Satoshi Nakamoto: Natural Elite to the Rescue

August 4th, 2013   Submitted by Doug French

bitneedThe pursuit of sound money illustrates the effectiveness of democracy and politics, versus the natural order or anarchy. In democracies problems are discussed, factions formed, alliances made. But ultimately, the health of the state and its needs are paramount.

In a stateless world the needs of society are predominate. Entrepreneurs supply the needs of civilization.  No government gets in the way.

F.A. Hayek famously argued in The Road to Serfdom, that in politics, the worst get on top, and outlined three reasons this is so. First, Hayek makes the point that people of higher intelligence have different tastes and views. So, as Hayek writes, “we have to descend to the regions of lower moral and intellectual standards where the more primitive instincts prevail,” to have uniformity of opinion.

Second, those on top must “gain the support of the docile and gullible,” who are ready to accept whatever values and ideology is drummed into them. Totalitarians depend upon those who are guided by their passions and emotions rather than by critical thinking.

Finally, leaders don’t promote a positive agenda, but a negative one of hating an enemy and envy of the wealthy. To appeal to the masses, leaders preach an “us” against “them” program.

“Advancement within a totalitarian group or party depends largely on a willingness to do immoral things,” Hayek explains. “The principle that the end justifies the means, which in individualist ethics is regarded as the denial of all morals, in collectivist ethics becomes necessarily the supreme rule.”

In stark contrast, in the natural order, as Hans-Hermann Hoppe explains in Democracy: The God that Failed, it is “private property, production, and voluntary exchange that are the ultimate sources of human civilization.” This natural order, Hoppe notes, must be maintained by a natural elite which would come by these positions of “natural authority,” not by election as in the case of democracy, or birth as in the case of monarchy, but by their “superior achievements, of wealth, wisdom, bravery or a combination thereof.” This is just the opposite of what Hayek describes as a characteristic of politics in democracy.

Hoppe writes in Natural Elites, Intellectuals, and the State that a few individuals in every society rise to elite status by their talent. Hoppe’s natural elite fit with the description of Abraham Maslow’s self-actualizers from the famous psychologist’s “hierarchy of needs” theory.  Only two percent of the population is self-actualizing according to Maslow. These people are creative and inventive. They have strong ethics, a self-deprecating sense of humor, humility and respect for others, resistance to enculturation, and enjoyment of autonomy and solitude instead of shallow relationships with many people. The self-actualizing elite believe the ends don’t necessarily justify the means and that the means can be ends in themselves.

One readily sees that Maslow’s self-actualizers have nothing in common with politicians in a democracy, who instead seek status, fame, glory, recognition, attention, reputation, appreciation, dignity, even dominance.

The natural elites approach problems with an eye to solving problems as quickly as possible, just as all entrepreneurs satisfy consumer demands. On the other hand, politicians, even the best ones, strut about to attract attention to their cause with the hope of eventually selling their souls for enough votes. Committees are formed and meet under the bright lights with C-SPAN cameras recording every inane exchange. Bills are drafted and redrafted only to be left dying in committee if the legislation is detrimental to the state’s needs.

For example, Ron Paul spent decades grilling Federal Reserve Chairman Alan Greenspan and Ben Bernanke  about central bank policies.  These exchanges made great YouTube theatre for Congressman Paul’s followers and helped him raise millions in campaign contributions. He was a one-man army for a sound dollar on Capitol Hill. His Audit the Fed bill actually passed the House a year ago. However, the Senate’s version of the bill is stuck in committee on orders from Senate Majority leader Harry Reid.

But, auditing the Fed would not make the dollar sounder. It would not provide citizens a choice in what currency to transact business or store wealth in. It’s merely a political charade that would provide the appearance that something is being done when in fact it’s simply the government checking up on the government.

As all this political maneuvering goes on, the Fed’s money supply inflation continues.

Meanwhile, as the financial world melted down in 2008, a person or group of people developed the cyber-currency Bitcoin under the pseudonym Satoshi Nakamoto.  This innovation epitomizes the natural elite in action. He, she, or they designed and created the original Bitcoin software, currently known as Bitcoin-Qt. This brilliant work, done anonymously, is, after only four years, providing a sound alternative to debauched government currencies.

No political grandstanding. No interviews from Capitol Hill. No ghost-written rants in the Wall Street Journal. No horse trading or sausage making. This is the simple creation of a product to satisfy human desires. A product people trade with voluntarily, not through the force of legal tender laws.

No one has admitted to being Satoshi Nakamoto. No one stands to take a bow. Remembering the characteristics of the Maslow-Hoppe self actualized elite, there is no question Satoshi enjoys autonomy and solitude.  His or her self-deprecating sense of humor and humility are displayed in this post of November 14, 2008 “it seems to me that simple altruism can suffice to keep the > network running properly. It’s very attractive to the libertarian viewpoint if we can explain it properly. I’m better with code than with words though.” The care with which bitcoin was created reflects Nakamoto’s respect for others. Bitcoin’s answer to the century old flawed fiat money problem shows a resistance to enculturation.

Politicians fiddle while the dollar burns.  But, a creation of the human mind and spirit (Bitcoin) triumphs.

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37 Responses to “Satoshi Nakamoto: Natural Elite to the Rescue”

  1. Seth KingNo Gravatar says:

    We need more libertarians to understand the brilliance of Bitcoin and adopt it into their daily lives post-haste.

    • PaulNo Gravatar says:

      You, yourself, summarized the “brilliance” of Bitcoin succinctly: “a person or group of people developed the cyber-currency Bitcoin under the pseudonym Satoshi Nakamoto…No one has admitted to being Satoshi Nakamoto. No one stands to take a bow.”

      Thus, it could prove difficult to identify the originators of the scheme if the bitcoins loose their purchasing power, as surely they would if a competitor, or competitors, launched another such scheme. (Octetcoine?) People would soon be asking at the water cooler, “what’s the theoretical limit on the number of these cyber-currency schemes??”

      Still, a competitor’ scheme could bring in a considerable amount of revenue, and I would expect such operators to be motivated in part by the saying that

      A foole & his money,
      be soone at debate:
      which after with sorow,
      repents him to late.

    • PaulNo Gravatar says:

      Oh, my. That wasn’t you, Seth, who wrote the essay but Doug French.

      This is going to be fun to watch.

    • PaulNo Gravatar says:

      “Update: Article has been amended to reflect that bitcoins can already be traded in small fractions, indeed to 0.00000001 BTC (eight decimal places).
      Nonetheless, even with the ability to break bitcoins into small pieces, there are too few bitcoins in existence for institutional traders to be willing to trade them.”

      “Article”: http://qz.com/69630/how-to-short-bitcoins-if-you-really-must/

      • Bob RobertsonNo Gravatar says:

        Wow, Ben, way to go showing your ignorance of economics.

        I recommend doing some math of what 8 decimal places means, before posting again about “not enough bitcoins”. Your argument is nothing but paper money posturing.

  2. thorax232No Gravatar says:

    I will never use BitCoin, its boom bust cycles and the fact that now matter how hard anyone tries it can not be physical or “real” makes it a huge no no in Austrian economics.

    • Ben StoneNo Gravatar says:

      thorax232 said: “… it can not be physical or “real” makes it a huge no no in Austrian economics.”

      I have personally spoke with several actual Austrian economists (guys who make a living teaching Austrian economics) and they would tell you that you are mistaken.
      To name a few, I have personally spoke with Robert Murphy, Mark Thornton, Doug French, and Yuri Maltsev on the topic of Bitcoins.
      Bitcoins meet all the Austrian qualifications for real money.

      Speaking of Doug French, he wrote this article and did a great job.

      • thorax232No Gravatar says:

        I could list plenty of names too, more reputable ones too, I’ve written very extensively on bitcoin and have been there to explain every one of its crashes to explain why.
        Facts are facts, reality is reality. No need to deny it.

        • RandallNo Gravatar says:

          Now would you like to explain why after each crash a new, higher level of support is maintained than before the previous run-up? And then after you explain that, please do tell us what happens if these levels keep continuing forward in this manner.

          Austrianosauruses like yourself make me want to punch kittens. Even if you’re not wrong about its’ future as money, why the heck wouldn’t you want to help along something that is waking so many people up to anti-government technology and philosophy???

    • Don DuncanNo Gravatar says:

      Let’s skip listing authors on both sides. Or making such statements such as “…a huge no no in Austrian economics.” These are appeals to authority and have no place at an anarchist forum. Just give me the reasons why you believe Bitcoin is not and can not become viable money.

      Bitcoin is being used as money. So, for some it is money. Paper is being used as money. We know it’s not sustainable. We would like to use hard money. But even hard money was not sustainable. It lost out to paper. I know what you are going to argue. “If” we didn’t have govt., then we would have hard money. I agree. And Bitcoin would hasten the downfall of govt. Moreover, unlike hard money, it will make govt. control of money impossible (at least for the present). Hard money created prosperity. It did not stop the spread of govt. In fact prosperity (wealth) attracts the parasites. The parasites will want to control Bitcoin. It is up to us to protect ourselves.

      • Christian GruberNo Gravatar says:

        “Is a huge no no in Austrian economics” isn’t entirely an appeal to authority – it’s a proscription based on an interpretation of a methodology. However, here, it seems to be _used_ as an appeal to authority.

        But it’s a poor one, as (and this has been pointed out) Austrian economists who share metholodogy and monetary analysis disagree on crypto currencies, since it is something that did not exist when primary Austrian monetary theory was being formulated, and the community of austrian economists are working this out, taking positions, arguing.

        I can see both positions arising from an austrian analysis, depending on how literally you apply the subjects of regression theory. But I think the jury is out on what “the austrian” position will be – or if there will be one. There isn’t, for example, on Monopoly, some preferring Mises analysis, others preferring Rothbard, etc.

    • Seth KingNo Gravatar says:

      Is Microsoft Windows real? Methinks you lack a competent understanding of what software is, how it works, and how it is built.

  3. VanmindNo Gravatar says:

    A fictional character pushing fictitious money. What could go wrong?

    • Seth KingNo Gravatar says:

      You mean a pseudonymous character that created a pseudonymous currency. Big difference.

      • PaulNo Gravatar says:

        If Bitcoin is pseudonymous, then what does “Satoshi Nakamoto” call it?

        Bear in mind, now, Doug French’s remark that a group of people could be responsible for Bitcoin. In fact, why rule out the possibility that Bitcoin is a governmental project? Governments have proven their ability to attract talented computer scientists, and there shouldn’t be any doubt that governments of the world might be interested in discrediting alternatives to their centralized purchasing power systems.

        A “pseudonymous”, electronic, pump and dump scheme would certainly tend to discredit e-currencies, which is ironic given the nature of our banking system. And as I’ve suggested already in another post, there appears to be no theoretical limit to the number of e-currencies that could be unleashed upon the world by clever fictional characters.

        So, pop goes the Bitcoin bubble. Maybe not this year or next, but in 10 or 15 years, after millions have become ensnared by and dependent upon the complicated newfangled stuff. Recall, if you will, the lesson being taught to the world at this very moment by those who control the Internet, which has the superficial appearance of being independent from the MIC that spawned it.

        Today, almost 20 years into the WWW frenzy, it’s becoming evident that the great Internet is a tool for ensnaring the trade and the communications of an entire planet with a computer network still firmly under the control of Publius’ empire, “an empire in many respects the most interesting in the world”. e pluribus pluribusque unum is the empire’s true motto, and now its masters are trying to annex the Moon, too.

        Pop goes the Bitcoin bubble. Then the usual suspects will scream and holler for government to protect the people from the adverse consequences of folly motivated at least in part by greed.

        • Seth KingNo Gravatar says:

          The state already has money that has us all enslaved. It’s called the dollar. I really don’t think you have a very firm understanding of free and open source software.

          • PaulNo Gravatar says:

            I don’t think that you have the skill to explain why it’s relevant that I have a better understanding of free and open source software than I do already. Of course, you don’t know what I know about such code. It should, however, be dawning upon you right about now whether or not I think very highly of arrogant script kiddies who can wipe a used HD with Darik’s Boot And Nuke, put a PC together with other used parts, and then install a popular OS that’s a fork in the Debian project. Could it be that I reserve my respect not for the script kiddie and his kith but for people capable of writing a kernel from scratch?

            It’s by the way that there are numerous American currencies masquerading under the name “dollar”. One such currency is issued as copper-colored coin in units of 1/100 th of a “dollar”, and the coin is called the penny. (Those issued before 1984, I think, had a much higher copper content than the newest ones.) This coin, the penny, usually trades at a rate of 5 pennies per nickel. Now, the nickel is another American currency issued under the rubric of “dollar”, and as is true of the penny, the word “dollar” does not appear on it. There are several more American coins, and we haven’t even begun to discuss the number of cross rates to be managed by the masters of the American purchasing power system in order to keep their coin from straying too far from the unit of account called by banks “dollar”.

            Debian: Deb-n-Ian. Pretty clever, huh? But why not Debinian?

            • Seth KingNo Gravatar says:

              You’ll figure out Bitcoin one of these days… when you’re ready for the truth.

              • PaulNo Gravatar says:

                One of these days you may have to pry apart a DIMM, an HD case, or an SSD to get your Bitcoins out. But you will find only solid things that cannot be readily monetized.

                http://upload.wikimedia.org/wikipedia/commons/f/f3/MagneticMedia. svg

                • ShawnNo Gravatar says:

                  Why would that be necessary, Paul? If one is smart, one has a backup of his private key, in the event of catastrophic computer failure, and can “regain” control over his Bitcoins by importing that key into a new wallet on a new machine and re-downloading the blockchain. Unless you’re concerned about either the internet going away somehow; in which case, sure, it would be a good idea to have some gold (lord knows fiat currency would also be in deep trouble in such an unlikely event). If such an *extremely* unlikely event scares you off of Bitcoin, then sure, don’t get involved with them.

                • RandallNo Gravatar says:

                  LOL… Paul, please do read up more on what bitcoin is… They aren’t actually kept on your computer, just an access key to your wallet is. You can memorize that or print it even, backing it up as many times as you like.

  4. thorax232No Gravatar says:

    I’m not going to reply to anyone in particular here because this subject for some reason makes the most logical people VERY stupid.
    I don’t like bitcoin, its volatile and less real than the U.S. dollar, people tell me my arguments don’t work because I don’t know computers… I’m a programmer. They tell me I don’t know Austrian economics, then I refer them to my writings and the writings over at Lew Rockwell that back up everything I say. Then they say, “Well its money because people use it, people use dollars too, that’s why its money.” ….Dollars aren’t money we all know that.
    “But decentralization!” Maybe keep up to date with bitcoin, it will be centralized and the major influences’ on the currency like the MtGox people are scammers, I almost joined in on that game to take advantage of the “believers” I decided against, money is nice, but not that nice.
    There are other options… like gold for gods sakes. At this very moment you can buy and sell gold instantly at market prices, its what I use for my savings account, and if needed I can have it delivered from vaults in Sweden.
    Bitcoin is a fad with a fervent following, one of these days one of those crashes is going to be really bad. I’ve met people who have lost their life savings to bitcoin and anybody reading this is not special.

    • Seth KingNo Gravatar says:

      One of these days you’re going to look back at this comment and laugh.

      BTW, you don’t like Dollars and you don’t think they’re money? But you’re still using it, right? We all know the Dollar is going to tank to zero. So, which is worse, Dollars or Bitcoins?

    • MAMNo Gravatar says:

      “There are other options… like gold for gods sakes. At this very moment you can buy and sell gold instantly at market prices, its what I use for my savings account, and if needed I can have it delivered from vaults in Sweden.”

      You know what happened to e gold right? You’re not special the State will steal your savings account.

    • Peter ŠurdaNo Gravatar says:

      Thorax,

      you’re a programmer, yet question the value of immaterial goods. That’s called a performative contradictions. You’re using language and the internet, which are other examples of value associated with protocols. Do you also think that because IP addresses are just numbers, the internet is not real and there is no reason to use it? And because language is just an abstract concept, and not even a very precise one, there is no reason to use verbal communication?

      With respect to volatility, there are two issues you’re ignoring. The first one is that volatility is inversely proportional to liquidity. Less liquid media of exchange are more volatile than more liquid media of exchange. There is nothing bitcoin-specific about this.

      The second issue is that volatility is only used as a reason to use a particular medium of exchange in a relatively narrow amount of situations. In “The Case for Genuine Gold Dollar”, for example, Rothbard criticises the argument of Hayek that absent legal tender laws, people would switch to a medium of exchange with a more stable purchasing power. Rothbard claims that this is not true (or to reformulate it in more mainstream terms, the choice of a medium of exchange is path-dependent).

      I agree that Bitcoin makes otherwise logical people very stupid. They react emotionally, which you yourself are an example of, having written that you “don’t like bitcoin”.

    • Bob RobertsonNo Gravatar says:

      Thorax, if you don’t like it, don’t use it.

      Unlike govt currencies, there is no Legal Tender Law to force you to use Bitcoin.

  5. AnonymousNo Gravatar says:

    Why do you want money??

    If the driller drills the oil, and the pipeliner pipes it, and the refiner refines it we will have gasoline regardless of what we give them in return for their labor, dollars, chickens, or bitcoins.

    If what we give them is a free pass to the big box store and they get what they need in return for the paper maker making paper and the big screen guy cranking out big screens and the freeware programmers giving their freeware in return for those nice towels at the Big K.

    Why would we want money when we can just go get the stuff for free??

    Just cut out all the middlemen, you will know them by the volume of their dissent.

    Think of all the judges, lawyers, accountants, and their secretaries that will need to help with food production instead of live off the food producers as leaches.

    Give them back their dignity,…

    • Seth KingNo Gravatar says:

      Getting rid of money would be a really bad idea, unless you favor the inefficiency of a strict barter economy.

      Even if we did get rid of money, the slave masters would still be able to steal the commodities directly and employ slave labor. Having money just means that the slave masters steal the money and then pay for the goods and services instead. Either way, you’ve still got slave masters.

    • Bob RobertsonNo Gravatar says:

      Go right ahead. If you want to live by barter, do so.

      The social function “money” will not be uninvented, using an indirect medium of exchange solves problems that direct barter has that, so far, cannot be solved any other way.

      Yet direct barter systems do exist. Go for it.

      • AnonymousNo Gravatar says:

        Ok, this may be esoteric, and hard to understand, but we don’t have to have money, we do have to have work.

        Somebody makes the toiletpaper(Big Screens, Lasik surgery, popular discussion forums, whatever), he passes it to the distributors, and in return gets from the distributors what he needs to feel complete and what he wants for supper. Whatever work you decide to take up as long as all the bases are covered from factory to delivery guy you can have whatever the world has to offer in return for 6 hours of labor for 25 years of your life.

        We don’t barter, we trust that our labors will be rewarded by others laboring in their specialty and the sharing of the products. Why you want to create artificial values to somehow value your computer skills at more than double my plumbings skills is a social faux pas you really should correct.

        Why folks think that profit is the only motivation possible for work is beyond me. I mean profit is really motivating, but so is rape, once you get away with it a couple times it gets to be downright addictive, at least so I’m told by folks that have the documented expieriences to know.

        When we give freely of our labors we can begin to work on the really big projects, but as long as I got to give 6 hours of plumbing work for 1 nanosecond of banking we will always be slaves to the banksters/capitalists.

        Here is a book that your school may have left off your reading list,….
        http://www.thevenusproject.com/downloads/ebooks/looking%20backwar d.pdf

        It seems a little too structured for my tastes, but if it eliminates billionaires and profiteers of all persuasions, I’m in.

        Seth, I would like to know more about why you are so devoted to money, do you think that the system we have is the only system possible? Why do I have to have a tit for tat system? Why do you insist that you have to be rewarded for your work with a medium of exchange? Don’t you want to go to the store and get one of everything on the shelf? (Another faux pas! Moderation, please.)

        In the world that I propose we all work, we all eat, and some lucky few of us go to the stars. We can’t all go because somebody has to be in charge of ground control and the farms, and not everybody wants to go.

        • Seth KingNo Gravatar says:

          If we all did for a living what we wanted to do, nobody would do the shit jobs. You’d get a lot of people who want to, say, paint pictures instead of work at the grocery store stocking vegetables.

          The beautiful thing about voluntary trade is that it shows us how much other people value our work.

          If you’re painting a bunch of pictures that nobody likes, you’re not going to make a living, and thus, you’ll need to do something else, like pump gas. If you paint pictures that people like and are willing to pay you for them, then you’ll be able to keep doing that.

          The price mechanism is what shows us what is needed. Without prices we are constantly suffering from surpluses and shortages.

          • AnonymousNo Gravatar says:

            I disagree that nobody would do the ‘dirty work’. I have met plenty of people that were willing to do some pretty heavy duty cleaning for no more than to make other people happy.

            I would propose that there are enough people willing to dictate right from wrong to others that ‘norms’ would spring up, and once acceptable to the people, that they would entice people into doing the dangerous work in return for less demanding schedules.

            I’m also saying that my system, through the elimination of duplication of process, will be far more efficient. So much so that we will live in abundance. No longer will there be homeless or hungry children. House building and food growing serving to answer your social work obligation.

            This world is only as far away as the glass walls holding the people back from going to the big box stores and taking what they want. Our work put it there and our continued work will replace it, though without the tax of the money masters,….

  6. Michael BarkerNo Gravatar says:

    Thorax said “I’ve met people who have lost their life savings to bitcoin and anybody reading this is not special. ”
    I’ve met people who have lost a lot of money in precious metals as well so nothing is a 100% safe as a monetary unit. Even at 1300.00 an ounce I think gold is still over valued. I would buy if it dipped below 1000.00.

    Seth said. “We all know the Dollar is going to tank to zero.”
    How do you know that ? People were saying that thirty years ago during 1979-1980 gold bubble.

    Bitcoin might be a bubble because so little is known about it. It’s value is in the idea. I think if I was moving currencies from one country to another or transferring Euro’s to Chilean peso’s I would use it to avoid government scrutiny. But I wouldn’t hold Bitcoin as an investment unless it was a small part of your overall portfolio set aside for risk.

    • ShawnNo Gravatar says:

      “Seth said. ‘We all know the Dollar is going to tank to zero.’
      How do you know that ? People were saying that thirty years ago during 1979-1980 gold bubble. ”

      I think *we all* know that based on a blend of regression analysis and an examination of current geopolitical events.

      Historically, there’s only so much printing an entity can do before hyperinflation kicks in and the thing being printed is worth nothing; the two most immediate currencies that come to mind are the Deutsch Mark of the 1930′s, and the Zimbabwe dollar of the 2000′s.

      The US prints money hand over fist based on its “value” as a reserve currency – as long as *other* nations feel good about the US economy, they will think US dollars are a good deal.

      What happens when foreign countries stop thinking the dollar is such a good deal? What happens when they figure out the US economy is a house of cards that’s going to cave at any moment? Just recently, Ben Bernanke, chairman of the Federal Reserve, actually said inflation was too LOW, and need to be raised to “spur” the US economy.

      By 1980 government standards, inflation is at 8% in the US; at that time, they included things like housing, energy, food, and medical care – you know, all those things that ARE actually inflating in price – but today, they make a “basket” out of all the things no one buys on a regular basis. They stopped including those little facets of reality because they’re too “volatile”….though they, of course, effect *everything* we may ever want to buy.

      So, today, *inflation* is at a paltry 1% according the man who controls the US printing press.

      Think about that.

      So, yes, he will mint more dollars, and the $1.3 trillion currently held in reserve will go on the market. And since the US economy is built on debt paying off prior debt, and no real assets, foreign governments will figure out an *economy* backed currency isn’t a currency at all, they will start selling off dollars faster than you can say “Holy Shit!” and bingo – hyperinflation, and the death of the US dollar.

      If you feel my analysis is wrong in anyway, please let me know. Understand I’m not saying Bitcoins are *the* answer, I just know they’re a pretty good bet for *future* trade because they do have *subjective* value, but unlike fiat currencies, they can’t be printed and *reserved* out of existence.

      • Michael BarkerNo Gravatar says:

        Shawn Said:
        “And since the US economy is built on debt paying off prior debt, and no real assets, foreign governments will figure out an *economy* backed currency isn’t a currency at all, they will start selling off dollars faster than you can say “Holy Shit!” and bingo – hyperinflation, and the death of the US dollar.”

        I think you have it mostly figured out except that the banking system and foreign countries aren’t independent as they have been historically in the past. When a country would inflate its money other solvent countries currencies would reflect the rate of inflation in regards to the inflated currency. That’s not the case today.

        Every currency is dependent on the other, whether were talking about the Euro, the Dollar, the Rwandan franc or the Chilean peso. It’s the mutually exchanged debt that “strengthens” currency and at the same time set’s it up for collapse if theirs a large enough hit on the system. The worlds is simultaneously inflating which is why hyper inflation isn’t happening.

        All banks world wide are systemically linked though a system of selling and trading debt in the form of government issued bonds.

        Money is created when the government issues bonds and give them to banks to create currency. The value of the currency reflects the “productivity” of the nation that issues the bonds. That productivity is human labor and a percentage of that labor is collected through taxation to pay off the bonds from the people living today as well as people not even born yet. That human value factor has been turned into a commodity and is a debt “instrument”. Keynesian economics along with fractional reserve banking has created both illusionary prosperity as well expanding distinct poverty. Capitalism takes an asset like a tangible piece of property and borrows on that to get the needed capital to invest. But what Banks do is claim ownership of your labor and they leverage that to create capital. So we have 50 trillion in world wide deficits that represent the human value of six billion people. Now add on top of that add USARY and you begin to see the method of your enslavement.

        Everyone here agrees that the system is unsustainable and that “The FRN is doomed, the only question is when.”

        I think their are a number of ways a melt down can come about and it might be a combination of things that trigger it. Or it might just limp along until the next big economic contraction.

        One is a kind of domino effect where a number of countries do what Iceland did and said fuck it were not paying any of this debt back. Iceland by itself wasn’t a big hit. But if you add a number of countries together like Greece, Italy, Spain, Ireland, Portugal as well as some countries in Africa and other places in the world then the stress to absorb that might trigger a collapse. Now Germany who is the most stable backer behind the Euro has been pushing austerity measures on these over leveraged countries and if their able to get these countries to stick to it they might be able to prolong the implosion or it might actually stabilize the banks their. The other way implosion happens is the various governments tax their tax farms to the breaking point to where the revenue intake doesn’t cover paying the interest on these bonds. Similar to Rome destroying the economic prosperities of the countries they conquered. I think the next economic contraction may come from a glut in the market of manufactured goods from China and other growing economies where more goods are produced then buyers to buy them. That’s the unsustainable part.

        http://www.youtube.com/watch?v=hT61kGLfDW4

    • Bob RobertsonNo Gravatar says:

      You do realize that the FRN _was_ on course to hyperinflation in the late 1970s? Only Paul Volker’s putting the brakes on at the Federal Reserve stopped it, and caused a deep, sharp depression. The correction was allowed to occur.

      The reason it won’t happen now is that no one in govt today has the balls to allow the correction to occur. And it will be a far larger correction than 1981 when it does happen, and it will eventually happen.

      The FRN is doomed, the only question is when.

  7. AuNeroNo Gravatar says:

    The dollar and other fiat currencies are the most popular currency because of legal tender laws. The IRS wants to be paid in dollars, so this drives up the demand for dollars.

    Just because this is not free market activity, doesn’t mean that the dollar is not money. It’s forced to be money.

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