for bitcoin with a cell phone.
Mining also incentives renewable energy, acting as a guaranteed customer for any new source of renewable power. Nobody else buys wind or hydro power at night, so bitcoin mining acts like a subsidy for renewable power.
A little different, in that some governments have economic momentum and the inertia of continued activity by millions of folks that don't think too much provides cover against collapse. Economic momentum is what keeps dollars and yuan afloat, and mountains of laws and regulations that keeps things from going haywire. Of course, economic momentum can collapse, but at that point, we all better hope we got a patch of dirt for growing our own food because that means the fat lady has sung and it's really, really over.
Quick and dirty: Vitalik Buterin is right to blame the crypto bubble on the housing bubble, and perhaps a lack of trust in the authorities was causal, but these entirely miss the underlying issue. Economic growth stinks because assets and income are horribly maldistributed benefitting wealthy entrenched powers and the Government is doing stupid things to try to keep things rolling. It's like inflating a leaking bicycle tube every five years. You're going nowhere and it's a bumpy ride.
Verbose as hell: while cryptocurrencies are a massive problem and stablecoins are particularly interesting trees to study, there is a broader forest here. The title of the piece could not be more apropos, because the American economy has become entirely dependent on financial chicanery to function. Like, literally. That's because of poor return on actually meaningful investment.
In order to get any economic growth to happen in the midst of the secular stagnation most eloquently championed by Larry Summers, real interest rates have to be incredibly low. Very low or negative real interest rates lead to bubbles. Real interest rates, even with the Fed's recent tightening, have been deeply negative. Canada has negative real interest rates. Most of the world does.
This leads to inflation more generally, and cryptocurrencies were a vector for that. They're clever undergrad computer science projects bound to a post-doctorate social studies program that had a metaphorical lab leak. Bitcoin has a structurally very negative real interest rate, as do all proof-of-work cryptocurrencies, as miners must sell coins for machines and electricity, but real currencies are actually giving it a race for its money into negative territory.
Indeed, it's not clear that we can achieve high enough nominal interest rates to break inflation in any meaningful way without first causing a significant recession, and secondarily breaking the Treasury. The mean duration on Treasury liabilities is relatively short, so it has been a huge beneficiary of the lower-for-longer interest rates that we've had recently.
But we're also running a double-digit budget deficit with government debt levels that range from "nauseating" to "kerosene" depending on what you count as government and what you count as debt. Social Security will become a net seller of Treasury securities soon. We are running highly expansionary fiscal policy, yet *still* falling into a recession as we speak if the Atlanta FRB's GDPNow Tracker is to be trusted -- and it's pretty good.
Why have we needed such deeply negative real interest rates for the past decade or two? The most handy explanation is because productivity growth is also low and the labor force has shrunk due to demographics and, most recently and severely, long COVID, which I suspect is the real fear driving Beijing's "dynamic zero-covid" policies.
Indeed, if you tried to smooth it, one might claim that we're on the brink of an actual secular decline in productivity, something that has not been seen for eons. The data is very lumpy, but smoothed, it's ugly and looks to be on the brink of going below zero.
The Great American Bubble Machine is a tremendous problem. However, we have lacked alternative solutions since at least 2002, when Krugman suggested the deliberate engineering of a housing bubble to save us from the Dot Com bubble's bust. That is the only bubble that formed organically.
"To fight this recession the Fed needs…soaring household spending to offset moribund business investment. [So] Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
p.s. One correction: "stocks for companies like Bitcoin and Ethereum surged to record highs" -> "currencies like Bitcoin..." or something similar. It was the market capitalization of all the coins that reached $3t, like if you summed the USD value of owning all of the shiny things, nothing to do with companies or stocks. Sorry if someone already got it.
Why does anyone in these United States of America bother to "work" at a "job" any more? Only guys I see working are wearing yellow vests and re-asphalting roads. I am not sure what happens on Zoom, which has replaced "the office," but I doubt it's much.
Zoom exists to make middle managers feel like they're still making an important and valuable contribution to a business in an era where most kinds of office work are atomized and self-managed (albeit poorly).
We have much better ways to communicate and plan than "let's get everybody together in one room and take turns talking."
Zoom is like if telephones were invented and then the Pony Express determined that they should manage and deliver telephone receivers to anyone who wanted to make a phone call instead of people just owning their own telephones, in order that the Pony Express remain relevant.
Why almost nobody does anything "at work" anymore in this new environment is a separate problem. When you're getting paid salary for your time, and there's no way to verify that you've done anything in exchange, and the employers and managers have no reliable metrics for how much you should be getting done, it's real easy to slack off all day. "Looking busy" while the manager was making his rounds used to be a requirement for the talented slacker, but working from home has really lowered the bar on the slacker skillset.
If everyone was a contractor who got paid per unit of work completed, market forces would sort out the slackers from the productive people. If you offered to push 100 papers for 20 bucks, and some other guy could push them for 15, and so on, then the bosses would be able to figure out who was worth paying and who wasn't.
Thank goodness for all the anti-contracting politicians out there. They're the only thing standing between millions of useless slackers and a world record year on foreclosures and repossessions.
The payout from legitimate work is indeed significantly worse than that from most hustles at this point in time, although the people who do real work in places where there's ample money get compensated ridiculously well. I live near Aspen, and virtually anyone in any trade can make oodles of money here.
The barrier to entry in our case is geographic and NIMBY: nobody wants to pave over any more of this beautiful area, but there is not enough housing to support the army of servants desired. Aspen's population is barely growing or shrinking as actual locals are displaced by second home owners. This was written by a particularly caustic and controversial former Mayor and City Councilman.
My own town is half bedroom community for Aspen and half tourist destination in its own right, Glenwood Springs. A referendum here recently overturned a proposal to add some 770 peoples' worth of housing. An 1880's gandy dancer house downtown advertises rooms with grooming sinks for over a thousand a month, and there's a waiting list years long for apartment rentals.
There is no saving America, but the elites have fashioned some very nice lifeboats for themselves. And, if I'm fully honest, myself. Servitude and abdication of all morality pays.
I've been a remote worker most of my life, and Zoom has only marginally changed the dynamics. That's what allowed me to afford one of the nicest homes in town in the wake of the 2008 bust. I retired at 39, but America's top research university is saving me from that now with a new gig. I need purpose in my life.
Then you need to get out more. We all work because many of us have jobs we like and make good money at, and no, one does not have to be in a cubicle or suck teat from despicables to do so. They can be self employed and take advantage of a huge range of tax deductible strategies so they can keep that money, they (we) can provide services that people actually need and are wiling to pay good money for, and achieve some semblance of that freedom that everyone keeps talking about but no one seems capable of obtaining. Hint...figure out a real job, freedom is included.
It's funny. People don't get this. Most folks settle for a bullshit job, as in Graeber's Bullshit Jobs, where work and the imagined results are abstractions and never in alignment. Yeah, I don't understand why anyone does that.
Stop being blinded by “get the man” narratives. This is about GREED and idiocy by the people who BOUGHT the crap and the inability of regulators to focus on mission…see Supreme Court W. Va. If the SEC stopped wasting time on 500 pages of bullshit climate crap and said, hey maybe Mark Cuban et al touring this bs to 20k Mav. fans every two 2 nights is essentially selling an unregulated investment in violation of every securities law..things might be a little better? Like every craze before it..the fault lies not in the “man”…but EVERY Alan down the food chain. We simply cannot help our reptilian brain need for immediate satisfaction. Sad fact…
Great point. The 'victims' of this bubble were people who made speculative investments in an experimental currency. Quite different than the last go-round, where many victims were merely home buyers.
Quite true about crypto buyers, but the "victims" of the home mortgage crash who knowingly bought way more house than they could afford (the McMansion-buying hairstylists and janitors Matt referenced in his article) shouldn't get a free pass.
Predatory lenders are evil, and especially insidious when they carry the name and trust of a well-respected financial institution. But people are responsible for remembering that if something seems too good to be true, it usually *is* too good to be true. Or, a fool and his money are soon parted. Or, there's a sucker born every minute. These are cliches for a reason.
With everything that was wrong about the 2008 crash, IMO the bank bailouts were the worst. Let these big banks go down in a glorious fireball of their own making, taking their C-suite stock options with them, and watch the industry work overtime to clean up its own mess to keep it from happening again.
Too big to fail? Too big to exist! If an institution's failure poses a systemic risk, then it needs to be broken up, not propped up! Fucking assholes!
This needs to be said more. The game is fixed - but if decide to play it you get what you get. I invest cautiously - pay too much in brokerage fees - get mediocre returns - but I don’t go bankrupt overnight.
Maybe I don’t understand crypto, but it seems to me to be just a digital form of fiat currency. It only has value if everybody agrees it has value. The job, then, is to convince everybody that a Bitcoin, for example, is actually worth something. So far, not everybody is convinced, and more and more it’s looking like crypto is just another swindle.
Precisely and exactly. Money, all money, is an abstraction, agreed upon. It requires me to trust that the other millions "invested" in this agreement continue to agree. In my entire life, I've met about a couple dozen folks I'd trust implicitly and forever. With crypto, I don't even know if all those fellow "investors" are even real.
No thanks on crypto. It doesn't do anything, or produce anything. All "value" is derived from greater fools theory, i.e., one has to hope and believe there will be someone that comes along that is even more foolish, and buy the stuff off me. An asset whose growth or value requires more and more people continually piling in to increase value is called a Ponzi scheme.
As a means of transferring money, it's great. Peer to peer lending becomes possible. Transactions are simplified. Those that benefit are those handling the transactions and taking a slice. I'm fine with that. But, it's not an investment; it doesn't return anything unless it continues as a Ponzi scheme, and we know where those go.
> It only has value if everybody agrees it has value.
This is more or less true of everything. If we all unanimously agreed that gold and silver were equivalent to dirt and refused to accept it in exchange for anything I suppose its value would evaporate too.
But that raises the *real* question: what gives things the perception of value in the first place?
For non-monetary goods, the relationship is simple: a thing has value to me because I want or need it directly. If you have the thing I want, I must come up with a thing you want more and offer it in exchange. Our estimates of the set of all possible ways things can be exchanged for other things is our perception of their value.
For currencies it's a bit different: I value it to the extent that I believe I can get something I want later by exchanging it. So I take it as a substitute for something I'd like now. Precious metals work well because we all have good reason to believe someone is always going to want it, and good reason to believe it's not going to decay or transform into something else.
Paper money works not so much because "we all agree it's worth something", but because we know that a complex web of laws and regulations ensures there's a gun to everyone's head forcing them to accept it and requiring them to have some of it, so we're unlikely to encounter a situation where we can't exchange with it.
Why does crypto work as a currency? Trick question: it doesn't. Almost nobody uses it that way. Almost everybody is speculating based on what its value in exchange _could_ be, in the event that in some distant future people did start using it as currency. But if it _does_ have the potential to be a better currency than either paper money or precious metals, Gresham's Law applies: as long as those other things exist and are marketable everyone will hoard cryptocurrency and exchange using the other things. If it does not, it's worth nothing and all of this is tulip mania. Pick whichever one you like. The conclusion is the same: if you play around in crypto you're gambling, not investing.
Bitcoin can and will work as a currency as Bitcoin is divisible to certain amount of decimal points, it's smallest denomination being called "sats".
The most important thing is to not conflate Bitcoin with crypto. Bitcoin is truly decentralised. I have bought some amounts of Bitcoin, I don't want to exchange it for fiat money. I just hope that it overturns the 'US petro barrell of a gun dollar' so that maybe we have a future where state and money have been separated, so they can't put imbeciles into power to take us to war, print trillions of our tax payer money devaluing it causing inflation and funneling all that money to war mongering arms manufacturers i.e Ukraine.
I like to ask myself the question Why couldn't the internet disrupt money?
Crypto as speculation? Yes I agree and don't do it, it's centralised. plus I'm just working folk, I'm not into that. It's more of a philosophical play for me to put into Bitcoin because I believe in its aims. I've watched a lot of Max Keiser on RT and YouTube and it made me go down the rabbit hole on money and its quite a trip and highly recommended. There's lots of good resources out there.
What is money? Yep, we need to wrap our heads around this
I don't see the point of the weird distinction you're making here between bitcoin and all other cryptocurrencies. All cryptocurrencies are decentralized. That's kind of, like, the point.
Centralization comes from the exchanges and custodial wallets. Much like gold coins as currency are decentralized, but not if you leave it to banks to own and manage physical gold and only ever engage in exchange with bank notes redeemable for gold only in theory. Which is how you end up with paper money, first backed by a lie and then backed by nothing, which is exactly what you have if you have a coinbase account balance and not a self-hosted wallet.
My head is fully wrapped around what is money. Gresham's Law applies to all things-that-would-be-currencies. They are only currencies in practice if there is not a shittier currency that everyone knows is inferior but which is still useful for exchange.
For bitcoin to work as a currency, all shittier currencies have to die. For dollars to die the global petrodollar-backed economy has to collapse, without taking internet and electricity (and thus bitcoin) with it, and without being replaced by a different shitty paper money. Unless that happens, people will tend to hoard and speculate in bitcoin and other cryptocurrencies while exchanging with paper money.
centralisation comes from the fact crypto currencies or tokens started up by a company made up of individuals that can tinker with policy and issuance of said tokens are just like printed govt paper, they have a central point of failure i.e the human actor, if humans are involved with the authority to fuck it up that's what will happen, they're also often 'proof of stake' which can't get around a fundamental problem of money which escapes me at this moment.
Bitcoin is just a protocol let loose on the internet, that's where the human tinkering sort of ends .
and has no central point of failure. There is a fixed suppy divisible into sats. It can't be inflated. It's deflationary. No fiat currency has lasted more than a hundred years and have all gone to zero.
Money represents time, energy and work that's gone into acquiring/producing it. Bitcoin achieves this through 'Proof of work' through the massive electricity usage to perform the cryptography that wins the miners bitcoin rewards and strengthens the network which is spread worldwide and doesn't have a single point of failure.
I don't understand what other crypto currencies even do, I'm not a trader. But the belief comes in here for me with Bitcoin, and that's it really.
“ I just hope that it overturns the 'US petro barrell of a gun dollar' so that maybe we have a future where state and money have been separated, so they can't put imbeciles into power to take us to war, print trillions of our tax payer money devaluing it causing inflation and funneling all that money to war mongering arms manufacturers i.e Ukraine.”
It’s a nice dream. Governments will outlaw Bitcoin before they let it happen.
El Salvador has made it a legit currency to get out under of IMF debt slavery. More countries will follow. Hopium yes. But you've got to believe that something can change the world. And voting ain't it. Follow the money and what do you find? That the corruption goes all the way up. Change the money. Change the world. #Bitcoin
The '34 Act limited US regulated broker-dealers ability to rehypothecate securities, that is, to use securities as collateral that the BDs themselves held as collateral.
There was no such limitation under English law, which is why US BDs would "sweep" their securities holdings overnight to English affiliates, then sweep them back again the next day. Wall Street bitched about this mightily.
This is also why Lehman was damaging to the US financial services industry, but it was absolutely catastrophic in Europe. Last I checker, they are still litigating over who owns what and how much of it and whose claims trump whose.
Wouldn't it be nice if such a rehypothecation law -- or, really, any law -- were applicable to cryptocurrency? Regulators were way behind the boat on this one, so far behind that I have to wonder what the ultimate reason for that was.
$3T in faith-based assets that are an economic burden to maintain is enough to have a real impact on the real economy if they go belly up. There are plenty of people who have borrowed in USD against these.
As far as Europe goes, yes. We really blew up Deutsche Bank in particular.
One might restrict or prohibit using "collateral as collateral"...but then our entire banking system would be absent what it calls a hedge. Right? Or no?
Fractional reserve lending needs to be re-examined in light of this, but rehypothecation laws are basically to prevent too much leverage from happening. One of the great(?) things about public blockchains is that you could literally trace the money and prevent this from happening if you had enough information embedded in the blocks.
I don't know much about most of these protocols. I developed federated identity as my main work in life, and that necessitated learning all about cryptography. I've read the Bitcoin white paper and laughed that people were paying for the incorporation of their transactions in blocks with very small SHA hashes. It was a cute trick, but, srsly. I doubt any of them actually contains enough information in there to say "this is a loan collateralized by yadda", but it's entirely possible to do.
Our "hedge" in real money land is nominally the FDIC and then the Fed once things get too horrible for the FDIC to help (hi, LTCM). It does little to actually throttle risky behavior, and now few things do because of bailouts, one of the many wonderful gifts bequeathed upon us by Geithner & Bros.
There may be a central bank digital currency someday, but I will almost guarantee you that it would be implemented using a simple, centralized database rather than a blockchain. You can't easily erase errors in a blockchain. It's got computational overhead. It reveals all of everyone's transactions to everyone, including those of the government, so long as you can dereference a public key to an entity -- and I'll guarantee you most states are able to do that.
The USD gets another perpetual bid because we're the best country for money laundering. We -- and in particular, our government -- won't give that up easily.
I copied and pasted this into my notes for future reference. There's a lot of sense in this and most of what gets reported people ultimately believing is nonsense.
That's a pretty good analysis. In fact, it's an excellent analysis.
Re: laundering...yup. England and America are the land of the free....laundry. Imagining the money folks are going to let that profit sector erode is magical thinking.
Decades ago a friend told me "If you don't understand the deal, don't put any money in it." I watched as people financed their lives bouncing from one credit card to another. A high interest way to kite checks. The idea of paying interest on a savings account disappeared along with S&Ls. It's probably time to go back to Social Clubs and neighborhood groups for banking and financial services. Wall Street and Uncle Sam are bankrupt and run by the same band of pirates.
Government regulates by writing rules for you to follow. They also want you to submit a plan on how you plan to follow those rules. Then they accept (if acceptable to the government regulator) your plan. Notice I didn't say approve, part of CYA. Your plans must include self-disclosure. If something goes awry and/or you fail to disclose any deficiency then government regulators come down with audits, fines, and perhaps criminal liability.
Basically it is already setup for self regulation. You do their work.
First, one needs ask if we need something to "replace" it. Of course the Fed is a mess and central banks are criminal, but there is at least a large percentage of the world population that still collectively agrees that US dollars and to an increasing degree Chinese RMB are "trustworthy" in that they have economic momentum to maintain continued value. The Dollar and the Renminbi can certainly collapse, but they will be the last to go. Crypto will be, and is, the first to go.
The Constitution agrees and why the Democrats want to burn it and add 2 more SCOTUS idiots to the ones they already added. They want to Chump Change America.
The four most dangerous words in the English language: "This time it's different".
Four more; “Ain’t that the truth!”
Shortly after followed by the six word sarcastic response: "Who could have seen this coming?"
You skipped over the famous five: "Too good to be true!"
It’s just common sense!
And as the old saying goes "Common sense is not all that common"
Or "there is no alternative" TINA (for pushing through really bad neoliberal policy initiatives with very little public support.
Because “money” is a human construct, the same problems will arise again and again regardless of what it is based on. That is, until human consciousness elevates…
I’m not holding my breath.
There is talk of the Great Reset, but yeah, I can’t hold my breath much longer than 2024.
Not advice at all, just an observation.
Militarizing intellect is a continuous process that has gotten us to where we are. Technology amplifies our negative aspects.
Opening our eyes to the reasons why is merely a first step.
I am not optimistic we will get beyond understanding we have a serious problem.
Once again I am reminded by George Carlin and his bit about religion being one of the greatest bullshit stories of all time. If he were alive today, he would remind us that there has never been a concerted effort to democratize finance for the people and cryptocurrencies are no different.
Think about the balls it takes to tell ordinary people, to trust this vault of coin that anyone can own and track via technology, and time stamping, but is stored in technological netherworlds, has massive swings in valuations, regulation, and the feeble ability to cash out during a meltdown? It's like a new world order bullshit story of epic proportions for people who play the lottery or take on massive student just to belong to a profession.
Lastly, the fact that the powers that be, who control finance, media, and technology companies, have not killed it out right means that the empire has found it useful in some way -- so this alone is enough to be wary of the product. And we should be vigilant in NOT forgetting that the world's reserve currency (the dollar) is under massive pressure in the future by our own hand (Ukrainian foreign policy - Multipolar world order economic arrangements in other parts of the world). One quick look at this (https://www.usdebtclock.org/) - $30 Trillion should indicate that we have a massive debt, currency, and military spending problem in the future. And considering our history in the world of finance (Theft, World Trade extortion, Massive inequality in the wealthiest country, and pursuit of perpetual dollar dominion), the 2008 Fin Crisis may turn out to be a walk in the park to what happens next.
The rot in this country is unbelievable.
its money. throughout history, the power that concentrated wealth gives people makes them craven. smoking gun proof is the rise of tenure & multibillion dollar endowments at the ivy leagues. Look at the things they teach young people now. The pursuit of truth has been replaced by the pursuit of boutique ideology that only serves the elites.
Look at the college loan debt relief SCAM. Only college students with Title One status can apply. All students working their way through school, they get no relief. Biden's MANDATE:
Stop working and let the government support you but only if you give away everything you own. "You will own nothing and you will be happy".
"in 2035 you will own nothing and be happy" -> WEF promotion of renting, leasing and subscription models over sales, within a capitalist, corporate framework. The class war has already been won and labor lost. Now they're simply trying to divide what's left of the semi-intelligent rabble along lines of "cultural marxism" and allegations that Biden is a "communist."
I can't believe they call him a communist. He is arguably the worst red-baiting, Russophobe of all time!!! This Ukraine business and Russia mania is as indefensible as it is incoherent. Russia stole the election? What a joke!!! How do you steal an already stolen rigged-ass two party election?!!!
They want you to question VOTING because they want to get rid of it:
This whole thing was planned long ago:
“We are grateful to the Washington Post, the New York Times, Time Magazine and other great publications (Biden's FREE advertisers) whose directors have attended our meetings and respected their promises of discretion for almost 40 years… (censorship)
…It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is more sophisticated and prepared to march towards a world government.
The supernational sovereignty of an intellectual elite and world bankers is surely preferable to the national autodetermination (VOTING) practiced in past centuries.”
David Rockefeller
The only thing he left out was you'll own nothing and be happy.
LOL no kidding. As if it matters one bit unless you're a very rich person, in which case the only thing that matters then is how much of a tax break you'll be getting from R's vs D's. The whole thing is rigged from the start. Any talk from either fake "side" about stolen elections (whether the evil Putin or Dominion, et. al.) is absolutely missing the point and designed to distract from the truth. Namely we aren't ALLOWED any real choice in the matter.
Exactly, TY for your understanding. Wanna know what is real? Propornot. (as in, is it Russian propaganda or not... Guess what kind of journalism was on the list...) Taibbi had a brush with this nonsense. How about Obama era Dems using Ukrainian intelligence (post coup) to target American journalism in an effort to rid our press of any actual liberalism? Is it treason if you farm that sort of authoritarian behavior out to your puppet govt in a faraway land or are you just a traitorous loser? This war has been on the calendar for ages and Biden is the perfect brand ambassador for our weapon makers. It's almost as if he were put there or something. Like, doesn't he feel a little pushed out there when he brags about the BILLIONS we've dumped into weapons for Ukraine? I can't prove it or anything, but I just can't believe he actually won the Dem primary. I don't know a single actual person that voted for him here in Nashville! But beware, RUSSIA!!!
I fear for my grandchildren.
Exactly. This is the correct interpretation of the quote, not the ridiculous bullshit circulating around that it was some sort of veiled (or not so) allusion to communism. As if. The rent seeking masters are telling us that we will rent or lease anything of substance from them for eternity and be happy about it. Anyone who's ever used Adobe or Microsoft software knows this. As does anyone who's ever used a John Deere tractor. Or "owned" an Apple product. Or planted Monsanto seeds. Far from a commie plot given voice, this is the finance capitalists' victory cry after successfully turning labor - even skilled - into a commodity and setting us rabble about each others' throats over nonsense and vagaries like cultural marxism, antifa, etc.
When you take out a 30+ note on a home and will never pay it off in full or if you "buy" a car with zero down and a 9 year note, with no intention (on your part or theirs) that you'll ever actually OWN the vehicle, can anyone see where this has gone?
Yep. Same idea with Bill Gates. RE: CCP, in the early days of the Bolshevik revolution and after they took power, numerous American corporations, oligarchs, financiers and banks were happy to be involved so long as there was a path to profits. However, those same interests would never, ever support even plain old socialism 'back home' in the Wild West USA. Of course these same actors acted in support of Hitler and numerous other far-right Latin American and Asian dictators. The Europeans supported far-right African leaders who would do their bidding. Bill Gates doesn't have a communist/socialist bone in his body, but he knows a profit opportunity when he sees it.
Or Mars, lol
If you can't say it kindly, say it accurately. You're not wrong...
They own everything, the politicans, the bank's, the courts etc. It's a big club and you ain't in it. Lot's of truth in comedy and GC was a giant.
Spot on RH, Spot on!
Sometimes it pays to listen to fool's. Trump being one said a few profound thing's. Fake News, it all is. Wall Street is the biggest casino in the world, it is followed by the city of London. It would be a good idea to get along with Russia, of course but not for the MIC who donate. "You think we're so clean" referring to all the military and financial evil the USA does in the world. Even Ray gun said trust but verify. Listening pays!
Carlin was an unmitigated genius. He also said “‘Bipartisan' usually means that a larger-than-usual deception is being carried out."
A giant, gave me much laughter and pleasure speaking truth in his inimitable way. RIP Mr. George Carlin, you are missed.
FED says if Congress votes to raise the Debt Ceiling, FED will devalue the dollar. We're coming to the end.
> to trust this vault of coin that anyone can own and track via technology, and time stamping, but is stored in technological netherworlds
It wasn't supposed to have been done that way. At least, that's not how it was designed. *You* are supposed to store your cryptocurrency, on a computer, a smartphone, or a small portable gadget. Technically you're storing a sort of key or title to it that proves it's yours and gives you exclusive control over it, but that's beside the point.
Naturally the first thing grifters did was to spread FUD that this is "way too hard and complicated for normal folks" so they could offer an alternative: "give us control instead!" And then shortly after that came the easy money schemes, the margin trading, the fractional reserve banking for crypto, and all the other things that poison normal markets.
But of course it was going to go this way. People are trained to be gullible, or at least their natural gullibility is refined and exacerbated, by the schools and the media on behalf of the con artists who own them and most of everything else. You can design all the theoretical, algorithmic, and technological perfect systems you want, but tech isn't magic and it can't fix stupid. The banking system works on paper too.
The rot in our country is apparent, yeah. If you still have a nose to smell it. If you're not rotten, desperate and conniving yourself. I suppose to a maggot rot smells like the sweetest of bouquets.
Almost no one who "owns Bitcoin" from a Coinbase like entity can explain the Bitcoin algorithm, or even explain how it works in vague terms. It's become a complete shit show.
Economics and politics are the new religions and they are clashing with the old religions (Catholicism, etc), but only because every religion is a power grab by people who want to use new ideas, technology or some symbol to get a free ride from the rest of us. How do we know if a new ideology is also a new religion? The purveyors of said philosophy will try to silence you, if your doth protest too much or even just try to bring rationalism into the debate. How many women and men who resisted the Catholic Church's expansion across Europe or the world lived to tell their tales?
True and after your death provided the entertainment, the church split your property with the prince, not a bad racket. They also used and still use social ostracizing to control you. Of course they want to control your sexuality, your life force. It all works because Homo sapiens can believe anything and the ruling classes have always been able to exploit the flaw. "One priest is better than a hundred police, cheaper and more effective"! You could say the same for a teacher or media person. Remember, Edward Bernays the father of modern propaganda / or was an American. Goebbels learned from him.
Well...the delusions of religion seem able to pass on for millenia, & maintain a modicum of civil order as people self regulate under fear of gods judgement. Today the woke & corporations sell gender ideology, sin without forgiveness and a 1984 vision of society. I would suggest the religious BS has more staying power than the Woke religion of todays elites, which is mutually assured destruction. Ever notice religious black people are happiest & hopeful ones...vs the woke version.
Agree! The Pope used to burn you alive for saying that the world was round. Now the Pope has his own astronomer. Religion is based on emotional needs and it's not amenable to reason. Just another tool in the toolbox of the ruling classes. Fortunately or unfortunately as the case may be, many people, not just black people are happy and religion is a big part of it but as us motorcyclists say "if I have to explain it to you, you wouldn't understand"! Thankfully I can have deeply religious friends because both them and I are tolerant.
That's easy; money. Lot's of atheists but even the jihad people believe in money and it's 100% faith based just like the invisible man in the sky. It's got a whole bunch of rules just like religion. Rule of law is a distant third, again, a giant fraud. The ruling classes have lots of tools in their extractive toolkit and it all starts as soon as you are born with your parents. Now, of course your parents mean well and so do "mostly" the schools. The media and the churches, not so much. The biggest lie is that they are teaching you critical thinking whereas you are born with that ability and their job is to take it out of you and they're very good at it.
If you can get rich quick, you can go broke even quicker.
I have had the pleasure of working on banking industry efforts where Maxine Waters was seated at the table. She is neither knowledgeable nor bright. I have met Larry Fink. He is very knowledgeable and very bright.
This example is ubiquitous and explains much of the danger to the economy and country in general related to the Wall Street corporatism games being played at the multi-billion dollar level. It explains the Great Recession. It explains why the root causes to the Great Recession have not been eliminated.
It is the professional looter hive of quid-pro-quo. Big government politicians and bureaucrats that lack the capabilities to start and grow a business but needing high income and wealth to meet their social hierarchy expectations, and get it from other people's money. And private sector brains that note the easier path to great wealth by gambling other people's money instead of producing real products that generate returns (because that path is more difficult).
This stuff has been going on since the federal government gained enough tax revenue to loot. During the Gilded Age is was off the rails... politicians and government employees transparently demanding cash from the wealthy for favorable policies and projects from government. Then over time controls were put in place by new politicians with stronger morals and seizing the opportunity in response to media-reported scandal.
Historically it has been the media that has provided some counter control of this getting out of hand. But check it out now. Blackrock, Vanguard, State Street, etc... together they own the controlling interest in the large media companies that own all the media content. They also own controlling interest in much of big tech. Wall Street wants the favors from the Biden Administration, and so in return, Wall Street directs the media that it owns to attack the Biden Democrat opponents while propping up the Biden Democrats. When the GOP takes over the national legislature (made more difficult if Wall Street thinks it is not in its best interests and directs its corporate media concerns to push voters for Democrats and against Republicans), Wall Street will just shift in its offers to help GOP politicians for quid pro quo.
I have no doubt that the owners of Substack have a business plan with an exit strategy to sell the business. And I have no doubt that Larry Fink has it on his radar. So get these articles out while you can!
BTW, seems that auto financing loans are another bubble ripe for popping.
Seems hard to believe in an inflationary environment, but apparently prices are rising even faster than wages, leaving car debtors who were once flush with cash having to decide between paying the rent and paying the car note.
edit: apparently there is also a lot of garbage auto loan paper out there, the Tahoe equivalent of NINJA loans.
Dealers’ lots are pretty full in my area for the first time in years. Looks like manufacturers have caught up with demand just as we are tipping into a recession. There may be some good deals on cars in the next year or two.
Interesting.
I was focusing on default rates (climbing steadily), sales (down double digits across the board) and then quality of auto loan paper of recent vintage (hot steaming garbage).
This actually fits hand in glove with the oversupply. There are fewer qualified or interested buyers and plenty of collateral damage coming for the banking system. I wouldn't touch consumer loans with a ten foot pole.
You can generalize this to recent statements made by the CEO's of major retailers. Target in particular took a major beating from having far too much inventory relative to their sales pace, and others are surely in the same boat.
Because of this newfound oversupply, inflation may not last long. I don't think the Fed should be hiking in this environment. Real interest rates may be negative, but they're not negative enough to stimulate economic growth in our moribund economy. I think massive fiscal consolidation and strategic default would be smarter moves. We already effectively strategically defaulted on debts to Russia by confiscating (excuse me, "freezing") their assets, and forced them to in turn default on their USD-denominated bonds to boot.
The Fed is pinned by a dual mandate that applies only to price stability and employment. Low unemployment is going to be easy to maintain with demographics and long COVID. It will be a welcome relief for besieged American workers. Economic growth is not actually a prime directive for the Fed at all. This is up to the Executive and Legislative branches.
Furthermore, with our idiotic SWIFT moves, we have cast a permanent shadow over the USD/IMF SDR's as reserve currencies. When the USD was *the* reserve currency, we had a permanent bid from price-insensitive players. This kept real interest rates low. We will now have to actually offer a competitive return on investment to attract capital, which is going to be a monumental challenge to an economy that has spent 70 years living the easy life. It will take a very, very long time and a lot of suffering to trim the fat and build new muscle.
Yes, but EVs and hybrids are no where to found. And with the government pushing renewables, supply is sourly lacking
Good to know. I stopped car shopping when I realized used cars with tons of miles were just slightly less expensive than new cars with inflated prices. Talk about sticker shock.
Looking forward to some reasonable prices on cars. I have been waiting for some time now, though, for the supply chain to get fixed and prices to revert to mean.
This stuff is collatarized by old cars. Investors can rest easy.
Thanks once again Matt! This is the meat my man. The protein. More meat!! (pounds table with knife and fork clutched in clenched fists 😉
Cats only ever need to eat meat. Along with the occasional blade of grass.
"Along with the occasional blade of grass."
Which they promptly vomit up.
Mainly when they come back in the house.
To quote the late great Alan Rickman, "Always."
Try it sometime. It feels great when it's over.
It doesn't feel great when you're the one who has to clean it up. I'm not a cat, just their servant (although catless at the moment.) I will admit to having pulled blades out of their butts. The things I do for love.
Blades? Anyway, as my moniker implies, I am feral.
Blades of grass.
I don't think most humans are really open to the experience.
“The world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version.”
John Kenneth Galbraith, “A Short History of Financial Euphoria”
Taibbi's article is nominally about cryptocurrency, but it's really about how trust gets farmed out rapidly and evaporates like a vampire in direct UV light. If the "communications revolution" accomplished anything, it was speeding up the con. There are no long cons any more, only the shortest of short cons. Welcome to three-card monte world.
Fiat currency runs on trust in institutions, which is all but dead.
So true Kosh. Trust is the central theme here. Imagine the country who's claim to fame are pay-day lenders, packaged "shitty" CDO's with huge leverage, and Arby's sandwiches (Jon Stewart once claimed Arby's sandwiches were like 'shock and awe' for your bowels) are the apostles of truth?
But trust on this one. Yeah right. The country who lied about WMDs, torture, surveillance programs, and fomented about 17 coup attempts in the last 2 decades is saying once again to the public, trust us. Sickening.
Except, I don't agree that they give a flying youknow whether we trust them or not anymore. They know what is best for the unwashed masses. Our trust, like our opinions, are all irrelevant. What did that White House econ adviser say in a blase' MSM interview? Suck it up on price per gallon; we are here to protect the Liberal World Order. Of course --- what was I thinking?!
Yeah, that was a horrifying quote, saying the quiet part out loud. Lizard people are for real. Davos, Bilderburg, giant vampire squid and all of that.
Roger that on the Lizard People.
Agree mostly. Trust though, can be used against the people via propaganda.
Russian red-baiting since 1950's. Bush telling citizens to go out and spend after 9/11. Jimmy Carter's "malaise" speech was denigrated by the press and public. Ukraine, Syria, Iraq and Afghanistan lies, and our defense department's budget dwarfs the rest of the world. There is a great deal of truth to your comment of "get with the program" - not asking for trust but demanding compliance. However, TPTB still own media, drug/tech companies, and are able to manipulate finance, education and policy to bend to their wills. Gilens and Page 2016 study shows just this (Oligarchy) but they are using multiple methods to achieve this result.
Bush told me to go out and spend, but at least he gave me a couple hundred bucks to get me started.
Totally agree. Except, now they don't have to be subtle about anything. If it is true that a group is now actually offering money/bounty for tips on the physical whereabouts of Supreme Court Justices --- this IS sickening and should be put down immediately, but it will not be. (Guess the AG is still stewing about not getting a life-time appointment.) This is the first step for taking care of someone's family financially if they will be a "martyr" for the cause.
I am thoroughly convinced at this point that the destruction of public trust in institutions was deliberate, and it runs far beyond currency. I'm sorry; nobody smart enough to acquire that much power is going to accidentally and consistently screw up almost everything just credibly enough that we're fixated on it and not the story behind the stories. Nothing posed a greater threat to the deep state than the actual state.
I nevertheless have more faith in fiat currency backed by a government that has a wickedly talented and ruthless security state and nuclear weapons than ones developed by standards committees and white papers. I've had brushes with the former, who apparently did not find me suitable for purpose, and endless stints in the latter.
Would be nice to mention to absurd environmental impact of cryptocurrencies. That alone should make it illegal.
Is the alternative, treasuries cranking out fiat the world over, all that different?
Crypto "mining" basically consists of computers coming up with complex math problems, and other computers solving those math problems. So, tons of electricity gets used in the currency generation process, especially once you factor in the A/C to keep the computers from overheating.
The alternative to mining is war. It is a defense budget, and has nothing to do with transaction processing, which can be done for bitcoin with a cell phone.
Mining also incentives renewable energy, acting as a guaranteed customer for any new source of renewable power. Nobody else buys wind or hydro power at night, so bitcoin mining acts like a subsidy for renewable power.
https://www.cnbc.com/2022/02/12/23-year-old-texans-made-4-million-mining-bitcoin-off-flared-natural-gas.html
What about when the miners are powered using gas that would be vented into the air? Then are they saving the planet?
Yeah, I’m invested in a seed round for a company that’s capturing flare gas in IL and IN to mine BTC
A little different, in that some governments have economic momentum and the inertia of continued activity by millions of folks that don't think too much provides cover against collapse. Economic momentum is what keeps dollars and yuan afloat, and mountains of laws and regulations that keeps things from going haywire. Of course, economic momentum can collapse, but at that point, we all better hope we got a patch of dirt for growing our own food because that means the fat lady has sung and it's really, really over.
Yet, it is. Massively so.
Crypto was a scam from it's inception, it was simply packaged differently and of course the "brain trust" of the world ate it hook, line and sinker.
Tomorrow is often promised yet many never see it.
So enlightened one please dispense your knowledge of all things "crypto" to me. Ps. Make it short.
Quick and dirty: Vitalik Buterin is right to blame the crypto bubble on the housing bubble, and perhaps a lack of trust in the authorities was causal, but these entirely miss the underlying issue. Economic growth stinks because assets and income are horribly maldistributed benefitting wealthy entrenched powers and the Government is doing stupid things to try to keep things rolling. It's like inflating a leaking bicycle tube every five years. You're going nowhere and it's a bumpy ride.
Verbose as hell: while cryptocurrencies are a massive problem and stablecoins are particularly interesting trees to study, there is a broader forest here. The title of the piece could not be more apropos, because the American economy has become entirely dependent on financial chicanery to function. Like, literally. That's because of poor return on actually meaningful investment.
In order to get any economic growth to happen in the midst of the secular stagnation most eloquently championed by Larry Summers, real interest rates have to be incredibly low. Very low or negative real interest rates lead to bubbles. Real interest rates, even with the Fed's recent tightening, have been deeply negative. Canada has negative real interest rates. Most of the world does.
http://larrysummers.com/2016/02/17/the-age-of-secular-stagnation/
https://economics.td.com/domains/economics.td.com/documents/reports/ff/A_Real_Perspective_on_Monetary_Policy.pdf
This leads to inflation more generally, and cryptocurrencies were a vector for that. They're clever undergrad computer science projects bound to a post-doctorate social studies program that had a metaphorical lab leak. Bitcoin has a structurally very negative real interest rate, as do all proof-of-work cryptocurrencies, as miners must sell coins for machines and electricity, but real currencies are actually giving it a race for its money into negative territory.
Indeed, it's not clear that we can achieve high enough nominal interest rates to break inflation in any meaningful way without first causing a significant recession, and secondarily breaking the Treasury. The mean duration on Treasury liabilities is relatively short, so it has been a huge beneficiary of the lower-for-longer interest rates that we've had recently.
But we're also running a double-digit budget deficit with government debt levels that range from "nauseating" to "kerosene" depending on what you count as government and what you count as debt. Social Security will become a net seller of Treasury securities soon. We are running highly expansionary fiscal policy, yet *still* falling into a recession as we speak if the Atlanta FRB's GDPNow Tracker is to be trusted -- and it's pretty good.
https://www.atlantafed.org/cqer/research/gdpnow
Why have we needed such deeply negative real interest rates for the past decade or two? The most handy explanation is because productivity growth is also low and the labor force has shrunk due to demographics and, most recently and severely, long COVID, which I suspect is the real fear driving Beijing's "dynamic zero-covid" policies.
Indeed, if you tried to smooth it, one might claim that we're on the brink of an actual secular decline in productivity, something that has not been seen for eons. The data is very lumpy, but smoothed, it's ugly and looks to be on the brink of going below zero.
https://data.bls.gov/timeseries/PRS85006092
The Great American Bubble Machine is a tremendous problem. However, we have lacked alternative solutions since at least 2002, when Krugman suggested the deliberate engineering of a housing bubble to save us from the Dot Com bubble's bust. That is the only bubble that formed organically.
"To fight this recession the Fed needs…soaring household spending to offset moribund business investment. [So] Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
https://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html
It's good to have you back, Matt.
p.s. One correction: "stocks for companies like Bitcoin and Ethereum surged to record highs" -> "currencies like Bitcoin..." or something similar. It was the market capitalization of all the coins that reached $3t, like if you summed the USD value of owning all of the shiny things, nothing to do with companies or stocks. Sorry if someone already got it.
Why does anyone in these United States of America bother to "work" at a "job" any more? Only guys I see working are wearing yellow vests and re-asphalting roads. I am not sure what happens on Zoom, which has replaced "the office," but I doubt it's much.
> I am not sure what happens on Zoom
Zoom exists to make middle managers feel like they're still making an important and valuable contribution to a business in an era where most kinds of office work are atomized and self-managed (albeit poorly).
We have much better ways to communicate and plan than "let's get everybody together in one room and take turns talking."
Zoom is like if telephones were invented and then the Pony Express determined that they should manage and deliver telephone receivers to anyone who wanted to make a phone call instead of people just owning their own telephones, in order that the Pony Express remain relevant.
Why almost nobody does anything "at work" anymore in this new environment is a separate problem. When you're getting paid salary for your time, and there's no way to verify that you've done anything in exchange, and the employers and managers have no reliable metrics for how much you should be getting done, it's real easy to slack off all day. "Looking busy" while the manager was making his rounds used to be a requirement for the talented slacker, but working from home has really lowered the bar on the slacker skillset.
If everyone was a contractor who got paid per unit of work completed, market forces would sort out the slackers from the productive people. If you offered to push 100 papers for 20 bucks, and some other guy could push them for 15, and so on, then the bosses would be able to figure out who was worth paying and who wasn't.
Thank goodness for all the anti-contracting politicians out there. They're the only thing standing between millions of useless slackers and a world record year on foreclosures and repossessions.
The payout from legitimate work is indeed significantly worse than that from most hustles at this point in time, although the people who do real work in places where there's ample money get compensated ridiculously well. I live near Aspen, and virtually anyone in any trade can make oodles of money here.
The barrier to entry in our case is geographic and NIMBY: nobody wants to pave over any more of this beautiful area, but there is not enough housing to support the army of servants desired. Aspen's population is barely growing or shrinking as actual locals are displaced by second home owners. This was written by a particularly caustic and controversial former Mayor and City Councilman.
https://www.aspendailynews.com/opinion/ireland-is-aspen-s-population-shrinking-and-do-we-care/article_ce1a4a2e-fe2b-11eb-9f79-aba684388f4e.html
My own town is half bedroom community for Aspen and half tourist destination in its own right, Glenwood Springs. A referendum here recently overturned a proposal to add some 770 peoples' worth of housing. An 1880's gandy dancer house downtown advertises rooms with grooming sinks for over a thousand a month, and there's a waiting list years long for apartment rentals.
There is no saving America, but the elites have fashioned some very nice lifeboats for themselves. And, if I'm fully honest, myself. Servitude and abdication of all morality pays.
I've been a remote worker most of my life, and Zoom has only marginally changed the dynamics. That's what allowed me to afford one of the nicest homes in town in the wake of the 2008 bust. I retired at 39, but America's top research university is saving me from that now with a new gig. I need purpose in my life.
Then you need to get out more. We all work because many of us have jobs we like and make good money at, and no, one does not have to be in a cubicle or suck teat from despicables to do so. They can be self employed and take advantage of a huge range of tax deductible strategies so they can keep that money, they (we) can provide services that people actually need and are wiling to pay good money for, and achieve some semblance of that freedom that everyone keeps talking about but no one seems capable of obtaining. Hint...figure out a real job, freedom is included.
It's funny. People don't get this. Most folks settle for a bullshit job, as in Graeber's Bullshit Jobs, where work and the imagined results are abstractions and never in alignment. Yeah, I don't understand why anyone does that.
Stop being blinded by “get the man” narratives. This is about GREED and idiocy by the people who BOUGHT the crap and the inability of regulators to focus on mission…see Supreme Court W. Va. If the SEC stopped wasting time on 500 pages of bullshit climate crap and said, hey maybe Mark Cuban et al touring this bs to 20k Mav. fans every two 2 nights is essentially selling an unregulated investment in violation of every securities law..things might be a little better? Like every craze before it..the fault lies not in the “man”…but EVERY Alan down the food chain. We simply cannot help our reptilian brain need for immediate satisfaction. Sad fact…
Great point. The 'victims' of this bubble were people who made speculative investments in an experimental currency. Quite different than the last go-round, where many victims were merely home buyers.
Quite true about crypto buyers, but the "victims" of the home mortgage crash who knowingly bought way more house than they could afford (the McMansion-buying hairstylists and janitors Matt referenced in his article) shouldn't get a free pass.
Predatory lenders are evil, and especially insidious when they carry the name and trust of a well-respected financial institution. But people are responsible for remembering that if something seems too good to be true, it usually *is* too good to be true. Or, a fool and his money are soon parted. Or, there's a sucker born every minute. These are cliches for a reason.
With everything that was wrong about the 2008 crash, IMO the bank bailouts were the worst. Let these big banks go down in a glorious fireball of their own making, taking their C-suite stock options with them, and watch the industry work overtime to clean up its own mess to keep it from happening again.
Too big to fail? Too big to exist! If an institution's failure poses a systemic risk, then it needs to be broken up, not propped up! Fucking assholes!
This needs to be said more. The game is fixed - but if decide to play it you get what you get. I invest cautiously - pay too much in brokerage fees - get mediocre returns - but I don’t go bankrupt overnight.
Maybe I don’t understand crypto, but it seems to me to be just a digital form of fiat currency. It only has value if everybody agrees it has value. The job, then, is to convince everybody that a Bitcoin, for example, is actually worth something. So far, not everybody is convinced, and more and more it’s looking like crypto is just another swindle.
Precisely and exactly. Money, all money, is an abstraction, agreed upon. It requires me to trust that the other millions "invested" in this agreement continue to agree. In my entire life, I've met about a couple dozen folks I'd trust implicitly and forever. With crypto, I don't even know if all those fellow "investors" are even real.
No thanks on crypto. It doesn't do anything, or produce anything. All "value" is derived from greater fools theory, i.e., one has to hope and believe there will be someone that comes along that is even more foolish, and buy the stuff off me. An asset whose growth or value requires more and more people continually piling in to increase value is called a Ponzi scheme.
As a means of transferring money, it's great. Peer to peer lending becomes possible. Transactions are simplified. Those that benefit are those handling the transactions and taking a slice. I'm fine with that. But, it's not an investment; it doesn't return anything unless it continues as a Ponzi scheme, and we know where those go.
So…my emu eggs are only good for scrambling?
Faith based.
> It only has value if everybody agrees it has value.
This is more or less true of everything. If we all unanimously agreed that gold and silver were equivalent to dirt and refused to accept it in exchange for anything I suppose its value would evaporate too.
But that raises the *real* question: what gives things the perception of value in the first place?
For non-monetary goods, the relationship is simple: a thing has value to me because I want or need it directly. If you have the thing I want, I must come up with a thing you want more and offer it in exchange. Our estimates of the set of all possible ways things can be exchanged for other things is our perception of their value.
For currencies it's a bit different: I value it to the extent that I believe I can get something I want later by exchanging it. So I take it as a substitute for something I'd like now. Precious metals work well because we all have good reason to believe someone is always going to want it, and good reason to believe it's not going to decay or transform into something else.
Paper money works not so much because "we all agree it's worth something", but because we know that a complex web of laws and regulations ensures there's a gun to everyone's head forcing them to accept it and requiring them to have some of it, so we're unlikely to encounter a situation where we can't exchange with it.
Why does crypto work as a currency? Trick question: it doesn't. Almost nobody uses it that way. Almost everybody is speculating based on what its value in exchange _could_ be, in the event that in some distant future people did start using it as currency. But if it _does_ have the potential to be a better currency than either paper money or precious metals, Gresham's Law applies: as long as those other things exist and are marketable everyone will hoard cryptocurrency and exchange using the other things. If it does not, it's worth nothing and all of this is tulip mania. Pick whichever one you like. The conclusion is the same: if you play around in crypto you're gambling, not investing.
Bitcoin can and will work as a currency as Bitcoin is divisible to certain amount of decimal points, it's smallest denomination being called "sats".
The most important thing is to not conflate Bitcoin with crypto. Bitcoin is truly decentralised. I have bought some amounts of Bitcoin, I don't want to exchange it for fiat money. I just hope that it overturns the 'US petro barrell of a gun dollar' so that maybe we have a future where state and money have been separated, so they can't put imbeciles into power to take us to war, print trillions of our tax payer money devaluing it causing inflation and funneling all that money to war mongering arms manufacturers i.e Ukraine.
I like to ask myself the question Why couldn't the internet disrupt money?
Crypto as speculation? Yes I agree and don't do it, it's centralised. plus I'm just working folk, I'm not into that. It's more of a philosophical play for me to put into Bitcoin because I believe in its aims. I've watched a lot of Max Keiser on RT and YouTube and it made me go down the rabbit hole on money and its quite a trip and highly recommended. There's lots of good resources out there.
What is money? Yep, we need to wrap our heads around this
#BitCoin for Peace.
I don't see the point of the weird distinction you're making here between bitcoin and all other cryptocurrencies. All cryptocurrencies are decentralized. That's kind of, like, the point.
Centralization comes from the exchanges and custodial wallets. Much like gold coins as currency are decentralized, but not if you leave it to banks to own and manage physical gold and only ever engage in exchange with bank notes redeemable for gold only in theory. Which is how you end up with paper money, first backed by a lie and then backed by nothing, which is exactly what you have if you have a coinbase account balance and not a self-hosted wallet.
My head is fully wrapped around what is money. Gresham's Law applies to all things-that-would-be-currencies. They are only currencies in practice if there is not a shittier currency that everyone knows is inferior but which is still useful for exchange.
For bitcoin to work as a currency, all shittier currencies have to die. For dollars to die the global petrodollar-backed economy has to collapse, without taking internet and electricity (and thus bitcoin) with it, and without being replaced by a different shitty paper money. Unless that happens, people will tend to hoard and speculate in bitcoin and other cryptocurrencies while exchanging with paper money.
centralisation comes from the fact crypto currencies or tokens started up by a company made up of individuals that can tinker with policy and issuance of said tokens are just like printed govt paper, they have a central point of failure i.e the human actor, if humans are involved with the authority to fuck it up that's what will happen, they're also often 'proof of stake' which can't get around a fundamental problem of money which escapes me at this moment.
Bitcoin is just a protocol let loose on the internet, that's where the human tinkering sort of ends .
and has no central point of failure. There is a fixed suppy divisible into sats. It can't be inflated. It's deflationary. No fiat currency has lasted more than a hundred years and have all gone to zero.
Money represents time, energy and work that's gone into acquiring/producing it. Bitcoin achieves this through 'Proof of work' through the massive electricity usage to perform the cryptography that wins the miners bitcoin rewards and strengthens the network which is spread worldwide and doesn't have a single point of failure.
I don't understand what other crypto currencies even do, I'm not a trader. But the belief comes in here for me with Bitcoin, and that's it really.
“ I just hope that it overturns the 'US petro barrell of a gun dollar' so that maybe we have a future where state and money have been separated, so they can't put imbeciles into power to take us to war, print trillions of our tax payer money devaluing it causing inflation and funneling all that money to war mongering arms manufacturers i.e Ukraine.”
It’s a nice dream. Governments will outlaw Bitcoin before they let it happen.
El Salvador has made it a legit currency to get out under of IMF debt slavery. More countries will follow. Hopium yes. But you've got to believe that something can change the world. And voting ain't it. Follow the money and what do you find? That the corruption goes all the way up. Change the money. Change the world. #Bitcoin
Bitcoin and crypto are two different things.
Explain please
The '34 Act limited US regulated broker-dealers ability to rehypothecate securities, that is, to use securities as collateral that the BDs themselves held as collateral.
There was no such limitation under English law, which is why US BDs would "sweep" their securities holdings overnight to English affiliates, then sweep them back again the next day. Wall Street bitched about this mightily.
This is also why Lehman was damaging to the US financial services industry, but it was absolutely catastrophic in Europe. Last I checker, they are still litigating over who owns what and how much of it and whose claims trump whose.
Wouldn't it be nice if such a rehypothecation law -- or, really, any law -- were applicable to cryptocurrency? Regulators were way behind the boat on this one, so far behind that I have to wonder what the ultimate reason for that was.
$3T in faith-based assets that are an economic burden to maintain is enough to have a real impact on the real economy if they go belly up. There are plenty of people who have borrowed in USD against these.
As far as Europe goes, yes. We really blew up Deutsche Bank in particular.
No clue how one might enforce such a law...
One might restrict or prohibit using "collateral as collateral"...but then our entire banking system would be absent what it calls a hedge. Right? Or no?
Fractional reserve lending needs to be re-examined in light of this, but rehypothecation laws are basically to prevent too much leverage from happening. One of the great(?) things about public blockchains is that you could literally trace the money and prevent this from happening if you had enough information embedded in the blocks.
I don't know much about most of these protocols. I developed federated identity as my main work in life, and that necessitated learning all about cryptography. I've read the Bitcoin white paper and laughed that people were paying for the incorporation of their transactions in blocks with very small SHA hashes. It was a cute trick, but, srsly. I doubt any of them actually contains enough information in there to say "this is a loan collateralized by yadda", but it's entirely possible to do.
Our "hedge" in real money land is nominally the FDIC and then the Fed once things get too horrible for the FDIC to help (hi, LTCM). It does little to actually throttle risky behavior, and now few things do because of bailouts, one of the many wonderful gifts bequeathed upon us by Geithner & Bros.
There may be a central bank digital currency someday, but I will almost guarantee you that it would be implemented using a simple, centralized database rather than a blockchain. You can't easily erase errors in a blockchain. It's got computational overhead. It reveals all of everyone's transactions to everyone, including those of the government, so long as you can dereference a public key to an entity -- and I'll guarantee you most states are able to do that.
The USD gets another perpetual bid because we're the best country for money laundering. We -- and in particular, our government -- won't give that up easily.
I copied and pasted this into my notes for future reference. There's a lot of sense in this and most of what gets reported people ultimately believing is nonsense.
That's a pretty good analysis. In fact, it's an excellent analysis.
Re: laundering...yup. England and America are the land of the free....laundry. Imagining the money folks are going to let that profit sector erode is magical thinking.
Faith based assets....exactly.
Decades ago a friend told me "If you don't understand the deal, don't put any money in it." I watched as people financed their lives bouncing from one credit card to another. A high interest way to kite checks. The idea of paying interest on a savings account disappeared along with S&Ls. It's probably time to go back to Social Clubs and neighborhood groups for banking and financial services. Wall Street and Uncle Sam are bankrupt and run by the same band of pirates.
Government regulation will not work because government is inefficient, incompetent, lazy, and most of all concerned only about CYA.
What would you propose in its place? Has the free market proven capable of regulating itself in this instance? You might ask Terra holders.
Genuine question, not snark.
Government regulates by writing rules for you to follow. They also want you to submit a plan on how you plan to follow those rules. Then they accept (if acceptable to the government regulator) your plan. Notice I didn't say approve, part of CYA. Your plans must include self-disclosure. If something goes awry and/or you fail to disclose any deficiency then government regulators come down with audits, fines, and perhaps criminal liability.
Basically it is already setup for self regulation. You do their work.
First, one needs ask if we need something to "replace" it. Of course the Fed is a mess and central banks are criminal, but there is at least a large percentage of the world population that still collectively agrees that US dollars and to an increasing degree Chinese RMB are "trustworthy" in that they have economic momentum to maintain continued value. The Dollar and the Renminbi can certainly collapse, but they will be the last to go. Crypto will be, and is, the first to go.
The Constitution agrees and why the Democrats want to burn it and add 2 more SCOTUS idiots to the ones they already added. They want to Chump Change America.