Gold collapsing. Bitcoin UP.

[lunar]

This is a great little overview map of the world currency crisis. (looks like some data is missing esp Africa?)
The Fed is dammed if they do and dammed if they don't it seems. Good luck with that Yellen.

This leads to vast amounts of US treasuries being liquidated in order to protect local currencies.(esp China) Thus reversing QE (quantitative tightening). Brazil apparently has 250B... just waiting for them to hit sell.

http://www.zerohedge.com/news/2015-09-24/currency-carnage-global-fx-heatmap-bloodbath

 

[cypherdoc]

escalator up, elevator down:

 

[cypherdoc]

heh, heh. t'was better not to be greedy. i'll get another chance to reload.

btw, the fact that both gold and Bitcoin are starting to rally indicates to me that stocks are indeed in trouble in case i hadn't previously convinced you:

 

[cypherdoc]

this can't be good:

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/09/CAT retail sales 1_0.jpg

 

[Peter R]

So I've been reading Graeber (Debt: The First 5,000 Years) and I found the way he ended the book quite interesting.

He doesn't make any concrete proposals until the very last two pages, where he proposes a "Biblical-style Jubilee" that would affect both consumer and international debt. He says that not only would this relieve so much human suffering, but it would remind us that "money is not ineffable, that paying one's debt is not the essence of morality, that all these things are human arrangements and that if democracy is to mean anything, it is the ability to all agree to arrange things in a different way."

It don't think creditors would ever agree to such a jubilee, but the widespread adoption of Bitcoin would have the effect of a jubilee (the real value of debts denominated in fiat currency would become trivial). Anyways…Graeber's Jubilee Proposal, his leadership role in the Occupy Wall Street protests, and his self-description as an anarchist seems to make him a natural Bitcoin evangelist. However, I can't find anywhere where he has commented on Bitcoin. I'd really love to hear his thoughts...

 

[Erdogan]

Do any readers here know David Graeber (I am looking for an introduction)? He is the author of Debt: The First 5,000 Years (which I think is the book that inspired Wences Casares' "money as a ledger" video). David was a lead figure in the Occupy Wall Street protests, and he is Professor of Anthropology at the London School of Economics.

It is a waste of time. (Read half his book). He is more of an anthropologist, not an economist. Read Ludwig von Mises and Murray Rothbard in stead.

 

[molecular]

@Peter R thanks for telling me what the last 2 pages of Graebers book contain . I've been reading a german translation of "Debt: the first 5,000 years" which I unluckily picked up at a bookstore. Got about a third of the way through, then got bored with what seemed like never-ending stories about marriage rites, gender relations and customs of cultures long gone and later misplaced the book somewhere.

The biggest takeaway from the book for me was the correction of the standard narrative about barter and the emergence of commodity money (the part you suspect Wences picked up from him). The story that "debt is the oldest kind of money" clearly makes much more sense than the emergence of commodity money to ease 3-way barter within small communities. The use of salt/sheep/gold as money likely emerged later when trade was done on a larger scale and trustlessness was increasingly desirable, not as a replacement for barter, but for debt-based money.

 

[cypherdoc]

CAT:

"Q5: Does today's announcement reflect a change in your long-term view of the key industries you serve – construction, mining, oil and gas, etc.?

A: Many of the key industries we serve have a long history of substantial cyclicality and are currently well below prior peak levels. For example, mining equipment sales are far below the prior peak and are substantially below what we would consider a reasonable replacement level. Oil and gas has declined substantially as a result of lower oil prices, and construction equipment sales are well below prior peaks in North America, Latin America, Europe, Africa, the Middle East and Asia Pacific. As the world economy improves, we strongly believe the need for Cat® products and services for infrastructure, mining, commodities, energy and transportation will improve. With the actions we've taken over the past few years, along with the restructuring announced today, we believe Caterpillar will be well positioned to deliver solid results when these industries recover and demand improves."

oops:

 

[cypherdoc]

we got the 1-2 punch of the Peter_R Effect plus 21 in full force :

 

[DDDGGG]

Re: Graeber

Perhaps my biggest takeaway from this book was an understanding of how debt, and the system which encodes it (fiat money in our time), is and must be a social construct. Graeber describes a 5,000 year history of how this aspect of our humanity has been impacted by the both the material means at our disposal (gold, silver, shells, etc.) and the shifting relationship between the forces that constitute our society: politics, war, exchange, benevolence, inequality, racism...

I believe his background as an anthropologist makes him uniquely suited to provide a new perspective on the potential 'biggest picture' impacts of Bitcoin. Mainstream economics, defined as the study of a presumably isolated system of exchange separate from the rest of humanity (ie 'disembedded' as per Polanyi), is too limited in scope to properly address Bitcoin. Bitcoin holds the potential to revolutionize money in a very fundamental way and, by extension, alter significantly our social fabric.

However, Graeber is clearly a passionate humanist (if I understand that term correctly) and I suspect he would have grave concerns about a world where Bitcoin becomes the dominant money system.

Would a transition to Bitcoin be the same, in a way, as a debt jubilee? Yes, I believe so, and perhaps Graeber would agree. But would this be good for humanity in the long term? Or would this one-time jubilee lock us into a rigid system where our encoding of debt is now immutable and not subject to the many other systems that form our societies? Would Bitcoin have an infinite memory for debt and would power eventually concentrate in the hands of a small number of individuals, to the detriment of the majority? Or would a dynamic ecosystem emerge where new currencies/jubilees are constantly emerging as a result of this inequality? How would this impact individual-state and state-state relationships?

...

As for how to get hold of him... Something tells me he'd appreciate the intellectual challenge of answering one or more broad questions, similar in scope to what he tackled in Debt.

I'll keep thinking

 

[cypherdoc]

@DDDGGG

Da, Da, David, Gra, Gra, Graber?

 

[cypherdoc]

The Air Kiss. i like that. sounds like something i'd come up with:

http://www.alt-m.org/wp-content/uploads/2015/09/BitcoinVolatilityTimeSeries_BTCEUR.png?6ed0ec

 

[Mengerian]

Graeber also describes himself as "anti-capitalist", so not sure how compatible that is with Bitcoin.

The whole barter/debt debate on the emergence of money is a bit of a false dichotomy. There are many examples of ancient peoples using barter, and trading commodities, especially for more far-flung trade. There are even current day tribal cultures that still use commodity money, such as the Masai who use cows as money. And in our society, we don't typically use money when doing favours for family or friends, even though money predominates for trade outside our immediate group.

@Peter R : Have you looked at Konrad Graf's paper on the origins of bitcoin? http://konradsgraf.com/blog1/2013/10/23/on-the-origins-of-bitcoin-my-new-work-on-bitcoin-and-monetar.html

He talks about the emergence of commodity money from collectibles or trinkets. This is basically just a spin on Menger's theory of commodity money emerging from barter, but presented in a more intuitively plausible manner.

He also directly addresses Graeber's arguments in this paper: http://pricesandmarkets.org/volume-3-issue-3-winter-2015/commodity-scarcity-and-monetary-value-theory-in-light-of-bitcoin/

 

[Peter R]

Re: Graeber

Perhaps my biggest takeaway from this book was an understanding of how debt, and the system which encodes it (fiat money in our time), is and must be a social construct. Graeber describes a 5,000 year history of how this aspect of our humanity has been impacted by the both the material means at our disposal (gold, silver, shells, etc.) and the shifting relationship between the forces that constitute our society: politics, war, exchange, benevolence, inequality, racism...

I believe his background as an anthropologist makes him uniquely suited to provide a new perspective on the potential 'biggest picture' impacts of Bitcoin. Mainstream economics, defined as the study of a presumably isolated system of exchange separate from the rest of humanity (ie 'disembedded' as per Polanyi), is too limited in scope to properly address Bitcoin. Bitcoin holds the potential to revolutionize money in a very fundamental way and, by extension, alter significantly our social fabric.

However, Graeber is clearly a passionate humanist (if I understand that term correctly) and I suspect he would have grave concerns about a world where Bitcoin becomes the dominant money system.

Would a transition to Bitcoin be the same, in a way, as a debt jubilee? Yes, I believe so, and perhaps Graeber would agree. But would this be good for humanity in the long term? Or would this one-time jubilee lock us into a rigid system where our encoding of debt is now immutable and not subject to the many other systems that form our societies? Would Bitcoin have an infinite memory for debt and would power eventually concentrate in the hands of a small number of individuals, to the detriment of the majority? Or would a dynamic ecosystem emerge where new currencies/jubilees are constantly emerging as a result of this inequality? How would this impact individual-state and state-state relationships?

...

As for how to get hold of him... Something tells me he'd appreciate the intellectual challenge of answering one or more broad questions, similar in scope to what he tackled in Debt.

I'll keep thinking

Great post!

Regarding whether the Jubilee would be a single event though, I think probably not. The first Jubilee (the abandonment of fiat) would remind us that money only has value if we agree that it has value. It only has power over us if we as humanity allow it to have that power. If bitcoin concentrates to such an extent that the resulting distribution of wealth hurts humanity more than it helps, then this just presents the conditions necessary for the abandonment of the "Bitcoin ledger" into a new cryptocurrency ledger. The productive people of the world can always abandon any currency system if that currency system is no longer useful to those people.

As for how to get hold of him... Something tells me he'd appreciate the intellectual challenge of answering one or more broad questions, similar in scope to what he tackled in Debt.

Agreed. How about: "What would a Biblical-style Jubilee look like in our modern age?

 

[cypherdoc]

this POS should've died long ago but they insist on keeping it around. maybe this time we get lucky:

 

[cypherdoc]

HOV is kinda like this one where we were supposed to have this perma shipping container boom from all the Trans-Pacific trade:

 

[Justus Ranvier]

Daniel Krawisz has done a good job collecting "money as a ledger/debt" ideas into a coherent explanation:

http://nakamotoinstitute.org/reciprocal-altruism-in-the-theory-of-money/

 

[cypherdoc]

and then there's the NBG, which also refuses to stop going down:

 

[Peter R]

@DDDGGG

Thinking a bit more, if mankind moves forward with cryptocurrency, it would probably be easier to guard against great abuses that result from dysfunctional distributions of wealth. The reason it would be easier is because the possibility of the abandonment of a cryptocurrency's ledger is ever present.[1] I don't really know how to explain it, but the fact that cryptocurrency is just bits in a blockchain would seem to reduce obstacles associated with "ledger abandonment," compared to the entire world abandoning the "gold ledger" in favour of platinum in ancient times.

[1] I'm certainly not against wealth inequality in general…I believe that some people are better stewards of capital than others.

 

[Bloomie]