Forum Replies Created
MemberMay 9, 2021 at 16:35
I don’t have much to add. Thanks for the link.
I would encourage you to reply to old comments. We are just getting started and there are few people willing to make the effort. Conversations will be helpful to all of us.
MemberFebruary 26, 2021 at 22:12
Ideas I missed:
Pacific sea otters
The Amazon rainforest!
Art moved from realistic to abstract for a good economic reason. The bottom fell out of the market for realistic paintings, which are both expensive and slow to produce. A better product came out: the camera (photographs).
MemberFebruary 26, 2021 at 19:19
If you don’t mind a very mechanistic perspective, maybe hiring people is more or less like acquiring capital machinery. Especially if you invest to train them.
MemberFebruary 25, 2021 at 19:29
Normalizing to the price of gold is a good idea. Unfortunately, the price of gold is being manipulated by US and other central banks. If they allowed the gold price to rise as fast as _real_ inflation, people would freak out — and their little scam would fail.
If we could find an asset that is truly constant-value and has a price that “floats” against the dollar, then we could measure the _real_ inflation rate. Sadly, I cannot think of any such thing. Platinum’s price is obviously being manipulated just like gold (just look at the historic price curves). Two metals that might have escaped manipulation so far are Palladium and Rhodium.
Palladium resists corrosion like Platinum, but there is a lot more of it around. The mining rate could be adjusted to balance the price, so stock to flow predicts that it isn’t a good basis for a standard.
Surprisingly, Rhodium is the “truly” most precious metal in the world, even though most people say, incorrectly, that position is held by gold. Rhodium (Rh) is also in the class of Platinum-like metals. Rh is extremely resistant to corrosion just like Gold, and makes the option of a Rh-standard seem interesting.
The Rhodium flow is extremely low b/c it is very hard to mine. Basically, you have to mine Platinum and then throw away 90% of the ore (the Platinum part) and extract Rhodium from the rest. The downside of Rh is that it has very important industrial metal for catalytic converters, so the Rh is used up (i.e. destroyed) by industry faster than it can be mined. So there is no Rh stock, and it is a poor candidate for a monetary standard.
If anyone can suggest a commodity that has a stable real value that is not manipulated by the central bank, and has a high stock to flow, then I’d be happy to hear about it.
I don’t have sufficient motivation to look up the references I used to write this message.
MemberJanuary 28, 2021 at 19:08
With some more study, I have a partial answer to my question above. My argument rests on the assumption “central banks can suppress the gold to USD exchange rate only until they run out of gold,” which is strictly true. However, if the central bank has access to an unlimited supply of money, then they can postpone the “running out of gold” event to the end of the universe. IOW, never.
With sufficient funds, you can buy gold at a higher price and then immediately turn around and sell it at a lower price. With such transactions, your net hoard of gold does not change over time. As long as you keep selling at the lower price, the market price of gold cannot rise. In these circumstances, you will be constantly draining your monetary supply, but if you have the ability to print new money, then your money supply never runs out.
I was disappointed when I realized this flaw in my original argument. And while the gold price has increased by an average of ~15% over the past _20_ years, a closer look at the graph of historical prices shows that it has increased by an average of nearly 0% over the last _10_ years. So in the last decade, central bank manipulation of gold prices has greatly increased. The suppression of gold is financed through inflation of our fiat currency — IOW, it is paid with a hidden tax on everyone who holds dollars. The central bank pays no penalty.
My next question is about similar manipulation of Bitcoin, and I will put that into a fresh thread.
MemberJanuary 24, 2021 at 22:43
Gary, my informed opinion as a physicist is that action and reaction of forces is an imperfect analogy. While it is true that the Earth moves when you drop your PBJ sandwich, for all practical purposes this movement is negligible.
Instead, I would say it is like the relativity of perception of motion. From Earth, the Sun is certainly moving around the Earth in our perception. Standing on the Sun gives you a different perception of who is moving.
MemberJanuary 24, 2021 at 22:27
There is an excellent discussion of inflation as a vector in Ch 4 of the fiat standard. Thank you, Saifedean.
MemberJanuary 16, 2021 at 23:04
To clarify. “…an obvious power imbalance…” I would add, “When applicant supply greatly dominates the demand for employees…”
MemberJanuary 16, 2021 at 21:23
No one agrees with Mark, and instead is presenting one or another apology for Bitcoin.
Mark is obviously correct; if there is a finite supply of bitcoin, and a nonzero probability that any hoard of bitcoin will be lost each year, then the number of hoards in play decreases exponentially with time. As such, the probability that at least one hoard remains never goes to exactly zero. But eventually, the probability that at least one hoard remains goes to a value much less than 1. Final loss is inevitable.
I was bothered by the same thing as Mark, until I realized that Bitcoin won’t be around forever. Sometime during this millennium, something better than Bitcoin will come along and people will move their hoards into that. Hence, even though Mark points to a real weakness of Bitcoin, Bitcoin will die of natural causes before that weakness will become fatal.
If I may wax philosophical, there is a Zen-Buddhist truth here that I discovered only recently: In a universe that never stops changing, nothing is gained by preparing for very improbable events.
MemberDecember 26, 2020 at 23:03
Thanks, that is really helpful. Yeah, I had heard something about only 10k nodes are ‘fully functional,’ out of 100k. But I don’t understand this so I went with 100k to be conservative WRT the resources for a 51% attack. And I emphasize that its not the attack so much as people losing faith in the network.
So what is your conclusion? Could it be easily accomplished by a state actor, like Russia?
MemberMay 6, 2021 at 10:35
Thank you Gonzalo Coelho. I’m glad you restarted this conversation.
My response is that you make an excellent point. Minimum wage causes harm to inexperienced workers.
My point is that there are always positive and negative outcomes to any economic policy.
In his writing, Saifedean explains how fiat_distorts_the_labor_market. His conclusion is that the high unemployment we know would not exist in an economy with hard money.
I hope someday we will have hard money. But for now, lots of people suffer avoidable unemployment thanks to the boom-bust cycle of inflationary fiat. Especially the poor. Until we have a better base economy, inserting just one small part of Austrian economics into a fiat economy can do more harm than good.
Pragmatically, we must develop policies that are in balance with the _current_ state of the economy, not with some utopian vision of a perfect world.
Unnecessary unemployment hurts the poor. Minimum wage hurts the inexperienced. Can we find a policy that reduces harm both to the poor and the inexperienced?
MemberFebruary 5, 2021 at 12:46
That video is absolutely awesome! Wish I knew Portuguese, but the meaning is clear.
And I don’t disagree with the message, but you are kind of evading my point. I said that minimum wage may not be the best solution, clearly it has drawbacks, but that doesn’t change the negative effects of power imbalance in the employer / employee relationship. It isn’t enough to simply provide an argument for why minimum wage is bad, because some of the effects of minimum wage are good.
I am shooting for a deeper conversation. About economic policies and unfairness that is inherent in the system.
Also, I believe you are ignoring my example about sexual harassment. I don’t think you are condoning sexual harassment for the betterment of society. Somewhere, there must be a line between acceptable and unacceptable abuses of power imbalance. Is total neglect of employer abuse of power really the best solution?
Thanks for engaging. That video makes a good point and is so cool!
MemberDecember 27, 2020 at 01:20
If every country inflated at the same time, that would still make the 99% into all paupers, no? Just checking.
MemberDecember 27, 2020 at 00:20