This Blog Continues on Myth Made Man

If you actually are reading this blog, I continue posting on similar topics on Myth Made Man.

Irrational Numbers and Real Reality

The current dominant strain of "western" philosophical thought has roots in the occult, esoteric tradition. The quick and dirty version: man is a historically and culturally constructed being, and that there is no reality, only mental constructs. As I wrote before, this leads to a counter-intuitive result: though reality is understood in radically subjective and solipsistic terms, other beings are inexorably viewed as mere objects that lack their own internal reality. We see this strain of thought infecting economics and political philosophy, and the low become the high. For example, mere rhetoric in the pursuit of power becomes the highest art. (See: Gorgias for the very thorough 2,400 year old analysis and discussion.)

Kurt Goedel

In spite of this belief, reality remains. It might be possible to herd billions of people into a cave of nihilistic illusion but reality still shines through. My personal favorite example is the irrational numbers. The square root of 2, for example, can be interpreted in a number of different ways. The Pythagoreans, for example, regarded it as a deadly secret. Why? Perhaps they believed the human mind partakes in the cosmic mind and number is at minimum, proof of that, and perhaps the universe is number. However, you can't use numbers to express the length of the hypotenuse of a simple triangle with legs of length 1: sqrt(2), which seems to indicate that the mathematical bridge between the human mind and reality doesn't make it all the way. The Austrian logician Kurt Goedel showed, with the incompleteness theorem, that axiomatic systems are self referential.

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2014 Iran Becomes Good Guy/Saudi Arabia Becomes Bad Guy

Let's watch what happens as the "West" recasts the bad guy role.

Gold and Gresham's Law

COMEX Registered Gold 12/20/2013

The last hundred years has seen massive centralization of money and military power, and the last few decades have seen the financial system decouple from the real world and disappear into a parallel universe of pure fantasy and number. Now, however, we're seeing the inexorable operation of Gresham's Law at the COMEX. Gresham's law is one of those concepts, like the irrational numbers, that shows that the reality of the universe is beyond number and mind.

Really, Gresham's law is about price controls on commodities, and "price control" is all about reconciling a number, i.e. an idea, with reality. Reality stubbornly slips through any attempt to bind it in an inky net.

Gold is an alternate store of value to contractual devices, like dollars, stocks, or bonds. "Money", is really a way to organize (or bind) people's time and energy and thoughts. People's agreement to be bound to the system is what makes a dollar valuable. Prices are currently attached to precious metals through markets that are easily manipulated by the beneficiaries of the monetary system, but the mass of people, especially in Asia stubbornly refuses to believe that numbers are valuable.

What happens when the USD denominated gold market breaks? That's a pretty huge glitch in the matrix.

Is Our World Really This Stupid?

Jackson Destroys the Banks
A Satanic Banker Runs Away

President Andrew Jackson kicked the "international bankers" out of the United States around 1833 by shutting down the Second Bank of the United States. Subsequently, there was no central bank; only state banks. A decentralized banking system, in theory, should benefit savers and borrowers, which really means "the people".

That mode of banking lasted until around the "civil war". The common narrative about the United States Civil War is that it was a struggle about slavery, or about two regions with divergent cultural histories--the industrial north and the agricultural south. But another interpretation is it was another theater of "great game" politics and an attempt by the British to weaken and break up the United States to maintain their empire and to re-establish a US central-bank branch of the Bank of England.

During the time of the civil war the Union was in a strongly antagonistic relationship with Britain and France, but found common cause with Germany and Russia. In fact, the Russians, under Czar Alexander II, offered military aid at a crucial moment in the war and kept the British and French from providing aid to the confederacy.

The victorious north also had a victorious financial system. The constitution gives power to the congress to issue money, and Lincoln did that with the "Greenback". The Greenback is a very dangerous idea for the bankers all around the world--it's as dangerous as the Pythagoreans thought sqrt(2) is. If people realized all wealth comes from them, and that there's actually nothing in the bank, and in fact the financial sector is, at best, a parasite, and typically more like a predator, the con would be over.

During the civil war the Union found herself on the same side as the Russian Empire, and not so coincidentally on the same side financially. However, in the decades after the civil war, Wall Street helped finance the budding Empire of Japan, and encourage them in war against Russia, and also financed the communist revolution, and toppled the Tsar. These are really the key decades in American history--when any shred of the ideas and ideals of the founding disappeared. The assassination of Lincoln, then William McKinley brought in the counterrevolutionaries and turned the United States into something more British.

This really kooky condition continues today. The friction between "The United States" and Russia is essentially this same issue. Putin booted "western" companies from Russia's oil sector and jailed the operatives of the "western" financial sector. (At least that's how I interpret those events currently) Russia's not a total financial basket case like the Western countries.

So from that perspective, Putin and Lincoln, perhaps would have been brothers in arms, while the current set of rodentates in Washington/New York are aligned with the City of London.

Bitcoin Value

The siren song of current affairs is distracting me from the historical research. I want to take a stab at figuring out how to value bitcoin.

Bitcoin is two things, a protocol, and a network consisting of lots and lots of hardware. The "coins" are really units of computer work that's necessary for the protocol to function. Bitcoin could replace large swaths of the banking system--really the electronic accounting systems and payment transfer systems. Wire transfers, ACH transactions, credit card transactions, pay pal transactions, all these things can be replaced with a cheaper system--a theoretically cheaper system.

Is it a better system? One of the problems with bitcoin is that transactions take about an hour to settle. Order a cup of coffee--wait an hour, get your coffee? This is a very unfortunate aspect of the current version of the protocol. Bitcoin probably isn't viable unless that's cut to seconds--perhaps that's feasible.

Is it cheaper? Well, cheaper than what? Bitcoin is really designed to obviate a trusted third party for settlement. With the current protocol, it takes many thousands of computers cranking away 24/7 to accomplish this. That's expensive. Compare that to the potentially low cost of a trusted third party hosting a webservice for payment settlement--a couple servers can handle millions of transactions at very low cost. Also, there are many middlemen involved to make the system work--paradoxically they are charging a lot more than a bank or brokerage might for various services.

I think aspects of the bitcoin system are totally ingenious and valuable--like the public ledger idea. However, the inefficiency of the network processing transactions is a big weakness.

Right now, the bulk of the bitcoin price is based on speculation. I'd say the speculation is really about whether the protocol can be improved; if a transaction time can be dropped to seconds, then bitcoin will go into wider use. Even then, it will be hard for bitcoin to beat a trusted third party service.

Spontaneous Collusion

In the previous post, I hinted at something that needs to be spelled out more clearly. What's taught in economics classes all around the world is, for the most part, ideology (aka rhetoric) posing as science. Even in an ostensibly free society like the United States, ideas are formulated, promoted, and promulgated when they advance an "official" agenda. However, it's not really necessary for any authority to state what the "official" agenda is. The collusion to form and promote it is spontaneous.

The mainstream reaction to bitcoin is a good current example. The value of "bitcoin", today, is sort of like the value of the early world wide web. The WWW is built on a giant stack of hardware, open protocols and specifications. Near the top of that stack is the HTTP protocol. Today, millions of web servers run the HTTP protocol, millions of business transactions take place over the HTTP protocol. Today, the WWW is essential infrastructure worth countless billions of dollars. The value of bitcoin emerges from its utility as a means of exchange, the infrastructure that makes that operate, and the ideas and concepts that make that infrastructure work.

Over the past couple of weeks as the BTC price sky-rocketed, bitcoin attracted the attention of the mainstream media. The reaction is typically skeptical to negative. There's an instinctive wagon-circling; no memo from the central office is necessary to coordinate the reaction of the many apparatchiks who benefit from the current system. (Rather than provide an example here, just read Reggie Middleton's takedown of Krugman's "Anti Social Network".) This "spontaneous collusion" model is also how I view the founding of the progressive era.

Similarly, bitcoin is an example of spontaneous collusion. Many people are waking up to the inadequacies of the institutions they grew up with, really those institutions don't serve any of their needs or further their goals. Bitcoin is one of the potential alternatives. It is part of the DIY movement and a shift to removing responsibility and power from central authorities and their useless technocratic allies and distributing it.