Archive for the ‘economics’ Category


Thursday, November 16th, 2023

According to official statistics, everything is coming up roses. Inflation is way down, unemployment is way down, GDP is way up, and we are doing so much better than under the horrible horrible Trump economy.

Looking out the window of the plane from ten thousand feet as it comes in to the airport, you can see that not everything is coming up roses.

The Democrats noticed that not everyone seems impressed by the wonderful economic performance of the Biden regime and so they commissioned some push polls.

The purpose of a push poll is not to find out what the public thinks. Everyone already knows what the public thinks about the economy. It is to change what people think. The pollster asks “How do you feel about everything coming up roses and the wonderful job Biden is doing” (Perhaps I exaggerate, but not by much.)

It is the standard shill tactic of false consensus. Supposedly everyone knows and agrees things are wonderful, and the pollster wants to find out how wonderfully you are enjoying all this wonderfulness.

Presumably they were calling up normies, but the normies gave them much the same answer as they would have received on this blog. They got a thirty five percent approval rating, which in a push poll does not indicate that thirty five percent approve. It indicates that of those people the pollster called who were too polite to hang up on him and call him names, or call him names and then hang up on him, thirty five percent were too polite to say “stop pissing on me and telling me that it is raining.”

Ever since hedonic adjustment was introduced (because the statistics need to show that toilets that do not flush, clothes washing machines that do not spin, and cars made of tinfoil and plastic and held together by chewing gum are a huge improvement in the standard of living) the statistics have been improbable. And now they are rapidly getting a great deal more improbable, reaching Soviet levels of mendacity, resulting in Soviet levels of disbelief and cynicism.

We are not the voice in the wilderness. They are. They have the loudspeaker and we do not, but no one is listening.

Enormous move in bitcoin coming up

Thursday, June 29th, 2023

The good news is that in the not very distant future, everyone who matters is going to be using Bitcoin. The bad news is that if they will be using something resembling currently available software, they will still be net peons, not netizens.

Probably no dramatic price changes next week. Or next month. Maybe not next year. But we are on a big move up that will likely continue going up and up for a very long time.

The dollar is failing as a medium of international exchange.

Cannot do transactions internationally in fiat when the bankers are untrustworthy and untrusted. Cannot do international transactions in gold, because difficult and dangerous to move long distances.

Russia and others have been messing around trying to come up with fiat alternatives to the dollar. They just are not flying. The sovereign of country A agrees with the sovereign of country B for a deal that allows fiat transactions between A and B, and tells the bankers and bureaucrats to work out the details. But a deal that was actually workable would involve bureuacrats giving up power. So they work out a deal in which the bureaucrats of both A and B have complete power. Which means that in practice the merchant lacks the power to actually perform the transaction. You get a bunch of mysterious pieces of paper that are impossible fill out in a valid manner, your money disappears until you have met requirements that no one will explain to you because no one understands them, least of all the bureaucrats that created them, and your money gets frozen and eventually confiscated. So, increasingly, international transactions are getting done in bitcoin. Eventually bitcoin is going to replace to dollar as the medium of international exchange. Because sometimes, increasingly often, there is no useful alternative.

The US dollar is locked in place by Metcalf’s law. For it to fall, an alternative network must achieve critical mass. Bitcoin does not yet have critical mass but it is getting there. People are being forced into bitcoin because the international fiat money system is broken and getting more broken. Dollar dysfunction is likely to force a critical mass into existence. The more people using bitcoin for international transactions, the more useful it becomes for international transactions, which is likely to result eventually in a quite sudden transition.

This foreshadows a huge upmove in bitcoin. Also a huge attack to get state control through the dangerously concentrated miners.

Hodlers are generally betting on Wiemar style collapse of the US$ for everyday transactions, which is probably still some distance away. But a slow motion collapse of the dollar as medium for international exchange is happening right now.

For international transactions, the bitcoin blockchain suffices. The merchant sends you a public key he wants given value, usually over a highly insecure channel likely to leak information to all sorts of people who might want to rob you or just maliciously harm you. You transfer the requested amount of bitcoin to that key. Which should suffice because the transfer shows up on the bitcoin blockchain, which is a reliable broadcast channel, but the merchant frequently wants you to also send him a screen shot of the information that you just published on the bitcoin blockchain, after the transaction has gone through and received a reasonable number of confirmations, on the same insecure channel, because he wants the bitcoin transaction linked to rest of his highly insecure transaction metadata.

For everyday transactions, we need the lightning network. The cryptographically secure Nostr social network has recently been linked to the cryptographically secure lightning network, but the linkage is horribly insecure.

Nostr uses ssh style public private keypairs. Which is not good enough if there is money on the social network, plus people are used to wallet style public private keypairs derived from a master passphrase. People are used to doing it right, and SSH has forever been doing it wrong. And now Nostr is walking the footsteps of SSH. However, the one nostr client that integrates lightning wallet uses wallet style keys, and presumably eventually they all will.

Now if Nostr could be upgraded to use wallet style keypairs, and the linkage between lightning and nostr fixed up, and if lightning’s backup problem was fixed up, we would have a useful system for transactions. Unfortunately the people implementing the linkage were rightly aiming at user friendliness, mass usage, and getting it up in a hurry, and security got trodden under in the rush.

The linkage has now achieved critical mass, which is great, and may well soon show up on Twitter, which would be super duper great, but cleaning up the security mess is likely to be hard and will get harder the more the insecure system is adopted. Still, no one has incentive to do it right, until large numbers of people doing it wrong creates problems. And whatever is wrong with this system, it is a big improvement on what we have now. At present, you can only use nostr with certain peon wallets, though the underlying zap protocol is perfectly capable of supporting the real thing. Unfortunately the real thing is difficult, dangerous, and expensive to set up, which is why Nostr developers have not bothered with it yet.

If you use the standard easy to use lightning wallets, you are a peon. Someone else controls your money, knows what you are doing with it, is selling that information to all and sundry, and you are using your money by his permission. And some of the people buying that information do not like you very much. The real lightning wallets are Lnd and C-lightning. Which you really have to be a unix guru to use. And even if you are unix guru, you are likely to foul up and lose your money.

To use the money safely, you have to have a C-lightning wallet running on a dedicated always on machine, the wallet state has to be continuously backed up moment to moment to a nas running on another machine, (and the wallet is in the clear, and a nas is by its nature not very secure), and the ip address that the lightning network sees your machine at cannot be your home address, because then all manner of bad people know there is money at your home address, which can be physically taken by taking the machine running your lightning node. You are at risk of state authorities deciding that you must be doing something bad, taking your computer with your lightning bitcoin in it, and to get it back you have to prove you were not doing something bad, which is impossible to prove. Or random criminals may just take your computer.

So you want the transactions to go through the vpn, but you don’t want the backup to the Nas to go through the vpn. You don’t want the vpn blocking local network access.

Umbrel and Citadel use Lnd for the lightning network, and are designed for small cheap machines. Unfortunately Lnd is broken, because they never fixed the backup problem. It is only safe to run Lnd on a big expensive highly reliable machine, typically a nas, and not all that safe even on a big expensive highly reliable machine. It is impossible to backup wallet.db, because it is continually being written to, and if your machine dies, you probably have a broken copy of wallet.db. It can only be safely backed up when Lnd has done a clean shut down. And as soon as you start up lnd again, your backup is not only useless, but dangerous.

And wallet.db is where your money actually is.

channel.db is not a backup copy of your money. It is an overly clever and too complicated by half mechanism for recovering money lost in a computer crash, which might or might not work. Will likely recover some of your money. And after you have recovered some of your money, all your lightning channels, accrued reputation and connections are gone.

And if you are running it on a raspberry pi or something similar, you are likely running off an external drive attached to a usb port. And the port connection is going to start randomly failing from time to time sooner or later, probably within a few months. And boom, you have lost all your channels, and probably some of your money. Not to mention rasberries just keep dying.

C-lightning however uses the more reliable and crash resistant sqlite3 database format, and more importantly, allows dual sqlite3 databases. So you have your primary database on your local machine, and a backup with the same name in a different directory on a network drive in the basement on the other side of the house. The backup contains stealable money, and is in the clear, so probably not a good idea to put on the cloud, assuming sqlite will work reliably with a cloud drive, which I doubt.

A “successful” recovery on Lnd is painful, complicated, and no matter how clever and technically savvy you are, you will lose a great deal. A successful recovery of c-lightning will simply resume where it left off.

Lnd is experimenting with a database that is designed to run over the network, as part of their failure recovery strategy. But, last I looked, not yet ready for prime time. And the way Lnd is implemented makes it difficult to implement a reliable backup and restore facility.

What is really needed is a custom database that physically writes a new block on local and remote disks for every lightning transaction, and then from time time creates a packed copy of that data, and then, when the packed data verifies as correct frees up the blocks. Sounds like a big project. And you would want a social network with parity files so that each person kept a parity file (or parity data structure in sqlite) that would enable any one party to recover everything from his seed phrase the way you can with a normal bitcoin wallet. People expect to have a system where they can just download the software from the internet onto a new machine, type in their passphrase, and they get everything back. We know in principle how to accomplish this, but actually accomplishing it is hard.

At present what you need is a wireguard vpn server in the cloud, a dedicated computer on your local hard wired network running wallets, and another dedicated computer hard wired on your network acting as a nas. TerraMaster F4-210 is remarkably cheap nas that can store a lot of data, though you can go somewhat cheaper if you are only going to use the nas to backup your lightning wallet, and therefore do not care about big storage. You can also get a perfectly good fanless mini pc capable of running wallets for a whole lot less than a preconfigured umbrel or citadel strawberry.

To enable people without a pile of hardware on their local lan and good nix administration skills to operate a lightning wallet that is truly their own, and a monetized Nostr identity that is truly their own, without requiring them to do a whole lot work, and risk losing money if they mess up that work, requires a whole lot of software not yet written. We don’t have reasonably easy to use software that makes a man a netizen rather than a peon of big tech.

Demand is coming, while our software is still broken. And no end of people are happy to fill the gap with scam software and peon software. Bitcoin is about to hit the big time, and for international transactions it is good enough, but for lightning transactions, not yet ready, Nostr may well hit the big time, and our software is not ready. If you are on Nostr with a peon lightning wallet, still a peon.

Nazis are commies and commies are nazis

Tuesday, January 10th, 2023

Near as makes no difference.

Notice that Russia’s leaders say that Russia’s goals in the Ukraine include de-nazification and/or de-communization, without really making a distinction between de-nazification and de-communization.

Nazism was radical leftism in its day, and was perceived as radical leftism in its day.

And, predictably, Hitler found himself outflanked on the left within the Nazi party, as Stalin found himself outflanked by Trotsky. So he killed them.

Whereupon Stalin created the third positionists, “fascists” who were even lefter than Hitler, Franco, Mussolini and company. At the start of World War II, the third positionists were revealed to be in Stalin’s pocket.

The third positionist movement has always been in the pay of the left, they are always selling a socialism even more radical than that of Hitler, which was itself more radical than the socialism of Franco and Mussolini.

Here in the US, the equivalent of the Azov brigade call themselves third positionists. They are socialist and hostile to Christianity, still selling what they sold for Stalin, though today they appear to be in the pay of Soros. Russia calls the Azov brigade commies or nazis interchangeably, and that is entirely accurate.

The Azov brigade and today’s third positionists are supposed nationalists who serve Jewish globalists. During world war two, they were in the pocket of internationalist socialism, today, they are in the pocket of post capitalist Jewish globalists.

Hitler’s nazism had the usual faults of socialism, and led to the usual catastrophes of socialism, which bit at the worst possible moment. He ran out of other people’s stuff just when he was invading Russia. But for all that, it was different from communism in important ways. Third positionism is not. Hitler wanted to coopt, rather than exterminate, the merchant class. Third positionists, like Marxists, want to eradicate the merchant class and have the priestly class take their wealth.

Hitler perceived the merchant class as doing something important and valuable. Third positionists and Marxists think that wealth just springs forth from the magic dirt, and the evil capitalist overlords just scarfed it all up. This difference proved less important in practice than one might think, as Hitler shut down the creation of wealth by the Merchant class inadvertently, while the Marxists, the Covid worshipers, and the Gaia worshipers destroy it intentionally.


Monday, October 24th, 2022

Time to discuss the nature of capitalism, because fake Nazis on Gab are spouting Marxist history, economics, and theory:

The Marxist sees bread on the supermarket shelf, and thinks this a manifestation of a central plan. He thinks we already live in a socialist economy, with big capitalists giving marching orders to little capitalists.

And that is why they refuse to acknowledge that Musk is the great rocket scientist of our day, as Wernher von Braun was the great rocket scientist of his day.

The man who favors equality hates better men and hates great men more, and wants to tear down and destroy what they create, for he is envious of the excellence of anyone superior to himself.

They will not acknowledge that entrepreneurs create value and capital. If suddenly the world has a whole lot more lift to orbit capability, supposedly it must be because Harvard assigned the rocket technology to Musk, and the Rothschilds allocated the necessary resources and commanded it to exist. Supposedly that technology was granted to Musk by Harvard. “Where is Musk’s degree in rocketry?” they sneer. If Musk owns Starlink and two thirds of civilizations lift to orbit capability, he must have stolen it somehow from someone.

All the technology of industrialization was created by entrepreneurs like Musk.

The Marxist who calls himself a Marxist names the center from which the central plan comes as “wall street”. The Marxist who lyingly calls himself a fascist says “Rothschilds” (Before 1930, the Rothschilds had a great deal of wealth and power, which they used for evil purposes, but in 1930, they lost most of it, and anyone still saying “Rothschilds” in this day and age is usually a Soros shill. Everyone whose last name is Rothschild dropped off the bottom of the Forbes 400 long, long ago, usually with creditors hunting him and his assets.)

These guys who call themselves fascists and Nazis while spouting Marxist theory and Marxist economics are enemy entryists. If any of the original Nazis were fans of Marxist economics and Marxist theory, Hitler took care of that lot in the night of the long knives.

The Marxist thinks that all the wealth and value of the modern world was stolen, that value is not created, merely distributed. When the fake Nazis praise Hitler’s socialism, they imply that they will distribute all this value back to proletariat, but they are Soros shills (we know they are working for Soros because strangely unable to notice what Soros is up to), and Soros thinks that all this wealth and value was stolen, not from the the disturbingly white proletariat, but from the brave and stunning warrior women of subsaharan Africa, and plans to ship it all back to Africa to be buried in the fertile African soil, from which it will supposedly sprout anew.

(Why you might ask would Soros and Zelenksy fund and protect third positionist national socialists? Well in the Ukraine, they are fighting for a globalist Jew installed in power by Soros and Victoria Nuland, and are the only force that Zelensky can rely on to shoot conscripts who attempt to run away from the front.)

It logically follows from Marxism that all wealth is stolen, so it logically follows from Marxism that if you are better off than fly blown maggot infested half starved subsaharan Africans who are eating each other, you must be oppressing them, and need to be punished. That punishing you makes the Marxist holy, and punishing you more makes him even holier.

The huge increase in lift capability to orbit that Musk created is a demonstration and reminder that science, technology, industry, and wealth is created by entrepreneurs. Thus Marxists want us stuck on earth forever. They think we are all kulaks.

Industrialization and Tech

We have had three hundred and eighty years of corporate tech innovation, starting with the canal and water power companies that appeared under Charles the second, and tech innovation is always performed by a tech CEO, and the innovation always spreads via engineers whom that CEO trained. Corporate tech innovation always depends on a techie in power. Always has, always will. He is soon replaced by bean counters, lawyers, and suchlike, as Jim Clarke frequently and loudly complained – and then tech innovation by that company ends. As Jim Clarke frequently and loudly complained

You can buy existing tech by hiring an engineer who has trained under someone who was implementing that tech, but new tech always needs power, authority, and status for it to be created in the first place. This corporate formula is centuries old.

When Wernher von Braun was a prisoner of Nasa, with war crimes charges pending for bombing London and employing slave labor, he told them how to build rockets, but they could not build them. To build them, had to put him in charge and compel everyone to treat him with respect. To build them, had to give him power and status.

It is just not practical to develop significant new tech unless you are the CEO: Bessemer and steel, Shockley and transistors.

Bessemer tried to teach other steelmakers his method of making steel, but they were unable to learn, while engineers under his command were able to learn. Shockley wrote the book on how to build transistors, but every transistor everywhere is built by an engineer who trained under an engineer … who trained under Shockley. The book just did not work, just as Bessemer’s licenses and patents did not work. Knowledge needs power to be implemented.

Smart guys, knowledgeable guys, are not enough. You need a really smart and knowledgeable man in charge, and the people implementing his vision have to treat him respect, or else stuff just fails to work.

Academia bears the same relationship to technology and industry as niggers bear to civilization. Someone builds a civilization and niggers say “We build dat. We waz Kangs” and proceed to smash it up. Someone builds a technology, and academics say “we taught you how to do that”, then they meet behind closed doors and establish an official scientific consensus on the basis of secret evidence that they will not show anyone, a consensus that makes the technology stupid, impractical, expensive, and dangerous. Academia inherently and naturally applies the theological method, which is great for establishing consensus on matters of faith and morals, but disastrous for matters of material and effective causation, for which we need the scientific method. The inherent nature of academia makes it very difficult to apply the scientific method if the university is signing your paycheck. This has always been the way that it was, and it will always be the way that it will be. It is just the wrong form of social organization for addressing matters of material and effective causation. Academia just cannot do it, any more than you can hammer nails with a screwdriver. Wrong tool for the job. It is stupid to attempt to train techies in academia, though today HR forces us to only hire those with “good” degrees. Trying to do science and tech through universities is like trying to innovate technology in a company with a bean counter or a lawyer as CEO.

Until Musk, all American rockets, including the moon rocket, were the same basic design as Wernher von Braun built at the rocket club.

After Wernher von Braun built those rockets at the rocket club, he then went to university and got a degree in rocketry, the very first degree in rocketry, as if there was some professor who knew more about rockets than he did. And then he got kidnapped by the Nazis to build rockets to hit London, then kidnapped by the Americans.

After Wernher von Braun retired, American rockets went steadily downhill, implementing that same basic design, but less and less well.

Then Musk decided we need better rockets if the human race and technological civilization is going to survive. So he hired an existing rocket scientist who had trained under someone who had trained under Wernher von Braun, who had some sketchy recollections on how to build rockets. Then Musk built a few Wernher von Braun type rockets, then proceeded to rapidly improve the art of rocketry.

Definition of Capitalism

A Marxist will never define capitalism. So, we get to define it.

The word “capital” is derived from “head” as in “head of cattle”. If you want to count a herd of cattle, easiest to count their heads, so “head” is a synonym for how many cattle you have.

Capital is a generalization of how much cattle you own. Cattle produce milk and calves, and it is a generalization from counting up cattle to counting up assets that you use to produce value, milk and calves among that value.

Cattle being the original form of wealth, wealth that produces milk and produces more cattle, if wisely and competently husbanded. So “capital” is wealth that is like that, wealth that can produce more wealth, if wisely managed. So capitalism is doing that. The primary original form of capital, back in the days when Aryans conquered the world, was cattle. And cattle are still to this day a significant and important form of capital.

Capital is well managed cattle, also mines, oil fields, trucks, factories, ships, and so forth. That is capital, using it well is capitalism, and a capitalist is someone who uses it well and uses it to create more capital.

The capitalist creates capital and applies it wisely and productively:

Proverbs Chapter 31
13 She seeketh wool, and flax, and worketh willingly with her hands.
14 She is like the merchants’ ships; she bringeth her food from afar.
15 She riseth also while it is yet night, and giveth meat to her household, and a portion to her maidens.
16 She considereth a field, and buyeth it: with the fruit of her hands she planteth a vineyard.
17 She girdeth her loins with strength, and strengtheneth her arms.
18 She perceiveth that her merchandise is good: her candle goeth not out by night.
19 She layeth her hands to the spindle, and her hands hold the distaff.

The capital that she creates in part is her savings from spinning, in part that she “considereth” the field – meaning she invests her savings wisely, so the field is more capital than her original savings, for it embodies not just the work of spinning, but the work, ability, skill of judgment, and in part that she directly creates capital, by planting vines.

She is was little capitalist, a kulak. A commie talks about Rothschilds, Wall Street and such and such but if you scratch a commie you will find it is really the kulaks he hates, because we feel the status competition with people close to us, not far from us. He really hates the man who owns a pizza shop, and the small family farm. He explains that by killing the cows of the peasant with two cows, you are actually striking a blow at the Rothschilds and doing a big favor to the peasant with two cows.

But the merchant who wisely applies capital is apt, in time, to wind up with a lot of it, so will hire other people to work it. The good wife Solomon spoke of is likely to eventually find her family owns a bigger vineyard than they can harvest.

Mathew 20:
2 And when he had agreed with the laborers for a penny a day, he sent them into his vineyard.
3 And he went out about the third hour, and saw others standing idle in the marketplace,
4 And said unto them; Go ye also into the vineyard, and whatsoever is right I will give you. And they went their way.

And eventually his assets become so great that he needs other men to manage them and invest them wisely for him:

Mathew 25:
15 And unto one he gave five talents, to another two, and to another one; to every man according to his several ability; and straightway took his journey.
16 Then he that had received the five talents went and traded with the same, and made them other five talents.
17 And likewise he that had received two, he also gained other two.
18 But he that had received one went and digged in the earth, and hid his lord’s money.
19 After a long time the lord of those servants cometh, and reckoneth with them.

So the lord was a bigger capitalist. Where do big capitalists come from? They come from little capitalists, kulaks.

So a capitalist is someone who owns a lot of value that he uses competently and effectively to produce more value. Not quite the same meaning as entrepreneur. He might be a speculator or an investor, but an entrepreneur is the archetype.

Capitalism is what such people do, and to ask whether a society is capitalist is to be distracted by Marxist flim flam. Those people are capitalists, and what they are doing is capitalism.

Those who rule do not produce wealth and value directly, so in this sense no “society” has ever been or ever will be capitalist, but those who rule have to produce a social order that permits such people, or they will be conquered by rulers who do have an adequate supply of such people and thus have the logistics, provided by capitalists, that enable them fund and equip armies and to move those armies over distance.

A society is capitalist to the extent that those who rule attempt to foster capitalists and succeed, but to ask if a society is capitalist is to ask the wrong question. Soviet Russia depended on capitalists as much as every other society. It thus had to tolerate the mafias, and invite in foreign businessmen, so capitalism was illegal, but widely practiced and quietly tolerated. If you want to argue Soviet Russia was capitalist, look at the mafias, international investment, and the private plots. If you want to argue it was socialist, look at laws, enforcement and official documents, but both arguments are irrelevant and unimportant, distracting you with what is irrelevant to capitalism and capitalists. All societies are capitalist, or else they are starving and about to collapse and/or be overrun by foreign enemies. No societies are capitalist, because capitalists never rule, never can rule, never will rule. Thus it is always stupid to ask if a society is capitalist. A government can be, and often is, anti capitalist. But after Lenin hung the capitalists with the rope he purchased from the capitalists, Lenin and Stalin found that they still needed rope.

Marxist (and fake Nazi) history

Marxists and fake Nazis sneak in an implicit definition of capitalism by Marxist history. Which implicit definition is too obviously stupid for them ever to say it outright. Instead they tell a story about our past that implicitly presupposes that everyone already accepts that Marxism is true by definition and completely uncontroversial, much like the troofers arguing from the assumption that everyone knows and agrees that building seven fell straight down like a demolition, that there was no airliner sized and shaped hole in the Pentagon and that molten steel was pouring out of the Trade towers.

Marxists will never ever tell you their definition of capitalism, because if said plainly, their argument would sink like a stone. Instead they ramble around saying stuff that assumes that everyone already agrees with their definition.

Thus the point and purpose of Marxist history is nothing to do with history. It is to sneak in a definition of capitalism that no one would buy if proposed explicitly and overtly. They do not give a dam about history. They actually want you to accept as the universally accepted and uncontroversial definition of capitalism, a definition that nobody in fact believes – not even Marxists, for if they genuinely believed it, they would be willing to actually state their definition.

Marxist history is that capitalism is new – that previously there was feudalism, then the capitalists took power from the lords. Which implicitly defines capitalism as a system of government, which is transparently silly and which no one believes for a moment.

So, a little discussion of what feudalism was.

Feudalism and knighthood is exemplified by life and career of William the Marshal, who is the type specimen of knighthood and feudalism.

Feudalism was a very direct form of warrior rule, in a time when highly trained warriors when with extremely expensive equipment mattered, and hordes of peasant conscripts mattered not at all, when one or two highly trained expensively equipped warriors could slaughter a mob of peasants like sheep.

Any knight could make another man a knight, which is to say, any man with the right to keep and bear arms could give another man the right to keep and bear arms, though they only cared about expensive arms involving a great deal of training. Possession of land was power and nobility, and since it was power and nobility, could not ordinarily be bought or sold. In unstable times, generally acquired at sword point. In stable times, inherited through primogeniture.

Typically this was by the granting of fiefs. The possessor of a fiefdom would grant a portion of his fiefdom to a knight, in return for fealty, in a contract binding on the parties, and also binding on their descendants by primogeniture in the male line. Kings and great lords tended to be generous in unsettled times in granting fiefdoms to land that they did not in fact possess, to men that they suspected were capable of taking possession of it at swordpoint, but in more settled times, it led to a quieter life if one only granted fiefdoms to land that one did in fact possess, about which they were apt to be more tightfisted.

Not much point in making a man a knight, unless you could give him armor and a warhorse capable of carrying a man in armor. And there were two ways of acquiring armor and warhorses. One was by taking them off another knight at swordpoint, which William the Marshal did quite a bit of in his younger days, and the other was by buying them from people who produced such things, which he did quite bit of in his older days.

(In principle you could also take them at swordpoint from people who produced such things, but such people tended to be hard to find if they were at risk of losing their stuff at swordpoint)

Land was nobility, but it was not warhorses and armor. William the Marshal acquired quite a lot of land at sword point, but land does not in itself produce warhorses and armor. For that, you need wealth and a market economy that can generate elaborately transformed goods. And if there is nothing on your land but a rather small number of half starved peasants, which was the condition of much of the land William the Marshal acquired, not going to produce much in the way of wealth. So, William the Marshal, aging warrior, went into the real estate business. To persuade productive people to settle on his land, and thus to subject themselves to his power and his taxes, he had to grant them security – that no one else would shake them down, and that he would only shake them down within certain predictable limits. Which deal makes capitalists and capitalism possible. In going into the real estate business, in developing his land, he became a capitalist, and created the conditions that made it possible for people who were not knights and not noble to become wealthy capitalists.

The power of the lords was ownership of land, which depended on ownership of war horses and armor. They did not own the means to produce warhorses and armor. Which meant that those who could produce advanced goods, armor being among those advanced goods, tended to wind up owning some substantial amount of land after there had been peace for a while, and nobility flowed from that peacefully acquired land.

To the extent that lords were able to convert swordpoint ownership of land into money ownership of warhorses and armor, feudalism was capitalist. To the extent that lords were unable to convert swordpoint ownership of land into money ownership of warhorses and armor, not capitalist and not very feudal either, since the life expectancy of lords was apt to be short. If goods are always transferred at swordpoint, no one is going to produce warhorses and armor. The methods that William the Marshal applied in his youth to acquire warhorses and armor led to a rather chancy life for the nobility.

Land was never the primary means of production, because no one cared all that much about land, but about obtaining warhorses and armor, which land does not spontaneously bring forth. They had to acquire warhorses and armor, advanced goods, through the capitalist economy.

Land was the measure of nobility, and land ownership predominantly acquired at swordpoint. We are always ruled by priests or warriors, and usually something of both. Capitalists did not rule then and they do not rule now. Those who owned land ruled, but they had to provide the necessary conditions for capitalism, or die.
And to the extent that they failed to maintain the necessary conditions for capitalism, they frequently did die.

Land was power. But it was not wealth. And wealth provided the means for power and land. So when feudalism was less chaotic and violent that it frequently was, we saw both wealth and nobility. Wealthy men who were short on nobility would marry their sons and daughters to nobles who were short on wealth.

Capitalists have never ruled, never will rule, never can rule. Any time capitalists have ruled, they have been warrior capitalists, like the pirates of Hong Kong, or the pirates of the Venetian Republic, or the bandits of the East India company. Clive of India was an armed and dangerous corporate accountant arranging corporate mergers, acquisitions, and takeovers between businesses with armed and dangerous boards and armed and dangerous CEOs. His primary skillset was bookkeeping and accounting, though another important skill was keeping gunpowder dry.

If you look at who rules and who fights when discussing capitalism, you are not looking at capitalism. Which is the Marxist sleight of hand when they deny that feudalism was capitalist. They “define” capitalism by telling you “look at this shiny thing over there”. Don’t look at the shiny thing. Look at capitalism.

Wealth got you warhorses and armor. Land was not the measure of wealth, but of nobility and authority. But to keep land, nobility, and authority, needed warhorses and armor. So had to obtain wealth. In stable times there were a lot of people who were wealthy, but lacked land and nobility, and lot of people with land, nobility, power, and authority, who were mighty hard up for wealth, though mighty good with a sword and a horse. Nobility short of wealth tended to marry wealth, and wealth short of nobility tended to marry nobility.

Feudalism is a form of warrior rule, the most naked, direct, and simple form of warrior rule. Rule is irrelevant to whether a society is capitalist or not. What matters is security of property rights, and thus the opportunity to use capital to create more capital. Property rights were not very secure during feudalism, but to the extent that they were insecure it was a problem that the lords had no choice but to attempt to fix, that William the Marshal, the defining exemplar of feudalism and knighthood, did fix. To the extent that property rights were insecure, not only did capitalists not dare become to wealthy, but nobles were short of warhorses and armor, and thus the sons of nobles were unlikely to inherit land and nobility.

Feudalism was warrior rule by warriors with expensive elite equipment. Expensive elite equipment is elaborately transformed goods, and you do not get elaborately transformed goods without capitalism. A suit of armor, a warhorse, and a swordarm like lighting got William the Marshal land, but warhorses and armor failed to spring spontaneously from that land. In order to obtain armor and warhorses without the rather dangerous activity of chopping up other knights, had to foster capitalism on that land.

National Capitalism and Sanctions on Russia

Tuesday, September 20th, 2022

The Global American Empire thought sanctions would ruin Russia. Still think that, though they now think it will take a little longer. Formerly talking weeks, now talking years.

The Russian economy has, according to statistics, been knocked down ten or twenty percent. Seeing a Youtuber chatting to Russians on the ground, sounds roughly accurate. The question is, is it, like the ruble, bouncing back, or going over a cliff? The ruble bounce back came as a shock to the Global American Empire, and they are still in denial, though the denial is getting mighty thin. I rather think that the effect of sanctions on the Russian economy is going to be similar, is already becoming similar.

The effect of the sanctions has been to impose National Capitalism on Russia from outside.

A modest dose of national capitalism worked great for the Trump economy. It spectacularly industrialized South Korea.

National Capitalism defined

National Capitalism is self sufficiency in the organization of people for production, and self sufficiency in the skills and equipment needed for production, that relies on internal free markets and supports local businessmen.

If your people are being organized for production under a businessman subject to a foreign sovereign, that foreign sovereign is going to make him pursue the interests of that sovereign rather than your sovereign, such as exporting his state religion to you, and the interests of that sovereign’s people, not your people.

If the skills and equipment needed for producing one thing are in your country, rather than in a foreign country, production of that thing has large beneficial externalities, making it easier for others of your people to produce other things, creating opportunity and incentive for the talented among your people. These externalities are not part of the profit and loss of the business, so businesses are apt to make decisions to offshore stuff where the offshoring has harmful externalities onshore. And if the business is run by a foreigner subject to a foreign corporate headquarters, he is going to keep critical skills and equipment close to his foreign headquarters. Hence close to a foreign sovereign, and far from your people, who are thus unable to take advantage of those skills and equipment to compete with that business, or start other businesses producing related products.

So how is this working out for Russia

A builder in the middle of a one horse town found that nails and screws were unobtainable or absurdly expensive, because they had formerly been imported from the west. He also found that metals, which had formerly been exported to the west, were now considerably cheaper.

According to Global America Economists, that builder is now going to stop building. And for a little while he did stop building. What he did instead of building was go to China and buy a self contained computer controlled machine that turns metal into nails and screws, and now he is back to building, and also in the business of selling nails and screws.

If millions of Russians are doing something similar, then the short term effect is that the sanctions will have rapidly diminishing impact, and the long term effect will be to create Russian skills and jobs repairing, maintaining, upgrading, and eventually building those machines.

Similarly when the McDonalds franchise pulled out of Russia. The former franchisees organized a new franchise, and their burger joints ripped down their McDonald’s signs and put up the new signs. They also renamed, and slightly altered, their menu. Which means that Russians are a whole lot less likely to be forced to watch black people, mixed race couples, transexuals, and faggots, eating burgers on television.

Decline in GDP per capita

Thursday, August 11th, 2022

Your grandfathers could enjoy a house, a garden, children, and stay at home wife looking after the kids. Their grandchildren are dual income no kids, but live in a little box with Ikea furniture Not only did we land on the moon in the 1970s, we had nicer cars, nicer toilets, and better clothes washing machines, though today we have nicer phones and computers.

But Americans can no longer make the cpus and ram for those computers, which come from Taiwan and South Korea, and our war planes cannot fly as far, as high and as fast as the warplanes of the seventies.

The US and Europe have thrown many billions at the collapse of chip technology problem, and repeatedly had the leading chipmakers in the US empire come here and to Europe to give us their technology, and they attempt to do so, and are strangely unable to do so. Their smarties cannot cross the IQ gap between themselves and the normies running our chip foundries.

“China’s top chipmaker SMIC has successfully advanced its chip manufacturing by two generations and is now exporting 7nm chips, despite US sanctions attempting to block its rise, a reverse engineering analysis from techinsights on its products has found.” This puts China four years behind the current state of the art. Close enough to support modern information epoch warfare weaponry, while the US is utterly dependent upon Taiwan and South Korea.

Compare the old malls with the new shopping centers. These are places built for poor people. I recently revisited San Francisco, having been away for a decade or so. That the streets are full of human shit and crime is governmental failure caused by browns in government, but that the buildings need some maintenance and a coat of paint indicates everyone is getting poorer.

I recently visited a high end jewelry shop. It was a shop built to serve people poorer than the people of my youth. Prosperous people demand nicer surroundings. The ambience was a lot more Walmart than the places people shopped long ago. Compare our shopping centers with the old malls. Obviously built to serve poor people.

“The mall was big and beautiful and comfortable and even a little overwhelming. All of the wide passages, lined by stores, were multi-level – two in most places, but three at the food court and the movie theater. Everything there was new and gleaming and clean and safe, and automatic sliding doors and escalators were all around the place. There were walkways suspended in midair over wide indoor plazas and courtyards.”

“The decline of the mall coincided not only with the rise of the internet, but also with the rise in earnest of Walmart and other big-box warehouse stores. There are no skate parks or indoor waterfalls at Walmart. The increasingly impoverished remnants of what was once our middle class shuffle in to buy cheap junk”

Biden tells us everyone is getting more prosperous. That lie comes from the same people who are denying space travel and arguing for flat earth, and is as plausible as that the earth is flat. I can see that ordinary people are poorer, for middle class is a wife, a house, a garden, and children.

“Don’t you know that it’s 2015? That means gay marriage! Women in combat! Even the first rumblings of the normalization of pedophilia! Say what you will about the Classical Marxists of the past – Lenin, Stalin, Mao – but they built massive hydroelectric dams, intercontinental missiles, skyscrapers, and atom bombs. Yet in The Current Year, they and their grand projects have been replaced by the Cultural Marxism of Gramsci, Marcuse, and Alinsky. To the leftists of The Current Year, global warming means we can’t build big impressive things anymore, so now we simply declare the cutting edge to be increasingly degenerate sexual and cultural practices. There is nothing of The Future in The Current Year – any caveman could have smoked dope, had weird sex, or dressed up like a girl.”

A holiness spiral peaks suddenly, and then it is over. Sometimes no one survives, but usually it is abruptly terminated by a Hitler or a Stalin before it gets to that point.

A dark age sets in slowly, at about one percent a year for centuries, From time to time there are dramatic crises, and even turnarounds, but these make little difference to the long term trend. We have a holiness spiral and a dark age setting in.

Stagflation is here

Thursday, May 19th, 2022

Walmart reports it is selling less stuff, and is going to have to raise prices further.

If it is selling less stuff, everyone is buying less stuff. Meaning everyone is poorer, living standards are falling

If everyone is buying less stuff, and yet stuff is still in short supply, then production of value is falling. As has been obvious from holding a finger to the wind for some time, but this is a concrete confirmation. Official cpi and gdp statistics have, as I have said before, long been fraudulent and are approaching Soviet levels of mendacity.

I attribute the decline to three main factors

1. Unstable price levels foul up business planning. Your books become meaningless.

2. Unstable price levels disrupt relationships between businesses. Things have to be renegotiated.

3. ESG. Environmental, Social, and Governance. The state is weaponizing your accounting department to impose holiness on you. This accelerates the existing disruption caused by the Human Resources Department and women in the workforce.

Accelerating levels of holiness are characteristic of a left singularity, which usually blows up pretty fast, and then it is over, and your society very likely recovers. Sometimes it does not.

We have long had technological decline in an increasing number of fields. Now we have economic decline. This may pass in time, probably will pass, but long term economic decline is a possibility, in which case we may heading into a dark age. Dark ages set in slowly, and last for a long time. I think this merely the effects of the holiness spiral, and after the holiness spiral self destructs, technological and economic progress will resume. Which one it is, however, will not be apparent for some considerable time. Depends on how the left singularity ends. Deng fixed China, but Xi is returning to the Marxist ideology that Deng theoretically left in place, while ignoring in actual practice.

Money has functions four

Thursday, April 21st, 2022

A medium, a measure, a standard, a store.

1. Medium of exchange

The US centered financial system has become less and less functional for exchange, with international bank transfers becoming ever more dangerous and difficult. Cutting Russia out of SWIFT was a huge additional blow to this functionality. Countries now need to keep some foreign reserves in the Yuan or the Ruble, in order to enable transactions, and are starting to do so. Israel, among others, has added a tiny amount of Yuan to its foreign reserves, and correspondingly decreased its dollar and EU holdings by a tiny amount.

I was expecting far bigger moves, far faster, but it begins. Slower than I expected. Markets can remain irrational longer than you can remain solvent, but they correct eventually.

In the commodity markets, someone who is making preparations and spending money with the intent of delivering a commodity, such as ingots of copper, sells a on the commodity exchange a promise to deliver, in return for a promise to pay a certain price, thus he knows when he is spending money to dig and smelt the copper, how much he is going to be paid. Similarly, someone who is preparing to build something, for which he will need a great deal of copper, buys a promise of delivery at a certain price, and these promises are traded on the commodity exchanges. When the time comes for both parties to fulfill the contract, the supplier delivers the commodity to somewhere ten thousand miles away from the commodity exchange, and gets paid the agreed sum by a speculator on the commodity exchange, and the buyer pays a different agreed sum to a different speculator on the commodity exchange. This makes the entries on both parties books meaningful, connects the paper book keeping to reality, and ensures your books accurately depict activities that will deliver a stream of fiat money.

Reality now is that commodity exchanges are defaulting on contracts right, left, and sideways.

“Sorry, sanctions” says the commodity speculator as he pockets your money.

“Also Anthropogenic Climate Change, Covid, Environmental, Social, and Governance” he says as he pockets some more. We are seeing a collapse of trust and trustworthiness among the elite operating the financial system.

In order to move goods over distance, you need financial system you can trust. And lately the elites operating the financial system have been acting in a conspicuously untrustworthy fashion.

“You contracted for delivery of urea, and it was not delivered, and in consequence your corn crop failed? Sorry. Can’t be helped. Environmental, Social, and Governance.”

To move goods over distance, particularly commodity goods with fluctuating prices, we are going to need a blockchain, an immutable append only data structure. But to connect a blockchain to physical things, like land or urea deliveries, would require a stationary bandit who enforces property rights witnessed by a blockchain, so that he can tax those property rights and so that his military logistics works. Need the social technology, as well as the software.

2. A measure of value

You look at dollar prices to see if something is too expensive or a good buy, but with rapid inflation your past experience and your intuition is worthless.

The US dollar has become disastrously less useful as a measure of value, and the physical shortages you are seeing are a reflection of this.

As I posted previously: A business is built on its books, and when you have rapid inflation, the books are meaningless. It is like trying to build a house using rubber tape measures and silly putty set squares. Normality bias is built into the way a business operates, so they get hit first and hardest when the seigniorage tax approaches and exceeds the Laffer limit.

3. A standard of value

You contract in dollars for future payments, as when buying real estate with a fixed interest mortgage.

Mortgage rates are rising rapidly, but are well below inflation, and so far, are rising substantially slower than inflation. So real estate at ridiculously high prices with a high interest mortgage is likely a very good buy.

The financial risk of buying real estate at a high price with a high fixed interest rate, is that the government will successfully check inflation. Last time the government successfully checked inflation was the Reagan era, which required a long period of real interest rates that reflected real inflation. If the government has the will to raise interest rates to match real inflation, and if it has the financial capacity to do that without defaulting on the national debt, then real estate might well be a bad buy. What are the chances that the government has the will and financial capacity to do what had to be done last time?

The big risk with real estate, as a great many wealthy people in blue state America are discovering right now, is not that government might suddenly discover the will and capability to halt inflation. It is that government might well lack the will and capability to defend your property rights. All those lily white people in lily white neighborhoods full of three million dollar mansions put out their socially required Black Lives Matter signs, and voted to defund the police to prove that they were good persons, and, surprise surprise …

4. A store of value

If you store value in US dollars, you are paying a very high seigniorage tax.

Hodling time

Tuesday, April 12th, 2022

As investment advice, this post represents rumor, speculation, and incomplete information. Keep an eye on the bad weather I speak of, and make your own judgment about the storm. I have lost a great deal of money, and made a great deal of money. Future performance may not reflect past performance.

I am long on land, stocks, and crypto currency. Will soon no longer be long on stocks.

We are now a time of high inflation, though the CPI and general public are still in stubborn denial. To accurately assess real inflation, look at the prices of spot traded base commodities: Oil, natural gas, copper, silver (not gold, it is demonetizing) wheat, soybeans, corn, coffee, cotton, rice, cocoa, and the used vehicle index. The apartments for rent index is not useful, as it differs radically in different locations as order and safety collapse in some locations far more than in others.

Commodity prices are soaring, and they are all soaring in roughly the same way at the same time

It looks like the underlying inflation rate for commodities is around fifty to a hundred percent. Commodities are the primary leading indicator for inflation. List prices are a lagging indicator, reflecting the inherent detachment from reality of book keeping denominated in fiat currency.

Last time we had high inflation, stocks were an absolutely terrible investment. Once Reagan checked inflation, they were a terrific investment.

It is difficult to operate a business during rapid inflation. A business is built on its books, and when you have rapid inflation, the books are meaningless. It is like trying to build a house using rubber tape measures and silly putty set squares. This is another issue that future crypto currency wallets must address.

Businesses were an accounting fiction before they were a legal fiction, and they still are primarily an accounting fiction imagined into reality, rather than a legal fiction pretended by the state.

Normality bias is built into the way a business operates, so they get hit first and hardest when the seigniorage tax approaches and exceeds the Laffer limit.

Last time we had high inflation, you should have invested in gold. I was late into gold.

This time, crypto currency. Gold is being spontaneously demonetized as silver was. In a time short as measured in decades, will fall to its value as an industrial metal, as silver did. Though if the grid goes down and you are stuck in an area where the grid has gone down and stayed down, and have no plans to move, being nestled with like minded and like armed people, gold will be mighty handy. On the other hand, the situation may well arrive when it is move or die, in which case gold will be useless, and crypto currency mighty handy.

But which crypto currency?

The nature of the Cathedral is to assimilate, rather than to intentionally destroy, though they usually wind up unintentionally destroying. And they are assimilating crypto currency, or attempting to, for example WBTC, an enemy institution run by people who hate us and intend us harm.They are assimilating through KYC, with the result that the KYC exchanges are suffering a downturn, which will eventually be fatal. The KYC exchanges will die with fiat.

KYC exchanges are, and will remain, the path from fiat to bitcoin, but in order for this to work for our enemies, they have to demonetize “dirty” bitcoins. Some of our enemies have made a start on this, and I am becoming very worried, but Shaniqua is in charge, the game plan remains assimilation. The threat looms, but is likely to go on quietly looming for some time.

Because miners are few, well known, and immobile, the blood diamonds attack (demonetization of “dirty” bitcoins) is likely to work. I am writing code for preparations for this eventuality, for the use of crypto currency in a considerably more hostile environment, but my preparations are very far from ready. For the moment, safe harbor from the blood diamonds attack is Monero. Not moving into Monero yet, but getting ready to jump. Probably going to jump soon, depending on how the wind blows. Some people are jumping already, and this may be behind the recent rise in Monero. If you jump late, you will be buying Monero at a higher price, but if you jump early, you are acting on rumor, speculation, and incomplete information, which is always bad.

When allocating capital to its highest and best use it is generally wiser to jump in late, and miss out of some of the appreciation that you wisely anticipated, rather than to jump in early and be totally wrong.

Monero faces even worse scaling problems than bitcoin. It is not going to be the one. The one will have the capacity to scale to being a world currency, and will have its privacy system and most of its contract system in the lightning layer, not in the primary blockchain. Monero has inherent problems implementing a contract system and a lightning layer. But Monero may well be a safe harbor in the coming storm.

The one will have a sophisticated and flexible lightning contract layer, and simple, inflexible, and seldom changing contract system in its primary layer.

The bitcoin lightning layer is theory capable of being a better shield than Monero, but we will have to see how things develop. It does not seem adequately weaponized to resist the blood diamonds attack, though it can be and should be.

Weaponization means you don’t just have to worry about individual bad apples and screwups doing bad things out of self interest or incompetence, but brigading, entire highly organized groups saying “we are your side, we are here to help”, with the intention of doing you harm, even at their own expense, as for example WBTC.

The chief flaw in all existing crypto currencies, including Monero and Grin, is that the metadata about a transaction goes through outside your wallet, and, of course, gets integrated with blockchain analysis data. Which blockchain analysis causes considerably less damage to fungibility in Monero and Grin, but does not do zero damage. We need a system where the social net through which you transact, and the reputations of business and financial institutions, are inside the wallet. The wallet has to be a chat and messaging system, in which messages can carry money, but do not need to. So when you pay someone, your data about the transaction and his data about the transaction are rendered immutable and linked to each other, but linked only by hashes existing in your wallet and his wallet, which therefore has to be frequently backed up, and therefore can contain no secret keys, just the information about how the secret keys are derived from the master secret. It should be possible to enter additional master secrets and secret keys, but they should be used once, then the wallet immediately discards them.

This means that the wallet is potentially capable of being a business book, in which which case we will eventually have to separate the value of transaction at the time it was made from the current value of the currency in which it was made. Bitpay does this by representing everything in American dollars at the time of transaction and Bitcoin beach wallet gives you your choice of fiat currency to represent the value of a transaction, a solution that with rapid inflation now, the likelihood of hyperinflation looming, and the role of the dollar as an international medium of exchange, measure of value, standard of value, and store of value collapsing, is no longer satisfactory and likely to rapidly become less satisfactory. Some people are proposing a commodity index as a replacement for the measure and standard of value roles of money, separating those two roles from the medium and store roles of money. Thus one should have the option of representing transactions and making promises of transactions in terms of the commodity value that the crypto currency had at the time of the transaction.

If we rely upon the existing eco system of networks, it is likely to be applied against us as it was against Russia. All existing networks will be weaponized, resulting in fragmentation. The internet is becoming the splinternet. When blood diamonds attack comes through, lightning servers that do not comply are going to lose their domain names. So, we have to have a reputation system where a server’s reputation is attached to a public key, whose master secret is not hot anywhere, and similarly, a proof of stake has to function as a replacement for the corporate form, or else we get what happened to bitpay

Bitpay did great work of immense value to all bitcoiners by making it easy for a business to accept payment in bitcoin. Unfortunately it organized itself as a limited liability corporation, and the state became pissed when people used bitcoin to do what bitcoin was designed to do, and the boot of the state is now on Bitpay’s back.

Crypto currency corporations, to resist the kind of pressure that crippled Bitpay’s functionality, need to be organized as sovereign corporations, with a proof of stake blockchain in place of shares. And they need to support a lightning wallet with a lightning wallet style transaction that exchanges their shares for lightning layer bitcoin off chain.

We will likely see what happened to SWIFT – as existing networks become weaponized against privacy and freedom, demand for alternatives will rise. There has been a big rise in bitcoin-ruble transactions.

Russia was utterly unprepared for being thrown out of SWIFT, and still has not organized any satisfactory replacement, but as people and governments found ad hoc, messy, complicated, and unsatisfactory workarounds, this is having an effect less and less damaging for Russia and Russians, and more and more damaging for the US dollar and the international banking system. The ruble has now recovered against the US dollar, while the US dollar is falling like a stone again commodities and losing primacy as the currency in which goods and services are valued internationally.

If all goes well, by the time that existing networks are fully weaponized against crypto currency and blockchain based technologies, we will manage to stumble our way to bringing up a counter system of networks, and something similar will happen. By weaponizing the network, the state will bring about splinternet, and thus makes its networks less useful, as it has made SWIFT less useful.

Sanctions and crypto currency

Tuesday, March 29th, 2022

For a long time it has been becoming more and more difficult and dangerous to perform international transactions in fiat money. It has suddenly become a lot more difficult and dangerous.

Crypto currency is replacing fiat currency. The breakdown of trust and trustworthiness means that there is no alternative. That is why crypto currency scaling problems are now biting hard, and will soon be biting a great deal harder.

Bankers have an incentive to create unsustainable debt bubbles. To prevent this, need to pop term transformation bubbles early and often, and have draconian consequences for bankers that fail. But, because bankers have a lot of pull, and because sovereigns tend to lose control of their bureaucracy, the opposite policy tends to be followed.

Popping a term transformation bubble is painful and hurts a lot of people, primarily powerful and influential people, so the problem keeps getting kicked down the road until it gets too big to kick.

That the Rothschilds were out of power was suddenly revealed to everyone when their too-big-to-kick-any-further bubble popped in 1931. Which is why today all the Soros shills say “Rothschilds, Rothschilds, Rothschilds, pay no attention to the man behind the curtain”

In the great depression, and postwar, the US debt bubble was largely nationalized. Additional nationalizations of debt bubbles left outside have occurred since then, most dramatically mortgage backed securities following the great minority mortgage meltdown.

People keep investing in unsustainable debt bubbles, expecting them to be nationalized when problems happen.

But even nationalization cannot kick the bubble down the road forever, and the United States dollar is reaching the end of the road.

Wartime controls will both accelerate its end, and simultaneously extend the pretense that everything is fine and normal, as it is slowly and shockingly discovered that everything is not fine and normal.

War makes the end both faster and also considerably slower and more painful. Lots of proposals are floating around to make de-facto nationalization even more de-jure than it already is. The likely result of such measures is that in the end official reality will be completely fine while you are living in the street and eating bugs.

In the Chinese Evergrande crisis, international investors were mighty shocked when the theoretically communist Chinese government, in a surprising display of commitment to Hong Kong capitalism, cheerfully allowed Evergrande’s debt to pop. The ordinary man who put a down payment on an apartment is now at the head of the line, and the international investors at the back of the line. And if you are at the back of the line, the obligations that Evergrande owes you are likely to worthless. In similar situations, the theoretically democratic and theoretically capitalist American government seldom allows the bubble to pop, and if it does pop, the ordinary man is at the back of the line, and the international investor at the front of the line. We have an ever growing pile of unpopped zombie bubbles denominated in American dollars. Biden promises to address this problem by soaking the rich, while the problem exists in large part because certain rich people have far too much state and quasi state influence and power.

Those rich are not going to be soaked. The productive rich, such as Musk, will be soaked, but no amount of soaking of anyone is likely to make much of a dent in the problem. It became far too big to be solved by any amount of soaking of anyone long before it became far too big to continue kicking it down the road.

It is impractical for Russians to receive payment in gold from an unfriendly country, or even from a friendly country with high levels of elite defection, because the gold would be intercepted. And these days every major trading country has high levels of elite defection, particularly China.

And impractical for Russians to receive payment in Euros or dollars, because the Euros or dollars would be intercepted on the ground of sanctions.

Thus the Putin policy simply reflects what is in the individual interests of individual businessmen who are simply trying to do business and are horrified that war is in the way.

Every businessman in every country has one foot in the same boat, since every businessman doing business internationally is evading sanctions, or might well be evading sanctions unknowingly, because there is no clear way of complying with sanctions, or doing business with someone who is evading sanctions, or likely to be accused of attempting to evade sanctions by someone who wants to seize money in transit.

This is making it very difficult to do business internationally.

I would like to say “crypto currency to the rescue”, but …

Bitcoin and Monero are both hitting their scaling limits hard, even though the Monero blockchain is nowhere near as large as the bitcoin blockchain.

Neither data structure was designed to handle enormous sizes, and the Monero data structure handles enormous sizes considerably worse even than the Bitcoin data structure.

There is no way of knowing the bitcoin current mutable state (the set of unspent transaction outputs, the set of public keys that govern non zero value on the blockchain) other than grinding through the entire immutable append only data structure from the beginning without a single error or failure, and in Monero, there is in a sense no way of knowing the current state at all, which makes it very possible that due to subtle bugs or coordinated fraud (brigading), Monero is being inflated under the covers.

To scale, you have to have a data structure that gracefully handles some small part of the data getting lost, corrupted, or incorrectly processed. And we just don’t have that. It has long been known how to do that, but it just has not been done.

And we are going to need a representation of the immutable append only data structure that gracefully extends over several disks, and if one disk fails, we only lose and only have to restore one disk’s worth of data.

If you have a single corruption or data loss issue in the bitcoin blockchain, you have to re-index, which takes a very long time. And if you have a single corruption or data loss issue in the Monero blockchain, you have to re-download the entire blockchain from the beginning, because the Monero blockchain is all one gigantic memory mapped file. Which takes a very long time. And as the blockchains get larger and larger, data corruption necessarily happens more and more often.

Once a single memory mapped file gets big enough, it is always going to have data corruption and data loss issues. Monero does have all sorts of measures to mostly accommodate this problem most of the time, but as the blockchain gets larger and larger, they take longer and longer, and failures that cannot be accommodated happen more and more often.