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Cryptocurrency: Economic Morons Declare Debasement Is Moral
by grarpamp 26 Nov '21

26 Nov '21

https://mises.org/wire/joe-weisenthal-thinks-debasing-dollar-moral-thing-do Joe Weisenthal Thinks Debasing The Dollar Is The Moral Thing To Do https://www.bobmurphyshow.com/episodes/ep-26-capital-and-interest-in-the-au… https://www.bobmurphyshow.com/episodes/ep-28-capital-and-interest-in-the-au… https://www.bobmurphyshow.com/episodes/ep-31-capital-and-interest-in-the-au… https://twitter.com/TheStalwart/status/1460636183860588547 https://twitter.com/BobMurphyEcon/status/1460725467992973316 https://mises.org/library/human-action-0/html/pp/804 Joe Weisenthal is an editor and host at Bloomberg who has recently been using his large Twitter platform to cast stones at the inflation hawks. In one recent thread, Weisenthal mocked the people worried about the falling purchasing power of the US dollar, and claimed in fact that it would be immoral for currency to maintain its value over time. As we’ll see, although Weisenthal’s thought experiment of a time traveler is a bit whimsical, it provides a good opportunity for us to explore the underlying economics. The whole episode underscores, once again, why the Austrian school provides the public with a beacon of light amid the confusion of our financial punditry. Weisenthal’s Time Traveler Below is the original tweet, which is largely self-explanatory, though interested readers can see me grappling with Weisenthal by clicking here. In context, Weisenthal (and Adam Singer) are poking fun at the Ron Paul–types who are upset at the steady decline in the dollar’s purchasing power since the Fed was formed in late 1913. Weisenthal thinks it is absurd to expect that actual currency would maintain its market value over the course of a century. Why, what would such a “hoarder” have done to benefit society all that while? Shrinking the Time Scale To cut to the chase, Weisenthal is completely mistaken: there was nothing immoral about the classical gold standard and its maintenance of the dollar’s purchasing power over long stretches. But it will be easier to pinpoint the flaw in Weisenthal’s thinking if we first consider a simple story. Suppose Joey is a teenager who cuts lawns for extra income and he typically makes $25 a weekend. Joey wants to buy a $300 Xbox, so he saves his weekly lawn-mowing money under his mattress. After three months, Joey takes the saved $300 in cash to the mall and buys the coveted electronics. Does Joe Weisenthal have a problem with this scenario? Did the market economy function immorally by allowing Joey to transfer his purchasing power from the start of the summer to the end of the summer? Was Joey supposed to have done something in addition to cutting lawns to earn the ability to defer his potential consumption through time? I trust Weisenthal would not object to Joey saving up his currency over the summer. But then, what is the principled difference between Joey’s three-month deferral and Weisenthal’s time traveler who executed a hundred-year consumption deferral? Present Goods Trade at a Premium for Future Goods In fact, not only should a time traveler not be penalized for deferring consumption a century, he should be actively rewarded. This is because present goods are more valuable than future goods. (Note that we are here getting into some very technical issues. The interested reader can check out my three-part podcast series—one, two, and three—to hear the intricate details of interest theory in the Austrian tradition.) So to go back to the original tweets, if a guy in 1921 has two quarters in his pocket, and that would be enough for him to buy a delicious hamburger, then for his willingness to effectively trade away his 1921 hamburger for a burger to be delivered in 2021, the guy should at least get to trade at par. And in fact, he would (normally) be able to obtain a promise for more than one burger in the future, since the former are more valued. (This is no more mysterious than one present burger trading for more than one present hot dog.) It’s easy to understand why, subjectively, people would need to be promised a greater number of goods in the future to give up potentially consuming their goods today. But how, mechanically, can the borrowers deliver on these promises? How is it possible, technologically speaking, to transform 100 units of present goods into (say) 150 units of future goods? The answer is that the longer we are willing to wait, generally speaking, the greater physical output we can obtain for a given amount of today’s inputs. Eugen von Böhm-Bawerk famously referred to the superior physical productivity of wisely chosen, more roundabout processes. For example, if a man is in the woods and wants to get water from a stream into his nearby cabin, he has different techniques he could use. A very fast and direct method is to cup his hands and run back and forth from the stream to his cabin. This delivers some water to his cabin very quickly, but the yield—measured in gallons of water per hour of his labor—is also very low. An intermediate method would be to hollow out two coconuts to make little buckets, and then go back and forth armed with the newly created capital goods. This would take longer to get the initial water to his cabin, but once the process is underway, it would deliver far more gallons per hour of invested labor—even including the time spent constructing the buckets. Finally, the man might take several months digging a small path from the stream to his cabin, so that the water flowed directly to him. Once completed, his renovations would be extremely productive if we measure in terms of water volume per hour of his labor time. And so we see society would be willing and able to reward Weisenthal’s hypothetical time traveler for earning $100 in 1921 and then postponing his consumption for a century. The real resources that would have gone into satisfying him in 1921 would be freed up to be invested in longer processes, which had a higher physical yield. To put it simply, it makes perfect sense that a 1921 hamburger would trade on the forward market for several 2021 hamburgers. Bonds versus Cash We can really see the weakness in Weisenthal’s analysis if we suppose the time traveler took his original cash and deposited it into a savings account at the bank. Would it be immoral for a bank account to have $100 in 1921, and to grow to more than that amount by 2021? Or for another example, what if the time traveler from 1921 initially bought a very long-term bond that would come due in 2021? The time traveler jams the bond into his pocket, activates the time machine, and shows up at Weisenthal’s doorstep. He asks Joe to help him cash his matured bond (and working at Bloomberg, Weisenthal is just the guy). The time traveler is pleased to discover that the nominal interest he earned on the hundred-year bond is just enough to have maintained his purchasing power, since goods are much more expensive than the traveler is used to seeing. Has the market economy behaved immorally by allowing such a transaction to occur? In principle, the same type of intertemporal trade occurs if people invest their savings not in bank account balances or bonds, but instead in the accumulation of actual cash. Even here, the initial drop in consumption frees up real resources that can be channeled into the production of a greater amount of future goods. As Ludwig von Mises explains in Human Action: If an individual employs a sum of money not for consumption but for the purchase of factors of production, saving is directly turned into capital accumulation. If the individual saver employs his additional savings for increasing his cash holding because this is in his eyes the most advantageous mode of using them, he brings about a tendency toward a fall in commodity prices and a rise in the monetary unit's purchasing power. If we assume that the supply of money in the market system does not change, this conduct on the part of the saver will not directly influence the accumulation of capital and its employment for an expansion of production. The effect of our saver's saving, i.e., the surplus of goods produced over goods consumed, does not disappear on account of his hoarding. The prices of capital goods do not rise to the height they would have attained in the absence of such hoarding. But the fact that more capital goods are available is not affected by the striving of a number of people to increase their cash holdings. If nobody employs the goods—the nonconsumption of which brought about the additional saving—for an expansion of his consumptive spending, they remain as an increment in the amount of capital goods available, whatever their prices may be. Those two processes—increased cash holding of some people and increased capital accumulation—take place side by side. It is a fascinating topic to ponder the ideal money (if such a concept makes sense) and whether its purchasing power would fall, rise, or remain steady over long periods. What we can say for certain is that rapid and unpredictable changes are undesirable, because a wildly fluctuating money defeats the effectiveness of monetary calculation, which is one of the underpinnings of civilization itself. To wit, double-entry bookkeeping only works when the money units of revenues and costs are comparable. Conclusion Contrary to Joe Weisenthal’s musings, there is nothing immoral if a money retains its purchasing power over long stretches. In general, when people channel their savings into conventional vehicles (such as bank accounts or bonds), this frees up real resources that can be used to yield a greater physical amount of output down the road. In principle, holding currency could be merely a different financial asset for achieving the same purpose.

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MAGA-world is lousy with Russian agents.
by professor rat 26 Nov '21

26 Nov '21

description of the significance of Rinat Akhmetov https://twitter.com/emptywheel/status/1464282355980541953

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Assange deadenders should just own the Russian stuff rather than spewing conspiracy theories.
by professor rat 26 Nov '21

26 Nov '21

Update on another journalist-fraud-criminal piece-of-GOP-shit https://twitter.com/emptywheel?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwg…

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Longtime Trump aide Katrina Pierson, accused of being “deeply involved in the violent & unlawful acts of Jan 6.”
by professor rat 26 Nov '21

26 Nov '21

Whose a rat? https://www.palmerreport.com/analysis/roger-stone-is-already-throwing-peopl… Link provided as is and no endorsement of any site politics is implied.

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Cryptocurrency: Socialism = Fail... Then, Now, Always
by grarpamp 26 Nov '21

26 Nov '21

https://schiffgold.com/commentaries/the-pilgrims-did-socialism-and-died-try… The Pilgrims Did Socialism And Died Trying Authored by Michael Maharrey via SchiffGold.com, When I was a kid, we used to say some things only “sound good on paper.” In other words, they seem like good plans, but there is no way they’re going to work in the real world. That’s socialism in a nutshell. The Pilgrims found this out the hard way during their first couple of years in North America. Socialism really does sound good on paper though, right? We’re all going to own everything together and take care of each other. “From each according to his ability, to each according to his needs.“ It sounds so nice. And we all want to be nice, right? People are emotionally drawn to socialism because it sounds nice. It sounds fair. It sounds good. Except when people start dying. Do you know what’s not nice? Corpses. That’s exactly what happened when the Pilgrims took a stab at socialism. Most Americans don’t know that the Plymouth colony was originally an experiment in socialist utopianism and were it not for a complete 180 a couple of years in, we probably wouldn’t have enjoyed the bountiful feasts most of us will indulge in today. There would have been no Thanksgiving because there would have been nobody left to give thanks. When the Pilgrims arrived in Massachusetts on November 11, 1620, they placed all their food and provisions in a “common store.” These folks were forward thinkers. They didn’t even have Marx’s scribblings to appeal to. They set things up on the socialist principle of, “From each according to his ability, to each according to his need.” Well, things got off to a bad start. Conditions were miserable, as William Bradford described them. That which was most sad and lamentable was, that in two or three months time half of their company died, especially in January and February, being the depth of winter, and wanting houses and other comforts; being infected with the scurvy and other diseases, so as there died sometimes two or three of a day, in the aforesaid time; that of 100 and odd persons, scarce 50 remained.” Now, the Pilgrim’s initial struggles didn’t have anything to do with socialism. They just had the misfortune of landing in Massachusetts at the onset of winter. Anyway, the following fall, the Pilgrims harvested their first crops and they all went into the common store. Now, wasn’t that nice? No greed. Nobody getting any more than they should. Of course, nobody was getting much of anything at all – but still – they had to feel good about themselves, right? So, in November the ship Fortune arrived with more than 30 new settlers, mostly young men. More manpower was welcome, but according to accounts, they brought “not so much as a bisket-cake” with them. The future looked bleak as food supplies ran out and the “planned socialist” community faced starvation yet again. The following year, the harvest was poor in spite of the added manpower. Nevertheless, the pilgrims again put the meager harvest in the common store. Because, you know, it’s going to work this time! It didn’t. That winter, they starved. The colonists were learning economics the hard way. Richard Grant in The Incredible Bread Machine wrote: “For two years the Pilgrims faithfully practiced communal ownership of the means of production. And for two years nearly starved to death, rationed at times to “but a quarter of a pound of bread a day to each person.” Governor Bradford wrote that “famine must still ensue the next year also if not some way prevented.” He described how the colonists finally decided to introduce private property: [The colonists] began to think how they might raise as much corn as they could, and obtain a better crop than they had done, that they might not still thus languish in misery. [In 1623] after much debate of things, the Gov. (with the advice of the chiefest amongst them) gave way that they should set down every man for his own … and to trust themselves … so assigned to every family a parcel of land. This had very good success; for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means the Gov. or any other could use, … and gave far better content. The women now went willingly into the field, and took their little-ones with them to set corn, which before would allege weakness, and inability; whom to have compelled would have been thought great tyranny and oppression.” Reflecting on the experience of the previous two years, Bradford goes on to describe the folly of communal ownership: “The experience that was had in this common course and condition, tried sundry years, and that amongst godly and sober men, may well evince the vanity of that conceit of Platosand other ancients, applauded by some of later times; — that the taking away of property, and bringing in community into a common wealth would make them happy and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed much confusion and discontent, and retard much employment that would have been to their benefit and comfort. For the young-men that were most able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children, without any recompense. The strong, or man of parts, had no more indivision of victuals and cloths, than he that was weak and not able to do a quarter the other could; this was thought injustice…” Woah! Some people resented doing all the work? They didn’t work as hard when they knew they weren’t going to directly benefit? Shocking. Actually, it’s not shocking at all. It’s human nature. And we all know it. Now, we can lament the fact. We can say it shouldn’t be that way. We can finger-point and talk about greed. We can get all holier-than-thou and say we wouldn’t act that way (in other words lie). But people will still be people. Here’s a harsh truth: good intentions and feel-good policies can’t trump basic economics. You can dream unicorns and lollipops all day, but it won’t change reality. Scarcity. Human behavior. Incentives. The experience of the Pilgrims vividly demonstrates basic economic principles. Their good intentions could not overpower the cold hard realities of economic principles. They never have. They never will.

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Cryptographers are not happy with how you’re using the word “crypto”
by zeynepaydogan 26 Nov '21

26 Nov '21

https://www.theguardian.com/technology/2021/nov/18/crypto-cryptocurrency-cr…

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Crypto-fascism into Africa
by professor rat 26 Nov '21

26 Nov '21

The warning signs are there for genocide in Ethiopia https://www.theguardian.com/commentisfree/2021/nov/26/ethiopia-genocide-war… Cardano plans to build national ID blockchain system in Ethiopia https://finance.yahoo.com › news › cardano-plans-build… 20 Aug 2021 — Cardano has been assisting Ethiopia’s Ministry of Education with the goal of building a blockchain-based universal student credentialing system

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Prozac for Gramps collection drive
by professor rat 26 Nov '21

26 Nov '21

Please give generously, in this spirit, even though Gramps is criminal garbage. Donations pour in for man who served 43 years in prison for a crime he didn't commit KSL.com 3 hours ago Thousands of people have raised more than $1 million for a man who served 43 years in prison for a crime he didn't commit CNN 11 hours ago View Full Coverage

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Low-Cost Antidepressant Fluvoxamine Saves Lives of COVID-19 Patients – “Powerful Weapon Against the Virus”
by jim bell 26 Nov '21

26 Nov '21

https://scitechdaily.com/low-cost-antidepressant-fluvoxamine-saves-lives-of…

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Thai Monarchy invited to subvert itself up-the-arse
by professor rat 26 Nov '21

26 Nov '21

A push in Thailand to boost gross domestic product (GPD) by targeting crypto digital nomads is coming closer to fruition according to local media. The Tourism Authority of Thailand (TAT) has been looking into launching its own utility token called TAT Coin since September as part of a planned “cryptourism” campaign. The initiative aims to attract crypto wealthy digital nomads and the TAT has been in discussions with the Stock Exchange of Thailand regarding TAT Coin’s issuance. https://cointelegraph.com/news/thai-lawmakers-urged-to-approve-tourism-cryp… Never mind all these wealthy and powerful aristocrats dotted around the world. I'm reliably informed by respected GovCorp theorists ( Like Karl Marx & Batshit Crazy ) they don't exist. Just close your eyes and go " LaLA LA LA! " real loud. That's the spirit.

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